In 2017 my Website was migrated to the clouds and reduced in size.
Hence some links below are broken.
One thing to try if a “www” link is broken is to substitute “faculty” for “www”
For example a broken link
http://www.trinity.edu/rjensen/Pictures.htm
can be changed to corrected link
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Contact me at 
rjensen@trinity.edu if you really need to file that is missing

Universal Health Care Messaging
Bob Jensen at Trinity University


Introduction

The Lies and Deceptions

December 31, 2020

December 31, 2019

December 31, 2018

December 31, 2017

June 30, 2017

March 31, 2017

December 31, 2016

September 30, 2016

June 30, 2016

March 31, 2016

December 31, 2015

December 31, 2014

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

September 30, 2012

June 30, 2012

March 31, 2012

December 31, 2011

September 30, 2011

June 30, 2011

March 31, 2011

December 31, 2010

September 30, 2010

July 29, 2010,

July 17, 2010

June 29, 2010

June 10, 2010

May 27, 2010

May 20, 2010

May 10, 2010 

April 29, 2010

April 20, 2010 

April 8, 2010  

March 30, 2010 

March 18, 2010

March 8, 2010

February 23, 2010  

February 15, 2010 (including Health Insurance in Germany)

February 1, 2010

January 26, 2010

January 17, 2010 

January 5, 2010

December 23, 2009

December 17, 2009

December 7, 2009 

November 25, 2009

November 17, 2009

November 10, 2009 (The Most Frightening Legislation in the Shrinking History of the United States)

October 26, 2009

October 15, 2009

October 5, 2009

September 24, 2009

September 15, 2009 Update

September 3, 200 9 Update

August 26, 2009 Update

August 17, 2009 Update

August 07, 2009 Update

Canada

Finding and Using Health Statistics --- http://www.nlm.nih.gov/nichsr/usestats/index.htm

Bob Jensen's threads on economic statistics and databases ---
http://faculty.trinity.edu/rjensen/Bookbob1.htm#EconStatistics

 

Introduction

Finding and Using Health Statistics --- http://www.nlm.nih.gov/nichsr/usestats/index.htm

Best Medical Schools in the World (2013) ---
http://studychacha.com/discuss/139694-best-medical-school-world.html
More of the Top 50 are in the USA relative to any other nation.

World Health Organization ranking of health systems in 2000 ---
https://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000

From Our World in Data
Financing Health Care
--- https://ourworldindata.org/financing-healthcare/
Lots of interesting comparisons here
Added considerations should be that having insurance with enormous deductibles is like having no insurance for people who cannot afford thousands of dollars in deductibles before the insurance kicks in,"
Added considerations include having insurance that the major providers (hospitals and doctors) refuse to accept is like having no insurance.

 

World Health Organization: World Health Statistics 2015 --- http://www.who.int/gho/publications/world_health_statistics/2015/en/

Harvard:  Where Both the ACA and AHCA Fall Short, and What the Health Insurance Market Really Needs ---
https://hbr.org/2017/03/where-both-the-aca-and-ahca-fall-short-and-what-the-health-insurance-market-really-needs?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date&spMailingID=16826969&spUserID=MTkyODM0MDg0MAS2&spJobID=981683047&spReportId=OTgxNjgzMDQ3S0

Jensen Comment
The biggest problem for Medicaid and other lower-end covered ACA people is that the medical coverage is crap coverage.

Major hospitals in Chicago will no longer serve patients insured in Obamacare exchanges (except in true emergencies) ---
http://beta.hotair.com/archives/2016/10/24/chicago-hopenchange-major-hospitals-bail-obamacare-2017/?utm_source=hadaily&utm_medium=email&utm_campaign=nl

News Item Prior to November 8 Election of President Trump
Major Chicago Hospitals Not In 2017 Obamacare Marketplace Plans -
--
https://www.wbez.org/shows/wbez-news/major-chicago-hospitals-not-in-2017-obamacare-marketplace-plans/f55d6c23-d9b1-452f-8c75-73635bd83d07

Some of Chicago’s largest hospitals said they will not be part of any Cook County Affordable Care Act marketplace plans in 2017.

 

University of Chicago Medical Center and Rush University Medical Center both said they don’t plan to be in network for any Obamacare marketplace plans next year. 

 

 

The change means patients with doctors at those hospitals will either need to find a plan off the marketplace, and lose Obamacare subsides, or find a new doctor.

 

Northwestern Memorial Hospital said it will also be out of the marketplace, but will have exceptions for some of its partner hospitals.

Continued in article


According to emergency room physicians Obamacare made it much worse for emergency rooms.
American College of Emergency Room Physicians
The Uninsured: Access to Medical Care Fact Sheet ---
http://newsroom.acep.org/fact_sheets?item=30032

 

Medicaid Is Free. So Why Does It Require a Mandate?
https://www.wsj.com/articles/medicaid-is-free-so-why-does-it-require-a-mandate-1489529946?mod=djemMER

The Congressional Budget Office is out with its analysis of the House Republicans’ ObamaCare replacement, the American Health Care Act (AHCA). The CBO’s report includes an implicit but powerful indictment of Medicaid, America’s second-largest health care entitlement.

Medicaid has been around since 1965; it was a core part of LBJ’s Great Society entitlement expansion. The program’s idiosyncratic design requires states to chip in around 40% of the program’s funding, while only getting to control about 5% of how the program is run. The federal Medicaid law—Title XIX of the Social Security Act—mandates a laundry list of benefits that states must provide through Medicaid, and bars states from charging premiums. Copays and deductibles cannot exceed a token amount.

Medicaid is the largest or second-largest line item in nearly every state budget. But for all practical purposes, the main tool states have to control costs is to pay doctors and hospitals less than private insurers pay for the same care. As a result, fewer doctors accept Medicaid patients, making it very hard for Medicaid enrollees to get access to care when they need it. Poor access, in turn, means that Medicaid enrollees—remarkably—have no better health outcomes than those with no insurance at all.

That brings us back to the AHCA. According to the CBO, able-bodied adults on Medicaid receive about $6,000 a year in government health-insurance benefits. They pay no premiums and minimal copays. You’d think that eligible individuals would need no prodding to sign up for such a benefit.

And yet, according to its analysis of the GOP ObamaCare replacement, the CBO believes that there are five million Americans who wouldn’t sign up for Medicaid if it weren’t for ObamaCare’s individual mandate. You read that right: Five million people need the threat of a $695 fine to sign up for a free program that offers them $6,000 worth of subsidized health insurance. That’s more than 1 in 5 of the 24 million people the CBO (dubiously) claims would end up uninsured if the AHCA supplanted ObamaCare.

On its face, there’s reason to doubt the CBO’s view. The mandate is enforced through the income-tax system, and enforcement of the mandate has been spotty for those in low tax brackets. Many of those eligible for Medicaid don’t work or file returns. Under rules established by the Obama administration, those who do can leave the “I have insurance” box blank and face no penalty.

Still, it’s remarkable that the CBO believes people need to be fined into signing up for Medicaid. That tells us something about the CBO’s assessment of Medicaid’s value to those individuals—and it buttresses the GOP’s case that Medicaid needs substantial reform.

Not coincidentally, the AHCA represents the most significant Medicaid reform since 1965, and thereby the most significant entitlement reform in American history. The 1996 welfare reform law is hailed by many conservatives as the most important domestic policy achievement of the past 25 years. Fiscally speaking, the AHCA is 10 times as significant.

The AHCA would put Medicaid on a budget, increasing Medicaid spending per beneficiary at the same rate as the medical component of the Consumer Price Index. This isn’t a far-right concept; President Clinton first proposed reforming Medicaid this way in 1995, as an alternative to the GOP idea of block grants. The 1996 law ended up including neither provision.

Combined with administrative reforms that may come from the Department of Health and Human Services, the bill would give states more flexibility to manage Medicaid’s costs in ways that could increase access to doctors and other providers, while reducing Medicaid spending by hundreds of billions in its first decade and trillions thereafter.

Ultimately, Medicaid for able-bodied low-income adults should be merged into the system of tax credits that the AHCA proposes for those above the poverty line. In that way, all Americans, rich and poor, would have the ability to choose the health coverage and care that reflects their needs, and build nest eggs in health savings accounts that could be passed on to their heirs.

Medical Malpractice Lottery for Lawyers or Criminals or Both ---
http://faculty.trinity.edu/rjensen/Health.htm#Malpractice

Bob Jensen's Threads and Timeline for  Obamacare ---
http://faculty.trinity.edu/rjensen/Health.htm

Bob Jensen's threads on medicine ---
http://faculty.trinity.edu/rjensen/bookbob2-Part2.htm#Medicine

 

History Timeline of Health Care Reform in the United States

Something AARP Wants Kept Secret

 

Introductory Quotations and Links

Full Text of H.R. 3962 --- http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.3962
 

Obamacare --- http://en.wikipedia.org/wiki/Obamacare#Term_.22Obamacare.22
Although President Obama never proposed using that term, eventually he said is was an honor for him to assi8ate his name with this legislation that he promoted to be the crowning achievement of his Presidency. "President Obama endorsed the nickname, saying, "I have no problem with people saying Obama cares. I do care."

First of all, it’s called the ‘Affordable Care Act"
House Minority Leader Nancy Pelosi more unhappy with the use of the word "Obamacare in 2014.

Brookings: The Patient Protection and Affordable Care Act (links to hundreds of studies) ---
 
http://www.brookings.edu/research/topics/affordable-care-act

"Chuck Schumer: Passing Obamacare in 2010 Was a Mistake:  The Senate’s No. 3 Democrat says that his party misused its mandate," by Sarah Mimms, National Journal, November 25, 2014 ---
http://www.nationaljournal.com/congress/chuck-schumer-passing-obamacare-in-2010-was-a-mistake-20141125

Chuck Schumer upbraided his own party Tuesday for pushing the Affordable Care Act through Congress in 2010.

While Schumer emphasized during a speech at the National Press Club that he supports the law and that its policies "are and will continue to be positive changes," he argued that the Democrats acted wrongly in using their new mandate after the 2008 election to focus on the issue rather than the economy at the height of a terrible recession.

"After passing the stimulus, Democrats should have continued to propose middle-class-oriented programs and built on the partial success of the stimulus, but unfortunately Democrats blew the opportunity the American people gave them," Schumer said. "We took their mandate and put all of our focus on the wrong problem—health care reform."

The third-ranking Senate Democrat noted that just about 5 percent of registered voters in the United States lacked health insurance before the implementation of the law, arguing that to focus on a problem affecting such "a small percentage of the electoral made no political sense."

The larger problem, affecting most Americans, he said, was a poor economy resulting from the recession. "When Democrats focused on health care, the average middle-class person thought, 'The Democrats aren't paying enough attention to me,' " Schumer said.

Continued in article

"Sen. Chuck Schumer: Obamacare Focused 'On The Wrong Problem,' Ignores The Middle Class" by  Avik Roy, Forbes, November 26, 2014 ---
http://www.forbes.com/sites/theapothecary/2014/11/26/sen-chuck-schumer-obamacare-focused-on-the-wrong-problem-ignores-the-middle-class/

Despite the enduring unpopularity of Obamacare, Congressional Democrats have up to now stood by their health care law, allowing that “it’s not perfect” but that they are proud of their votes to pass it. That all changed on Tuesday, when the Senate’s third-highest-ranking Democrat—New York’s Chuck Schumer—declared that “we took [the public’s] mandate and put all our focus on the wrong problem—health care reform…When Democrats focused on health care, the average middle-class person thought, ‘The Democrats aren’t paying enough attention to me.’”

Sen. Schumer made his remarks at the National Press Club in Washington. “Democrats blew the opportunity the American people gave them…Now, the plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed,” Schumer maintained. “But it wasn’t the change we were hired to make. Americans were crying out for the end to the recession, for better wages and more jobs—not changes in health care.”

“This makes sense,” Schumer continued, “considering 85 percent of all Americans got their health care from either the government, Medicare, Medicaid, or their employer. And if health care costs were going up, it really did not affect them. The Affordable Care Act was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote…it made no political sense.”

The response from Obama Democrats was swift. Many, like Obama speechwriters Jon Lovett and Jon Favreau and NSC spokesman Tommy Vietor, took to Twitter. “Shorter Chuck Schumer,” said Vietor, “I wish Obama cared more about helping Democrats than sick people.”

Jensen Comment
So what's wrong with the ACA?
Firstly it expanded the piñata for fraud --- Medicaid. Half the people on Medicaid in Illinois were found not to be eligible for Medicaid.  It's bad in most other states that just are paying for audits while the Federal government is paying the tab.

Secondly it's a windfall for ACA insurance companies since the Federal government guarantees their profits and promises taxpayer money if they begin to fail. In capitalism, business firms are supposed to take on financial risks.

Thirdly, the affordable policies have 40%-60% co-pays that essentially prevents insured people from going to doctors, medical clinics, and hospitals unless they are really, really sick because of what it costs them up front. Insurance companies love that, because they are selling insurance that people don't use as much as they should be using that insurance.

Fourthly, insurance companies love the ACA because paying for medical services and medications for people behind on the payments of their ACA premiums are passed on to doctors and hospitals after 30 days. Is it any surprise that so many doctors and hospitals are refusing to accepted patients with ACA insurance?

And the list of complaints against the ACS goes on and on --- See below


I'm in favor of nationalized health care. Between 2008 and 2010 the Democrats had substantial majorities in the House and Senate and an enormously popular President Obama could've legislated nationalized health care without any help from a single Republican. Instead the Democrats  blew it and gave birth to an abomination that is yet another unfunded entitlement nail in the coffin of the United States.

But every system has rationing in some form or another. Rich Canadians unwilling to wait many months for treatments pay cash in the USA for immediate health care. Rich Swedes go elsewhere as well, often to Switzerland or the USA.

I also like Germany's combination of public and private health insurance system for a number of reasons, including the fact that it like the health plans of most other nations is a pay-as-you go plan.
Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance

Don't confuse wanting a government-managed health care system like the one in Germany with the private insurance company rip off in the ACA in the USA where insurance companies have guaranteed profits while shifting the bad debts to the doctors and hospitals.

To add pain to misery these ACA insurance companies are offering over-priced policies with enormous deductibles that discourage patients from having medial treatments except in emergencies.

Hopefully, President Hillary Clinton will have the courage to reduce for-profit insurance companies to offer only supplemental elective plans like they do in Germany and for Medicare in the USA.

I vote for the German system that operates a lot like Medicare for all ages of citizens but with better fraud controls. I used to lean toward the Canadian system, but it's elective medical procedure delays for new hips, knees, and shoulders forces too many Canadians to pay cash for such procedures in the USA. when they grow weary of waiting out Canadian health plan approval.

What bothers me the most are the blatant lies our leaders broadcast to voters just to get a health care bill passed. I would be much less critical if they had flat out been honest about what they really intend for this legislation to cost. One example of a political lie is that Cadillac insurance plans will be taxed. The unions didn't object very loudly because they know full well that by 2018 when the tax is supposed to commence, Congress will have repealed all or most of the Cadillac tax.  The same is true with many other provisions of the legislation that can be altered at taxpayer expense. Also our leaders promised that nearly a half trillion dollars will be saved by reducing third party payments to physicians. But those projections are easily altered if physicians truly demand higher reimbursements.

I just wish that Congress had passed a pay-as-you-go tax as part of this legislation, where people at all levels of income and wealth pay their fair share of the health benefits they receive. Middle class America should foot their own bills for health care through substantial tax increases on the middle class.

"A Simple Theory for Why School and Health Costs Are So Much Higher in the U.S.," by Andrew O’Connell, Harvard Business Review Blog, April 7, 2014 ---
http://blogs.hbr.org/2014/04/a-simple-theory-for-why-school-and-health-costs-are-so-much-higher-in-the-u-s/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29&cm_ite=DailyAlert-040814+%281%29&cm_lm=sp%3Arjensen%40trinity.edu&cm_ven=Spop-Email 

Jensen Comment
One reason higher education costs more in the USA is that more attempts are made to bring college education to everybody with nearby physical campuses such as community colleges and online degree programs from major universities. In Europe and most other parts of the world higher education is available only to a much smaller portion of the population. In Germany, for example, less than 25% of young graduates are admitted to college and opportunities for adult college education are much more limited than in the USA. Those other nations, however, often offer greater opportunities for learning a trade that does not require a college education.

There are many reasons health care costs more in the USA. One reason is that the USA is the world leader in medical and medication research. Another reason is that the USA imposes a costly private sector insurance intermediary where other nations offer insurance from a more efficient public sector.

Still another reason is that malpractice lawsuits are a legal punitive damages lottery in most parts of the USA such that hospitals and physicians must pay ten or more times as much for malpractice insurance relative to nations like Canada that restrict malpractice to actual damages only, leaving out the lottery for lawyers.

Still another reason is that the USA keeps extremely premature babies alive that other nations throw away. Even more expense if what Medicare spends on keeping people hopelessly and artificially alive, dying people that other nations let slip away without all the very costly artificial life extensions.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

National Bureau of Economic Research: Bulletin on Aging and Health --- http://www.nber.org/aginghealth/

Leading ACA Act Blogs ---
http://www.zanebenefits.com/blog/15-best-health-reform-blogs

WHO: World Health Statistics --- http://www.who.int/gho/publications/world_health_statistics/e


The Australian Health Care System Sounds a Whole Lot like the German System of a Choice Between a National Health Care Plan or a Private Insurance Plan
Obviously the private plans would not survive unless there was value added when paying for private insurance

Is Australia's Health Care Plan Better Than Ours ---
http://www.americanthinker.com/articles/2017/05/is_australias_healthcare_better_than_ours.html

Jensen Comment
Since Australia has slightly over 30 million people with relatively few medical schools compared the USA with over 320 million people and many more medical schools, one has to question whether Australia can provide the highly specialized services (think neonatal care) available in the USA and India and other nations having many more medical schools for research and clinical service. For example, medical schools in the USA do a lion's share of the clinical testing of new drugs and devices for big pharmaceutical companies.

National health care systems, including the Australian system, handle malpractice claims more efficiently than in the USA where medical malpractice insurance alone can cost over $200,000 per year for some physicians.---
https://digital.lib.washington.edu/dspace-law/bitstream/handle/1773.1/689/13PacRimLPolyJ163.pdf?sequence=1

Canadian Malpractice Insurance Takes Profit Out Of Coverage," by Jane Akre, Injury Board, July 28, 2009 --- 
Click Here

The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

 

National health systems, including the Australian system, avoid much of the useless cost of keeping terminal patients hopelessly alive in near vegetative states.
On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 --- 
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/
As I read it its much more common to withhold life-sustaining treatments for terminally ill patients in Australia.

More on the comparisons of national health care systems ---
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3633404/

 


For years I've been a proponent of a national healthcare plan supplemented with discretionary private insurance much like the system in Germany. Some other national healthcare plans are falling apart --- 
http://faculty.trinity.edu/rjensen/Health.htm

Nationalized healthcare is not all it's cracked up to be ---
http://www.businessinsider.com/nationalized-healthcare-is-not-all-its-cracked-up-to-be-2016-9

. . .

Back home, though, Canadians seem far more critical of the system. If you follow the internal Canadian debate, you’ll hear the word “crisis.” In fact, many Canadian healthcare economists warn that their system is headed for a major collapse. The aging population has continued to stress an already fragile system. This is the same system that many proponents of the Affordable Care Act, or Obamacare, pointed to as a model.

Another model of national health care cited by fans of the ACA is the UK’s National Health Service (NHS). Like the Canadian system, there seems to be one attitude for export and another for domestic consumption. You may recall the odd tribute to the UK’s National Health Service (NHS) in the opening ceremony of the 2012 Olympics. The NHS was portrayed as a sea of Mary Poppins bliss. At home, though, Brits had reason to complain. The UK was rated as having the worst patient care and lowest cancer survival rates in the Western World.

The NHS is in even worse shape now, and complaints are growing louder. According to the committee that represents UK hospitals, the NHS is on the verge of collapse. The former health minister Paul Burstow warned of this outcome two years ago. At the time, increases in the NIH budget were limited to the rate of inflation. But that did not allow for the increased cost of a growing elderly population. The NIH effort to find £30 billion in “efficiency savings” was already putting enormous strains on the system.

When a healthcare system is overloaded, it’s not just the aged who suffer. A Lancashire man operated on himself when he was put on a long waitlist for a surgery that he badly needed. With waitlists growing, the Royal College of Surgeons reports that financially challenged clinical groups are denying services to patients who are obese or smoke. Often, delayed treatment will increase medical costs in the long run.  

So it shouldn’t be surprising that the Affordable Care Act, which was inspired by the Canadian and British systems, is in deep trouble. Though I predicted it, it is worrisome when the act’s biggest supporters, including The New York Times, admit the program’s flaws.

The growing aged population is a huge financial burden

Obamacare doesn’t deal with the real source of rising healthcare costs: the increase in age-related diseases due to a growing elderly population. It is mathematically impossible to cut societal medical costs while at the same time providing adequate healthcare to a growing and increasingly expensive older population.

This is not just a problem with health care. Social Security and pension funds are running deficits, which will also worsen. Alan Greenspan, former chairman of the Federal Reserve, recently said that he has lost the optimism that he has long been known for. The reason is that “we have a 9 percent annual rate of increase in entitlements, which is mandated by law.  It has got nothing to do with the economy. It has got to do with age and health and the like.”

Greenspan points out that politicians refuse to deal with the “third rail” of entitlements. I agree, but I think there’s a solution. Politicians claim that voters won’t accept delayed retirement. But the evidence shows that most people would like to work longer and save more to pay their own way. Zoya Financial reports that almost two thirds of Americans have to retire earlier than planned, largely due to problems with their own health or a spouse’s.

Anti-aging biotechnologies are in labs right now that could lengthen health spans and working careers. This would allow us to save our entitlement systems. But economists and politicians still have no clue about the biotechnological progress that has marked the start of the 21st century. This will change because it must… but I hope it happens soon

Continued in article


OECD Health Statistics 2016 --- http://www.oecd.org/els/health-systems/health-data.htm


50% of health and social-care funding is spent on 4% of people . . . About 25% of all hospital inpatient spending during a person’s lifetime occurs in the final three months.
"The (British) National Health Care Service is a Mess," The Economist, September 10, 2016, pp. 48-49 ---
http://www.economist.com/news/britain/21706563-nhs-mess-reformers-believe-new-models-health-care-many-pioneered

. . .

Like health-care systems around the world, the National Health Service (NHS) is struggling to provide good care at low cost for patients such as Mrs Evans (not her real name). Its business model has not kept up with the changing burden of disease. For as more people enter and live longer in their dotage, demand increases for two costly types of care. The first is looking after the dying. About 25% of all hospital inpatient spending during a person’s lifetime occurs in the final three months. The second is caring for those with more than one chronic condition. About 70% of NHS spending goes on long-term illnesses. More than half of over-70s have at least two and a quarter have at least three. In south Somerset 50% of health and social-care funding is spent on 4% of people.

. . .

If one fallacy about the NHS is that it is the envy of the world, as its devotees claim, another is that it is a single organisation. In fact it is a series of interlocking systems. Public health, hospitals, general practitioners (or GPs, the family doctors who provide basic care outside hospitals) and mental-health services all have separate funding and incentives. Social care, which includes old-folks’ homes and the like, is run by local councils, not the NHS

. . .

So the NHS must do more with what it already spends. A sign of inefficiency is the 6,000 patients in English hospitals who are ready to go home but not yet discharged, up from 4,000 in 2013. They cost the service hundreds of millions of pounds per year and obstruct others from treatment. The bed-blockers themselves are harmed, too. Elderly patients lose up to 5% of muscle strength for every day they are laid up in hospital. Some delays are the result of council cuts: about 400,000 fewer old people receive social care than in 2010, meaning that hospitals are sometimes used as expensive alternatives to care homes. But most are due to how hospitals are run.

. . .

On average, the framework made GPs some of the highest-paid family doctors in the world when it was introduced in 2004. But since then it has become less generous. GPs’ real-terms income has fallen by one-fifth. This, and poor planning, has led to a shortage of them. England needs 5,000 more in the next five years. The NHS is mulling a deal with Apollo, whereby the Indian health-care firm supplies enough doctors to fill the gap.

. . .

The move from “volume to value”—that is, from paying providers for the procedures they carry out to paying them for the outcomes they achieve—has helped to stem the cost of Medicare, the American health system for pensioners. The expansion of ACOs as part of Obamacare led to reduced mortality rates and savings for providers of about 1-2%. But Dan Northam Jones, a visiting fellow at Harvard, warns that the potential for savings is greater in systems like Medicare, where there is no cap on spending.

And yet ACOs reflect a growing belief that if you want radically to improve health care you have to change how you pay for it. They will not solve all the problems of the NHS, some of which are inherent in its taxpayer-funded model. But perhaps its business model may yet catch up with how illness is changing. The NHS should forget being the envy of the world, and instead learn from it.


A Personal Experience
Why many physicians will turn away their Medicare patients just like my wife was turned away by her surgeon in the South Texas Spinal Clinic in San Antonio because she was on Medicare
--- http://faculty.trinity.edu/rjensen/Health.htm#SpinalClinic 

"The Worst Bill Ever:   Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all," The Wall Street Journal, November 1, 2009 ---
http://faculty.trinity.edu/rjensen/Health.htm#110709
Jensen Comment
Nancy Pelosi catered to just about every special interest in the United States (except Medicare patients) and doled out earmark frauds like jelly beans to get economy/jobs destroying bill through the House. Please pray for Senate sensibility.

Frightening Clauses in the Pending House Bill (H.R. 3962) in November 2009

 

The End of the American Dream

Jensen Choice

Affordable Care Act Chart --- http://faculty.trinity.edu/rjensen/ObamaCareChart.pdf

20 Questions About the Affordable Care Act

The Top Ten Myths About Medicare

A Brief History of Health Insurance in the United States --- http://everylearner.com/bm/knowledgenews/americana/health-insurance-history-1.shtml
A key stimulus was in 1945 when the National War Labor Board made it possible for unions to negotiate coverage.
More importantly, however, business firms could get tax deductions for health benefits that were not taxable,
Thereby, workers did not have to pay for health insurance out of after-tax dollars.

Humor

The Wall Street Journal Guide to the Affordable Care Act, October 14, 2009 --- Click Here
http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage

"Follow the Money," by Ben Shapiro, Townhall, October 21, 2009 ---
http://townhall.com/columnists/BenShapiro/2009/10/21/follow_the_money

Fathom the odd hypocrisy that the administration wants every citizen to prove they are insured, but people don't have to prove they are citizens.
Ben Stein

 

October 15, 2010 message from Bob Jensen to the AECM

Hi David,

There are many reasons why people cannot or should not stay in the main careers. Professional athletes are generally over the hill before age 40 in terms of beating out their competitors, but they generally find alternative employment. We can't trust many pilots and bus drivers and combat buddies after age 55. But they too can find alternative employment.

Trinity University has a management professor named Don VanEynde who was a Battalion Commander in Vietnam, earned a PhD from Columbia University after military retirement, and has been one of the most popular, if not the most popular, campus-wide professors for 15 years. He's still going strong even though he's older than me. .

Professors have many advantages in that many physical ailments like Professor Fordham's arthritis do not detract from outstanding performance as long as wisdom, memory, scholarship, and enthusiasm have not yet waned. .

When tragedy does strike at any age that prevents working in virtually any productive capacity, it's possible to start collecting social security and Medicare before the prescribed ages for retirement. Due to being injured on the job as a surgical nurse, my wife commenced collecting SS disability benefits and Medicare when she 54 years old. After her spinal injury (she was ordered by a surgeon to lift a 300 lb instrument table over a power cord and had to be put immediately on traction for 30 days in the hospital) she worked for 10 more painful years before undergoing the first of her eventual 12 spine surgeries. Each surgery led to worse enduring pain --- http://faculty.trinity.edu/rjensen/Erika2007.htm She most certainly is not a poster child for million-dollar spine surgeries. Worker compensation paid for the early surgeries until she was declared eligible for social security disability and Medicare.

The problem is that Congress provided disability entitlements without nearly enough funding such that these entitlements now are enormous drivers of present and future multi-trillion deficits being passed on to current and future children in the United States. Extending SS retirement ages will most certainly increase the numbers of disability claims, but the majority of older workers are gratefully not eligible for disability status before retirement at higher ages. Disabled people can start collecting Medicare at any age as soon as they are declared eligible for SS disability benefits.

Disabled people should've been funded outside the SS retirement system, but members of Congress were too chicken to establish a separate Disability and Medical Fund. They sneaked the financial entitlements of the disabled onto the SS retirement and Medicare systems and passed the funding deficits on to our present and future children.

Between 1776 and 1950 the care of the elderly and disabled was the responsibility of their own savings, their parents, their children, and in extreme cases the County Homes. After the disabled became the responsibility of the Federal government, heirs confiscated their parents' savings and children were unburdened of parental care responsibilities. Federal and state governments took on the housing, care, and feeding of every disabled person. In theory, savings of the elderly are to be used for nursing home care, but fraud is rampant in terms of passing these costs on to taxpayers.

We can argue endlessly whether disabled people should be the responsibilities of their families or taxpayers or employers. For example, perhaps I should've been more financially responsible for my wife's disability than the social security and Medicare systems. On this subject I can truly be an academic who can take on any side in a debate. Perhaps worker compensation insurance should've covered my injured wife for a longer period of time, but the worker compensation insurance firm worked tooth and nail to pass her on to SS and Medicare.

The point is that government funding for the disabled should be a pay-as-you-go system taxation rather than a Ponzi scheme of deficit financing. The present entitlement system is not only unfair to future generations, it threatens the very survival of the United States --- http://faculty.trinity.edu/rjensen/Entitlements.htm

Bob Jensen


Deficit tops $1 trillion second year in a row ($1.29 trillion before November and December) ---
http://money.cnn.com/2010/10/15/news/economy/treasury_fy2010_deficit/index.htm

Long-term problem:
There has been a lot of political hysteria expressed over the annual deficits of the past two years.

Fiscal experts note, however, that the abnormally large deficits incurred in the wake of the financial crisis are not the primary source of the country's biggest fiscal problems.

The biggest source of fiscal concern remains the so-called structural deficit, which is made up primarily of spending on the big three entitlement programs. That structural deficit will continue to balloon faster than the economy grows long after the current downturn has ended.

Indeed, the Government Accountability Office projects that by the end of this decade, the vast majority of all federal tax revenue will be swallowed up by just four things: Interest payments on the country's debt, and the payment of Medicare, Medicaid and Social Security benefits.

The president's bipartisan fiscal commission, charged with recommending ways to get U.S. debt under control, will issue a report in December.


I'm in favor of health care reform that completely nationalizes health insurance phased in reasonably with high tax pay-as-you-go restriction and strict cost-saving caps on punitive damage lawsuits. I really favor former Senator Bill Bradley's long-forgotten Canada-like proposal:

The bipartisan trade-off in a viable health care bill is obvious: Combine universal coverage with malpractice tort reform in health care. Universal coverage can be obtained in many ways — including the so-called public option. Malpractice tort reform can be something as commonsensical as the establishment of medical courts — similar to bankruptcy or admiralty courts — with special judges to make determinations in cases brought by parties claiming injury. Such a bipartisan outcome would lower health care costs, reduce errors (doctors and nurses often don’t report errors for fear of being sued) and guarantee all Americans adequate health care. Whenever Congress undertakes large-scale reform, there are times when disaster appears certain — only to be averted at the last minute by the good sense of its sometimes unfairly maligned members. What now appears in Washington as a special-interest scrum could well become a triumph for the general interest. But for that to happen, the two parties must strike a grand bargain on universal coverage and malpractice tort reform. The August recess has given each party and its constituencies a chance to reassess their respective strategies. One result, let us hope, may be that Congress will surprise everyone this fall.
Bill Bradley, "Tax Reform’s Lesson for Health Care Reform," The New York Times, August 30, 2009 ---
http://www.nytimes.com/2009/08/30/opinion/30bradley.html?_r=1

IOUSA (the most frightening movie in American history) ---
(see a 30-minute version of the documentary at www.iousathemovie.com )

I have come to the conclusion that the real reason this gifted communicator (Obama) has become so bad at communicating is that he doesn't really believe a word that he is saying. He couldn't convey that health-care reform would be somehow cost-free because he knows it won't be. And he can't adequately convey either the imperatives or the military strategy of the war in Afghanistan because he doesn't really believe in it either. He feels colonized by mistakes of the past. He feels trapped by the hand that has been dealt him.
Leftist Leaning Tina Brown, "Obama's Fog War," The Daily Beast ---
http://www.thedailybeast.com/blogs-and-stories/2009-12-03/what-is-obama-talking-about/
Jensen Comment
And President Obama was the dealer.

Voters are increasingly worried about unemployment, but Democratic leaders in Congress remain obsessed with passing health- care reform. Senate Majority Whip Richard Durbin was asked recently if a health-care bill would pass the Senate by the end of this month. "It must," he said. "We have to finish it." Still, many in the trenches are uneasy about the sprawling, complex bill they privately acknowledge has no bipartisan support, doesn't seriously tackle soaring costs and will increase insurance premiums. That may explain Majority Leader Harry Reid's haste—he has ordered a rare Sunday session this weekend to hurry up the debate. Public support for the bill averages only 39.2% backing in all polls compiled by Pollster.com.
John Fund, "Why Dems Are Obsessed by Health Reform:  They believe the liberal base expects them to deliver and will punish them if they don't," The Wall Street Journal, December 4, 2009 ---
http://online.wsj.com/article/SB10001424052748704007804574575584229775884.html#mod=djemEditorialPage


America spends far more on health care per capita than any other nation in the world.
One reason is that America spends trillions each year on people that other nations let go of for cost reasons:

(1) Extremely premature and lightweight newborns that other nations cannot or do not afford to save;
(2) Dying people prolonged by machines in intensive care units that have no hope of leaving ICU alive.

Born at 9.1 Ounces  She Would've been thrown away in most other nations
Cozy in her incubator, set to 81.5 degrees, heart going at 174 beats a minute as she snoozed in her red, footy pajamas, Oliviyanna Harbin-Page may be a global record-holder. Born Aug. 5 to 16-year-old Jamesha Harbin of Eight Mile after 21 to 24 weeks of gestation, Oliviyanna weighed only 259 grams, or 9.1 ounces -- possibly making her, according to the University of South Alabama Children's & Women's Hospital, the world's smallest surviving baby. She now weighs 3 pounds 2 ounces. One of three girl triplets -- the other two are identical, she is fraternal
"Baby who may be world's smallest surviving newborn could go home soon," by Roy Hoffman, al.com, December 18, 2009 ---
http://blog.al.com/live/2009/12/baby_who_may_be_worlds_smalles.html

What went so wrong in the health care system of the United States?
Mostly what went wrong is our ill-conceived and underfunded attempts to reform the system!

The New York Times Timeline History of Health Care Reform in the United States ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
Click the arrow button on the right side of the page.

The $61 Trillion Margin of Error, and What "Empire Decline" Means in Layman's Terms
This is a bipartisan disaster from the beginning and will be until the end

David Walker --- http://en.wikipedia.org/wiki/David_M._Walker_(U.S._Comptroller_General)

Niall Ferguson --- http://en.wikipedia.org/wiki/Niall_Ferguson

Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1
Please note that this is NBC’s liberal Newsweek Magazine and not Fox News or The Wall Street Journal.

. . .

In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.

. . .

Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.

Continued in article --- http://www.newsweek.com/id/224694/page/1

Niall Ferguson is the Laurence A. Tisch professor of history at Harvard University and the author of The Ascent of Money. In late 2009 he puts forth an unbooked discounted present value liability of $104 trillion for Social Security plus Medicare. In late 2008, the former Chief Accountant of the United States Government, placed this estimate at$43 trillion. We can hardly attribute the $104-$43=$61 trillion difference to President Obama's first year in office. We must accordingly attribute the $61 trillion to margin of error and most economists would probably put a present value of unbooked (off-balance-sheet) present value of Social Security and Medicare debt to be somewhere between $43 trillion and $107 trillion To this we must add other unbooked present value of entitlement debt estimates which range from $13 trillion to $40 trillion. If the Affordable Care Act passes it will add untold trillions to trillions more because our legislators are not looking at entitlements beyond 2019.

The Meaning of "Unbooked" versus "Booked" National Debt
By "unbooked" we mean that the debt is not included in the current "booked" National Debt of $12 trillion. The booked debt is debt of the United States for which interest is now being paid daily at slightly under a million dollars a minute. Cash must be raised daily for interest payments. Cash is raised from taxes, borrowing, and/or (shudder) the current Fed approach to simply printing money. Interest is not yet being paid on the unbooked debt for which retirement and medical bills have not yet arrived in Washington DC for payment. The unbooked debt is by far the most frightening because our leaders keep adding to this debt without realizing how it may bring down the entire American Dream to say nothing of reducing the U.S. Military to almost nothing.

Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1

This matters more for a superpower than for a small Atlantic island for one very simple reason. As interest payments eat into the budget, something has to give—and that something is nearly always defense expenditure. According to the CBO, a significant decline in the relative share of national security in the federal budget is already baked into the cake. On the Pentagon's present plan, defense spending is set to fall from above 4 percent now to 3.2 percent of GDP in 2015 and to 2.6 percent of GDP by 2028.

Over the longer run, to my own estimated departure date of 2039, spending on health care rises from 16 percent to 33 percent of GDP (some of the money presumably is going to keep me from expiring even sooner). But spending on everything other than health, Social Security, and interest payments drops from 12 percent to 8.4 percent.

This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America's debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president's first term should be the administration's most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority. But cutting the deficit in half is simply not enough. If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.

The Meaning of Present Value
Initially it might help to explain what present value means. When I moved from Florida State University to Trinity University in 1982, current mortgage rates were about 18%. As part of my compensation package, President Calgaard agreed to have Trinity University carry my mortgage. I purchased a home at 9010 Village Drive for $300,000 by paying $100,000 down and signing a 240 month mortgage at 12% APR and a 1982 present value of $200,000. At payments of $2,202 per month my total cash obligation (had I not refinanced from a bank when mortgage rates went below 12%) would've been $528,521. However, since money has time value, the present value of that $528,521 was only $200,000.

In a similar manner, Professor Ferguson's $104 trillion present value translates to over $300 trillion in cash obligations of Social Security and Medicare before being tinkered with changed entitlement obligations.

The "Burning Platform" of the United States Empire
Former Chief Accountant of the United States, David Walker, is spreading the word as widely as possible in the United States about the looming threat of our unbooked entitlements. Two videos that feature David Walker's warnings are as follows:

David Walker claims the U.S. economy is on a "burning platform" but does not go into specifics as to what will be left in the ashes.

The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon.
David M. Walker, Former Chief Accountant of the United States --- http://www.financialsense.com/editorials/quinn/2009/0218.html
 

An "Empire at Risk"
Harvard's Professor Niall Ferguson is equally vague about what will happen if the U.S. Empire collapses from its entitlement burdens.
Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1

This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America's debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president's first term should be the administration's most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority. But cutting the deficit in half is simply not enough. If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.

The precedents are certainly there. Habsburg Spain defaulted on all or part of its debt 14 times between 1557 and 1696 and also succumbed to inflation due to a surfeit of New World silver. Prerevolutionary France was spending 62 percent of royal revenue on debt service by 1788. The Ottoman Empire went the same way: interest payments and amortization rose from 15 percent of the budget in 1860 to 50 percent in 1875. And don't forget the last great English-speaking empire. By the interwar years, interest payments were consuming 44 percent of the British budget, making it intensely difficult to rearm in the face of a new German threat.

Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.


Empire Collapse in Layman's Terms
In 2010, hundreds upon hundreds of people will daily sneak across the U.S. border illegally in search of a job, medical care, education, and a better life under the American Dream. By 2050 Americans will instead be exiting in attempts to escape the American Nightmare and sneak illegally into BRIC nations for a job, medical care, education, and a better life under the BRIC Dream.

A BRIC nation at the moment is a nation that has vast resources and virtually no entitlement obligations that drag down economic growth --- http://en.wikipedia.org/wiki/BRIC

In economics, BRIC (typically rendered as "the BRICs" or "the BRIC countries") is an acronym that refers to the fast-growing developing economies of Brazil, Russia, India, and China. The acronym was first coined and prominently used by Goldman Sachs in 2001. According to a paper published in 2005, Mexico and South Korea are the only other countries comparable to the BRICs, but their economies were excluded initially because they were considered already more developed. Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world. The four countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world's population.

Brazil, Russia, India and China, (the BRICs) sometimes lumped together as BRIC to represent fast-growing developing economies, are selling off their U.S. Treasury Bond holdings. Russia announced earlier this month it will sell U.S. Treasury Bonds, while China and Brazil have announced plans to cut the amount of U.S. Treasury Bonds in their foreign currency reserves and buy bonds issued by the International Monetary Fund instead. The BRICs are also soliciting public support for a "super currency" capable of replacing what they see as the ailing U.S. dollar. The four countries account for 22 percent of the global economy, and their defection could deal a severe blow to the greenback. If the BRICs sell their U.S. Treasury Bond holdings, the price will drop and yields rise, and that could prompt the central banks of other countries to start selling their holdings to avoid losses too. A sell-off on a grand scale could trigger a collapse in the value of the dollar, ending the appeal of both dollars and bonds as safe-haven assets. The moves are a challenge to the power of the dollar in international financial markets. Goldman Sachs economist Alberto Ramos in an interview with Bloomberg News on Thursday said the decision by the BRICs to buy IMF bonds should not be seen simply as a desire to diversify their foreign currency portfolios but as a show of muscle.
"BRICs Launch Assault on Dollar's Global Status," The Chosun IIbo, June 14, 2009 ---
http://english.chosun.com/site/data/html_dir/2009/06/12/2009061200855.html

Their report, "Dreaming with BRICs: The Path to 2050," predicted that within 40 years, the economies of Brazil, Russia, India and China - the BRICs - would be larger than the US, Germany, Japan, Britain, France and Italy combined. China would overtake the US as the world's largest economy and India would be third, outpacing all other industrialised nations. 
"Out of the shadows," Sydney Morning Herald, February 5, 2005 --- http://www.smh.com.au/text/articles/2005/02/04/1107476799248.html 

The first economist, an early  Nobel Prize Winning economist, to raise the alarm of entitlements in my head was Milton Friedman.  He has written extensively about the lurking dangers of entitlements.  I highly recommend his fantastic "Free to Choose" series of PBS videos where his "Welfare of Entitlements" warning becomes his principle concern for the future of the Untied States 25 years ago --- http://www.ideachannel.com/FreeToChoose.htm 


"Social Security to See Payout Exceed Pay-In This Year," by Mary Williams Walsh, The New York Times, March 24, 2010 ---
http://www.nytimes.com/2010/03/25/business/economy/25social.html?hp

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.

Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances.

“When the level of the trust fund gets to zero, you have to cut benefits,” Alan Greenspan, architect of the plan to rescue the Social Security program the last time it got into trouble, in the early 1980s, said on Wednesday.

That episode was more dire because the fund could have fallen to zero in a matter of months. But partly because of steps taken in those years, and partly because of many years of robust economic growth, the latest projections show the program will not exhaust its funds until about 2037.

Still, Mr. Greenspan, who later became chairman of the Federal Reserve Board, said: “I think very much the same issue exists today. Because of the size of the contraction in economic activity, unless we get an immediate and sharp recovery, the revenues of the trust fund will be tracking lower for a number of years.”

The Social Security Administration is expected to issue in a few weeks its own numbers for the current year within the annual report from its board of trustees. The administration has six board members: three from the president’s cabinet, two representatives of the public and the Social Security commissioner.

Though Social Security uses slightly different methods, the official numbers are expected to roughly track the Congressional projections, which were one page of a voluminous analysis of the federal budget proposed by President Obama in January.

Mr. Goss said Social Security’s annual report last year projected revenue would more than cover payouts until at least 2016 because economists expected a quicker, stronger recovery from the crisis. Officials foresaw an average unemployment rate of 8.2 percent in 2009 and 8.8 percent this year, though unemployment is hovering at nearly 10 percent.

The trustees did foresee, in late 2008, that the recession would be severe enough to deplete Social Security’s funds more quickly than previously projected. They moved the year of reckoning forward, to 2037 from 2041. Mr. Goss declined to reveal the contents of the forthcoming annual report, but said people should not expect the date to lurch forward again.

The long-term costs of Social Security present further problems for politicians, who are already struggling over how to reduce the nation’s debt. The national predicament echoes that of many European governments, which are facing market pressure to re-examine their commitments to generous pensions over extended retirements.

The United States’ soaring debt — propelled by tax cuts, wars and large expenditures to help banks and the housing market — has become a hot issue as Democrats gauge their vulnerability in the coming elections. President Obama has appointed a bipartisan commission to examine the debt problem, including Social Security, and make recommendations on how to trim the nation’s debt by Dec. 1, a few weeks after the midterm Congressional elections.

Although Social Security is often said to have a “trust fund,” the term really serves as an accounting device, to track the pay-as-you-go program’s revenue and outlays over time. Its so-called balance is, in fact, a history of its vast cash flows: the sum of all of its revenue in the past, minus all of its outlays. The balance is currently about $2.5 trillion because after the early 1980s the program had surplus revenue, year after year.

Now that accumulated revenue will slowly start to shrink, as outlays start to exceed revenue. By law, Social Security cannot pay out more than its balance in any given year.

For accounting purposes, the system’s accumulated revenue is placed in Treasury securities.

In a year like this, the paper gains from the interest earned on the securities will more than cover the difference between what it takes in and pays out.

Mr. Goss, the actuary, emphasized that even the $29 billion shortfall projected for this year was small, relative to the roughly $700 billion that would flow in and out of the system. The system, he added, has a balance of about $2.5 trillion that will take decades to deplete. Mr. Goss said that large cushion could start to grow again if the economy recovers briskly.

Indeed, the Congressional Budget Office’s projection shows the ravages of the recession easing in the next few years, with small surpluses reappearing briefly in 2014 and 2015.

After that, demographic forces are expected to overtake the fund, as more and more baby boomers leave the work force, stop paying into the program and start collecting their benefits. At that point, outlays will exceed revenue every year, no matter how well the economy performs.

Mr. Greenspan recalled in an interview that the sour economy of the late 1970s had taken the program close to insolvency when the commission he led set to work in 1982. It had no contingency reserve then, and the group had to work quickly. He said there were only three choices: raise taxes, lower benefits or bail out the program by tapping general revenue.

The easiest choice, politically, would have been “solving the problem with the stroke of a pen, by printing the money,” Mr. Greenspan said. But one member of the commission, Claude Pepper, then a House representative, blocked that approach because he feared it would undermine Social Security, changing it from a respected, self-sustaining old-age program into welfare.

Mr. Greenspan said that the same three choices exist today — though there is more time now for the painful deliberations.

“Even if the trust fund level goes down, there’s no action required, until the level of the trust fund gets to zero,” he said. “At that point, you have to cut benefits, because benefits have to equal receipts.”


Where Did Social Security Go So Wrong?
Social Security in the United States currently refers to the Federal Old-Age, Survivors, and Disability Insurance (OASDI) program. It commenced only as an old age ("survivors:") retirement insurance program as a forced way of saving for retirement by paying worker premiums matched by employer contributions into the SS Trust Fund. Premiums were relatively low due heavily to the proviso that the SS Trust Fund got to keep all the premiums paid for each worker and spouse that did not reach retirement age (generally viewed as 65).  Details are provided at
http://en.wikipedia.org/wiki/Social_Security_(United_States)#Creation:_The_Social_Security_Act

If Congress had not tapped the SS Trust Fund for other (generally unfunded social programs of various types), the SS Trust Fund would not be in any trouble at all if it were managed like a diversified investment fund. But it became too tempting for Congress to tap the SS Trust Fund for a variety of other social programs, the costliest of which was to make monthly living allowance payments to each person of any age who is declared "disabled." In many cases a disabled person collects decades of benefits after having paid less than a single penny into the SS Trust Fund. It's well and good for our great land to provide living allowances to disabled citizens, but without funding from other sources such as a separate Disability Trust Fund fed with some type of other taxes, the disability payments mostly drained the SS Trust Fund to where it is in dire trouble today.

The obligation to pay pensioners as well as disabled persons was passed on to current and future generations to a point where the Social Security and Disability Program is no longer self-sustaining with little hope for meeting entitlement obligations from worker premiums and employer matching funds. The SS Trust Fund will have deficits beginning in 2010 that are expected to explode as baby boomers collect benefits for the first time.

Where Did Medicare Go So Wrong?
Medicare is a much larger and much more complicated entitlement burden relative to Social Security by a ratio of about six to one or even more. The Medicare Medical Insurance Fund was established under President Johnson in1965.

Note that Medicare, like Social Security in general, was intended to be insurance funded by workers over their careers. If premiums paid by workers and employers was properly invested and then paid out after workers reached retirement age most of the trillions of unfunded debt would not be precariously threatening the future of the United States. The funds greatly benefit when workers die before retirement because all that was paid in by these workers and their employers are added to the fund benefits paid out to living retirees.

The first huge threat to sustainability arose beginning in 1968 when medical coverage payments payments to surge way above the Medicare premiums collected from workers and employers. Costs of medical care exploded relative to most other living expenses. Worker and employer premiums were not sufficiently increased for rapid growth in health care costs as hospital stays surged from less than $100 per day to over $1,000 per day.

A second threat to the sustainability comes from families no longer concerned about paying up to $25,000 per day to keep dying loved ones hopelessly alive in intensive care units (ICUs) when it is 100% certain that they will not leave those ICUs alive. Families do not make economic choices in such hopeless cases where the government is footing the bill. In other nations these families are not given such choices to hopelessly prolong life at such high costs. I had a close friend in Maine who became a quadriplegic in a high school football game. Four decades later Medicare paid millions of dollars to keep him alive in an ICU unit when there was zero chance he would ever leave that ICU alive.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

What is really sad is the way Republicans are standing in the way of making rational cost-benefit decisions about dying by exploiting the "Kill Granny" political strategy aimed at killing a government option in health care reform.
See the "Kill Granny" strategy at --- www.defendyourhealthcare.us

The third huge threat to the economy commenced in when disabled persons (including newborns) tapped into the Social Security and Medicare insurance funds. Disabled persons should receive monthly benefits and medical coverage in this great land. But Congress should've found a better way to fund disabled persons with something other than the Social Security and Medicare insurance funds. But politics being what it is, Congress slipped this gigantic entitlement through without having to debate and legislate separate funding for disabled persons. And hence we are now at a crossroads where the Social Security and Medicare Insurance Funds are virtually broke for all practical persons.

Most of the problem lies is Congressional failure to sufficiently increase Social Security deductions (for the big hit in monthly payments to disabled persons of all ages) and the accompanying Medicare coverage (to disabled people of all ages). The disability coverage also suffers from widespread fraud.

Other program costs were also added to the Social Security and Medicare insurance funds such as the education costs of children of veterans who are killed in wartime. Once again this is a worthy cause that should be funded. But it should've been separately funded rather than simply added into the Social Security and Medicare insurance funds that had not factored such added costs into premiums collected from workers and employers.

The fourth problem is that most military retirees are afforded full lifetime medical coverage for themselves and their spouses. Although they can use Veterans Administration doctors and hospitals, most of these retirees opted for the underfunded  TRICARE plan the pushed most of the hospital and physician costs onto the Medicare Fund. The VA manages to push most of its disabled veterans onto the Medicare Fund without having paid nearly enough into the fund to cover the disability medical costs. Military personnel do have Medicare deductions from their pay while they are on full-time duty, but those deductions fall way short of the cost of disability and retiree medical coverage.

The fifth threat to sustainability came when actuaries failed to factor in the impact of advances in medicine for extending lives. This coupled with the what became the biggest cost of Medicare, the cost of dying, clobbered the insurance funds. Surpluses in premiums paid by workers and employers disappeared much quicker than expected.

A sixth threat to Medicare especially has been widespread and usually undetected fraud such as providing equipment like motorized wheel chairs to people who really don't need them or charging Medicare for equipment not even delivered. There are also widespread charges for unneeded medical tests or for tests that were never really administered. Medicare became a cash cow for crooks. Many doctors and hospitals overbill Medicare and only a small proportion of the theft is detected and punished.

The seventh threat to sustainability commenced in 2007 when the costly Medicare drug benefit entitlement entitlement was added by President George W. Bush. This was a costly addition, because it added enormous drains on the fund by retired people like me and my wife who did not have the cost of the drug benefits factored into our payments into the Medicare Fund while we were still working. It thus became and unfunded benefit that we're now collecting big time.

In any case we are at a crossroads in the history of funding medical care in the United States that now pays a lot more than any other nation per capita and is getting less per dollar spent than many nations with nationalized health care plans. I'm really not against the Affordable Care Act legislation. I'm only against the lies and deceits being thrown about by both sides in the abomination of the current proposed legislation.

Democrats are missing the boat here when they truly have the power, for now at least, in the House and Senate to pass a relatively efficient nationalized health plan. But instead they're giving birth to entitlements legislation that threatens the sustainability of the United States as a nation.

In any case, The New York Times presents a nice history of other events that I left out above ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html

"THE HEALTH CARE DEBATE: What Went Wrong? How the Health Care Campaign Collapsed --
A special report.; For Health Care, Times Was A Killer," by Adam Clymer, Robert Pear and Robin Toner, The New York Times, August 29, 1994 --- Click Here
http://www.nytimes.com/1994/08/29/us/health-care-debate-what-went-wrong-health-care-campaign-collapsed-special-report.html

November 22, 2009 reply from Richard.Sansing [Richard.C.Sansing@TUCK.DARTMOUTH.EDU]

The electorate's inability to debate trade-offs in a sensible manner is the biggest problem, in my view. See

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/19/AR2009111904053.html?referrer=emailarticle 

Richard Sansing

The New York Times Timeline History of Health Care Reform in the United States ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
Click the arrow button on the right side of the page. The biggest problem with "reform" is that it added entitlements benefits without current funding such that with each reform piece of legislation the burdens upon future generations has hit a point of probably not being sustainable.

Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1

. . .

In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.

. . .

Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.

Continued in article

This is now President Obama's problem with or without new the Affordable Care Act entitlements that are a mere drop in the bucket compared to the entitlement obligations that President Obama inherited from every President of the United States since FDR in the 1930s. The problem has been compounded under both Democrat and Republican regimes, both of which have burdened future generations with entitlements not originally of their doing.

Professor Niall Ferguson and David Walker are now warning us that by year 2050 the American Dream will become an American Nightmare in which Americans seek every which way to leave this fallen nation for a BRIC nation offering some hope of a job, health care, education, and the BRIC Dream.

Bob Jensen's threads on health care ---
http://faculty.trinity.edu/rjensen/Health.htm

Bob Jensen's threads on entitlements ---
http://faculty.trinity.edu/rjensen/entitlements.htm


Quotations

Let me get this straight.
We're about to get a health care plan shoved down our throats that is Written by a committee whose head says he doesn't understand it, Passed by a Congress that hasn't read it but exempts themselves from it, signed by a president that also hasn't read it, With funding administered by a treasury chief who was caught not paying his Taxes, overseen by a surgeon general who is obese, and financed by a Country that's nearly broke.
What could possibly go wrong?

IS THIS A GREAT COUNTRY OR WHAT!

Forwarded by Maureen

Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/

"How can Obama Top a Great Speech," by Joan Walsh, Salon, September 10, 2010 --- http://www.salon.com/opinion/walsh/politics/2009/09/10/healthcare_speech/index.html 
Jensen Answer
Dear Ms Walsh, President Obama can top his great speech by filling in details of truthful estimates of the Affordable Care Act costs and how he plans to finance these added costs of wider coverage of health issues and more people covered. Thus far his sweeping claims of cost savings sound like snake oil.

Video tutorial on the President's strategy and the legislative process for passing health reform legislations --- http://www.kaiseredu.org/tutorials/reformprocess/player.html

H.R.  3200 Summary
http://faculty.trinity.edu/rjensen/Health.htm#HR3200
Introduced in the House on July 14, 2009
Also see http://www.defendyourhealthcare.us/houseandsenatebills.html

H.R.   676  Summary ---
http://faculty.trinity.edu/rjensen/Health.htm#HR676
Introduced in House on January 26. 2009

U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

Bob Jensen's threads on pending economic disaster ---
http://faculty.trinity.edu/rjensen/Entitlements.htm

Jensen Comment
Because of the present health care system in the United States is unjust and inefficient, I am in favor of a National Health Plan modeled after the Canadian National Health Plan where Canadians are taxed for a huge portion of their health services irrespective of their levels of income. Any system that does not make users of the system share heavily in the cost of the services will be unjust, abused, and inefficient --- http://faculty.trinity.edu/rjensen/Health.htm#Canada

Having said that I prefer a Canadian-style national health plan for the U.S., I wish democrats in Congress would use their power and vote one in in spite of protests around the country. With a 60-vote surplus in the House and only needing 51 votes in the Senate, the Democrats could vote in National Health Care in an instant. The reason they won't is that most of them would be voted out of office the next time they come up for re-election. They know this!

But Americans at all levels of income would have to agree to much higher taxes
The average Canadian family spends more money on taxes than on necessities of life such as food, clothing, and housing, according to a study from The Fraser Institute, an independent research organization with offices across Canada. The Canadian Consumer Tax Index, 2007, shows that even though the income of the average Canadian family has increased significantly since 1961, their total tax bill has increased at a much higher rate.

The Fraser Institute, April 16, 2007 --- http://www.newswire.ca/en/releases/archive/April2007/16/c5234.html
Jensen Comment
I put the portion of the Canadian tax dollars going into comparable health and social services contained in the Affordable Care Act legislation to be about 40% of each Canadian's tax dollar where malpractice coverage and government fraud is greatly controlled relative to the United States
---
http://faculty.trinity.edu/rjensen/Health.htm#Canada
Canada greatly restricts the number of free riders in the system and negotiates much lower prescription drug prices relative to insurance companies and Medicare in the United States. Malpractice awards in Canada are tightly controlled.

So the present (health care) system is an unsustainable disaster, but you can keep your piece of it if you want. And the Democrats wonder why selling health care reform to the public has been so hard?
Ramesh Ponuru,
"the Affordable Care Act's Fatal Flaw:  Democrats claim their plans will save money, but they have too many conflicting goals," Time Magazine August 17, 2009, Page 35
Jensen Comment
The problem is that they keep adding expensive medical services that sound great on paper, but few people, companies, and certainly not government can afford these uncapped benefits.

YouTube - ABC's John Stossel Destroys/Pulverizes/Crushes Obama's anti-American 'Health Care' Plan --- Click Here

Congressman Mike Rogers' opening statement on Health Care reform in Washington D.C. ---
http://www.youtube.com/watch?v=G44NCvNDLfc

Jacob Hacker: Fixing America's Healthcare System (not humor) ---
http://fora.tv/2008/07/21/Jacob_Hacker_Fixing_America_s_Healthcare_System

Jack Webb on Health Care and America (Humor) ---
http://pubsecrets.wordpress.com/2009/09/05/just-the-facts-barack/

Video:  Jon Stewart reveals Glenn Beck speaking about health care from both ends of his digestive tract ---
http://www.thenation.com/blogs/notion/462437/breaking_rush_newt_and_sarah_supported_death_panels_too

Americans who want to tip the debate in the most progressive direction should take advantage an opening provided at the last minute during negotiations to get a bill approved by the House Energy and Commerce Committee. And they should do so by advocating even more aggressively for single-payer health care.
John Nichols, "Why Single Payer Advocacy Matters Now More Than Ever ," The Nation, August 4, 2009 --- Click Here
Jensen Comment
Passionate advocates of universal health care are screaming "yes, yes, yes" without even caring how health care will be funded or whether or not it will further destruct the U.S. economy. The cannot care because they're so willing to vote yet before a funding proposal is even put forth. I actually favor single-payer nationalized health care but I'm unwilling to destroy by beloved homeland in a passionate rage for the gold plated version that this debt-ridden nation can ill afford at the present time --- http://faculty.trinity.edu/rjensen/Entitlements.htm
"Schumer: Healthcare Changes This Year 'No Matter What'" --- Click Here
U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

Jesus, the Great Healer, wants Obamacare according to MSNBC (even if top preachers are "dreadfully silent"). Watch the video ---
http://hotair.com/archives/2009/08/13/msnbc-host-hey-wouldnt-jesus-want-us-to-have-universal-health-care/

But what helps many Americans as individuals may hurt society as a whole. That's the paradox. Unchecked health spending is depressing take-home pay, squeezing other government programs—state and local programs as well as federal—and driving up taxes and budget deficits. The president has said all this; he simply isn't doing much about it. He offers the illusion of reform while perpetuating the status quo of four decades: expand benefits, talk about controlling costs. The press should put "reform" in quote marks, because this is one "reform" that might leave the country worse off.
Robert J. Samuelson, Health Reform That Isn't:  Despite the Rhethoric, Costs (and trillion dollar deficits) Will Rise, Newsweek Magazine, August 3, 2009, Page 26 --- http://www.newsweek.com/id/208439/page/2
Samuelson is the author of The Great -Inflation and Its Aftermath.

For starters, $1 trillion of extra debt-financed spending would cause the government to pay about $300 billion of extra interest in the next decade. Moreover, the CBO's method of estimating the cost of such a program doesn't recognize the incentives it creates for households and firms to change their behavior. The House health-care bill gives a large subsidy to millions of families with incomes up to three times the poverty level (i.e., up to $66,000 now for a family of four) if they buy their insurance through one of the newly created "insurance exchanges," but not if they get their insurance from their employer. The CBO's cost estimate understates the number who would receive the subsidy because it ignores the incentive for many firms to drop employer-provided coverage. It also ignores the strong incentive that individuals would have to reduce reportable cash incomes to qualify for higher subsidy rates. The total cost of ObamaCare over the next decade likely would be closer to $2 trillion than to $1 trillion.
Martin Feldstein, "ObamaCare's Crippling Deficits The higher taxes, debt payments and interest rates needed to pay for health reform mean lower living standard," The Wall Street Journal, September 7, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574393110640864526.html?mod=djemEditorialPage

In 1935 President Franklin Roosevelt engineered the Social Security Act with honest and well-defined components of benefits and costs. It was intended to only be a supplemental pension program to force people to save something for their retirements. Later on Congress muddled the program up by adding social services (such as lifetime pensions for disabled people of all ages and death benefits for families of soldiers who died in service). Medicare and Medicaid health coverage was later added to massively increase the entitlements obligations of Social Security as pension fund (as originally crafted).

The Wall Street Journal Guide to Obamacare, October 14, 2009 --- Click Here
http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage

Bumper Stickers --- http://www.upyoursobama.com/

The Promise and Peril of Big Data --- http://www.aspeninstitute.org/sites/default/files/content/docs/pubs/InfoTech09.pdf

Frightening Clauses in the Pending House Bill (H.R. 3962) in November 2009

Full Text of H.R. 3962 --- www.defendyourhealthcare.us .


"We Pay Them to Lie to Us," by my hero John Stossel, Townhall, November 25, 2009 ---
http://townhall.com/columnists/JohnStossel/2009/11/25/we_pay_them_to_lie_to_us 

When you knowingly pay someone to lie to you, we call the deceiver an illusionist or a magician. When you unwittingly pay someone to do the same thing, I call him a politician.

President Obama insists that health care "reform" not "add a dime" to the budget deficit, which daily grows to ever more frightening levels. So the House-passed bill and the one the Senate now deliberates both claim to cost less than $900 billion. Somehow "$900 billion over 10 years" has been decreed to be a magical figure that will not increase the deficit.

It's amazing how precise government gets when estimating the cost of 10 years of subsidized medical care. Senate Majority Leader Harry Reid's bill was scored not at $850 billion, but $849 billion. House Speaker Nancy Pelosi said her bill would cost $871 billion.

How do they do that?

The key to magic is misdirection, fooling the audience into looking in the wrong direction.

I happily suspend disbelief when a magician says he'll saw a woman in half. That's entertainment. But when Harry Reid says he'll give 30 million additional people health coverage while cutting the deficit, improving health care and reducing its cost, it's not entertaining. It's incredible.

The politicians have a hat full of tricks to make their schemes look cheaper than they are. The new revenues will pour in during Year One, but health care spending won't begin until Year Three or Four. To this the Cato Institute's Michael Tanner asks, "Wouldn't it be great if you could count a whole month's income, but only two weeks' expenditures in your household budget?"

To be deficit-reducers, the health care bills depend on a $200 billion cut in Medicare. Current law requires cuts in payments to doctors, but let's get real: Those cuts will never happen. The idea that Congress will "save $200 billion" by reducing payments for groups as influential as doctors and retirees is laughable. Since 2003, Congress has suspended those "required" cuts each year

Do you feel the leaked information from a global warming alarmist organization is meaningful? This was an illegal information leak that should be ignored It makes me question my belief in global warming activists It's an example of dangerous scientific politicization I haven't really heard about the controversy

This was an illegal information leak that should be ignored (1 %)

It makes me question my belief in global warming activists (8 %)

It's an example of dangerous scientific politicization (86 %)

I haven't really heard about the controversy (5 %)

Our pandering congressmen rarely cut. They just spend. Even as the deficit grows, they vomit up our money onto new pet "green" projects, bailouts for irresponsible industries, gifts for special interests and guarantees to everyone.

Originally, this year's suspension, "the doc fix," was included in the health care bills, but when it clearly pushed the cost of "reform" over Obama's limit and threatened to hike the deficit, the politicians moved the "doc fix" to a separate bill and pretended it was unrelated to their health care work.

Megan McArdle of The Atlantic reports that Rep. Paul Ryan of Wisconsin asked the Congressional Budget Office what the total price would be if the "doc fix" and House health care overhaul were passed together. "The answer, according to the CBO, is that together they'd increase the deficit by $89 billion over 10 years." McArdle explains why the "doc fix" should be included: "They're passing a bill that increases the deficit by $200 billion in order to pass another bill that hopefully reduces it, but by substantially less than $200 billion. That means that passage of this bill is going to increase the deficit."

From the start, Obama has promised to pay for half the "reform" cost by cutting Medicare by half a trillion over 10 years. But, Tanner asks, "how likely is it that those cuts will take place? After all, this is an administration that will pay seniors $250 to make up for the fact that they didn't get a Social Security cost-of-living increase this year (because the cost of living didn't increase). And Congress is in the process of repealing a scheduled increase in Medicare premiums."

Older people vote in great numbers. AARP is the most powerful lobby on Capitol Hill. Like the cut in doctor's pay, the other cuts will never happen.

I will chew on razor blades when Congress cuts Medicare to keep the deficit from growing.

Medicare is already $37 trillion in the hole. Yet the Democrats proudly cite Medicare when they demand support for the health care overhaul. If a business pulled the accounting tricks the politicians get away with, the owners would be in prison.

Something AARP Wants Kept Secret

"McCain Urges Seniors to Abandon AARP," Fox News, December 3, 2009  ---
http://www.foxnews.com/politics/2009/12/03/mccain-aarp-betrayed-senior-citizens/

"Medicare Part D 'Reforms' Will Harm Seniors An ObamaCare change will cost taxpayers a bundle and lead to poorer drug coverage," Tom Scully, The Wall Street Journal, December 7, 2009 ---
http://online.wsj.com/article/SB10001424052748704107104574569930258127214.html#mod=djemEditorialPage

There is a little-noticed provision buried deep in both the House and Senate health-care reform bills that is intended to save billions of dollars—but instead will hurt millions of seniors, impose new costs on taxpayers, and charge employers millions in new taxes.

As part of the Medicare Modernization Act in 2003, Congress created a new drug benefit—called Medicare Part D—for retirees at a cost of about $1,900 per recipient per year. Many private employers already provided drug coverage for their retirees, and the administration and Congress did not want to tempt employers into dropping their coverage. Actuaries calculated that if the government provided a subsidy of at least $800, employers would not stop covering retirees.

The legislation created a $600 tax-free benefit (the equivalent of $800 cash for employers), and it worked. Employers continued to cover about seven million retirees who might have otherwise been dumped into Medicare Part D.

It was a good arrangement for all involved. An $800 subsidy is cheaper than the $1,900 cost of providing drug coverage. And millions of seniors got to keep a drug benefit they were comfortable with and that in many cases was better than the benefit offered by the government.

But now that subsidy is coming in to be clipped. This fall congressional staff, looking for a new revenue source to pay for health reform, proposed eliminating the tax deductibility of the subsidy to employers. The supposed savings were estimated by congressional staff to be as much as $5 billion over the next decade.

It sounds smart—except that nobody asked how many employers will drop retiree drug coverage. Clearly, many will. The result is that, instead of saving money, the proposed revenue raiser will force Medicare Part D costs to skyrocket as employers drop retirees into the program.

The careful calculation that was made in 2003 to minimize federal spending and maximize private coverage will go out the window if this provision becomes law. Any short-term cost savings that Congress gets by changing the tax provision will be overwhelmed by higher costs in the long run.

Some members in the House want to mitigate the cost of this provision by mandating that employers maintain existing levels of retiree coverage despite the reduced subsidy. But it's not that simple. A mandate would increase costs on businesses, which in turn would make it harder for those businesses to hire new employees. The mandate would effectively be a tax on employers that provide retiree benefits; this in turn will simply induce some unknown number of employers to terminate their retiree drug programs before the mandate kicks in.

In short, if the changes that are proposed for employer subsidies in the current Medicare Part D program are enacted, everyone will lose. Unions will lose as employers seek ways to drop retiree drug coverage. Seniors will lose as employers drop them into Medicare Part D. Medicare and taxpayers will lose as they face higher costs. And employers will lose as they find it harder to provide benefits.

To make matters worse, accounting rules for post-retirement benefits will require companies that keep their retiree benefits to record the entire accrued present value of the new tax the day the provision is signed into law. This would cause many employers to immediately post billions in losses, which could significantly impact our financial markets.

There are many reasons to pass health-care reform. There is no reason to hurt seniors, employers and taxpayers in the process. Businesses are struggling, and the Medicare trust funds have plenty of problems as it is. It makes no sense to make these problems worse.

Mr. Scully was the administrator of the Centers for Medicare and Medicaid Services from 2001-04 and was one of the designers of the Medicare Part D benefit.


"What the Pelosi Health-Care Bill Really Says:  Here are some important passages in the 2,000 page legislation," by Betsy McCaughey, The Wall Street Journal, November 7, 2009 --- Click Here

The health bill that House Speaker Nancy Pelosi is bringing to a vote (H.R. 3962) is 1,990 pages. Here are some of the details you need to know.

What the government will require you to do:

• Sec. 202 (p. 91-92) of the bill requires you to enroll in a "qualified plan." If you get your insurance at work, your employer will have a "grace period" to switch you to a "qualified plan," meaning a plan designed by the Secretary of Health and Human Services. If you buy your own insurance, there's no grace period. You'll have to enroll in a qualified plan as soon as any term in your contract changes, such as the co-pay, deductible or benefit.

• Sec. 224 (p. 118) provides that 18 months after the bill becomes law, the Secretary of Health and Human Services will decide what a "qualified plan" covers and how much you'll be legally required to pay for it. That's like a banker telling you to sign the loan agreement now, then filling in the interest rate and repayment terms 18 months later.

On Nov. 2, the Congressional Budget Office estimated what the plans will likely cost. An individual earning $44,000 before taxes who purchases his own insurance will have to pay a $5,300 premium and an estimated $2,000 in out-of-pocket expenses, for a total of $7,300 a year, which is 17% of his pre-tax income. A family earning $102,100 a year before taxes will have to pay a $15,000 premium plus an estimated $5,300 out-of-pocket, for a $20,300 total, or 20% of its pre-tax income. Individuals and families earning less than these amounts will be eligible for subsidies paid directly to their insurer.

• Sec. 303 (pp. 167-168) makes it clear that, although the "qualified plan" is not yet designed, it will be of the "one size fits all" variety. The bill claims to offer choice—basic, enhanced and premium levels—but the benefits are the same. Only the co-pays and deductibles differ. You will have to enroll in the same plan, whether the government is paying for it or you and your employer are footing the bill.

• Sec. 59b (pp. 297-299) says that when you file your taxes, you must include proof that you are in a qualified plan. If not, you will be fined thousands of dollars. Illegal immigrants are exempt from this requirement.

• Sec. 412 (p. 272) says that employers must provide a "qualified plan" for their employees and pay 72.5% of the cost, and a smaller share of family coverage, or incur an 8% payroll tax. Small businesses, with payrolls from $500,000 to $750,000, are fined less.

Eviscerating Medicare:

In addition to reducing future Medicare funding by an estimated $500 billion, the bill fundamentally changes how Medicare pays doctors and hospitals, permitting the government to dictate treatment decisions.

• Sec. 1302 (pp. 672-692) moves Medicare from a fee-for-service payment system, in which patients choose which doctors to see and doctors are paid for each service they provide, toward what's called a "medical home."

The medical home is this decade's version of HMO-restrictions on care. A primary-care provider manages access to costly specialists and diagnostic tests for a flat monthly fee. The bill specifies that patients may have to settle for a nurse practitioner rather than a physician as the primary-care provider. Medical homes begin with demonstration projects, but the HHS secretary is authorized to "disseminate this approach rapidly on a national basis."

A December 2008 Congressional Budget Office report noted that "medical homes" were likely to resemble the unpopular gatekeepers of 20 years ago if cost control was a priority.

• Sec. 1114 (pp. 391-393) replaces physicians with physician assistants in overseeing care for hospice patients.

• Secs. 1158-1160 (pp. 499-520) initiates programs to reduce payments for patient care to what it costs in the lowest cost regions of the country. This will reduce payments for care (and by implication the standard of care) for hospital patients in higher cost areas such as New York and Florida.

• Sec. 1161 (pp. 520-545) cuts payments to Medicare Advantage plans (used by 20% of seniors). Advantage plans have warned this will result in reductions in optional benefits such as vision and dental care.

Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/

• Sec. 1402 (p. 756) says that the results of comparative effectiveness research conducted by the government will be delivered to doctors electronically to guide their use of "medical items and services."

Questionable Priorities:

While the bill will slash Medicare funding, it will also direct billions of dollars to numerous inner-city social work and diversity programs with vague standards of accountability.

• Sec. 399V (p. 1422) provides for grants to community "entities" with no required qualifications except having "documented community activity and experience with community healthcare workers" to "educate, guide, and provide experiential learning opportunities" aimed at drug abuse, poor nutrition, smoking and obesity. "Each community health worker program receiving funds under the grant will provide services in the cultural context most appropriate for the individual served by the program."

These programs will "enhance the capacity of individuals to utilize health services and health related social services under Federal, State and local programs by assisting individuals in establishing eligibility . . . and in receiving services and other benefits" including transportation and translation services.

• Sec. 222 (p. 617) provides reimbursement for culturally and linguistically appropriate services. This program will train health-care workers to inform Medicare beneficiaries of their "right" to have an interpreter at all times and with no co-pays for language services.

• Secs. 2521 and 2533 (pp. 1379 and 1437) establishes racial and ethnic preferences in awarding grants for training nurses and creating secondary-school health science programs. For example, grants for nursing schools should "give preference to programs that provide for improving the diversity of new nurse graduates to reflect changes in the demographics of the patient population." And secondary-school grants should go to schools "graduating students from disadvantaged backgrounds including racial and ethnic minorities."

• Sec. 305 (p. 189) Provides for automatic Medicaid enrollment of newborns who do not otherwise have insurance.

For the text of the bill with page numbers, see www.defendyourhealthcare.us .

Ms. McCaughey is chairman of the Committee to Reduce Infection Deaths and a former Lt. Governor of New York state.

 

Reason Magazine's Really Important Concerns about Medicare-for-All
The Contradiction at the Heart of Bernie Sanders' Medicare for All Plan ---

https://reason.com/2019/04/24/the-contradiction-at-the-heart-of-bernie-sanders-medicare-for-all-plan/

There is a huge contradiction at the heart of Bernie Sanders' Medicare for All plan.

On the one hand, Sanders not only wants to expand government-provided coverage to everyone in the country, he wants that coverage to be significantly more generous than Medicare, private insurance, or comparable government-run systems in other countries. On the other hand, he wants to drastically cut payments to hospitals, many of which lose money on Medicare right now, making up for the program's relatively low payments by charging much higher prices to private insurers.

What Sanders is proposing, in other words, is that the government finance a significant increase in government services while also radically reducing the amount it pays for those services. Even making generous assumptions, it's almost impossible to see how his plan could work.

Let's start with the promises Sanders makes about Medicare for All. No networks, premiums, deductibles, or copayments. Under his plan, essentially all non-cosmetic services would be free at the point of care for everyone.

Sanders calls this Medicare for All, but what he's describing isn't Medicare as we now know it. As The New York Times noted earlier this year upon the release of a Sanders-inspired Medicare for All bill in the House, the new program would "drastically reshape Medicare itself," changing both what it pays for and how. In many ways, it would be a completely different program. Medicare for All, in other words, isn't really Medicare.

And that program would be far more expansive and expensive than nearly any other comparable system. It would cover more, and require less direct financial outlays (not including taxes), than either today's Medicare or typical private insurance plans in the U.S.

It would also be substantially more generous than the national health systems set up in other countries. Sanders likes to unfavorably contrast America's mixed public-private health care system with foreign systems where the government is more directly involved. When he announced the 2017 version of his Medicare for All plan, for example, he bemoaned the state of affairs in the United States "a time when every other major country on earth guarantees health care to every man, woman, and child." Discussions about health care policy on social media often include some variant of the question, "If every other country with a developed economy can do it, why can't the United States?"

The problem with this line of questioning is that what Sanders is proposing isn't what other countries do. Canada, for example, has a single-payer system, but it doesn't cover dental care, vision, drugs, or any number of other services. A majority of Canadians carry private insurance in order to cover those services. In Britain, which offers a fully socialized medical system where health care providers are government employees, many resident still buy private coverage. Sanders, on the other hand, would effectively wipe out private coverage in the space of just four years.

There are similar limitations on coverage in other countries, like the Netherlands. It's also true in Australia, where patients typically pay a percentage of the cost of specialty services. It's true that in these countries, government plays a more central role in health care financing. But their systems have also reckoned with costs and tradeoffs in a way that Sanders, after so many years, has not.

Indeed, the main trade-off that Sanders seems willing to discuss is the elimination of insurance companies, which he portrays as greedy middlemen driving up the cost of health care. Wiping out the industry in one fell swoop, as Sanders has proposed, would be a unprecedented and disruptive move that would have significant economic repercussions, including the probable loss of thousands of insurance industry jobs. But it still wouldn't do much to bring down the cost of health care, because so much money in the nation's health care system is tied up in provider payments, especially hospitals.

And therein lies the (first) contradiction.

Most people probably think of hospitals as places where you go to get health care services. Politically and economically, however, they also fulfill another role: They are hubs for stable middle-class jobs, paying reasonably good wages to thousands of highly trained workers, most of whom are not doctors or specialists earning stratospheric salaries.

To acquire the revenue to pay for all these jobs, hospitals rely on a mix of private and public payments. Public payments make up a somewhat larger share of total hospital budgets, but private payers are typically charged much higher prices.

Hospitals like to argue that Medicare and Medicaid payments are too low to cover their costs, and that as a result, higher private payments effectively subsidize public health coverage. Critics (with some evidence) often respond that hospitals either overstate or don't really understand their own costs, and that this is just a ploy to extract more money from government health programs and private payers.

But when considering Medicare for All, the particulars of this debate are largely beside the point, because there is simply no question that eliminating private insurance and payment for all services would drastically reduce the amount of revenue for hospitals.

Yet that is exactly what Sanders wants to do. His plan calls for paying for health care services at Medicare rates, which means that, practically overnight, hospitals would end up with far, far less revenue. Exactly how much is unclear, but one estimate indicated that payments could drop by as much as 40 percent.

That would leave hospitals with a couple of difficult choices. They could eliminate services. They could try to force some employees to take pay cuts. They could fire large numbers of workers. Or they could simply shut down. As a recent New York Times report on how Medicare for All would affect hospitals noted, rural hospitals—many of which are already struggling to stay afloat—would be particularly at risk of closing.

Whatever ended up happening, there is simply no way most hospitals would or could continue operating as they do now under the payment regime that Sanders envisions. Lots of middle class jobs would disappear. Services would be eliminated or cut back. 

Yet Sanders not only imagines that hospitals would continue to operate as they do now, but that they would expand their services to even more people, since more people would have coverage. And since he also imagines a system with no deductibles or copays, those people would almost certainly end up dramatically increasing utilization of hospital services.

Studies of health insurance have consistently shown that expansions of health insurance result in increased demand for (and use of) health care services; more people with coverage means more people lining up to get care. (Relatedly, introducing even very small copays—on the order of just a few dollars—can reduce the number of visits to doctors and hospitals.) Greater utilization of health care services does not necessarily translate into measurably better physical health outcomes. But it does increase the strain on the health care delivery system—which is to say, it puts a huge amount of pressure on hospitals.

Continued in article

Jensen Comment
Another contradiction is that to pay for Medicare-for-All program Bernie Sanders wants to tax most of what high-income workers earn, and the highest income professionals in the USA on average are physicians. There is currently a shortage of physicians. This shortage will become critical as medical care becomes virtually free and often overused as a free service by hundreds of million residents of the USA.

Here's the second contraction

Taxing physician income at 70% or more will discourage students from becoming physicians and will give existing physicians incentives to retire early or work at leisurely part-time doctoring. Far better work two days per week and pay a 30% income tax rate than to be a 60--hour week highly stressed, and overworked physician being taxed at 70% of every extra dollar earned.

Medicare-for-All is a Tragedy of the Commons ---
https://en.wikipedia.org/wiki/Tragedy_of_the_commons

 


Vox:  The Bernie Sanders national medical plan has lots of details about what single-payer would cover. It has less information on how to pay for it (well over $3 trillion per year and growing for more generous coverage than all other national health plans) ---
https://www.vox.com/2019/4/10/18304448/bernie-sanders-medicare-for-all

. . .

Medicare, employer coverage, and these other countries show that nearly every insurance scheme we’re familiar with covers a smaller set of benefits with more out-of-pocket spending on the part of citizens. Private insurance plans often spring up to fill these gaps (in Canada, for example, vision and dental insurance is often sponsored by employers, much like in the United States).

The reason they went this way is clear: It’s cheaper to run a health plan with fewer benefits. The plan Sanders proposes has no analog among the single-payer systems that currently exist. By covering a more comprehensive set of benefits and asking no cost sharing of enrollees, it is likely to cost the government significantly more than programs other countries have adopted

. . .

But who pays how much more is a key question this Sanders bill doesn’t answer yet. Until there is a version that does, we can’t know whether the health system the Vermont senator envisions could actually become reality.

Jensen Comment
The Sanders plan eliminates all private-sector medical insurance companies and eliminates Medicare and Medicaid.

The good news for us retired folks is that long-term care insurance that is not covered presently under Medicare will cover us retired folks. Hooray for Bernie! I can eat, drink, and be merry on my long-term care savings.

Two things Bernie does not like to discuss is the impact on doctors and hospitals. At present many (most?) of the top physicians and hospitals refuse Medicaid patients because of caps placed on fees. Many also reject Medicare patients, but more of them are covered because of supplemental private insurance benefits that can be added to Medicare insurance. Presently Erica and I pay over $1,200 for supplemental benefits that will not be allowed under the Sanders' plan.

I think Sanders does not like to discuss caps that will be placed on physician billings and hospital rates because the medical profession would otherwise crank up an huge lobbying effort against his plan. The medical profession has only begun to fight.

Also Sanders does not like to discuss the shortage of physicians and hospital services that will arise when bringing tens of millions of people into his plan (think nearly 20 million undocumented residents that will be covered in rural areas already underserved with doctors and hospitals).

Also Sanders does not like to discuss the transition costs in creating the vast government bureaucracy that does not exist for processing medical insurance claims. At present Medicare and Medicaid outsource claims processing to the private sector. Bernie plans to kill that outsourcing sector.

Bernie Sanders: "You’re Damn Right We’re Going to Destroy Private Health Insurance" ---
Click Here
And he will limit the number of doctors by regulating what they're allowed to earn.

And Bernie plans on taxing high income earners in the USA by taking away 70% or more of what they now earn. What will be the incentive for spending years of misery to become a physician good at a craft that will be taxed to death rather than rewarded after all those years of misery?

The problem with becoming a physician is not just the cost of medical school. The problem is the ordeal --- those years of education and training needed to become masters of their crafts. The time needed varies with specialties, but you don't become a neurosurgeon without years of ordeal in training before you can bill your first paying patient. And there's a lot of blood, sweat, and tears in those training years. Even worse is that there's a lot of weekly tension and risk of burn out in the years of practice that follow. Tell that to the advocates of Medicare-for-All combined with soaring taxes!

Why did Cuba abandon its socialist/communist dream of equality for everybody?
The Guardian:  This was the egalitarian dream of Cuba in the 1960s: For years in Cuba, jobs as varied as farm workers and doctors only had a difference in their wages of the equivalent of a few US dollars a month.

https://www.theguardian.com/world/2008/jun/12/cuba 
Jensen Comment
Only now is Cuba backtracking from its egalitarian dream by uncapping wages and legalizing profits while liberals in the USA want to return again to the 1960s Cuban dream.

But is Denmark socialist? …Denmark doesn’t at all fit the classic definition of socialism, which involves government ownership of the means of production. It is, instead, social-democratic: a market economy where the downsides of capitalism are mitigated by government action, including a very strong social safety net. …The simple fact is that there is far more misery in America than there needs to be. Every other advanced country has universal health care and a much stronger social safety net than we do.
Paul Krugman
https://www.nytimes.com/2015/10/19/opinion/something-not-rotten-in-denmark.html
Jensen Comment
What Krugman does not mention is that Denmark is mostly a homogeneous (white) nation of less than 6 million people. It's much more difficult and expensive to afford and maintain a similar safety net with over 300 million highly diverse people located on top of a very porous border with thousands trying to sneak in daily to enjoy the safety nets.

Welfare Leads to Slower Growth in the Nordic Nations ---
https://mises.org/wire/paul-krugman-learns-wrong-lesson-denmark

The Swedish Welfare State Leads to Poor Immigrant Assimilation ---
https://mises.org/wire/swedish-welfare-state-leads-poor-immigrant-assimilation

Ending Jensen Comment
But don't get me wrong! Erika and I will vote for Bernie Sanders since our possible expensive long-term health care not funded by Medicare will soon be free. To hell with the future economic engine of the USA. Bring on the Bernie Sanders' socialism since I'm too old to witness the chaos and economic destruction that follows in its path. Since Democrats are promising free everything why shouldn't Erika and I get in on the free everything?

Listen to Big Rock Candy Mountain' performed by Burl Ives ---
Big Rock Candy Mountain' Burl Ives

"But (American) virtuous feelings have been played on by some facts with more fiction; they have been the dupes of artful maneuvers, and made for a moment to be willing instruments in forging chains for themselves.”
Thomas Jefferson
William J. Watkins, Jr., Winter 1999, “The Kentucky and Virginia Resolutions:  Guideposts of Limited Government,” The Independent Review, Vol. III, No. 3, pp. 406-407.

 


March 21, 2019
Hi Elliot,,

You must also realize that when the wealthy people fund the new ventures they are also taking on highe financial risks. For some the payout is more wealth. For others there are huge losses. Bill Gates and Warren Buffet and other billionaires lost big time in Theranos. But Theranos and other more successful ventures got a chance that they would never get in Europe due to all the regulations and red tape entanglements and high taxes. 

How many innovative ventures that succeeded and failed have been funded by European nations like the Nordic nations? And in China and Russia these new ventures probably could not get started without having the best ideas stolen/hacked from the USA.

You raised the question:
"At what point do most people take Sen. Warren or Rep. AOC more seriously and consider
their solutions as reasonable instead of fringe?"

Do you really think Warren and AOC have thought out "their solutions" even to the satisfaction of their own party?

Most Democrats consider AOC and Warren economics fringe and worry that at adding $100+ trillion in social spending might destroy the USA economic engine.

Consider Medicare-for-All.

The sensible liberal press argues as follows:

The New York Times' David Brooks:  ‘Medicare for All’: The Impossible Dream ---
https://www.nytimes.com/2019/03/04/opinion/medicare-for-all.html?action=click&module=Opinion&pgtype=Homepage

Washington Post:  You can’t have it all — even with Medicare-for-all ---
https://www.washingtonpost.com/opinions/you-cant-have-it-all--even-with-medicare-for-all/2019/01/31/b0551dcc-24c4-11e9-ad53-824486280311_story.html?utm_term=.7d24dfad68da

 

If the nation were building a health-care system from scratch, single-payer might be the rational choice. Even now, with many Americans reasonably satisfied with their employer-sponsored coverage, politicians can make an argument that they’d be better off in a different system. But they should not make that argument by exaggerating the benefits or lowballing the costs of single-payer, as Medicare-for-all advocates so often do. Any system will demand tradeoffs and constraints.

 

Pelosi Drops a Bomb on 'Medicare for All' --- 
 https://www.rollingstone.com/politics/politics-features/nancy-pelosi-trump-interview-797209/
 Also see
 https://www.newsweek.com/nancy-pelosi-medicare-all-single-payer-health-insurance-affordable-care-act-1318788
 and
 https://www.cnbc.com/2019/03/06/2020-democratic-primary-candidates-weigh-medicare-for-all-public-option.html
 

Kaiser Family Foundation:  People love Medicare-for-All until they're told it'll raise their taxes to  the $30+ trillion cost:  Then support nosedives  ---
https://www.businessinsider.com/ap-poll-support-for-medicare-for-all-fluctuates-with-details-2019-1

The Democratic Party is Split
“You have to make decisions that you’re going to reach certain goals, and some of our goals
we think are achievable
Nancy Pelosi (when criticizing Alexandria's Green New Deal and Basic (Guaranteed) Income Medicare-for-All)
Click Here

What do you see in the Warren and AOC solutions that are sustainable from the standpoint of economic reality?
Yes we can move toward universal healthcare in a number of ways, but certainly not in the way that the fringe candidates want to do by eliminating all private sector insurance
in two years.

Thanks,
Bob

 


Government Medical Research Spending Favors Women ---
https://marginalrevolution.com/marginalrevolution/2018/08/government-medical-research-spending-favors-women.html


Medicare for All: Administrative Costs Are Much Higher than You Think ---
https://mises.org/wire/medicare-all-administrative-costs-are-much-higher-you-think?utm_source=Mises+Institute+Subscriptions&utm_campaign=8a83a2b8d3-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-8a83a2b8d3-228708937

How to Mislead With Statistics
Left-Leaning VOX: The $21 trillion Pentagon accounting error that can’t pay for Medicare-for-all, explained ---
https://www.vox.com/policy-and-politics/2018/12/3/18122947/pentagon-accounting-error-medicare-for-all

The US military budget is such a bloated monstrosity that it contains accounting errors that could finance two-thirds of the cost of a government-run single-payer health insurance system. All Americans could visit an unlimited array of doctors at no out of pocket cost. At least that’s a notion spreading on left-wing Twitter and endorsed and amplified by newly elected Rep. Alexandria Ocasio-Cortez, one of Democrats’ biggest 2018 sensations and an undeniable master at the fine art of staying in the public eye.

 

Unfortunately, it’s not true.

 

The idea spread like a game of telephone from a Nation article to the US Congress while losing a crucial point of detail: The Pentagon’s accounting errors are genuinely enormous, but they’re also just accounting errors — they don’t represent actual money that can be spent on something else.

Proponents of this vision have the political wind at their backs and continue to deploy the idea effectively to win intra-party arguments without really making any headway on the core obstacles to writing a Medicare-for-all bill that could become law. That said, to the extent that political power rather than concrete legislation is the goal, that’s probably for the best.

Misunderstandings fly around on Twitter all the time, and AOC’s level of policy knowledge is pretty typical for a member of Congress. But this particular flub is telling about progressive frustration over the double standard on military versus non-military spending, and also the fraught state of play regarding the push for a Medicare-for-all program.

The Pentagon’s mystery $21 trillion, explained

The underlying article by Dave Lindorff in the Nation that kicked this off is an investigative report into the Defense Department’s accounting practices. Lindorff reveals that Pentagon accounting is quite weak, that the department keeps flunking outside audits, that funds are shifted between accounts without proper oversight, and that overall documentation of what’s actually happening with the Pentagon’s vast budget is extremely poor.

Lindorff goes beyond these observations to allege that what’s happening amounts to deliberate fraud, the purpose of which is to persuade Congress to increase appropriations levels beyond what would otherwise be approved.

Continued in article

Jensen Comment
We really cannot compare proposed Medicare-for-All plan without more specific definitions of "Medicare-for-All" and the "cared for population." For example, Medicare currently does not pay for the enormous cost of long-term nursing care. Medicare only pays 80% of most of the things it does cover like hospital and doctor care.

Also Medicare has built up trust funds over the 50 years using payroll deductions from individuals and employers. The trust funds are not sustainable at predicted usage rates, but it's not like the existing Medicare program did not accumulate any finds for the elderly and disabled. A Medicare-for-All plan does not have 50 years of payroll deductions to help pay for an abrupt shock to the system.

Advocates of Medicare-for-All never mention that Medicare for all is mostly a private sector program where claims are serviced in the private sector along with private sector doctor, nursing, and medicine delivery of goods and services. Medicare is not like the U.K. system where most services are delivered by government employees.

The Nation's analysis of the Defense Department's expenses ignores the fact that even if we entirely eliminated the current Army, Navy, and Air Force the government's obligations to retired and disabled former military personnel would carry on for hundreds of billions of dollars into the indefinite future. And how long would the USA and its Medicare-for-All program survive without any Army, Navy, and Air Force?

The Nation's analysis is an example of totally irresponsible and misleading statistics.

WaPost fact-checker gives Ocasio-Cortez four Pinocchios for Pentagon claim ---
https://thehill.com/homenews/media/419730-wapost-fact-checker-gives-ocasio-cortez-four-pinocchios-for-pentagon-claim


Krugman redefines ‘Medicare for all,’ but gets it wrong ---
http://pnhp.org/news/krugman-redefines-medicare-for-all-but-gets-it-wrong/

. . .

Comment:

By Don McCanne, M.D.

“Medicare for all…would mean allowing individuals and employers to buy into Medicare – basically a big public option.” Who says? Well Paul Krugman and many others. This is not simply a debate about labels. This is a debate about fundamental policy. Are we going to accept the status quo with the tweak of a public option, or are we going to address the fundamental defects in our system that have driven up costs, perpetuated mediocrity, and left tens of millions vulnerable with impaired access to health care with all of its consequences and often with intolerable financial hardship?

This is similar to the debate that took place within the Democratic Party just before Hillary Clinton and Barack Obama began jockeying for the 2008 presidential nomination. The Democratic Party machine was in complete control of the policy debate on health care reform. The neoliberal party elite had decided that we were going to “build on what works” – employer-sponsored and union-supported plans – and reject single payer based on their concepts of what was politically feasible. Those of us advocating for the expanded and improved Medicare for all single payer approach were ejected from the conversations (often rudely so – they were in charge!).

Similarly, with the contest for the 2016 Democratic presidential nomination, the debate at the platform committee confirmed that the battle had not changed. The neoliberal leadership, represented by Neera Tanden, was successful in rejecting the single payer Medicare for all plank.

Tanden, of the Center of American Progress, has continued the fight for control of the policy debate by releasing their new proposal, “Medicare Extra For All.” Although some of the tweaks proposed seem beneficial, it basically continues the current dysfunctional, fragmented financing system, but with one important political change. They have stolen the “Medicare for all” label! This has contributed to the ubiquitous deception that the public option is Medicare for all. When the current candidates campaign on Medicare for all but behind the scenes are supporting an option to buy into Medicare while accepting campaign funds from the insurance and pharmaceutical industries, we need to call them on their deception.

It is no wonder the public is confused, even if they do not realize it. When Nobel laureate Paul Krugman jumps in and says Medicare for all is allowing individuals and employers to buy into Medicare as a public option, then we know that the political campaigns are corrupted with deceptions. How can we get the public to understand that a well designed, single payer national health program – a bona fide Improved Medicare for All – is the reform that they crave?

 


Tapper:  Democrats' Obamacare Pitch Was Dishonest ---
Jake Tapper, CNN
http://freebeacon.com/issues/tapper-democrats-obamacare-dishonest/


From the CFO Journal's Morning Ledger on May 11, 2017

Aetna to pull out of Affordable Care Act exchanges
Aetna Inc.
said it would pull out of the Affordable Care Act exchanges in Delaware and Nebraska next year, confirming that the insurer will exit all of the marketplaces where it currently sells plans.

The Atlantic:  Why So Many Insurers Are Leaving Obamacare ---
https://www.theatlantic.com/health/archive/2017/05/why-so-many-insurers-are-leaving-obamacare/526137/
This article really does not get at the reasons why.

 


Obama says Bernie Sanders supporters helped undermine Obamacare ---
http://www.businessinsider.com/r-obama-says-sanders-supporters-helped-undermine-obamacare-2017-1

Jensen Comment
I must admit that I too am in favor of a German-style medical insurance system where there is a national plan funded by taxpayers with added premium plans funded by companies or people themselves.


The Lies and Deceptions of Obamacare ---
http://faculty.trinity.edu/rjensen/Health.htm

Jensen Comment
One misleading statement that 20 million uninsured got medical insurance under Obamacare. That may be literally true, but most either got added to Medicaid (free medical insurance that could have happened without the complicated legislation of Obamacare) or insurance with such enormous deductibles that those insured could not afford to use that insurance and went to emergency rooms instead for free medical care.

 

The other sad thing about Obamacare (and Medicaid) is that so many doctors and hospitals refused to accept patients insured by Obamacare.

Something you will never hear in a speech by President Obama
Major hospitals in Chicago will no longer serve patients insured in Obamacare exchanges (except in true emergencies) ---
http://beta.hotair.com/archives/2016/10/24/chicago-hopenchange-major-hospitals-bail-obamacare-2017/?utm_source=hadaily&utm_medium=email&utm_campaign=nl

News Item Prior to November 8 Election of President Trump
Major Chicago Hospitals Not In 2017 Obamacare Marketplace Plans -
--
https://www.wbez.org/shows/wbez-news/major-chicago-hospitals-not-in-2017-obamacare-marketplace-plans/f55d6c23-d9b1-452f-8c75-73635bd83d07

Some of Chicago’s largest hospitals said they will not be part of any Cook County Affordable Care Act marketplace plans in 2017.

 

University of Chicago Medical Center and Rush University Medical Center both said they don’t plan to be in network for any Obamacare marketplace plans next year. 

 

 

The change means patients with doctors at those hospitals will either need to find a plan off the marketplace, and lose Obamacare subsides, or find a new doctor.

 

Northwestern Memorial Hospital said it will also be out of the marketplace, but will have exceptions for some of its partner hospitals.

Continued in article


According to emergency room physicians Obamacare made it much worse for emergency rooms.
American College of Emergency Room Physicians
The Uninsured: Access to Medical Care Fact Sheet ---
http://newsroom.acep.org/fact_sheets?item=30032

 


"Accountability for ObamaCare:   Democrats should pay a political price for this historic failure," The Wall Street Journal, October 25, 2016 --- |
http://www.wsj.com/articles/accountability-for-obamacare-1477435661?mod=djemMER 

ObamaCare has suddenly been injected back into the 2016 election debate, on the news of the law’s 25%-plus average premium increase for 2017. Even Donald Trump is talking about it. With only two weeks to go, this is a moment for voters to hold accountable the Democrats who imposed this debacle on the country over voter objections.

Next year’s enormous price increases are merely the latest expression of ObamaCare’s underlying problems, and the dysfunction is undermining the health security of Americans who lack employer coverage. A wave of major insurers have quit the exchanges, and those that are left have raised deductibles and copays and restricted choices of doctors and hospitals. The public is witnessing—and the unlucky are experiencing—the collapse of one progressive promise after another.

At every stage of the ObamaCare saga, liberals said not to worry. Sure, the law was unpopular when Democrats rammed it through Congress on a partisan vote in 2009-10, but voters would learn to love it once the subsidies started rolling. That didn’t happen, and in 2014 President Obama tried to buck up Democrats by saying that “five years from now” people will look back on the law as “a monumental achievement.” Two years later it’s worse.

Nothing could shake the liberal faith in their supposed landmark: Not the Healthcare.gov website fiasco of 2013, or the millions of individual health plans that were cancelled despite President Obama’s promise about keeping them. The left kept the faith as the entitlement subtracted from economic growth, hurt incomes and killed jobs. MIT economist Jonathan Gruber called the critics stupid, and Mr. Obama denigrates anyone who disagrees with him as illegitimate or politically motivated.

Now reality is confirming what the critics predicted. ObamaCare’s regulatory mix—benefit mandates, requiring insurers to sell coverage to all comers, and narrow ratings bands that limit how much premiums can vary by health status—was tried by several states in the 1980s and ’90s. Every one saw the same results that are now unspooling nationally: high and rising costs, low and declining enrollment, and less insurer and provider competition.

The Affordable Care Act was supposed to solve these predictable disruptions with subsidies and a mandate to buy insurance or pay a penalty. But most people don’t think ObamaCare plans provide value for the money, especially if they are non-subsidized.

So now the liberal line is that ObamaCare has a few problems, but don’t worry: The same geniuses who wrote the law know how to fix it. The Bernie Sanders-Elizabeth Warren left wants a new “public option,” higher subsidies, more price controls and even more intrusive regulatory control. Hillary Clinton has endorsed all of this.

“The Affordable Care Act has done what it was designed to do,” Mr. Obama declared last week in Miami, apparently meaning that the law has reduced the number of uninsured. But most of the coverage gains have come from dumping patients into Medicaid, a failing program that provides substandard care. Nominally private exchange plans increasingly resemble Medicaid too.

Mrs. Clinton may be horse-whispering Ms. Warren now, but ObamaCare’s failures aren’t likely to bring the U.S. closer to their single-payer nirvana any time soon. ObamaCare was the best Democrats could do when they had a 60-vote Senate supermajority and bought off interest groups like the insurers, hospitals, drug makers and American Medical Association.

The only way to break the ObamaCare status quo is if the public returns a Republican Congress to Washington. If Republicans can hold the Senate amid a Clinton victory, they’d be in a better position to negotiate solutions along the lines of the House GOP “Better Way” blueprint that would start to repair the individual market and create incentives for more choice and competition.

Take Wisconsin, where Democrat Russ Feingold cast the deciding 60th vote for ObamaCare and voters fired him for it in 2010. He’s back hoping voters forget. Evan Bayh, who also cast the deciding vote before retiring to become a superlobbyist, is back facing Indiana voters and Hoosiers can deliver a verdict.

In Arizona, premiums will rise a mind-boggling 116%, only two insurers are still selling plans, and John McCain has made ObamaCare a major theme. His opponent, Congresswoman Ann Kirkpatrick, calls ObamaCare her “proudest vote.” Katie McGinty likes to say Pennsylvanians should be “proud of ObamaCare,” though the commonwealth is slated for a 53% increase. A memo about ObamaCare pride month must have gone out from Democratic HQ.

Mr. Trump has missed a chance by not prosecuting a consistent case against ObamaCare, despite Mrs. Clinton’s past as the chief architect of its HillaryCare prototype in the 1990s. As that episode shows, the longstanding progressive goal has been to centralize political control over American health care.

Now voters are finally seeing what happens when the planners try to design a single health-care solution for a large and diverse country. Mr. Obama called ObamaCare “a starter home” in Miami. Republicans ought to campaign as the bulldozer.


From the CFO Journal's Morning Ledger on December 2, 2016

Obamacare’s bright spots and drawbacks
Here’s the good news: Thanks to the Affordable Care Act, or Obamacare, more Americans have access to health care than ever before, Leemore Dafny and Dr. Thomas Lee write for Harvard Business Review. The bad news? The care itself hasn’t improved much. Despite the hard work of dedicated providers, our health-care system remains chaotic, unreliable, inefficient and crushingly expensive.


Nation's Top Hospitals Refuse Obamacare-Insured Patients ---
http://www.newsmax.com/Newsfront/Obamacare-hospitals-plans-coverage/2013/11/01/id/534327/

Something you will never hear in a speech by President Obama
Major hospitals in Obama's home town of Chicago will no longer serve patients insured in Obamacare exchanges (except in true emergencies) ---
http://beta.hotair.com/archives/2016/10/24/chicago-hopenchange-major-hospitals-bail-obamacare-2017/?utm_source=hadaily&utm_medium=email&utm_campaign=nl

News Item Prior to November 8 Election of President Trump
Major Chicago Hospitals Not In 2017 Obamacare Marketplace Plans -
--
https://www.wbez.org/shows/wbez-news/major-chicago-hospitals-not-in-2017-obamacare-marketplace-plans/f55d6c23-d9b1-452f-8c75-73635bd83d07

Some of Chicago’s largest hospitals said they will not be part of any Cook County Affordable Care Act marketplace plans in 2017.

 

University of Chicago Medical Center and Rush University Medical Center both said they don’t plan to be in network for any Obamacare marketplace plans next year. 

 

 

The change means patients with doctors at those hospitals will either need to find a plan off the marketplace, and lose Obamacare subsides, or find a new doctor.

 

Northwestern Memorial Hospital said it will also be out of the marketplace, but will have exceptions for some of its partner hospitals.

Continued in article


According to emergency room physicians Obamacare made it much worse for emergency rooms.
American College of Emergency Room Physicians
The Uninsured: Access to Medical Care Fact Sheet ---
http://newsroom.acep.org/fact_sheets?item=30032


"Sen. Chuck Schumer: Obamacare Focused 'On The Wrong Problem,' Ignores The Middle Class" by  Avik Roy, Forbes, November 26, 2014 ---
http://www.forbes.com/sites/theapothecary/2014/11/26/sen-chuck-schumer-obamacare-focused-on-the-wrong-problem-ignores-the-middle-class/

Despite the enduring unpopularity of Obamacare, Congressional Democrats have up to now stood by their health care law, allowing that “it’s not perfect” but that they are proud of their votes to pass it. That all changed on Tuesday, when the Senate’s third-highest-ranking Democrat—New York’s Chuck Schumer—declared that “we took [the public’s] mandate and put all our focus on the wrong problem—health care reform…When Democrats focused on health care, the average middle-class person thought, ‘The Democrats aren’t paying enough attention to me.’”

Sen. Schumer made his remarks at the National Press Club in Washington. “Democrats blew the opportunity the American people gave them…Now, the plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed,” Schumer maintained. “But it wasn’t the change we were hired to make. Americans were crying out for the end to the recession, for better wages and more jobs—not changes in health care.”

“This makes sense,” Schumer continued, “considering 85 percent of all Americans got their health care from either the government, Medicare, Medicaid, or their employer. And if health care costs were going up, it really did not affect them. The Affordable Care Act was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote…it made no political sense.”

The response from Obama Democrats was swift. Many, like Obama speechwriters Jon Lovett and Jon Favreau and NSC spokesman Tommy Vietor, took to Twitter. “Shorter Chuck Schumer,” said Vietor, “I wish Obama cared more about helping Democrats than sick people.


Medicaid Explodes New enrollments vastly exceed estimates, and states are on the hook. ---
http://www.wsj.com/articles/medicaid-explodes-1479426939?mod=djemMER

On Donald Trump’s victory Republicans in Congress are primed for an ambitious agenda, and not a moment too soon. One immediate problem is ObamaCare’s expansion of Medicaid, which has seen enrollment at least twice as high as advertised.

Most of the insurance coverage gains from the law come from opening Medicaid eligibility beyond its original goal of helping the poor and disabled to include prime-age, able-bodied, childless adults. The Supreme Court made this expansion optional in 2012, and Governors claimed not joining would leave “free money” on the table because the feds would pick up 100% of the costs of new beneficiaries.

In a new report this week for the Foundation for Government Accountability, Jonathan Ingram and Nicholas Horton tracked down the original enrollment projections by actuaries in 24 states that expanded and have since disclosed at least a year of data on the results. Some 11.5 million people now belong to ObamaCare’s new class of able-bodied enrollees, or 110% higher than the projections.

Analysts in California expected only 910,000 people to sign up, but instead 3.84 million have, 322% off the projections. The situation is nearly as dire in New York, where enrollment is 276% higher than expected, and Illinois, which is up 90%. This liberal state triumvirate is particularly notable because they already ran generous welfare states long before ObamaCare.

Continued in article

Jensen Comment
President Obama baited the hook by claiming the Federal Government would pay for Medicaid expansion. But the states that took the bait are now on the hook. Medicaid is not the largest single expense item in most states, and the expense that will go completely out of control (heavily due to fraud) will be the cost of caring for older people where medical expenses are greatest, especially since Medicaid foots sometimes years of all  nursing home and medication costs.


"How to Fix the Scandal of Medicaid and the Poor," by Scott W. Atlas, The Wall Street Journal, March 15, 2016 ---
http://www.wsj.com/articles/how-to-fix-the-scandal-of-medicaid-and-the-poor-1458080771?mod=djemMER

Many doctors won’t take the insurance, and the care patients do receive is inferior. Here’s a solution.

The two principal expenditures of the Affordable Care Act so far include $850 billion for insurance subsidies and a similar outlay for a massive Medicaid expansion. The truth is that Medicaid—a program costing $500 billion a year that rises to $890 billion in 2024—funnels low-income families into substandard coverage. Instead of providing a pathway to excellent health care for poor Americans, ObamaCare’s Medicaid expansion doubles down on their second-class health-care status.

Already 55% of doctors in major metropolitan areas refuse new Medicaid patients, according to the 2014 Merritt Hawkins annual survey. Even of those providers signed up with Medicaid, 56% of primary-care doctors and 43% of specialists are not available to new patients. Moreover, numerous studies have found that the quality of medical care is inferior under Medicaid, compared with private insurance. Lower quality means more in-hospital deaths, more complications from surgery, shorter survival after treatment, and longer hospital stays than similar patients with private insurance.

The two principal expenditures of the Affordable Care Act so far include $850 billion for insurance subsidies and a similar outlay for a massive Medicaid expansion. The truth is that Medicaid—a program costing $500 billion a year that rises to $890 billion in 2024—funnels low-income families into substandard coverage. Instead of providing a pathway to excellent health care for poor Americans, ObamaCare’s Medicaid expansion doubles down on their second-class health-care status.

Already 55% of doctors in major metropolitan areas refuse new Medicaid patients, according to the 2014 Merritt Hawkins annual survey. Even of those providers signed up with Medicaid, 56% of primary-care doctors and 43% of specialists are not available to new patients. Moreover, numerous studies have found that the quality of medical care is inferior under Medicaid, compared with private insurance. Lower quality means more in-hospital deaths, more complications from surgery, shorter survival after treatment, and longer hospital stays than similar patients with private insurance.
.
Legislation signed by President Bill Clinton in 1996 transformed the federal welfare program into a pathway to self-sufficiency. In the same way, Medicaid should be redesigned as a bridge toward affordable private insurance. First, the new Medicaid should include a private-insurance option with catastrophic coverage but few coverage mandates for all enrollees.

Second, new Medicaid should establish and put initial funds into health savings accounts using part of the current federal dollars already going into Medicaid. This will empower beneficiaries and give them incentives to follow healthy lifestyles to protect those new assets. With these reforms, doctors and hospitals would receive payments from the same insurance as from non-Medicaid patients. Because health providers receive the same payments whether they treat Medicaid or non-Medicaid patients, the limited access and substandard treatment options under Medicaid would be eliminated.

To ensure availability of the same coverage to both Medicaid and non-Medicaid beneficiaries, federal funding would go only to eligible people in states that offer these same coverage choices to the entire state population. Federal money will be contingent on states meeting thresholds for the number of Medicaid enrollees moved into private coverage. Federal funds would go directly into beneficiary HSAs or to premium payments, rather than into state bureaucracies. States should want this new program because it will reduce the administrative costs of running a separate insurance program and, most important, provide access to quality health care for their residents.

Ultimately, traditional Medicaid would be eliminated as new enrollees move into private coverage. These reforms would change the purpose and culture of Medicaid agency offices from running government-administered plans to establishing HSAs and finding private insurance for beneficiaries.

Why focus on lower-cost, high-deductible health insurance coupled with HSAs? Published studies have shown that pairing HSAs with high-deductible coverage reduces health-care costs. Patient spending averages 15% lower in high-deductible plans, with even more savings when paired with HSAs—without any consequent increases in emergency visits or hospitalizations and without a harmful impact on low-income families. Secondarily, wellness programs that HSA holders more commonly use improve chronic illnesses, reduce health claims and save money.

Continued in article


Stanford University:  Long-term care can be ruinously expensive, and the odds of needing it are high. So why don’t seniors buy insurance to cover it? ---
https://www.gsb.stanford.edu/insights/whats-behind-americas-elder-care-crisis?utm_source=Stanford+Business&utm_campaign=62b269bea9-Stanford-Business-Impact-Issue-101-11-27-2016&utm_medium=email&utm_term=0_0b5214e34b-62b269bea9-70265733&ct=t(Stanford-Business-Impact-Issue-101-11-27-2016)

. . .

What’s Wrong Today

The flaws in existing long term care insurance policies are many. One common gripe is that premiums are too high relative to benefits. But Tonetti’s model shows that demand for long-term care insurance isn’t very sensitive to price — increasing premiums by 30% over the actuarially fair price had little effect on purchases.

The bigger deterrent, surely, is that the policies one can buy today don’t actually eliminate risk. “Those earlier studies basically assumed we all have access to a state-contingent asset and choose not to buy it,” Tonetti says. “But these aren’t state-contingent assets at all. They work on a reimbursement model. You pay for the care yourself and then hope to get your money back.”

Stories abound of insurance companies denying claims or dragging out the process. “It can get adversarial,” Tonetti says, “and you might be in no shape to fight back or might be dying and have a short horizon.”

Short stays in a facility, the most common case, are not covered because of deductibles. Long stays, often needed for patients with cognitive decline — the most expensive case — are not covered because benefits end after one to five years. Within those bounds, there are limits on the services paid for and where they can be delivered. And, oh, your premiums might be raised at any time; fail to pay and you lose your coverage.

Future Potential

Tonetti says those flaws don’t entirely explain the under-insurance puzzle. When the better policy was explained to test subjects, not all those predicted to want it said they’d actually buy it. But that gap arose mainly among the wealthiest individuals, who can rely on their own resources.

For the majority of elderly Americans, the introduction of an improved form of long-term care insurance would offer a tremendous increase in quality of life, not to mention peace of mind. And by lightening the load on Medicaid, it would be a relief for state and federal finances as well.

That’s not to say it would be easy. These papers don’t analyze why the market appears to be failing, but fears of “adverse selection” are likely a factor; that’s when coverage is purchased mainly by people who expect to cash in on the benefits, making it unprofitable. But Tonetti and his colleagues have convincingly demonstrated that there’s an unmet demand for long-term care insurance — a big opportunity for any insurer who can figure it out.

Christopher Tonetti is an assistant professor of economics at Stanford Graduate School of Business. His coauthors on the papers “Long-Term Care Utility and Late-in-Life Saving” and “Late-in-Life Risks and the Under-Insurance Puzzle” are John Ameriks, Vanguard; Joseph Briggs, New York University; Andrew Caplin, New York University & NBER; and Matthew D. Shapiro, University of Michigan & NBER.

Jensen Comment
One thing the article does not mention is a tactic taken by many, many folks approaching possible long-term care (usually in nursing homes but sometimes at home). The tactic is to plan ahead and push all the assets to the heirs before long-term care is needed. Then the heirs support the old folks until if and when those "impoverished" old folks now qualify for Medicaid to pay all the long-term care bills. Their Medicare will not pay for long-term care but their Medicaid will pay for all long-term care. A friend of mine insists this tactic is perfectly legal. But if it's legal (I'm not entirely convinced) its certainly not ethical to shield the savings of older folks from the expenses of their long-term care.

Younger folks such as severely disabled young adults generally can be turned over to states to pay for their long-term care. This is all perfectly legal. And in my opinion it's ethical since these unfortunates generally do not have their own savings for such purposes. Decades ago parents usually had to pay for the long-term care of their disabled children, and some still do contribute to their long-term care. But this is less and less common.

In other nations like Canada and the United Kingdom long-term care expenses created crises in funding.

Nationalized healthcare is not all it's cracked up to be ---
http://www.businessinsider.com/nationalized-healthcare-is-not-all-its-cracked-up-to-be-2016-9

. . .

Back home, though, Canadians seem far more critical of the system. If you follow the internal Canadian debate, you’ll hear the word “crisis.” In fact, many Canadian healthcare economists warn that their system is headed for a major collapse. The aging population has continued to stress an already fragile system. This is the same system that many proponents of the Affordable Care Act, or Obamacare, pointed to as a model.

Another model of national health care cited by fans of the ACA is the UK’s National Health Service (NHS). Like the Canadian system, there seems to be one attitude for export and another for domestic consumption. You may recall the odd tribute to the UK’s National Health Service (NHS) in the opening ceremony of the 2012 Olympics. The NHS was portrayed as a sea of Mary Poppins bliss. At home, though, Brits had reason to complain. The UK was rated as having the worst patient care and lowest cancer survival rates in the Western World.

The NHS is in even worse shape now, and complaints are growing louder. According to the committee that represents UK hospitals, the NHS is on the verge of collapse. The former health minister Paul Burstow warned of this outcome two years ago. At the time, increases in the NIH budget were limited to the rate of inflation. But that did not allow for the increased cost of a growing elderly population. The NIH effort to find £30 billion in “efficiency savings” was already putting enormous strains on the system.

When a healthcare system is overloaded, it’s not just the aged who suffer. A Lancashire man operated on himself when he was put on a long waitlist for a surgery that he badly needed. With waitlists growing, the Royal College of Surgeons reports that financially challenged clinical groups are denying services to patients who are obese or smoke. Often, delayed treatment will increase medical costs in the long run.  

So it shouldn’t be surprising that the Affordable Care Act, which was inspired by the Canadian and British systems, is in deep trouble. Though I predicted it, it is worrisome when the act’s biggest supporters, including The New York Times, admit the program’s flaws.

The growing aged population is a huge financial burden

Obamacare doesn’t deal with the real source of rising healthcare costs: the increase in age-related diseases due to a growing elderly population. It is mathematically impossible to cut societal medical costs while at the same time providing adequate healthcare to a growing and increasingly expensive older population.

This is not just a problem with health care. Social Security and pension funds are running deficits, which will also worsen. Alan Greenspan, former chairman of the Federal Reserve, recently said that he has lost the optimism that he has long been known for. The reason is that “we have a 9 percent annual rate of increase in entitlements, which is mandated by law.  It has got nothing to do with the economy. It has got to do with age and health and the like.”

Greenspan points out that politicians refuse to deal with the “third rail” of entitlements. I agree, but I think there’s a solution. Politicians claim that voters won’t accept delayed retirement. But the evidence shows that most people would like to work longer and save more to pay their own way. Zoya Financial reports that almost two thirds of Americans have to retire earlier than planned, largely due to problems with their own health or a spouse’s.

Anti-aging biotechnologies are in labs right now that could lengthen health spans and working careers. This would allow us to save our entitlement systems. But economists and politicians still have no clue about the biotechnological progress that has marked the start of the 21st century. This will change because it must… but I hope it happens soon

50% of health and social-care funding is spent on 4% of people . . . About 25% of all hospital inpatient spending during a person’s lifetime occurs in the final three months.
"The (British) National Health Care Service is a Mess," The Economist, September 10, 2016, pp. 48-49 ---
http://www.economist.com/news/britain/21706563-nhs-mess-reformers-believe-new-models-health-care-many-pioneered

. . .

Like health-care systems around the world, the National Health Service (NHS) is struggling to provide good care at low cost for patients such as Mrs Evans (not her real name). Its business model has not kept up with the changing burden of disease. For as more people enter and live longer in their dotage, demand increases for two costly types of care. The first is looking after the dying. About 25% of all hospital inpatient spending during a person’s lifetime occurs in the final three months. The second is caring for those with more than one chronic condition. About 70% of NHS spending goes on long-term illnesses. More than half of over-70s have at least two and a quarter have at least three. In south Somerset 50% of health and social-care funding is spent on 4% of people.

. . .

If one fallacy about the NHS is that it is the envy of the world, as its devotees claim, another is that it is a single organisation. In fact it is a series of interlocking systems. Public health, hospitals, general practitioners (or GPs, the family doctors who provide basic care outside hospitals) and mental-health services all have separate funding and incentives. Social care, which includes old-folks’ homes and the like, is run by local councils, not the NHS

. . .

So the NHS must do more with what it already spends. A sign of inefficiency is the 6,000 patients in English hospitals who are ready to go home but not yet discharged, up from 4,000 in 2013. They cost the service hundreds of millions of pounds per year and obstruct others from treatment. The bed-blockers themselves are harmed, too. Elderly patients lose up to 5% of muscle strength for every day they are laid up in hospital. Some delays are the result of council cuts: about 400,000 fewer old people receive social care than in 2010, meaning that hospitals are sometimes used as expensive alternatives to care homes. But most are due to how hospitals are run.

. . .

On average, the framework made GPs some of the highest-paid family doctors in the world when it was introduced in 2004. But since then it has become less generous. GPs’ real-terms income has fallen by one-fifth. This, and poor planning, has led to a shortage of them. England needs 5,000 more in the next five years. The NHS is mulling a deal with Apollo, whereby the Indian health-care firm supplies enough doctors to fill the gap.

. . .

The move from “volume to value”—that is, from paying providers for the procedures they carry out to paying them for the outcomes they achieve—has helped to stem the cost of Medicare, the American health system for pensioners. The expansion of ACOs as part of Obamacare led to reduced mortality rates and savings for providers of about 1-2%. But Dan Northam Jones, a visiting fellow at Harvard, warns that the potential for savings is greater in systems like Medicare, where there is no cap on spending.

And yet ACOs reflect a growing belief that if you want radically to improve health care you have to change how you pay for it. They will not solve all the problems of the NHS, some of which are inherent in its taxpayer-funded model. But perhaps its business model may yet catch up with how illness is changing. The NHS should forget being the envy of the world, and instead learn from it.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

"Germany Is Exporting Its Grandmas (to Poland)," by Naomi, Kresge, Bloomberg Business Week, September 26, 2013 ---
http://www.businessweek.com/articles/2013-09-26/germany-exports-its-seniors-to-nursing-homes-abroad

"Government Medicine vs. the Elderly:  In Britain in 2007-08, 16.5% of deaths came after 'terminal sedation," by Rupert Darwall, The Wall Street Journal, September 14, 2009 ---
http://online.wsj.com/article/SB10001424052970203917304574412680569936844.html?mod=djemEditorialPage

Rarely has the Atlantic seemed as wide as when America's health-care debate provoked a near unanimous response from British politicians boasting of the superiority of their country's National Health Service. Prime Minister Gordon Brown used Twitter to tell the world that the NHS can mean the difference between life and death. His wife added, "we love the NHS." Opposition leader David Cameron tweeted back that his plans to outspend Labour showed the Conservatives were more committed to the NHS than Labour.

This outbreak of NHS jingoism was brought to an abrupt halt by the Patients Association, an independent charity. In a report, the association presented a catalogue of end-of-life cases that demonstrated, in its words, "a consistent pattern of shocking standards of care." It provided details of what it described as "appalling treatment," which could be found across the NHS.

A few days later, a group of senior doctors and health-care experts wrote to a national newspaper expressing their concern about the Liverpool Care Pathway, a palliative program being rolled out across the NHS involving the withdrawal of fluids and nourishment for patients thought to be dying. Noting that in 2007-08, 16.5% of deaths in the U.K. came after "terminal sedation," their letter concluded with the chilling observation that experienced doctors know that sometimes "when all but essential drugs are stopped, 'dying' patients get better" if they are allowed to.

The usual justification for socialized health care is to provide access to quality health care for the poor and disadvantaged. But this function can be more efficiently performed through the benefits system and the payment of refundable tax credits.

The real justification for socialized medicine is left unstated: Because health-care resources are assumed to be fixed, those resources should be prioritized for those who can benefit most from medical treatment. Thus the NHS acts as Britain's national triage service, deciding who is most likely to respond best to treatment and allocating health care accordingly.

It should therefore come as no surprise that the NHS is institutionally ageist. The elderly have fewer years left to them; why then should they get health-care resources that would benefit a younger person more? An analysis by a senior U.K.-based health-care expert earlier this decade found that in the U.S. health-care spending per capita goes up steeply for the elderly, while the U.K. didn't show the same pattern. The U.K.'s pattern of health-care spending by age had more in common with the former Soviet bloc.

A scarcity assumption similar to the British mentality underlies President Barack Obama's proposed health-care overhaul. "We spend one-and-a-half times more per person on health care than any other country, but we aren't any healthier for it," Mr. Obama claimed in his address to Congress last Wednesday, a situation that, he said, threatened America's economic competitiveness.

This assertion is seldom challenged. Yet what makes health care different from spending on, say, information technology—or any category of consumer service—such that spending on health care is uniquely bad for the American economy? Distortions like malpractice suits that lead to higher costs or the absence of consumer price consciousness do result in a misallocation of resources. That should be an argument for tackling those distortions. But if high health-care spending otherwise reflects the preferences of millions of consumers, why the fuss?

The case for ObamaCare, as with the NHS, rests on what might be termed the "lump of health care" fallacy. But in a market-based system triggering one person's contractual rights to health care does not invalidate someone else's health policy. Instead, increased demand for health care incentivizes new drugs, new therapies and better ways of delivering health care. Government-administered systems are so slow and clumsy that they turn the lump of health-care fallacy into a reality.

According to the 2002 Wanless report, used by Tony Blair's government to justify a large tax hike to fund the higher spending, the NHS is late to adopt and slow to diffuse new technology. Still, NHS spending more than doubled to £103 billion in 2009-10 from £40 billion in 1999-2000, equivalent to an average growth rate of over 7% a year after inflation.

In 1965, economist (and future Nobel laureate) James Buchanan observed of the 17-year old NHS that "hospital facilities are overcrowded, and long delays in securing treatment, save for strictly emergency cases, are universally noted." Forty-four years later, matters are little improved. The Wanless report found that of the five countries it looked at, the U.S. was the only one to be both an early adopter and rapid diffuser of new medical techniques. It is the world's principal engine driving medical advance. If the U.S. gets health-care reform wrong, the rest of the world will suffer too.

Mr. Darwall, a London-based strategist, is currently writing a book on the history of global warming, to be published by Quartet Books in Spring 2010.

Jensen Plea
If and when I become gaga please sedate me to the max (meaning euthanize me)! I fear my wife, who is quite religious, will not allow that to happen.

 


Obamacare Fraud is Rampant
Obama Administration Breaks Law to Enrich Health Insurers ---
by Betsy McCaughey
Creaters, February 24. 2016
https://www.creators.com/read/betsy-mccaughey/02/16/obama-administration-breaks-law-to-enrich-health-insurers

The Obama administration will tell any lie and break any law to prevent the president's signature health program from collapsing. Insurance companies, such as UnitedHealthcare and Aetna, are losing billions trying to sell Obamacare plans, and the risk is they'll drop out at the end of 2016. No insurance companies means no Obamacare. In 2014, the White House tried to avert that disaster by promising insurers a bailout funded with taxpayer dollars, but public outrage and quick action by Senator Marco Rubio put a stop to it. Now the administration is at it again.

Desperate to keep insurers on board, the administration scrambled to find another source of money. Unfortunately, a big part of that money pot belongs to the public. Disregarding that fact, the administration announced on Feb. 12 that the money will be handed out to insurers — a whopping $7.7 billion this year alone. That huge handout to the insurance industry violates the law.

This is money you and everyone else who already has insurance is forced to pay, called a reinsurance fee. You pay the fee whether you buy your own plan or get covered at work, even if your employer self-insures. You may be clueless about it, but the fee is buried in your premium or taken out of your compensation.

The language of section 1341 of the Affordable Care Act, which details what this money can be used for, is clear as a bell. Some of these annual fees — adding up to billions a year — belong to the public, not the insurance companies. The law states a fixed share "shall be deposited into the general fund of the Treasury of the United States and may not be used" to offset insurance companies' losses. But the administration gave all of it to the insurance companies last year, and got away with that heist. So they're trying it again.

Anyone in the corporate world who misused funds that way would be headed to prison. This rogue administration is going to any length — including running afoul of the law — to keep insurers hooked into Obamacare.

In the words of University of Houston law professor Seth Chandler, who tried to call attention to the crime several months ago, this is an illegal "diversion of funds to enrich insurers." Last year alone, Cross Blue Shield of Texas got $549 million of these reinsurance funds, while Anthem Blue Cross of California got $401 million.

How did this fly under the radar last year? Because no one — especially members of Congress — has read the law. Insurance companies weren't about to object to getting more money than the law allows. Plus, the announcements of these payments were buried in mind-numbing federal agency releases. The latest such disclosure came late on the Friday of a holiday weekend. The business press reported the announcement but didn't go back to read section 1341 of the law and find that the payouts are illegal.

Last week, a few health scholars took notice, including Doug Badger, senior fellow at the Galen Institute. He says the illegal maneuver is "designed to keep a sinking ship from hitting rock bottom."

Congress should step in immediately and exercise its oversight duties to stop this looting. The next payments to insurers are promised for March. No time to waste.

Obamacare was sold on lies: You can keep your health plan if you like it. And you can keep your doctor if you like your doctor. Then, once it was passed, the administration resorted to a long string of lawless executive actions to keep an unworkable scheme going, despite the damage being done to employers, doctors and consumers.

The administration's diversion of public funds to its insurance company cronies is just the latest defiance of the law. The president has illegally delayed the employer mandate repeatedly. He's handing out free Obamacare plans to illegal immigrants. Statutory deadlines are routinely ignored, and funds are slyly shifted from one program to another — the law be damned.


Another Obama Lie Revealed
Revealed in Hillary Clinton's Long Delayed Email Release
"Hillary’s Dirty Little ObamaCare Secret:  The White House was telling her the opposite of what Obama said," by Gerald Herbert, The Wall Street Journal, March 1, 2016 ---
http://www.wsj.com/articles/hillarys-dirty-little-obamacare-secret-1456877391?mod=djemMER

The State Department released the last batch of Hillary Clinton’s emails on Monday, and the exercise has been instructive about her recklessness with classified material. But as a side note, we ought to memorialize what President Obama’s aides were telling Mrs. Clinton about the Affordable Care Act, which was the opposite of what their boss was telling the public.

Despite her duties as top diplomat, Mrs. Clinton found time to follow ObamaCare’s progress in Congress, and she received regular updates from Neera Tanden, then a White House health staffer. Ms. Tanden is now president of the liberal Center for American Progress, Mrs. Clinton’s economic policy shop.

In an Oct. 19, 2009 email, Mrs. Clinton asked Ms. Tanden, “Are you worried about the lack of cost controls in the current bills?” Ms. Tanden replied that “the dirty little secret is that we don’t have a lot of good evidence on what works—in a way that Congress has any appetite to do. I mean, cost controls, as we all know, is [sic] attacked as rationing. So everyone likes to discuss this, including the Administration, but then on the other hand, says they won’t touch the benefits. Now there is a lot of fat in the system, but some of that excess is just too much care. Yet no one really wants care to be restricted.”

Not a month earlier, the President had promised Congress that the bill would save “hundreds of billions of dollars,” according to “Democratic and Republican experts.” In March 2010 he said that “we have now incorporated almost every single serious idea from across the political spectrum about how to contain the rising cost of health care.”

Ms. Tanden was telling Mrs. Clinton that the truth was closer to the reverse. She wrote that “the other problem” is that the de minimis cost-control problems that ObamaCare did include “need some time to incubate because we don’t have all the evidence we need. . . . We may have oversold what these bills will (or even can) do.” Critics at the time, including us, argued that White House claims about cost control were always a bill of goods. But we’d be curious to hear what ObamaCare architects like Peter Orszag think of Ms. Tanden’s private candor, or the credulous columnists they duped.

By the way, the Clinton-Tanden correspondence is heavily redacted for some reason, and its release was delayed almost a year for interagency review—though emails about health care shouldn’t compromise national security. Perhaps they also shared a between-us laugh about the other health-care deceptions the White House was getting away with.

 


Inspector General's report warns that billions in federal loans might not be repaid.
"Obamacare’s Government-Backed Nonprofit Health Plans Are a Disaster—and Could Cost Taxpayers Billions," by Peter Suderman, Reason Magazine, July 31, 2015 ---
http://reason.com/blog/2015/07/31/obamacares-government-backed-nonprofit-h 

The federal government shelled out $2.4 billion in loans to a series of non-profit health plans under Obamacare, but now they’re struggling to stay alive.

The plans, dubbed CO-OPs (Consumer Operated and Oriented Plans) were intended to increase competition in the insurance market and serve as a check on private insurers by providing an alternative that wasn’t focused on profit. They were a compromise measure intended to satisfy liberals who wanted the law to set up a fully government-run health insurance option. 

As it turns out, Obamacare’s CO-OPs weren’t focused on profit—or, it seems, financial viability of any kind.

The CO-OPs have struggled to meet enrollment targets, with 13 of the 23 non-profit plans showing “considerably lower” enrollment than projected, according to a report by the Health and Human Services Inspector General. Finances were shaky all around with 21 of 23 plans incurring losses through the end of 2014, the report says.

This isn’t just a problem for the CO-OPs. It’s a problem for the taxpayers. The $2.4 billion in loans given to these startup plans were supposed to be repaid to the government with interest. Loans given to start the plans were supposed to be repaid in five years; “solvency” loans were supposed to be repaid in 15 years.

Continued in article

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


'The Unaffordable Care Act:  Premiums are spiking around the country. Obama is in denial," The Wall Street Journal, July 10, 2015 ---
http://www.wsj.com/articles/the-unaffordable-care-act-1436569086?tesla=y

The Affordable Care Act was supposed to make insurance, well, more affordable. But now hard results are starting to emerge: premium surges that often average 10% to 20% and spikes that sometimes run as high as 50% or 60% or more from coast to coast. Welcome to the new abnormal of ObamaCare.

This summer insurers must submit rates to state regulators for approval on the ObamaCare exchanges in 2016—and even liberals are shocked at the double-digit requests, or at least the honest liberals are. Under ObamaCare, year-over-year premium increases above 10% must also be justified to the Health and Human Services Department, and its data base lists about 650 such cases so far.

In a study across 45 states, the research outfit Health Pocket reports that mid-level Exclusive Provider Organization plans are 20% more expensive in 2016 on average. HMOs are 19% more expensive, and for all plan types the average is 14%.

President Obama dropped by Nashville last week to claim Tennessee as a state where “the law has worked better than we expected” and “actually ended up costing less than people expected,” so let’s test the reality of those claims. As a baseline, in 2015 premium increases for Tennessee plans ranged from 7.5% to 19.1%.

For 2016 BlueCross BlueShield of Tennessee—one of the state’s two major insurers—is requesting a 36.3% increase. One product line from Community Health Alliance Mutual is rising 32.8%, while another from Time Insurance Co. hits 46.9%. Offerings from Cigna, Humana and UnitedHealthcare range from 11% to 18%. If this means ObamaCare is working better than the President expected, then what, exactly, was he expecting?

Continued in article

Obama's Whoppers on the ACA --- Click Here
http://townhall.com/columnists/donaldlambro/2015/07/08/obamas-whoppers-will-bite-him-in-the-end-and-the-democrats-too-in-2016-n2022375?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=


"Hospitals Expected More of a Boost From Health Law Expansion of Medicaid hasn’t had the financial impact that was anticipated," by Christian Weaver, The Wall Street Journal, June 3, 2015 ---
http://www.wsj.com/articles/hospitals-expected-more-of-a-boost-from-health-law-1433304242?KEYWORDS=Hospitals

The health law’s expansion of Medicaid in many states hasn’t benefited nonprofit hospitals in those states as expected, according to a new report by Moody’s Investors Service.

Hospitals in the mostly blue states that expanded Medicaid were largely expected to benefit from fewer unpaid bills and more paying customers, but that hasn’t generally translated into better operating margins or cash flow, Moody’s found.

Performance improved across the board—including in the mostly Republican-led states that opted out of the law’s Medicaid expansion—as the economy gained steam last year and unemployment declined.

In expansion states, hospitals’ unpaid bills fell 13% on average last year compared with 2013, the report found. But, their 2014 operating margins didn’t increase any more than hospitals in the 22 states that have sat out the expansion, the report shows.

“Clearly, reducing bad debt is positive, but it is not this silver bullet,” said Daniel Steingart, a Moody’s analyst and author of the report. He said the findings call into question “a narrative out there that Medicaid expansion has lowered bad debt and that is driving [financial] improvements at hospitals.”

Continued in article

Jensen Comment
When I lived in San Antonio, over $1,000 of my property tax billing went to the Bexar County Hospital to cover charity medicine and bad debts of people who were treated but did not pay for the treatments. As a rule there's at least one hospital in larger cities, usually the largest non-profit hospital, that receives local tax dollars to contribute toward the hospital's bad debts.

Obamacare's promise of relieving the burden of local taxpayers for charity medicine turned into another one of the lies. Indeed there are fewer bad debts due to expanded Medicaid coverage such that more Federal dollars are pouring into hospitals who accept Medicaid patients. However, the bad news is that Medicaid only covers (according to the article) about half the cost of treating Medicaid patients in hospitals. This leaves hospitals with tow choices. Provide lower-cost care or ask for more dollars from local taxpayers to cover the added losses of the expanded Medicaid coverage.

It turns out that states who refused to expand Medicaid coverage are better off for having refused.


MediCal is California's Version of Medicaid free medical services for poor people. MedicCal also has a price-fixing program that is preventing many doctors and hospitals from providing services to patients insured by MediCal. This is an example of where price fixing either results in either having no goods and services or inferiors goods and service.

"Medi-Cal a waiting game for many low-income Californians," by Tracy Seipel, San Jose Mercury News, February 7, 2015 ---
http://www.mercurynews.com/health/ci_27481258/obamacare-medi-cal-waiting-game-many-low-income 

Julie Moreno felt lucky to be among more than 2.7 million previously uninsured Californians to be added to Medi-Cal, the state's health care program for the poor.

Until she needed cataract surgery.

For three months after her November 2013 diagnosis, the 49-year-old Mountain View resident said, she tried to get an appointment, but each time she called, no slots were available. Desperate and worried, she finally borrowed $14,000 from her boyfriend's mother to have the procedure done elsewhere last February.

One year into the explosive, health law-induced growth of Medi-Cal, it appears one of the most alarming predictions of critics is coming true: The supply of doctors hasn't kept up with demand. One recent study suggests the number of primary care doctors in California per Medi-Cal patient is woefully below federal guidelines.

"If you're pregnant, you get help," Moreno said. "But if you're 49 and not pregnant, you have to wait for everything."

In fact, seven months after Moreno's surgery, her original surgeon's office called just to say they still couldn't fit her in.

At least 1.2 million Californians have signed up for a private insurance plan since enrollment began in October 2013 under the Affordable Care Act, better known as Obamacare. But it's Medi-Cal that has witnessed the largest growth -- 2.7 million since the controversial law opened the program up to many more recipients in January 2014.

By mid-2016, more than 12.2 million people -- nearly a third of all Californians -- will be on Medi-Cal, state health officials say.

Those officials continue to insist that the current delays to see a doctor and crowded emergency rooms are all part of to-be-expected growing pains. But many experts say the problems are so widespread they shouldn't be ignored.

"California did a good job of getting people signed up, but they basically stuck their heads in the sand and assumed that California physicians would just jump right on board and want to take more Medi-Cal patients," said Dr. Del Morris, president of the California Academy of Family Physicians, which represents many of the first-line doctors who treat Medi-Cal patients. "It's unacceptable to say, 'We are not ready for you yet, you'll just have to suffer with your disease.'"

Morris and other experts say the situation is about to get worse, in part because of Medi-Cal's health care reimbursement rates.

For years, the rates paid by Medi-Cal -- called Medicaid in the rest of the country -- have been among the nation's lowest. A provision of Obamacare hiked the rates for primary care doctors to the substantially higher Medicare rates for two years, but those increases ended on Dec. 31. A second blow came last month when the state cut the Medi-Cal reimbursement rate by another 10 percent, a reduction approved by California lawmakers in 2011 but delayed in a court battle that doctors ultimately lost.

Even before the latest cuts, Medi-Cal doctors -- particularly specialists -- in California's rural areas often seemed nearly impossible to find. And the shortage of Medi-Cal physicians appears to be causing spikes in the number of Medi-Cal patients being treated in hospital emergency rooms around the state. Data from the Office of Statewide Health Planning and Development show that in the first three quarters of 2014, "treat and release" visits to emergency rooms by Medi-Cal patients jumped 30 percent from the same period the year before.

At least once a week at the MayView Community Health Center in Mountain View, the clinic is so swamped that it is forced to send Medi-Cal patients to hospital emergency rooms "because they cannot go anywhere else," clinic operations director Harsha Mehta said.

Since January 2014, Axis Community Health in Pleasanton has added about 1,700 new Medi-Cal patients to its five facilities that serve the Tri-Valley area, bringing the total to about 14,000. While 700 of those patients were already being treated at Axis before they enrolled in Medi-Cal, the overall jump in new patients is forcing Dr. Divya Raj, Axis' medical director, to hire more hard-to-find doctors.

A recent report by the California HealthCare Foundation that tried to determine if the state has enough doctors to handle the influx of Medi-Cal patients reinforces Raj's trepidation.

The report found the ratio of patients to full-time primary care doctors participating in Medi-Cal -- including family medicine physicians, general internists, pediatricians and ob/gyns -- was 35 to 49 physicians per 100,000 enrollees, well below the federal guidelines of 60 to 80.

"We had a shortage of primary care doctors before this flood (of Medi-Cal enrollees) came about," said Dr. Steven Harrison, a veteran primary care doctor who directs a residency program for such physicians at Natividad Medical Center in Salinas. "Now we have a dire shortage."

Bait and Switch for Primary Care "Doctors"
Nationwide there was an enormous shortage of primary care doctors before Obamacare. Obamacare greatly increased the demand for such doctors, thereby, making the shortage much worse. This has led to nationwide bait and switch primary care that is similar to three of the medical clinics in Littleton, New Hampshire. Each clinic has one MD and one or more added "physicians assistants" who are not medical doctors but can examine patients and prescribe common medications.

The bait and switch part is that patients in each clinic are not allowed to see the MD at all or must wait much longer for an appointment to see the the MD. In the meantime they are encouraged to be examined by only the physicians assistant or to go to emergency rooms.

Another sad part of the bait and switch tactic is that many specialists such as those at the Dartmouth medical center will only see patients referred by an MD or osteopath. Without such referrals patients are not allowed to make appointments with such specialists such as dermatologists, psychiatrists, and surgeons.

One other clinic up here has a really lousy and uncaring foreign-trained MD and an osteopath. My primary care doctor is the osteopath. He seems pretty good to me, but then my medical needs are fairly simple and routine. Our Littleton Regional Hospital does have an outstanding emergency room, although it's not a trauma center and has to send a relatively large number of patients by helicopter to the Dartmouth medical center about 50 miles away.

Of course patients with serious problems have discovered how to get referrals. The go directly to emergency rooms and maybe wait the better part of a day to be examined. But they eventually leave with a referral to see a specialist provided that specialist will accept their insurance.

The huge problem in New Hampshire is that nearly half (slightly less this year) of the hospitals and specialists will not accept ACA insurance.


"How Obamacare Is Ruining Health Insurance," by John C. Goodman, Forbes, February 11, 2015 ---
http://www.forbes.com/sites/johngoodman/2015/02/11/how-obamacare-is-ruining-health-insurance/

The health insurance market is changing. And the changes are not good. Even before there was Obamacare, most insurers most of the time had perverse incentives to attract the healthy and avoid the sick. But now that the Affordable Care Act has completely changed the nature of the market, the perverse incentives are worse than ever.

Writing in Sunday’s New York Times Elizabeth Rosenthal gives these examples:

But aren’t these insurers worried that if they mistreat their customers, their enrollees will move to some other plan? Here’s the rarely told secret about health insurance in the Obamacare exchanges: insurers don’t care if heavy users of medical care go to some other plan. Getting rid of high-cost enrollees is actually good for the bottom line.

To appreciate how different health insurance has become, let’s compare it to the kind of casualty insurance people buy for their home or their cars.

Dennis Haysbert is the actor I remember best for playing the president of the United States in the Jack Bauer series, 24.  You probably know him better as the spokesman for Allstate. In one commercial he is standing in front of a town that looks like it has been demolished by a tornado. “It took only two minutes for this town to be destroyed,” he says. And he ends by asking “Are you in good hands?”

The point of the commercial is self-evident. Casualty insurers know you don’t care about insurance until something bad happens. And the way they are pitching their products is: Once the bad thing happens, we are going to take care of you.

Virtually all casualty insurance advertisements carry this message, explicitly or implicitly. Nationwide used to run a commercial in which all kinds of catastrophes were caused by a Dennis-the-Menace type kid. In a State Farm ad, a baseball comes crashing through a living room window. Nationwide’s “Life comes at you fast” series features all kinds of misadventures. And of course, the Aflac commercials are all about unexpected mishaps.

The Case Against Obamacare: An eBook From Forbes
Don’t be fooled. The new health law has disrupted coverage for millions, and driven up costs for millions more.

My favorite casualty insurer print ad is sponsored by Chubb. It features a man fishing in a small boat with his back turned to a catastrophe. He is about to go over what looks like Niagara Falls. Here’s the cutline: “Who insures you doesn’t matter. Until it does.”

Now let’s compare those messages to what we see in the health insurance exchange. Federal employees have been obtaining insurance in an exchange, similar to the Obamacare exchanges, for several decades. Every fall, during “open enrollment,” they select from among a dozen or so competing heath plans. In Washington, DC where the market is huge, insurers try to attract customers by running commercials on TV, in print and in other venues.

Continued in article


From the CFO Journal's Morning Ledger on December 9, 2014

Workers to bear burden of ACA cost increases ---
http://blogs.wsj.com/cfo/2014/12/08/workers-to-bear-burden-of-aca-cost-increases/?mod=djemCFO_h

Workers in the U.S. should expect health care to take a bigger bite out of their paychecks next year, CFO Journal’s Vipal Monga reports. According to Bank of America Merrill Lynch, finance chiefs at U.S. companies expect the Affordable Care Act to increase healthcare costs next year, and the majority expect to pass that along to their employees.

Jensen Comment
There were only supposed to be savings for workers under the ACA. What went wrong?

"ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---
http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

. . .

Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.

The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.

The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”

Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.

My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.

Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.

Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)

If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”

So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.

The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.

Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)

In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.

Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.

The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.

Continued in article

"Senate Bill Sets a Plan to Regulate Premiums," by Robert Pear, The New York Times, April 20, 2010 --- http://www.nytimes.com/2010/04/21/health/policy/21healt

. . .

Grace-Marie Turner, president of the Galen Institute, a research center that advocates free-market health policies, said the Democrats’ proposal was unlikely to succeed in lowering insurance costs.

“Capping premiums without recognizing the forces that are driving up costs would be like tightening the lid on a pressure cooker while the heat is being turned up,” Mrs. Turner said.

Mrs. Feinstein said her bill would close what she described as “an enormous loophole” in the new law. And she said health insurance should be regulated like a public utility.

“Water and power are essential for life,” Mrs. Feinstein said. “So they are heavily regulated, and rate increases must be approved. Health insurance is also vital for life. It too should be strictly regulated so that people can afford this basic need.”

The 6 Biggest Whoppers In Gruber's ObamaCare Comic Book ---
http://news.investors.com/ibd-editorials-obama-care/120114-728618-the-6-biggest-whoppers-in-gruber-obamacare-comic-book.htm

. . .

What the reviewers failed to mention is that the book is also chock-a-block with misinformation and outright falsehoods about the law Gruber helped construct — many of which Gruber himself exposed later on. Among the most glaring:

• Gruber claims that for individuals and small firms qualifying for a tax credit, "this bill will lower your health care costs." But Gruber would later go on to tell several states the opposite. One of them was Wisconsin, where he said fewer than 6% would see lower premiums, and 41% would get hit with hikes of 50% or more. Meanwhile, millions learned that Gruber's claim was a fantasy last year, when they confronted ObamaCare's sky-high premiums after seeing their existing plans canceled.

• Gruber declares that the law doesn't raise taxes on anyone "with incomes below $200,000 per year." Yet several of the dozens of tax hikes stuffed into the bill hit the middle class, or soon will. Americans for Tax Reform counted seven big ones.

• In the section on the Cadillac tax, which depicts Gruber tooling around in a Caddy, he claims this tax would apply "only to the top few percent of health insurance plans" and would hit more only if premiums climb faster than inflation.

But in videotaped comments, Gruber explains that the tax was purposely designed to start small and then eventually hit all employer plans, "essentially getting rid of the exclusion for employer-sponsored plans."

• Gruber emphatically declares that ObamaCare will cut the federal deficit by $1 trillion over its second decade because "the deficit-reducing effects of this legislation grow over time."

But all the Congressional Budget Office said was that a "rough outlook" for ObamaCare's second decade resulted in deficit cuts "in a broad range of around one-half percent of GDP." And that assumed the law was enacted exactly as written, and worked exactly as predicted, both of which have already failed to come true.

When the Government Accountability Office ran the numbers using more realistic scenarios, it found ObamaCare adding significantly to the long-term deficit. The CBO, meanwhile, has given up making even short-term forecasts of ObamaCare's impact on the deficit.

• Throughout the book, Gruber cites CBO projections of ObamaCare's effects on premiums and coverage, calling it "the best independent source for evaluating bills like the ACA." What he doesn't mention is that when the CBO developed its health care forecasting model in 2007, Gruber had a role in creating it. It even credits Gruber for his "helpful comments and feedback ... throughout the model's development."

And in a 2011 paper, Gruber himself said that his own health care model "mirrors the CBO approach to modeling health reform."

• Gruber says that if the law's many cost-control measures work as expected, "the ACA will end up solving our cost problem in the U.S." But earlier this year Gruber told the Washington Post that it was "misleading" to say ObamaCare will save money. "The law isn't designed to save money," he said. "It's designed to improve health, and that's going to cost money."


Read More At Investor's Business Daily:
http://news.investors.com/ibd-editorials-obama-care/120114-728618-the-6-biggest-whoppers-in-gruber-obamacare-comic-book.htm#ixzz3KllqGGBp

 

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


"Supreme Court Battle Brewing Over Medicaid Fees," by Phil Galewitz, WebMD, January 12, 2015 ---
http://www.webmd.com/health-insurance/20150112/supreme-court-battle-brewing-over-medicaid-fees

Rita Gorenflo’s 7-year-old son Nathaniel was in severe pain from a sinus infection.

But since the boy was covered by Medicaid, she couldn’t immediately find a specialist willing to see him. After days of calling, she was finally able to get Nathaniel an appointment nearly a week later near their South Florida home. That was in 2005.

Last month, ruling in a lawsuit brought by the state’s pediatricians and patient advocacy groups, a federal district judge in Miami determined Nathaniel’s wait was “unreasonable” and that Florida’s Medicaid program was failing him and nearly 2 million other children by not paying enough money to doctors and dentists to ensure the kids have adequate access to care.

The Florida case is the latest effort to get federal judges to force states to increase Medicaid provider payment rates for the state and federal program that covers about 70 million low-income Americans. In the past two decades, similar cases have been filed in numerous states, including California, Illinois, Massachusetts, Oklahoma, Texas and the District of Columbia– with many resulting in higher pay.

But while providers and patient advocates nationwide hailed the Florida decision, they are deeply worried about a U.S. Supreme Court case that they say could restrict their ability across the country to seek judicial relief from low Medicaid reimbursement rates.

The high court on Jan. 20 will hear a case from Idaho seeking to overturn a 2011 lower court order to increase payments to providers serving Medicaid enrollees with development disabilities. In the original case, five centers serving developmentally disabled adults and children argued that Idaho was unfairly keeping Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of providing care had risen.

Idaho officials argue only the state and federal government should be able to set provider fees in Medicaid and all other “private parties,” including patients and providers, should not be able to use the court system to gain higher rates. Twenty-seven states and the Obama administration are supporting Idaho’s appeal, along with the National Governors Association

 


November 2014

The 6 Biggest Whoppers In Gruber's ObamaCare Comic Book ---
http://news.investors.com/ibd-editorials-obama-care/120114-728618-the-6-biggest-whoppers-in-gruber-obamacare-comic-book.htm

. . .

What the reviewers failed to mention is that the book is also chock-a-block with misinformation and outright falsehoods about the law Gruber helped construct — many of which Gruber himself exposed later on. Among the most glaring:

• Gruber claims that for individuals and small firms qualifying for a tax credit, "this bill will lower your health care costs." But Gruber would later go on to tell several states the opposite. One of them was Wisconsin, where he said fewer than 6% would see lower premiums, and 41% would get hit with hikes of 50% or more. Meanwhile, millions learned that Gruber's claim was a fantasy last year, when they confronted ObamaCare's sky-high premiums after seeing their existing plans canceled.

• Gruber declares that the law doesn't raise taxes on anyone "with incomes below $200,000 per year." Yet several of the dozens of tax hikes stuffed into the bill hit the middle class, or soon will. Americans for Tax Reform counted seven big ones.

• In the section on the Cadillac tax, which depicts Gruber tooling around in a Caddy, he claims this tax would apply "only to the top few percent of health insurance plans" and would hit more only if premiums climb faster than inflation.

But in videotaped comments, Gruber explains that the tax was purposely designed to start small and then eventually hit all employer plans, "essentially getting rid of the exclusion for employer-sponsored plans."

• Gruber emphatically declares that ObamaCare will cut the federal deficit by $1 trillion over its second decade because "the deficit-reducing effects of this legislation grow over time."

But all the Congressional Budget Office said was that a "rough outlook" for ObamaCare's second decade resulted in deficit cuts "in a broad range of around one-half percent of GDP." And that assumed the law was enacted exactly as written, and worked exactly as predicted, both of which have already failed to come true.

When the Government Accountability Office ran the numbers using more realistic scenarios, it found ObamaCare adding significantly to the long-term deficit. The CBO, meanwhile, has given up making even short-term forecasts of ObamaCare's impact on the deficit.

• Throughout the book, Gruber cites CBO projections of ObamaCare's effects on premiums and coverage, calling it "the best independent source for evaluating bills like the ACA." What he doesn't mention is that when the CBO developed its health care forecasting model in 2007, Gruber had a role in creating it. It even credits Gruber for his "helpful comments and feedback ... throughout the model's development."

And in a 2011 paper, Gruber himself said that his own health care model "mirrors the CBO approach to modeling health reform."

• Gruber says that if the law's many cost-control measures work as expected, "the ACA will end up solving our cost problem in the U.S." But earlier this year Gruber told the Washington Post that it was "misleading" to say ObamaCare will save money. "The law isn't designed to save money," he said. "It's designed to improve health, and that's going to cost money."


Read More At Investor's Business Daily:
http://news.investors.com/ibd-editorials-obama-care/120114-728618-the-6-biggest-whoppers-in-gruber-obamacare-comic-book.htm#ixzz3KllqGGBp

 


November 13, 2014
Here are three crucial facts about the ACA that both the White House and the media didn’t want you to know about ---
http://www.foxnews.com/opinion/2014/11/13/3-things-white-house-doesnt-want-to-know-about-obamacare-plus-3-things-coming/?cmpid=NL_opinion


1. HUGE DEFICITS AND NEW TAXES.
According to the Congressional Budget Office, the latest projections for the net cost of ObamaCare over the next ten years are just over $1.4 trillion. Whereas President Obama promised in 2009 that it would cost less than $1 trillion over ten years. In order to partially pay for this, ObamaCare has added more than 20 new taxes totaling over $500 billion.

2. BUREAUCRACY. Speaking of Orwellian politics, ObamaCare includes 159 new boards and agencies to restrict and govern your health care choices.

3. STILL MORE BUREAUCRACY.
Dysfunctional state exchanges with high deductible policies, narrow doctor networks,
including federally-run exchanges in 36 states which may not be allowable under the law (SCOTUS currently considering this case). 

Here are three new things coming up in 2015 that are highely controversial:

1. PENALTIES WILL RISE – INDIVIDUAL MANDATE.
In 2014, people are facing a penalty of $95 per person or 1% of income. 

In 2015, the penalty will more than triple to $325 per person or 2% of income, whichever is higher. 

If an American failed to get coverage this year, the penalty will be taken out of their tax refund in early 2015. 

2. SERIOUS RATE HIKES FOR CHEAPER OBAMACARE PLANS.
According to Investor’s Business Daily, the lowest cost bronze plan will increase an average of 7 % in many cases, the lowest cost silver plan by 9%, and the lowest priced catastrophic policy will climb 18 percent on average. Double digit rate hikes are anticipated in several southern and Midwestern states including Kansas, Iowa, Louisiana, North and South Carolina, Tennessee, Iowa, and Virginia.  

Subsidies will continue to be a huge part of the program. In 2014, subsidies provided ¾ of the premiums for the federally-run exchanges.  

3. EMPLOYER MANDATE WILL TAKE EFFECT.
After being delayed for a year, large businesses (100 or more employees in 2015, 50 or more in 2016) will be required to offer affordable (and subsidized) health plans to at least 70 percent of their full time employees or face a $2,000-$3,000 penalty per employee. 

This mandate will lead to fewer full time employees being hired.

Continued in article


"Audit found ineligible people on Minnesota's public-health rolls," Brian Lambert, Minneapolis Post, November 12, 2014 ---
http://www.minnpost.com/glean/2014/11/audit-found-ineligible-people-states-public-health-rolls

The AP story says, “Minnesota's legislative auditor says the state Department of Human Services has failed to adequately verify the eligibility of people who enroll in public health care programs through the state's health insurance exchange MNsure. In a report released Wednesday, the Office of the Legislative Auditor says it found many instances where department paid for Medical Assistance and MinnesotaCare benefits for people who weren't eligible because their incomes were too high or didn't qualify for other reasons. It says the department also charged incorrect MinnesotaCare premium rates.”

"Audit reveals half of people enrolled in Illinois Medicaid program not eligible," by Craig Cheatham, KMOV Television, November 4, 2013 ---
http://www.kmov.com/news/just-posted/Audit-reveals-half-of-people-enrolled-in-IL-Medicaid-program-not-eligible-230586321.html?utm_content=buffer824ba&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer

"Medicaid Spending Has Exploded, And It Will Keep Rising Faster Than Expected

"Medicaid Spending Has Exploded, And It Will Keep Rising Faster Than Expected," by John R. Graham, Daily Caller, November 12. 2014 ---
http://dailycaller.com/2014/11/12/medicaid-spending-has-exploded-and-it-will-keep-rising-faster-than-expected/

According to the Centers for Medicare & Medicaid Services (CMS), spending on Medicaid, the jointly funded state-federal welfare program that provides health benefits to low-income people, increased 6.7 percent in 2013 to $449.5 billion. And it will keep growing at a fast rate.

In 2014, total Medicaid spending is projected to grow 12.8 percent because Obamacare has added about 8 million dependents. A large minority of states have chosen to increase residents’ eligibility for Medicaid by expanding coverage to adults making up to 138 percent of the federal poverty level.

Unfortunately, more states are likely to expand this welfare program. This is expected to result in a massive increase in the number of Medicaid dependents: From 73 million in 2013 to 93 million in 2024. Medicaid spending is expected to grow by 6.7 percent in 2015, and 8.6 percent in 2016. For 2016 to 2023, spending growth is projected to be 6.8 percent per year on average.

This comprises a massive increase in welfare dependency and burden on taxpayers. Further, official estimates often low-ball actual experience. This is because it is hard to grapple with how clever states are at leveraging federal dollars.

The Office of the Inspector General of the U.S. Department of Health & Human Services has just released a report that summarizes a decade of research on how states game the system to increase spending beyond that which the federal government anticipated.

The incentive lies in Medicaid’s perverse financing merry-go-round. In a rich state like California, for example, the federal government (pre-Obamacare) spent 50 cents on the dollar for adult dependents. So, if California spent 50 cents, it automatically drew 50 cents from the U.S. Treasury. And most states had a bigger multiplier. Which state politician can resist a deal like that?

Continued in article


Jonathan Gruber --- http://en.wikipedia.org/wiki/Jonathan_Gruber_%28economist%29#Controversies

. . .

In January 2010, after news emerged that Gruber was under a $297,000 contract with the Department of Health and Human Services, while at the same time promoting the Obama administration's health care reform policies, some conservative commentators suggested a conflict of interest.[17][18][19] While he did disclose his HHS connections in an article for the New England Journal of Medicine, his oversight in doing this earlier was defended by Paul Krugman in The New York Times.[20]

One heavily-scrutinized part of the ACA reads that subsidies should be given to healthcare recipients who are enrolled "through an Exchange established by the State". Some have read this to mean that subsidies can be given only in states that have chosen to create their own healthcare exchanges, and do not use the federal exchange, while the Obama administration says that the wording applies to all states. This dispute is currently part of an ongoing series of lawsuits referred to collectively as King v. Burwell. In July 2014, two separate recordings of Gruber, both from January 2012, surfaced in which he seemed to contradict the administration's position.[5] In one, Gruber states, in response to an audience question, that "if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits",[21] while in the other he says, "if your governor doesn't set up an exchange, you're losing hundreds of millions of dollars of tax credits to be delivered to your citizens."[22] When these recordings emerged, Gruber called these statements mistaken, describing them as "just a speak-o — you know, like a typo".[21]

In November 2014, a series of four videos emerged of Gruber speaking at different events, from 2010 to 2013, about ways he felt the ACA was misleadingly crafted and marketed to get the bill passed; in several of these videos he specifically refers to American voters as ill-informed and "stupid." In the first, most widely-publicized video taken at a panel discussion about the ACA at the University of Pennsylvania in October 2013, Gruber said the bill was deliberately written "in a tortured way" to disguise the fact that it creates a system by which "healthy people pay in and sick people get money." He said this obfuscation was needed due to "the stupidity of the American voter" in ensuring the bill's passage. Gruber said the bill's inherent "lack of transparency is a huge political advantage" in selling it.[23] The comments caused significant controversy.[24][25][26][27][28] In two subsequent videos, Gruber was shown talking about the decision (which he attributed to John Kerry) to have the bill tax insurance companies instead of patients, which he called fundamentally the same thing economically but more palatable politically. In one video, he stated that "the American people are too stupid to understand the difference" between the two approaches, while in the other he said that the switch worked due to "the lack of economic understanding of the American voter."[29] In another video, taken in 2010, Gruber expressed doubts that the ACA would significantly reduce health care costs, though he noted that lowering costs played a major part in the way the bill was promoted.[30]


"Yes, Jonathan Gruber Is An Obamacare “Architect” The health law’s allies are trying to distance themselves from the economist’s remarks about the deception involved in passing the law. But they’re only proving him right," by Peter Suderman, Reason Magazine, November 18, 2014 ---
http://reason.com/archives/2014/11/18/yes-jonathan-gruber-is-an-obamacare-arch

Jonathan Gruber --- http://en.wikipedia.org/wiki/Jonathan_Gruber_%28economist%29#Controversies

Obamacaregate Question
Who disclosed the embarrassing Johathan Gruber videos?

Vox is a liberal/progressive Website, and this is a pretty good explanation of the Gruber embarrassment to date.
"The Jon Gruber controversy and what it means for Obamacare, explained," by Sarah Kliff, Vox, November 16, 2014 ---
http://www.vox.com/2014/11/13/7211279/obamacare-jon-gruber-controversy

. . .

4) Who keeps finding all these clips?

 

Rich Weinstein, a forty-something investment advisor whose insurance policy was canceled under Obamacare, has surfaced the last three videos. Dave Weigel has written a great profile of him, including this part where Weinstein describes how he got started:

"When Obama said 'If you like your plan, you can keep your plan, period'-frankly, I believed him," says Weinstein. "He very often speaks with qualifiers. When he said 'period,' there were no qualifiers. You can understand that when I lost my own plan, and the replacement cost twice as much, I wasn't happy."

So Weinstein, new plan in hand, started watching the news. "These people were showing up on the shows, calling themselves architects of the law," he recalls. "I saw David Cutler, Zeke Emanuel, Jonathan Gruber, people like that. I wondered if these guys had some type of paper trail. So I looked into what Dr. Cutler had said and written, and it was generally all about cost control. After I finished with Cutler, I went to Dr. Gruber. I assume I went through every video, every radio interview, every podcast. Every everything."

Continued in article

Jensen Comment
What are the biggest mistakes when the ACA was enacted?

Answer
In my opinion, apart from the technical things that need to be corrected such as foisting patient bad debts (due to premium payment lapses) on doctors and hospitals, the biggest mistake was the CBO's estimates of ACA costs, cost estimates that are largely traceable to Johathan Gruber.

"Pelosi Claims Health Care Reform to Save $1.3 Trillion," by Matt Cover, CNS News, March 26, 2010 ---
http://www.cnsnews.com/news/article/63373

According to the Congressional Budget Office, (in 2014) the latest projections for the net cost of ObamaCare over the next ten years are just over $1.4 trillion.
http://www.foxnews.com/opinion/2014/11/13/3-things-white-house-doesnt-want-to-know-about-obamacare-plus-3-things-coming/?cmpid=NL_opinion

Jensen Comment
Doesn't that add up to a $2.7 trillion change in estimated costs in four years?

Another embarrassment is how RomneyCare in Massachussets that preceded the ACA for the USA foisted RomneyCare costs on to Federal taxpayers. Governor Romney (and Ted Kennedy's legacy) should be embarrassed along with President Obama about Professor Gruber's revelations. ---
http://hotair.com/archives/2014/11/17/gruber-romneycare-just-a-way-to-rip-off-the-feds-for-400-million-a-year/


Obama personally asked me to help disguise unhelpful Obamacare facts.
Jonathan Gruber --- http://hotair.com/archives/2014/11/17/gruber-obama-personally-asked-me-to-help-disguise-unhelpful-obamacare-facts/


"Jonathan Gruber’s ‘Stupid’ Budget Tricks:  His ObamaCare candor shows how Congress routinely cons taxpayers," The Wall Street Journal, November 14, 2014 ---
http://online.wsj.com/articles/jonathan-grubers-stupid-budget-tricks-1416009107?tesla=y&mod=djemMER_h&mg=reno64-wsj

As a rule, Americans don’t like to be called “stupid,” as Jonathan Gruber is discovering. Whatever his academic contempt for voters, the ObamaCare architect and Massachusetts Institute of Technology economist deserves the Presidential Medal of Freedom for his candor about the corruption of the federal budget process.

In his now-infamous talk at the University of Pennsylvania last year, Professor Gruber argued that the Affordable Care Act “would not have passed” had Democrats been honest about the income-redistribution policies embedded in its insurance regulations. But the more instructive moment is his admission that “this bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies.”

Mr. Gruber means the Congressional Budget Office, the institution responsible for putting “scores” or official price tags on legislation. He’s right that to pass ObamaCare Democrats perpetrated the rawest, most cynical abuse of the CBO since its creation in 1974.

In another clip from Mr. Gruber’s seemingly infinite video library, he discusses how he and Democrats wrote the law to game the CBO’s fiscal conventions and achieve goals that would otherwise be “politically impossible.” In still another, he explains that these ruses are “a sad statement about budget politics in the U.S., but there you have it.”

Yes you do. Such admissions aren’t revelations, since the truth has long been obvious to anyone curious enough to look. We and other critics wrote about ObamaCare’s budget gimmicks during the debate, and Rep. Paul Ryan exposed them at the 2010 “health summit.” President Obama changed the subject.

But rarely are liberal intellectuals as full frontal as Mr. Gruber about the accounting fraud ingrained in ObamaCare. Also notable are his do-what-you-gotta-do apologetics: “I’d rather have this law than not,” he says.

Recall five years ago. The White House wanted to pretend that the open-ended new entitlement would spend less than $1 trillion over 10 years and reduce the deficit too. Congress requires the budget gnomes to score bills as written, no matter how unrealistic the assumption or fake the promise. Democrats with the help of Mr. Gruber carefully designed the bill to exploit this built-in gullibility.

So they used a decade of taxes to fund merely six years of insurance subsidies. They made-believe that Medicare payments to hospitals will some day fall below Medicaid rates. A since-repealed program for long-term care front-loaded taxes but back-loaded spending, meant to gradually go broke by design. Remember the spectacle of Democrats waiting for the white smoke to come up from CBO and deliver the holy scripture verdict?

On the tape, Mr. Gruber also identifies a special liberal manipulation: CBO’s policy reversal to not count the individual mandate to buy insurance as an explicit component of the federal budget. In 1994, then CBO chief Robert Reischauer reasonably determined that if the government forces people to buy a product by law, then those transactions no longer belong to the private economy but to the U.S. balance sheet. The CBO’s face-melting cost estimate helped to kill HillaryCare.

The CBO director responsible for this switcheroo that moved much of ObamaCare’s real spending off the books was Peter Orszag, who went on to become Mr. Obama’s budget director. Mr. Orszag nonetheless assailed CBO during the debate for not giving him enough credit for the law’s phantom “savings.”

Then again, Mr. Gruber told a Holy Cross audience in 2010 that although ObamaCare “is 90% health insurance coverage and 10% about cost control, all you ever hear people talk about is cost control. How it’s going to lower the cost of health care, that’s all they talk about. Why? Because that’s what people want to hear about because a majority of Americans care about health-care costs.”

*** Both political parties for some reason treat the CBO with the same reverence the ancient Greeks reserved for the Delphic oracle, but Mr. Gruber’s honesty is another warning that the budget rules are rigged to expand government and hide the true cost of entitlements. CBO scores aren’t unambiguous facts but are guesses about the future, biased by the Keynesian assumptions and models its political masters in Congress instruct it to use.

Republicans who now run Congress can help taxpayers by appointing a new CBO director, as is their right as the majority. Current head Doug Elmendorf is a respected economist, and he often has a dry wit as he reminds Congressfolk that if they feed him garbage, he must give them garbage back. But if the GOP won’t abolish the institution, then they can find a replacement who is as candid as Mr. Gruber about the flaws and limitations of the CBO status quo. The Tax Foundation’s Steve Entin would be an inspired pick.

Democrats are now pretending they’ve never heard of Mr. Gruber, though they used to appeal to his authority when he still had some. His commentaries are no less valuable because he is now a political liability for Democrats.

 

"Academic Built Case for Mandate in Health Care Law," by Catherine Rampell, The New York Times, March 28, 2012 ---
http://www.nytimes.com/2012/03/29/business/jonathan-gruber-health-cares-mr-mandate.html?pagewanted=all&_r=1&

After Massachusetts, California came calling. So did Connecticut, Delaware, Kansas, Minnesota, Oregon, Wisconsin and Wyoming.

They all wanted Jonathan Gruber, a numbers wizard at M.I.T., to help them figure out how to fix their health care systems, just as he had helped Mitt Romney overhaul health insurance when he was the Massachusetts governor.

Then came the call in 2008 from President-elect Obama’s transition team, the one that officially turned this stay-at-home economics professor into Mr. Mandate.

Mr. Gruber has spent decades modeling the intricacies of the health care ecosystem, which involves making predictions about how new laws will play out based on past experience and economic theory. It is his research that convinced the Obama administration that health care reform could not work without requiring everyone to buy insurance.

And it is his work that explains why President Obama has so much riding on the three days of United States Supreme Court hearings, which ended Wednesday, about the constitutionality of the mandate. Questioning by the court’s conservative justices has suggested deep skepticism about the mandate, setting off waves of worry among its backers — Mr. Gruber included.

“As soon as I started reading the dispatches my stomach started churning,” Mr. Gruber said of the arguments on Tuesday, while taking a break from quizzing his son for a biology test. “Losing the mandate means continuing with our unfair individual insurance markets in a world where employer-based insurance is rapidly disappearing.”

Mr. Gruber, 46, hates traveling without his wife and three children, so he is tracking the case from his home in Lexington, Mass. There he crunches numbers and advises other states on health care, in between headbanging at Van Halen concerts with his 15-year-old son and cuddling with the family’s eight parrots. (His wife, Andrea, volunteers at a bird rescue center.)

If the court rules against the mandate, Mr. Gruber says he believes the number of newly insured Americans could fall to eight million from the projected 32 million. He insists that without a mandate, the law will result in a terrible spiral: only relatively sick Americans will choose to get insurance, leading premium prices to rise and causing the healthier of even those sick people to drop their insurance, sending prices higher and higher.

Some other economists quibble, though, with Mr. Gruber’s pessimistic assessment.

“My general thought about the mandate is if insurance is affordable and accessible, most people will buy it anyway,” said David Cutler, an economist at Harvard and longtime collaborator of Mr. Gruber’s.

Others, like Paul Starr, a Princeton sociologist, say they believe Mr. Gruber’s work does not account for how hard it will be to enforce the mandate.

“There is this groupthink about how important the mandate is,” Mr. Starr says. “Most people don’t understand or won’t acknowledge how weak the enforcement mechanism is.”

Mr. Starr said he thought Mr. Gruber in particular was overstating the effectiveness of the mandate because “it’s his baby.”

 That said, it is difficult for too many other experts to categorically refute Mr. Gruber’s work, since he has nearly cornered the market on the technical science behind these sorts of predictions. Other models exist — built by nonprofits like the RAND Corporation or private consultancies like the Lewin Groupbut they all use Mr. Gruber’s work as a benchmark, according to Jean Abraham, a health economist at the University of Minnesota and former senior economist in both the Obama and George W. Bush administrations.

“He’s brought a level of science to an issue that would otherwise be just opinion,” Mr. Cutler says. “He’s really the only person who has been doing all this careful modeling for so long. He’s the only person you can go to for that kind of thing, which is why the White House reached out to him in the first place.”

Mr. Obama had made health care reform a cornerstone of his campaign, and wanted to announce a credible proposal quickly after taking office. But members of the Obama administration’s transition team said they had inherited an executive branch that had vastly underinvested in modeling research on health care, especially compared to the technical modeling that had been done in areas like tax policy.

“Creating a good model from scratch would have taken months, maybe years,” said Lawrence H. Summers, who was the director of President Obama’s National Economic Council and had advised Mr. Gruber on his dissertation when they were at Harvard.

Mr. Gruber had already spent years researching government mandates, starting with his 1991 dissertation about how mandated employer benefits cut into workers’ wages.

He also did similar analyses, on a broader range of public policies for the Treasury Department in the Clinton administration from 1997-98. He was recruited by Mr. Summers, who was then deputy secretary of Treasury.

Then in 2001, after returning to M.I.T., Mr. Gruber received an e-mail from Amy Lischko, who was then an assistant commissioner in the Massachusetts healthy policy department under then-Gov. Jane M. Swift, a Republican.

She was familiar with his work, and contracted him to model some potential ways that Massachusetts could expand health insurance coverage.

“He certainly wasn’t as well known then as he is now in the health care arena,” said Ms. Lischko, now a professor at Tufts University School of Medicine. “We couldn’t exactly kick the tires on these kinds of models back then, but we knew he had done work on simulations before.”

Mr. Gruber calls himself a “card-carrying Democrat.” He and his wife host a “great quadrennial Democratic victory party” whether or not the Democratic candidate wins, he said. But given his reputation and relatively rare expertise, he still ended up working for two Republican governors in Massachusetts.

When Mr. Romney succeeded Ms. Swift in 2003, he proposed using an individual mandate to help the state achieve universal health care coverage. Mr. Gruber was again brought in to analyze the idea, which he had not formally modeled before.

“Romney saw it as a traditional Republican moral issue of personal responsibility, getting rid of the free riders in the system, not as much of an economic issue,” Mr. Gruber said. “Not only were the Republicans for it, the liberals hated it. People forget that.”

Mr. Obama had vehemently opposed an individual mandate before his election in 2008.

After the Massachusetts plan passed in 2006, Arnold Schwarzenegger, then the Republican governor of California, invited Mr. Gruber to Sacramento to help model a similar proposal.

“That was awesome,” Mr. Gruber says, his eyes widening at the memory. “I got to see the sword from Conan the Barbarian.”

The California proposal fell apart, but soon Mr. Gruber had a little cottage industry helping states model potential health system changes. He also serves on the Massachusetts board that oversees the state’s new health care exchanges.

Along with these credentials, Mr. Gruber’s position as an adviser to the influential Congressional Budget Office also left him perfectly positioned to advise the White House on health reform.

“The most important arbiter of everything was the C.B.O.,” said Neera Tanden, who was a senior adviser for health reform at the Department of Health and Human Services.

The C.B.O.’s assessment of a bill’s efficacy and costs strongly influences political debate, but the office does not publicly reveal how it calculates those numbers.

“We knew the numbers he gave us would be close to where the C.B.O. was likely to come out,” Ms. Tanden said. She was right.

After Mr. Gruber helped the administration put together the basic principles of the proposal, the White House lent him to Capitol Hill to help Congressional staff members draft the specifics of the legislation.

This assignment primarily involved asking his graduate student researchers to tweak his model’s software code. It was also almost entirely conducted from his home office, while his children were at school and then after they had gone to bed.

“If I wanted to be in Washington, I’d have taken a job in Washington,” he said. “I wanted to be around for my family.”

Even though he was brought in by the White House, Congressional staff members from both parties trusted him because he was seen as an econometric wonk, not a political agent. But soon his very involvement with the bill caused questions about his objectivity to be raised in the news media.

During and after the bill’s slog through Congress, he frequently spoke with reporters and wrote opinion pieces supporting the Affordable Care Act but did not always mention his role in helping to devise it.

He says he regrets not being more upfront about his involvement with the administration. But he does not apologize for publicly advocating the legislation, and continuing to do so — including through a comic book he wrote to explain the law.

Yes, I want the public to be informed by an objective expert,” he says. “But the thing is, I know more about this law than any other economist.”

 

The unintentional Obamacare Wrecking Ball Professor from MIT
MIT economist Jonathan Gruber is one of the foremost architects of Obamacare, having bragged that he "knows more about this law" than anyone else in his field. He's also emerged as an unintentional one-man wrecking ball against Obamacare, making public statements that have undermined the Obama administration's legal and political defenses of the president's signature domestic legacy.
http://www.townhallmail.com/zlzjrctbjjwkrbjbkbrptkgllfkllbftddpcqrwdbwmdms_wzvdnjvgdsn.html

The Astonishing Omission in the Wall Street Journal's Story About Obamacare Enrollment
http://www.newrepublic.com/article/120268/wall-street-journal-article-latinos-obamacare-omits-medicaid

"Watch Obamacare Architect Jonathan Gruber Explain Why "Lack of Transparency" Was Key to Passing the Health Care Law," by Peter Suderman, Reason Magazine, November 10, 2014 ---
http://reason.com/blog/2014/11/10/watch-obamacare-architect-jonathan-grube

. . .

It's even harder to believe now that he has admitted that he thinks it's fine to mislead people if doing so bolsters the policy goals he favors. It's really quite telling, about the law and also about Gruber. Gruber may believe that American voters are stupid, but he was the one who was dumb enough to say all this on camera.

Jensen Comment
Condoning the misleading of the public for political purposes by a scientist borders on fabrication of data and may be in violation of his university's (MIT) academic integrity policy.

Similar issues arose in the allegations against Phil Jones regarding integrity of his climate temperature recordings ---
http://en.wikipedia.org/wiki/Climatic_Research_Unit_email_controversy
Professor Jones stepped aside temporarily but was reinstated. Nevertheless these and similar allegations badly damaged the public's confidence in climate change data.

Jon Krosnick, professor of communication, political science and psychology at Stanford University, said scientists were overreacting. Referring to his own poll results of the American public, he said "It's another funny instance of scientists ignoring science." Krosnick found that "Very few professions enjoy the level of confidence from the public that scientists do, and those numbers haven't changed much in a decade. We don't see a lot of evidence that the general public in the United States is picking up on the (University of East Anglia) emails. It's too inside baseball."[139]

The Christian Science Monitor, in an article titled "Climate scientists exonerated in 'climategate' but public trust damaged," stated, "While public opinion had steadily moved away from belief in man-made global warming before the leaked CRU emails, that trend has only accelerated."[140] Paul Krugman, columnist for the New York Times, argued that this, along with all other incidents which called into question the scientific consensus on climate change, was "a fraud concocted by opponents of climate action, then bought into by many in the news media."[141] But UK journalist Fred Pearce called the slow response of climate scientists "a case study in how not to respond to a crisis" and "a public relations disaster".[142]

A. A. Leiserowitz, Director of the Yale University Project on Climate Change, and colleagues found in 2010 that:

Climategate had a significant effect on public beliefs in global warming and trust in scientists. The loss of trust in scientists, however, was primarily among individuals with a strongly individualistic worldview or politically conservative ideology. Nonetheless, Americans overall continue to trust scientists more than other sources of information about global warming.

In late 2011, Steven F. Hayward wrote that "Climategate did for the global warming controversy what the Pentagon Papers did for the Vietnam war 40 years ago: It changed the narrative decisively."[143] An editorial in Nature said that many in the media "were led by the nose, by those with a clear agenda, to a sizzling scandal that steadily defused as the true facts and context were made clear."

Jensen Comment
Professor Gruber's confession will similarly affect the public opinion of the way Obamacare was foisted on the public. This is not a proud moment in science or the life of a scientist and his university.

Also see ethics issues at
http://www.ethicssage.com/2014/11/gruber-should-be-fired-from-mit-for-violating-academic-integrity.html

Flackcheck Patterns of Deception ---
http://www.flackcheck.org/patterns-of-deception/affordable-care-act/?gclid=CMWP97rJhsICFWxk7AodCA8AqQ

Bob Jensen's threads on professors who cheat ---
http://faculty.trinity.edu/rjensen/Plagiarism.htm#ProfessorsWhoPlagiarize

From the CFO Journal's Morning Ledger on November 6, 2014

Health insurers woo consumers in crowded market
http://online.wsj.com/articles/health-insurance-deadline-prompts-marketing-blitz-to-drum-up-business-1415202655?mod=djemCFO_h
Health insurers are unleashing a blizzard of ads, letters, live events and other efforts to reach consumers, as the industry ramps up for the reopening of the health law’s marketplaces on Nov. 15. Meanwhile, small-business owners test-driving the federal government’s new online health-insurance exchange report a mixed experience with the site ahead of its planned opening in 10 days.

Jensen Comment
Health insurance is currently a very good business for companies, because bad debts from people who do not pay contracted premiums are passed on to the doctors and hospitals after 30 days. In any case Obamacare promises guaranteed profits for insurance companies at taxpayer expense if necessary. This is not capitalism since one of the tenants of capitalism is that businesses take risks risks of losses and failure.

It's the doctors and hospitals that take the financial risks. In New Hampshire nearly half the hospitals refuse to admit patients with ACA insurance except in dire emergencies. Many doctors are turning patients away unless they have something other than ACA medical insurance.

Another good thing for insurers is that the deductibles have become so huge (40% to 60%) that insured people put off getting medical care until absolutely necessary --- thereby greatly reducing the number of claims to be processed and paid.

My point is that just to say that more people now have ACA health insurance is not saying a whole lot about the quality of health care that this insurance is buying. There will probably be gridlock for years in Washington DC for any attempts to bring quality health care to all citizens of the USA. I favor national health insurance, although national health insurance plans in most non-OPEC nations like Sweden, Denmark, and the UK are doing badly these days. I consider Canada to be an OPEC nation. Germany is doing better because it allows people to take on supplemental health insurance using their own savings.

The USA is now an one of the world's largest oil producers, but gridlock politics have all but destroyed possibilities for great health care for all citizens. It's one of the best nations for health care for people who can afford to pay for the services, including those lucky enough to be on Medicaid or Medicare.

 


A long-delayed correction of a lie
"You Might Lose Your Doctor Under Obamacare," WebMd, March 14, 2014 ---
http://hotair.com/archives/2014/03/14/great-news-80-of-employers-have-or-may-raise-deductibles-thanks-to-obamacare/

Voters in November might be ready to show Democrats what they think about removing choice and hiking costs, as well as their arrogance in determining that a few politicians in Washington know better about their choices than they do. Unfortunately, Barack Obama doesn’t appear to have figured out this problem. In an interview with WebMD, Obama finally acknowledged that, contra his promise, people might not be able to keep the doctors they liked, but that they probably shouldn’t have liked those doctors in the first place.

Jensen Comment
Why won't he still admit the truth. Many of those doctors that "they liked" tend to be so good that they get more than enough business without working for medical clinics and

Here in New Hampshire 10 of the 26 hospitals and many of the best physicians in the state refuse to go on network. One of the main reasons is that patients in default on their health exchange premiums must be treated for 90 days with physicians and hospitals bearing the treatment costs for the last 60 of those 90 days. God forbid that the fat-cat insurance companies or the Federal government take the risks of paying for the free care during those 60-days.


Questions
Was President Obama correct in promising that the ACA insurance would transfer Medicaid patients from ER rooms to ACA networked physicians?

How does the ACA expansion of Medicaid greatly increase the moral hazard of new Medicare patients?

One of the naive promises made by President Obama was that uninsured people previously seeking free care in Emergency Rooms (ER) would relieve the ER rooms for all the new Medicaid patients who could now have access to network physicians with their new free medical care and medication insurance policies. This was naive because he should have known that previous Medicaid patients preferred ER rooms even when they had  freeMedicaid insurance. He should have known that when Oregon expanded the number of people on Medicaid that demand for ER services increased by 40%.

People receiving free medical care and medications are inclined to favor ER services even when they can have care from network physicians. Reasons are complicated especially when walk-in medical clinics are available. One reason is that walk-in clinics serving Medicaid patients are not usually as close by as hospitals with ER services. The physicians in the ER facilities are likely to not only be MDs, they are sometimes better MDs that the staff of walk-in medical clinics who often hire newly graduated MDs still in residency or physicians assistants. In other words, if you want the best physicians the odds are usually better for ER rooms than networked ACA physicians and walk-in clinics.

When walk-in clinics are not convenient, getting an appointment with a networked physician may take weeks or even months. Top physicians are available 24/7 for emergency patients and non-emergency Medicaid patients. Insured patients not on Medicaid may be discouraged by co-pays of expensive ER services. But Medicaid patients never have to worry about co-payments.

Last night CBS News reported that ER use expanded by 40% due to new Medicaid patients.

 

"Medicaid Expansion Boosted Emergency Room Visits In Oregon," by Julie Royner, NPR, January 3, 2014 ---
http://www.wbur.org/npr/259128081/medicaid-expansion-boosted-emergency-room-visits-in-oregon

Giving poor people health insurance, the belief was, would decrease their dependence on hospital emergency rooms by providing them access to more appropriate, lower-cost primary care.

But a study published in the journal Science on Thursday finds that's not the case. When you give people Medicaid, it seems they use both more primary care and more emergency room services.

"Medicaid coverage increases emergency department use, both overall and for a broad range of types of visits, conditions, and subpopulations," says Amy Finkelstein, an economics professor at MIT and one of the authors of the study. "Including visits for conditions that may be most readily treatable in primary care settings."

In other words, people are going to the emergency department for things that aren't emergencies. This is exactly what policymakers hoped to avoid by giving people health insurance – including the huge increase in Medicaid coverage coming as part of the Affordable Care Act.

And the increase in ER use found in the study was significant – "about 40 percent," Finkelstein said.

This would be a good place to point out this is not just any study. It is the third major paper from something called the Oregon Health Insurance Experiment, which Finkelstein heads along with Katherine Baicker from the Harvard School of Public Health.

The experiment was a rare opportunity to create a randomized controlled experiment – the gold standard of scientific research. It came about almost by accident, thanks to Oregon's decision in 2008 to expand its Medicaid program via a lottery.

The result, said Finkelstein, was that the groups of people with or without insurance were identical, "except for the fact that some have insurance and some don't. You've literally randomized the allocation of insurance coverage."

And that gave researchers the ability to compare the effects of having health insurance — in this case, Medicaid.

The first paper from the research team, published in 2011, was mostly positive. It found that people who got Medicaid coverage were more likely to use health services in general, less likely to suffer from depression, and less likely to suffer financial problems related to medical bills than those who remained uninsured.

The results in the second paper, published last spring, were more equivocal. Researchers found no measurable health benefits in the Medicaid group for several chronic conditions, including hypertension, high cholesterol and diabetes.

It's not clear that the emergency room results will translate nationwide: The study only lasted 18 months and the study population is both more while and more urban than the rest of the nation.

But that's not stopping critics of Medicaid expansion.

"When you make ER care free to people, they consume more of it. They consume 40 percent more of it," says Michael Cannon, head of health policy for the libertarian Cato Institute. "Even as they're consuming more preventive care. And so one of the main arguments for how Obamacare was going to reduce health care costs is just flat out false."

Cannon says the study will likely further hurt President Obama's credibility for vowing that expanding Medicaid would help get people out of emergency rooms. But what's likely to bother the administration even more, he says, is what it may do to the half of the states that have yet to adopt the Medicaid expansion.

"This study is going to make it less likely that the 25 states that decided not to expand Medicaid are going to change their minds and decide to expand Medicaid," Cannon predicts.

But this study doesn't come as much of a surprise to those people who actually run Medicaid programs around the country.

"This is not something that is unexpected and not something that we're not prepared for," says Kathleen Nolan. She's director of state policy and programs for the National Association of Medicaid Directors.

Continued in article

Jensen Comment
The majority of new Medicaid patients will be poor, although it is possible for millionaires to now qualify for Medicaid with devious financial planning such as low income students having million dollar trust funds. The poor patients have incentives to game the ER services for prescription pain medicine. With one network physician or clinic, there will be records as to when prescriptions can be renewed. Given the Administration's track record for implementing databases, I strongly doubt that a Medicaid patient intent upon selling prescription pain killers can be prevented by traveling around to different hospital ER service for prescriptions that would not be granted if the ER physician was aware of the last time a Medicaid patient received such a prescription in another hospital and another and another.

I'm not certain how well pharmacies share prescription data or even if privacy laws even allow CVC and Walgreen and Wal-mart to even share a person's prescription data without receiving permission from the patient.

The moral hazard is greater with poor people in need of selling their pills like they sell food stamps.

Can prescription data be shared between different corporations without patient consent?

And then there's the problem of granting Medicaid to people who do not qualify for Medicaid. For example, an audit in Illinois revealed that half the people on Medicaid did not qualify for Medicaid. This appears to be yet another entitlement going crazy at taxpayer expense.

Bob Jensen's health care messaging updates --- http://faculty.trinity.edu/rjensen/Health.htm


The Lies and Deceptions

Americans stubbornly resist this landmark legislation in part because virtually every major claim about its benefits is turning out to be false—and people recoil when misled.
Karl Rove, The Wall Street Journal, September 30, 2010 ---
http://online.wsj.com/article/SB10001424052748704116004575522073624475054.html?mod=djemEditorialPage_t


Hi Norma,

Due in heavy part that the Affordable Care Act is passing both its deductible nonpayment bad debts and its premium non-payment bad debts (two of the three months of a three-month nonpayment grace period), many hospitals like the Andersen Cancer Center and many doctors (70% in California) are refusing to serve patients insured by the exchanges. The TV networks and major newspapers seem to conspire to not report this.
 
You may not be able to choose your doctor or hospital unless you pay cash or go on a high premium Cadillac plan that, in 2015, will cease to be tax deductible by you or your employer..
 
After his gun control initiatives failed in Congress, President Obama unilaterally added very expensive mental health coverage to the Affordable Care Act without mentioning that most psychiatrists will refuse to serve patients having any type of insurance..  Psychiatrists are already in short supply in the USA. Nearly half already only serve cash-paying patients and currently won't bill any insurance companies, including Medicare or Medicaid. I think even more will reject the the exchanges.
 
I have a relative who needs psychiatric medications daily. Even though her husband is on a good state university medical insurance plan for coverage of most of her medical needs, she's dependent upon the only (overworked) psychiatrist in the area. That psychiatrist does not accept insurance.
 
Why are there so few psychiatrists?
One reason is that psychiatry is the most dangerous medical specialty. Exhibit A is the recent mass murderer James Holmes in Aurora, Colorado who was booted off campus for threatening his psychiatrist. Personally I think another reason is that doctors do not like going into a specialty having such a low proportion of cure rates and having to be on call 24/7 (usually to prevent suicides).
 
Something will have to be done to prevent passing bad bad debts onto hospitals and doctors.
Now that the GOP has given up on deficit reduction (Sen. Ryan lied by excluding interest on the debt in his budget), perhaps  legislation to Federal coverage of bad debts on to the Federal government along with assurances that doctors can bill at their full rates they charge cash paying patients. The blow to the deficit will be devastating since patients have little incentive to pay their deductibles if the government will pay those deductibles.
 
What we now have is two political parties so desperate to win elections that both are now promising nearly-free medical coverage that will explode the deficit and provide false promises about the quality of medical care in short supply to meet exploding demand.
Medical care will be almost free as long as the government fails to seriously prevent frauds in Medicaid. Medicare phony disability coverage,  and the Affordable Care Act subsidies --- all three of which are now frauds out of control due to failed government enforcement

 

"Obamacare: Silence of the Insurers," by Jonah Goldberg, Townhall, December 18, 2013 ---
http://townhall.com/columnists/jonahgoldberg/2013/12/18/obamacare-silence-of-the-insurers-n1764535?utm_source=thdaily&utm_medium=email&utm_campaign=nl

When will the insurers revolt?

It's a question that's popping up more and more. On the surface, the question answers itself. We're talking about pinstriped insurance company executives, not Hells Angels. One doesn't want to paint with too broad a brush, but if you were going to guess which vocations lend themselves least to revolutionary zeal, actuaries rank slightly behind embalmers.

Still, it's hard not to wonder how much more these people are willing to take. Even an obedient dog will bite if you kick it enough. Since Obamacare's passage, the administration has constantly moved the goalposts on the industry. For instance, when the small-business mandate proved problematic in an election year, the administration delayed it, putting its partisan political needs ahead of its own policy and the needs of the industry.

But the insurers kept their eyes on the prize: huge guaranteed profits stemming from the diktat of the health insurance mandate. When asked how he silenced opponents in the health industry during his successful effort to socialize medicine, Aneurin Bevan, creator of the British National Health Service, responded, "I stuffed their mouths with gold."

Hence, the insurers were ready on Oct. 1. They rejiggered their industry. They sent out millions of cancellation letters to customers whose plans no longer qualified under the new standards set by the Affordable Care Act. They told their customers to go to the exchanges to get their new plans.

But because President Obama promised Americans "if you like your health care plan, you can keep it," (PolitiFact's "Lie of the Year"), those cancellations became a political problem of Obama's own making.

In response, the president blamed it on the insurance companies or "bad apple" insurers. White House spokesman Jay Carney insisted that it was the insurance companies that unilaterally decided not to grandfather existing plans. (The Washington Post's "Fact Checker" columnist, Glenn Kessler, gave this claim "Three Pinocchios.")

Then, just last week, Health and Human Services Secretary Kathleen Sebelius announced that she was "urging" insurers to ignore both their contracts and the law and simply cover people on the honor system -- as if they were enrolled and paid up. She also wants doctors and hospitals to take patients, regardless of whether they are in a patients' insurance network or even if the patient is properly insured at all. Just go ahead and extend the deadline for paying, she urged insurers; we'll work out the paperwork later.

Of course, urging isn't forcing. But as Avik Roy of Forbes notes, the difference is subtle. Also last week, HHS also announced last week that it will consider compliance with its suggestions when determining which plans to allow on the exchanges next year. A request from HHS is like being asked a "favor" by the Godfather; compliance is less than voluntary.

The irony, as Christopher DeMuth recently noted in the Weekly Standard, is that if the architects of Obamacare had their way, the insurers would have been in even worse shape today. The original plan was for a "public option" that would have, over time, undercut the private insurance market to the point where single-payer seemed like the only rational way to go. If it weren't for then-Sen. Joe Lieberman's insistence that the provision be scrapped, DeMuth writes, "Obamacare's troubles would today be leading smoothly to the expansion of direct federal health insurance to pick up millions of canceled policies and undercut rate increases on terms no private firm could match."

In other words, the insurers knew the administration never had their best interests at heart but got in bed with it anyway.

Continued in article

Jensen Comment
Until recently the enthusiasm of medical insurance companies was understandable since the the losses for deductible portions of contracts were passed on mostly to patients themselves and possibly their doctors. Most medical service bad debts of for default of premium payments were passed on to hospitals and doctors.

Also the big and prosperous insurance companies were allowed to opt out of participating in the more risky health insurance exchanges. Most did opt out such that the government had to make loans for new exchange companies to to become insurers for individuals not covered by their employers. These exchanges are poorly capitalized, and many will probably have to be bailed out by the government if and when they encounter insolvency.

To get more heavily capitalized insurance companies to participate would require higher premium rates and more protection against bad debt losses. But this in turn would raise premiums dramatically and be counter to the whole purpose of the Affordable Care Act ---  to get more people insured and using more preventative care options. High premiums and low deductibles could destroy the Affordable Care Act by making more rather than fewer people insured.

The silence of the media on astute health care providers is more problematic.
Many of the biggest and best hospitals like the Andersen Cancer Center will not serve patients covered by the exchanges. Over 70% of California's physicians will not serve patients covered by the exchanges (except in the case where emergency treatment is called for).

Has any media source complained that with proper investment planning very wealthy people, especially college students on trust funds, may get free Medicaid medical care and medications.

Jensen Question
I asked the following question on the Turbo Tax Forum Regarding the Affordable Care Act Questions:
Question
I'm told that only income, not wealth, will be the deciding factor on eligibility for Medicaid beginning in 2014.
If I'm a full time student having zero income and $10 million trust fund of stock paying no dividends, will I be eligible for Medicaid?

A Turbo Tax expert says that wealth may still be a criterion in the states that rejected the Medicaid expansion. Having valuable assets is no longer a criterion in those states that yielded to Whitehouse pressure and temporary funding to expand Medicaid roles.

There are 24 states who are not expanding Medicaid and may, therefore, still deny Medicaid to millionaires. The other 26 states may now grant free health care to millionaires who strategically lock in their wealth for long-term growth and negligible current income ---
https://www.statereforum.org/tracking-health-coverage-enrollment-by-state


"What 2014 means for Obamacare," by Sarah Kliff, The Washington Post, January 1, 2013 ---
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/01/what-2014-means-for-obamacare/

. . .

The next Obamacare fight is going to be about access.
After three months of enrollment, January will be the first month when shoppers can see what they purchased. We know that the plans for sale on the marketplace tend to have relatively limited networks, as insurers restricted doctor access to hold down premium prices. New subscribers could find that a doctor they want isn't in network, and get frustrated. Co-payments may seem alarmingly high -- a byproduct of keeping premiums low. While the health-care system probably has the capacity to absorb a few million new insurance subscribers (for a variety of reasons explored here) there is still room for issues about access to specific doctors and the price tag that comes along with trips to the doctor's office.

Continued in article

Jensen Comment
While the new Medicaid patients will probably flood the hospital ERs instead of seeking out network physicians, the patients on plans requiring co-payments and deductibles will probably seek out physicians on their network plans. Hospital ERs tend to charge large co-payments which of course do not matter to Medicaid patients since they do not have to pay any co-payments.

 

In some instances physicians who are suing the ACA network insurers after being dropped by the networks
",MDs sue ObamaCare insurer over dropped doctors" by Geoff Earle, Fox News, December 28, 2013 ---
http://nypost.com/2013/12/28/mds-sue-obamacare-insurer-over-dropped-doctors/

A group of New York doctors is suing insurance giant UnitedHealthcare, charging that it booted doctors from its network to avoid cost hikes imposed by ObamaCare.

The company’s decision to kick more than 2,000 docs from its Medicare Advantage network threatens to harm elderly and disabled patients, according to the filing in Brooklyn federal court.

“By terminating numerous physicians from the . . . network, United seeks to stem financial losses occasioned by reduced federal payments under the Affordable Care Act,” the suit launched by the Medical Society of the State of New York claims.

“This, of course, comes at the expense of physicians,” the suit continues, arguing that the company violated doctors’ contracts by failing to give sufficient notice, among other things.

Tugging at the heartstrings, the suit specifically mentions elderly and disabled patients “who must now either find new physicians (including traveling farther distances to find a participating . . . provider), switch plans to continue treatment with the terminated physicians, or pay significant additional out-of-pocket costs to continue treatment with an ‘out-of-network’ provider.”

It accuses United of “shifting the financial burdens imposed by the Affordable Care Act from itself, a multibillion-dollar company,” to providers and patients.

Medical Society President Sam Unterricht told The Post the company’s decision was unfair to patients, since they had to choose a new plan under Medicare Advantage, a private alternative to traditional Medicare, by Dec. 7, when company Web sites still showed doctors who were being kicked out of the network at the start of the new year.

“For some people who are medically fragile it can really be dangerous. There can be gaps in care,” he said.

Unterricht said reduced Medicare Advantage payments to physicians are being used as a cost-saving measure to fund ObamaCare. He said docs would get paid 20 percent or even 40 percent less per patient.

“A lot of doctors are not going to be able to accept that and really give good medical care at that kind of a price,” he said.

Continued in article

Jensen Comment
This is a reversal of the stories we are hearing about physicians boycotting the ACA networks.

We are seeing a bit about this up here. In their separate offices in our Littleton Regional Hospital three different medical network groups each dropped one of its MDs. Interestingly, all three of the dropped physicians at one time or another been general practitioners for my wife or me. The dropped MDs were all women MDs who were replaced by new and much cheaper Physician Assistants who are permitted, at least up here, to examine patients like a physician and write prescriptions.

One of the MDs, Dr. Virginia Jeffryes, after facing the huge expense of starting a new practice, was hired back by her network group but now has to commute to Whitefield. Dr. Kathleen Smith and Dr. Robin Hallquist are incurring the expenses of commencing new practices in Littlleton and Twin Mountain respectively. The startup expenses include renting office space, hiring medical and administrative staff, buying computers and other equipment,, going it alone for malpractice insurance premiums. Plus there is an enormous amount of red tape involved in getting permission to bill third parties like Medicare and Worker Comp.

I firmly believe these quality physicians were dropped by their respective medical network groups and replaced by Physician Assistants (PAs) and/or Osteopaths to save money. That, however, is only my opinion since I have no inside tracks to the accounting records.

One of the network groups retained a cheap and uncaring MD trained in another country. She needs and attitude adjustment. I'm told by a neighbor who works in the hospital that her patients are continually asking for another "doctor" be it a PA or an Osteopath.

Why didn't the group fire the lousy MD and retain the high quality MD? That's a no-brainer question for a managerial accounting student.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


Deloitte's Map of the Number of Healthcare Exchanges Estimated Per State ---
http://www.deloitte.com/assets/Dcom-UnitedStates/Local Assets/Documents/Health Plans/us_hp_hix_IndividualMarketCompetition_81313.pdf
For example, New Hampshire and West Virginia have one whereas Texas has 11, Wisconsin has 13, and New York has 16.
Each carrier does have multiple plans that vary largely on the size of the deductibles with bronze plans having 40% deductibles and silver having 30% deductibles. Prices vary in different states. Prices also vary with age and smoking.

There are differences even among states who are not providing their own exchanges. Currently there are 26 states who rely on Federally provided exchanges ---
https://www.statereforum.org/where-states-stand-on-exchanges
Why does Maine have only two exchanges while Texas has 11 exchanges?

How to Mislead With Statistics and Graphs

Question
If you were teaching statistics how could you use the following article to illustrate how to mislead with statistics?

"Obamacare Prices: Competition Lacking in Some Exchanges," by John Tozzi, Bloomberg Businessweek, December 19. 2013 ---
http://www.businessweek.com/articles/2013-12-19/obamacare-prices-competition-lacking-in-some-exchanges?campaign_id=DN122313

The drafters of the Affordable Care Act imagined vibrant marketplaces that would give consumers options from many insurers. So far, competition is limited: 40 percent of Americans live in counties with three or fewer companies selling Obamacare policies, leaving them more wireless carriers to choose from than health plans.

 

Jensen Comment
No matter how much we preach that correlation is not causation, journalists, students, and even professors fall into the same old trap of not digging deeper for causes rather than implying that correlation is synonymous with causation.

Yes premiums do seem to be correlated with competition. But how much is the competition really affecting price relative to underlying causal factors that affect such things as companies refusing to enter the competition?

Insurance companies themselves are not very forthcoming about why they avoid certain markets other than providing vague statements about those markets not being profitable. The bottom line is that I don't know why there is so little medical insurance competition in some parts of the country relative to other parts of the USA. But I would not be so naive to imply that lack of competition is a causal factor. Where there's lack of competition there are most likely either underlying barriers to entry or other causal factors that make medical insurance less profitable in those areas. Charging higher prices for insurance in those markets is a result of whatever factors are driving potential competitors out of those markets.

A skilled analyst would probe deeper as to why there is so little competition in come counties and states.

  • Could regulations at the state or county level be making the insurance market so unprofitable that most companies elect not to enter those markets?

     
  • Could litigation risks may be so high in a state or county that most companies are avoiding the market?

     
  • Could there be underlying causes result in higher medical service costs that drive the competition away in some counties?  For example, some states have more county hospitals that are funded by property taxes, thereby allowing for lower priced services of the hospitals.

     
  • Could it be that some counties/states have a higher proportion of people likely to become bad debts? Remember that in case an insured person defaults on a premium, the insurance company must pay for the medical care of that person for 30 days and the health care provider must pick up 60 more days in a 90-day grace period where a person remains insured in spite of defaulting on payments under Obamacare.

     
  • Could health differences explain the reluctance of companies to enter some markets. Health differences around the country explain between 75 percent and 85 percent of the cost variations." Jordan Rau in Kaiser Health News.
    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/29/trouble-for-obamacare-in-new-hampshire/

December 24 reply from the TurboTax Forum

Hello rjensen,

SweetieJean commented on an answer to your question: Why does the number of exchanges vary so greatly. For example, New Hampshire and West Virginia have only one exchange whereas New York has 16 exchanges and Texas has 11 exchanges?

Saw a recent article about someone who had only 1 insurance in their Exchange, but their across the street neighbor (who lived in a different zip code) had 15.  In very rural areas (NH, WV), there isn't enough of a customer population for most insurance companies to make a profit.

 

To view the comment, click (or copy and paste in your browser) the link below:
https://ttlc.intuit.com/replies/3351534

 


I never knew about ACA consumer add-on taxes until this was reported today by CBS News
"As Obamacare Deadline Looms, Insurance Companies Pile On The Taxes," CBS News, December 26, 2013 ---
http://newyork.cbslocal.com/2013/12/26/as-obamacare-deadline-looms-insurance-companies-pile-on-the-taxes/

. . .

And there’s more: most insurance companies don’t tell you about the taxes they add to their premiums. The numbers will vary, but one subscriber said their tax amount is $23.14 a month, or nearly $278 annually.;

Other add-ons include:

* A 2 percent premium tax on every health plan.

* A user fee of 3.5 percent to sell through the online marketplace.

* A $2-per-policy fee.

Nonetheless, supporters of the Affordable Care Act claim the neediest will get the best coverage.

“People who make a little more will pay more; people who make a little less will pay less,” Arevalo said.

Critics say most insurers don’t specifically post taxes on invoices, and some question how, in the case Brennan showed earlier, Alabama Blue Cross-Blue Shield was able to be so specific.

Watch the video


Surely Chuck you cannot argue that having premiums and choices of plans vary so drastically across zip codes is fair.
"COST, NUMBER OF HEALTH CARE PLANS VARY WIDELY BY COUNTY," USA Today ---
http://www.usatoday.com/story/news/nation/2013/11/21/affordability-obamacare-plans-varies-state-county/3641821/
Look at the maps!

The variable premiums and deductibles that were somewhat unfair by zip codes before the ACA have exacerbated those and are increasingly unaffordable in some zip codes. The USA Today (December emphasizes this ---
"Lack aid? Many counties have only pricey plans," by Jayne O'Donnell, USA Today, December 26, 2013 ---
http://www.usatoday.com/story/news/nation/2013/12/25/affordability-healthcaregov-plans-usa-counties/4165513/

 More than half of the counties in 34 states using the federal health insurance exchange lack even a bronze plan that's affordable — by the government's own definition — for 40-year-old couples who make just a little too much for financial assistance, a USA TODAY analysis shows.

 Many of these counties are in rural, less populous areas that already had limited choice and pricey plans, but many others are heavily populated, such as Bergen County, N.J., and Philadelphia and Milwaukee counties.

More than a third don't offer an affordable plan in the four tiers of coverage known as bronze, silver, gold or platinum for people buying individual plans who are 50 or older and ineligible for subsidies.

Those making more than 400% of the federal poverty limit — $47,780 for an individual or $61,496 for a couple — are ineligible for subsidies to buy insurance.

The USA TODAY analysis looked at whether premiums for the least expensive plan in any of the metal levels was more than 8% of household income. That's similar to the affordability test used by the federal government to determine whether premiums are so expensive consumers aren't required to buy plans under the Affordable Care Act.

The number of people who earn close to the subsidy cutoff and are priced out of affordable coverage may be a small slice of the estimated 4.4 million people buying their own insurance and ineligible for subsidies. But the analysis clearly shows how the sticker shock hitting many in the middle class, including the self-employed and early retirees, isn't just a perception problem. The lack of counties with affordable plans means many middle-class people will either opt out of insurance or pay too much to buy it.

The prices of exchange plans have shocked many shoppers, especially those who had plans canceled because they did not meet the ACA coverage requirements. But experts are not surprised.

"The ACA was not designed to reduce costs or, the law's name notwithstanding, to make health insurance coverage affordable for the vast majority of Americans," says health care consultant Kip Piper, a former government and insurance industry official. "The law uses taxpayer dollars to lower costs for the low-income uninsured but it also increases costs overall and shifts costs within the marketplace."

Along with underscoring how high rates are in many places, the analysis could portend more problems for the health law's troubled rollout. The Congressional Budget Office projected 7 million people would sign up for the law by the end of 2014 and enrollment is already falling several million short of that goal. Insurers need a lot of relatively healthy people to sign up for insurance to make up for the higher cost of insuring the less healthy. Highly subsidized lower-income consumers who haven't had insurance before often weren't getting regular doctors' visits. If many of those making about $50,000 for an individual or about $62,000 in household income for a couple opt out of the new health care system, it will deprive it of some of the counterbalancing effect needed.

Still, about 95% of consumers live in states where the average premiums are below earlier estimates, says Department of Health and Human Services spokeswoman Joanne Peters.

"The new Marketplace is night and day from what consumers faced in the individual market before the health care law, where they could see unlimited out-of-pocket expenses for plans with limited benefits and high deductibles, if they can even get coverage without being denied for a pre-existing condition," says Peters.

Many ACA-compliant plans will cover prescription drugs, routine care for chronic conditions and primary care visits even before deductibles are met, Peters notes.

But those aren't the plans that are affordable to many middle-class individuals buying insurance. In many cases, catastrophic plans — which USA TODAY excluded from its analysis — may be all that's left for consumers on the exchanges. These high-deductible plans are generally only available for consumers under 30, who are least likely to need to use them, but they can also be purchased by people who don't have other affordable options available in their area. These plans generally require consumers to pay all of their medical costs up to a certain amount — often $6,000 or more — although preventive benefits such as physicals have to be covered under the new law.

President Obama said last week that people whose plans were canceled and think the options on the exchanges are too expensive aren't required to buy insurance or can buy a catastrophic plan through what's known as a "hardship exemption." But most people actually do want insurance, says financial counselor and author Karen McCall.

"Every one of those people, if they have any consciousness and aren't totally self-medicating, would prefer to have insurance," says McCall, author of the book Financial Recovery. "You could go a year and not get any benefit of health insurance, but there is a deep emotional need to know that we have proper insurance."

State and federal exchange officials approve the rates health insurers can offer, and plans are then subsidized to levels that make them affordable for those below 400% of the poverty level. Karen Pollitz, a senior fellow at the Kaiser Family Foundation, acknowledges that catastrophic and even bronze plans would be very difficult for many 40 or 50-something consumers to afford with their $5,000-$6,000 annual deductibles.

"Most people don't have that kind of money in the bank, and I think it's going to create problems for people," Pollitz says.

Although premiums are unaffordable in many places now, protections in the law will prevent the massive jumps in premiums that characterized the individual insurance market before the ACA, she says.

Individual policies before had only the "optics of affordability and no dependability," Pollitz says. "What good is protection if it doesn't work when you need it?"

More than half of the counties in 34 states using the federal health insurance exchange lack even a bronze plan that's affordable — by the government's own definition — for 40-year-old couples who make just a little too much for financial assistance, a USA TODAY analysis shows.

Many of these counties are in rural, less populous areas that already had limited choice and pricey plans, but many others are heavily populated, such as Bergen County, N.J., and Philadelphia and Milwaukee counties.

More than a third don't offer an affordable plan in the four tiers of coverage known as bronze, silver, gold or platinum for people buying individual plans who are 50 or older and ineligible for subsidies.

Those making more than 400% of the federal poverty limit — $47,780 for an individual or $61,496 for a couple — are ineligible for subsidies to buy insurance.

Jensen Comment
If we are going to have affordable health care for all then the premiums should be affordable by all and not my some zip codes suffer much more than people living in other zip codes.


 

  1. The new rules in many states for extending free Medicaid on the bases of only income without tests of assets (such as students having million dollar trust funds) are huge moral hazards for millions of people to get totally free medical service and medications. My wife's long term friend (for over years) has a daughter living across the street in Longview Texas. The daughter put her share of their $200,000 plus house into her husbands name, divorced her husband, quit her job, and is now on welfare and Medicaid for herself and her children. She still lives in the house with her husband and readily admits this was a sham divorce. Her "husband" makes over $70,000. She tells the welfare folks she's living across the street with her parents --- which is a blatant lie.


    In Texas she had to sign off on her ownership of the house. In one of the states relaxing Medicaid rules she should get Medicaid and completely own the house herself. as long as her "former husband" paid the property taxes and other house expenses. In fact she could own a million dollar house and still get Medicaid's free health care.

     
  2. In order to make their premiums lower (with or without subsidies) most people are opting for bronze and silver plans where they must pay 30%-50%) of all medications and medical care. If they get hit with big bills most of these people just do not have the money to pay their deductibles. Either they will forego treatment or pass their bad debts on to doctors and hospitals .

     
  3. The ACA law should have been enacted only after rule enforcement checks were in place. I think the law should not have commenced without having the IRS matching incomes against subsidies and Medicaid expansion.

     
  4. In the past people who defaulted on premiums became uninsured people who were treated in special facilities such as county hospitals funded by taxpayers. Now people who default on premiums get a 90-day grace period where insurance companies pay their medical costs for 30 days and the doctors and hospitals have to pay for their medical care for 60 days.
     
  5. President Obama was smart to delay the employer-provided plans for a year. The main advantage of this is that employees are not yet shocked by how much more they will be paying out-of-pocket for higher premiums, higher co-pays, and hi9gher deductibles.
    "Employees will pay more for health care in 2014: New year likely to bring higher deductibles and co-pays, smaller employer contributions." by Julie Appleby, USA Today, December 19, 2013 ---
    http://www.usatoday.com/story/money/personalfinance/2013/12/19/employee-health-insurance/3958071/

 

Jensen Comment
The problem is that the ACA is just not sustainable unless drastic changes are made. The ACA assumed that wealthier and healthier people were going to pay for almost all the expansion of free Medicaid medical care and subsidized premiums. But the prices that were set are just not affordable to too many people and in order to have medical plans other people are opting for high deductibles that they will not be able to pay in times of expensive medical care needs.  Furthermore, the pricings are too variable and unfair across all the counties of the USA.

The ACA is just not sustainable. It should have been a national health plan from the beginning. Turning it into a national health plan in the future will be an enormous shock to the slowly expanding economy and a disaster to the entitlements disaster.

But I don't really care all that much. I will be dead before the enormous disasters hit.
I just hate the fraud and unfairness that the ACA is exacerbating. It turns out that the preconditions problem for uninsured people was not all that great a problem that could have been solved much more cheaply. The majority of the the problem with uninsured people was that they either could not afford or did not want to afford medical insurance that is now ever more costly to many of these same peopl


"Obama's Mental Health Solution Falls Flat," by Nicole Bailey, Townhall, December 2, 2013 ---
http://townhall.com/tipsheet/nicolebailey/2013/12/12/obamas-mental-health-solution-falls-flat-n1761910?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm

. . .

The Obama administration has expanded mental health care coverage, but the latest research shows that psychiatrists often do not accept insurance at all. When only 43% of psychiatrists accept Medicaid, it is difficult to see how expanded coverage will help mental health patients.

Psychiatrists accept medical insurance less frequently than other specialists across the board, according to the study published in JAMA Psychiatry by researchers from three separate medical schools:
 

  • 55.3% of psychiatrists accepted medical insurance in general, compared to 88.7% of other physicians
  • 54.8% of psychiatrists accepted Medicare, compared to 86.1% of other physicians
  • 43.1% of psychiatrists accepted Medicaid, compared to 73.0% of other physicians

The mainline media seems to avoid the greatest concerns of the Affordable Care Act --- concerns about making hospitals and doctors absorb most of the costs of medical care during the 90-day premium default grace period and the cost of serving patients who afterwards renege on paying the deductible portions that they agreed to pay to get lower premium plans.

The USA now has a dual health care program --- the highest quality health care in the world for the wealthy on Cadillac medical insurance plans and inferior quality health care in the chaos of the Affordable Care Act that will force soaring inflation in health care provider pricings. Your local Congressional representative is signing up for a Cadillac plan paid for by taxpayers.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


the Affordable Care Act:  Limits Placed Upon Choosing Your Own Doctor and Hospital

Jensen Comment
The media along with President Obama led us to believe that medical insurance plans were going to vary only be the amount of the deductibles and age of the applicant. We are now learning more about differences in medical networks of hospitals and doctors. The President kept insisting that we could keep our present doctors. Technically that was not a lie, but what was left unsaid is that to literally keep your favored doctors and hospitals you may have to opt for the more expensive Cadillac plans having "broader network coverage "of physicians and selective hospitals that opted out of serving the lower-priced limited network plans.

Dr. Ezekiel Emanuel --- http://en.wikipedia.org/wiki/Ezekiel_Emanuel

"ObamaCare in Translation Ezekial Emanuel explains what the President really meant about your doctor," The Wall Street Journal, December 8, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304014504579246552456954872?mod=djemEditorialPage_h

. . .

Mr. Wallace: "It's a simple yes or no question. Didn't he say if you like your doctor, you can keep your doctor?"

Dr. Emanuel: "Yes. But look, if you want to pay more for an insurance company that covers your doctor, you can do that. This is a matter of choice. We know in all sorts of places you pay more for certain—for a wider range of choices or wider range of benefits. The issue isn't the selective networks. People keep saying, 'Oh, the problem is you're going to have a selective network.'"

Mr. Wallace: "Well, if you lose your doctor or lose your hospital—"

Dr. Emanuel: "Let me just say something. People are going to have a choice as to whether they want to pay a certain amount for a selective network or pay more for a broader network."

Mr. Wallace: "Which means your premiums would probably go up."

Dr. Emanuel: "They get that choice. That's a choice you've always made."

It's nice to hear a central planner embrace choice, except this needs translating too. The truth is that you may be able to pay more to keep your doctor, but only after you choose one of ObamaCare's preferred plans that already costs you more than your old plan that ObamaCare forced you to give up.

Jensen Comment
What Dr. Emanuel failed to mention is that the "broader expensive network" plans are Cadillac plans for which employers lose their tax deductions.

The Cadillac Tax: A Game Changer for U.S. Health Care:  Can you explain this tax to your students?
Do you understand the Cadillac Tax provision of the Affordable Healthcare Act that will have a monumental 2018 impact on healthcare coverage of employees who are now covered by employer plans --- plans now costing the government over $250 billion per year? But not for long!

Do you understand the Cadillac Tax provision?
Me neither. As Nancy Pelosi said years ago, Congress passed the ACA before anybody in the USA had a chance to study all the surprises in this the enormous bill.

If you're covered presently on your employer's plan you should most certainly learn about the Cadillac Tax provision that kicks in in 2018.

"The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/

Jensen Comment
Non-profit organizations, especially labor unions, for whom Cadillac plans are especially popular will be allowed to keep their plans without penalty since tax deductions are not of concern to them.

Having preferred networks of doctors and hospitals is not unheard of in national health care plans. Germany, for example, has both public health insurance plus premium coverage with private insurance. Cuba notoriously has bourgeoisie plans for members of the Communist Party and the wealthy versus  proletariat plans for the poor people.

If you Congressional representative brags about signing up for Obamacare ask if he or she has a Cadillac Obamacare plan that lets them choose their own doctors and hospitals.


President Obama's Blatant Political Payoff:  Unions Get Tax-Free Cadillac Health Plans Unlike the Rest of the USA
Oops Some Selected Corporations Get Breaks as Well
"Unions Get Big ObamaCare Christmas Present As Other Self-Insured Groups Get Scrooged," by Larry Bell, Forbes, December 22, 2013 ---
http://www.forbes.com/sites/larrybell/2013/12/22/unions-get-big-obamacare-christmas-present-as-other-self-insured-groups-get-scrooged/

As a presumed constitutional scholar, Barack Obama should know that while a president has authority to check the Legislative Branch by recommending legislation to be passed by Congress, or through presidential veto, he or she cannot legislate through executive fiat or pick which parts of the law to comply with or decline. Article 2, Section 3, Clause 5 of our Constitution requires that the president “…shall take care that the Laws be carefully executed.” It doesn’t limit those laws or encapsulated provisions to the particular ones that he or she likes.

Speaking before the House Judiciary Committee on December 3, Professor Jonathan Turley of George Washington University observed that the president isn’t taking that “Laws be faithfully executed” oath very seriously, particularly with regard to his signature Affordable Care Act (aka.“ObamaCare”).

Although Turley had voted for Obama and professes to agree with him on health care and other issues, he warned that his power grabs are causing “the most serious constitutional crisis in my lifetime.”

The White House Earns Its Union Label

In addition to delaying and rewriting key ACA provisions and carving out a special subsidy for members of Congress, Obama’s latest constitutional violation will exempt unions from a fee the law imposes upon all large group health plans. That provision which appears in Section 1341 (b)(1)(A)  establishes a reinsurance program to compensate insurers on exchanges in the individual market if they are hit with higher than expected costs to cover those with pre-existing conditions. This will come from insurers and self-insured employers who pay in proportion to the number of people they cover. The target is to raise $25 billion during 2014, amounting to $63 per covered employee. The union exemption would kick in for 2015 and 2016.

As reported in a Wall Street Journal editorial, “The unions hate this reinsurance transfer because it takes from their members in the form of higher premiums and gives to people on the exchanges.”

The union exemption deal will require that insurers who aren’t fully reimbursed by fees along with non-exempted self-insured employers will have to pay more to make up the shortfall. How will they make that up? How else but by passing on higher costs to their customers? The Department of Health and Human Services has confirmed that the fee for other non-exempt plans will be higher as a result.

Responding to union pressure, an exemption buried on page 72,340 of the December 2 Federal Register states: “Our continued study of this issue leads us to believe that this provision may reasonably be interpreted in one of two ways – it may be interpreted to mean that self-insured, self- administered plans must make reinsurance contributions, or it may be interpreted to mean that such plans are excluded from the obligation…upon further consideration of the issue, we believe the statutory language can reasonably be read…”

Yet as Betsy McCaughey points out in an Investor’s Business Daily piece, while Taft-Hartley plans self -insure and self-administer, the weasel-wording is a ruse. She writes:  “That’s a lie. The ACA’s reinsurance provision doesn’t use the word ‘self-insured’ or distinguish between plans that pay their own claims and plans that hire administrators.”

Here, “self-insured” refers to a business which pays directly for its workers’ policy costs and hires an insurer as a third-party administrator to process claims and manage care. “Self-administered” plans go one step farther and manage their benefits in-house. As the Wall Street Journal observes, other than collectively-bargained Taft-Hartley plans, “Almost no business in the real world still follows this old –fashioned practice”. Such insurance covers about 20 million union members, and about four out of five Taft-Hartley trusts.

Eleven Republican senators who see the exemption as blatant congressional circumvention and cronyism by the Obama administration to curry favor with political allies have introduced a bill called the “Union Tax Fairness Act” (S. 1724) to block it. Included are U.S. Senators Orrin Hatch (R-UT), John Thune (R-SD), Lamar Alexander (R-Tenn.), James Inhofe (R-OK), David Vitter (R-LA), Mike Enzi (R-WY), Ron Johnson (R-WS), John Barrasso (R-WY), Tim Scott (R-SC), Saxby Chambliss (R-GA), and Tom Coburn (R-OK).

Senator Hatch commented: Since the overwhelming majority of self-administered health insurance plans are run by unions, let’s call this what it is: a political payback by the administration to its union friends for backing this disastrous law. But the fact is, the White House doesn’t have the authority to change the law on its own and, as this bill makes clear, any attempt at a Big Labor carve-out from ObamaCare must be approved by Congress.”

Senator Thune said: “Unions should not be granted a special exemption from ObamaCare’s reinsurance tax just because the president fears further union backlash on his signature law. These unions agreed to pay this tax when they endorsed ObamaCare, but now that they are finding out what the law means for them and their plans, they want out. Rather than granting special backroom deals to political allies, the administration should support fairness for all by permanently delaying the law for every American.”

Senator Alexander added: The Obama administration should not reward its labor union friends and allies who helped pass the health care law by giving them a carve-out from the law’s worst provisions. This hefty reinsurance fee is one of the many job-killing taxes that helped pay for the passage of the law – the administration should be embarrassed that it would consider exempting their union cronies without providing similar relief to our nation’s employers and faith-based and charitable organizations.”

The unions weren’t the only cronies to get a special ObamaCare break. Insurers who went along with ACA from the beginning in order to expand markets from previously uninsured populations on the taxpayer dole didn’t want any of that same medicine for themselves.

Ten giant health insurance companies, including Blue Cross/Blue Shield, Cigna and Aetna, went to the White House and received waivers allowing them to impose yearly cap limits on health coverage they provide to their own employees. Under ObamaCare, companies which aren’t exempt are required to phase out caps on annual health care benefits by 2014.

Cigna Corp., the largest waiver exemption beneficiary, was allowed to cap benefits for its 265,000 employees. This exception was granted just slightly less than one month before its CEO David M. Cordani told attendees at a November 9, 2010 Reuters Health Summit: “I don’t think it’s in our society’s best interest to expend energy in repealing the law.”

Aetna was granted a waiver on October 1, 2010 allowing it to cap benefits for its 209,423 enrollees. The company’s CEO Mark Bertolini had previously expressed mixed feelings about the legislation. Writing in a March 2010 Op/Ed which appeared in the Hartford Courant shortly after it became law, he said: “When fully implemented, the new law will have a major effect on the market…Individuals and small employers will have more options and choices. The private sector will do what it does best: innovate to solve problems,”

The BCS Insurance Group which notes on their website “We are the premier source for insurance and reinsurance for Blue Cross and Blue Shield plans” received an ObamaCare waiver for its 115,000 enrollees. In fact three divisions of Blue Cross/Blue Shield reportedly received waivers. They include Excellus Blue Cross/Blue Shield (18,860 enrollees), Blue Cross/Blue/Shield of Tennessee (20,205 enrollees), and Mountain State Blue Cross/Blue Shield with 270 enrollees.

HHS waivers from oversight rules were granted to “Medigap” policy providers which exempts them from releasing and explaining health care payment rate increases. According to the Daily Caller, AARP, the largest of these, advocated for ObamaCare to include an attack on their biggest competitor, Medicare Advantage.

AARP was a driving force behind getting ObamaCare through Congress. They conducted a $121 million advertising campaign to push it, plus spent millions more lobbying for it on Capitol Hill. After President Obama called for $313 billion in Medicare cuts to fund his signature program, Medicare Advantage took the big hit.

Broken Premises

Don’t forget that ObamaCare would have encountered the same forgotten fate as HillaryCare had it not been for the support of big unions and insurers. Perhaps recall those throngs of United Federation of Teachers (UFT) and Service Employee International Union (SEIU) members picketing the Supreme Court in favor of its approval carrying signs that read “Protect Working Families, Protect the Law”.

And they already received gratitude. Immediately after the provisions took effect, unions requested and were granted 1,231 waivers exempting 543,812 of their employees compared with only 69, 813 non-union worker exemptions.

Continued in article

Jensen Comment
With most of the millions of signing up "affordable health care" getting free medical care under the expanded Medicaid programs or premiums subsidized by the government, it shouldn't end up as a surprise who will really pay for medical care in the future. That's becoming a no-brainer. Even clever millionaires such as students with trust funds are now eligible for free Medicaid health care.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm

 


How to Lie With Naive Politically Correct Estimates

"Affordable Care Act: 17 Million Can Get Subsidies," by Mary Agnes Carey, WebMD News from Kaiser Health News, November 5, 2013 ---
http://www.webmd.com/health-insurance/20131105/17-million-people-eligible-for-premium-subsidies-study-finds

Jensen Comment
Fraud is inevitable and cannot be prevented when it comes to giving out subsidies to to insured that are not legally entitled to such subsidies. Firstly, there's the $2 trillion underground economy where people are receiving income that even the IRS cannot detect --- those folks who work for unreported cash earnings. We're talking about millions of people who do not report any income to the IRS or greatly under report their incomes ---
http://www.cs.trinity.edu/~rjensen/temp/TaxNoTax.htm

Secondly, the 17 million reported above does not jive with the estimated 49.5% (of 130 million) of taxpayers who file tax returns but do not pay any income taxes. Some of them have incomes offset by credits such as credits for dependents, but its likely that the nearly all of 50% of taxpayers who pay no qualify, at least on paper, for subsidies ---
http://www.cs.trinity.edu/~rjensen/temp/TaxNoTax.htm

Most of those making more than $100,000 pay some income taxes. Bloomberg reports that 98% of those that pay no income taxes have less than $100,000 in earnings. Most are availing themselves of recent tax breaks such as energy credits, tax breaks from employer contributions to medical insurance, increased tax breaks for dependents, and deferred tax breaks such as breaks professors get for employer contributions to TIAA-CREF.

Watch the April 3, 2012 Bloomberg Video ---
http://www.bloomberg.com/video/89503501/

A family of four making less than $98,000 qualifies for a health insurance subsidy from the government.

Hence I think the 17 million estimate is wildly inaccurate unless tens of millions of those eligible for subsidies simply go uninsured because they cannot afford the deductibles even if the premiums with subsidies are affordable.

One added qualifier is the huge unknown (at least to me) number of Medicaid and Medicare recipients who are scoped out of the Affordable Health Care Act. Those on Medicaid do not pay income taxes. Most of those on Medicare do pay income taxes such that the sources of error in estimating the number of others who will actually claim subsidies under the Affordable Health Care Act is probably impossible to estimate within a 10 million range of error or more.

The enormous source of error that cannot be eliminated is that $2 trillion underground cash-only economy that takes place under the noses of the IRS enforcers of taxes.


"NBC News: "Obama Administration knew millions could not keep their health insurance," by Bob Beauprez, Townhall, October 30, 2013 ---
http://finance.townhall.com/columnists/bobbeauprez/2013/10/30/nbc-news-obama-administration-knew-millions-could-not-keep-their-health-insurance-n1733175 

When Obama repeatedly made the claim – "If you like your health plan; you can keep your health plan" – objective observers knew it wasn't so. This morning, the media is buzzing with evidence that Obama knew it was a lie, but deliberately kept spinning the same phony claim for years.

The shock in all this is not that Obama was lying; he has a well established record of that. It's that somebody has uncovered the evidence; the smoking gun. The following is the NBC News account of the mess du jour for the White House and ObamaCare.

Our sources deeply involved in the Affordable Care Act tell NBC NEWS that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a “cancellation” letter or the equivalent over the next year because their existing policies don’t meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience “sticker shock.”

None of this should come as a shock to the Obama administration….

Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, “40 to 67 percent” of customers will not be able to keep their policy. And because many policies will have been changed since the key date, “the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.”

That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.

Yet President Obama, who had promised in 2009, “if you like your health plan, you will be able to keep your health plan,” was still saying in 2012, “If [you] already have health insurance, you will keep your health insurance.”

Continued in article

 


"5 Lies the Democrats Told To Sell Obamacare," by John Hawkins, Townhall, June 4, 2013 --- Click Here
http://townhall.com/columnists/johnhawkins/2013/06/04/5-lies-the-democrats-told-to-sell-obamacare-n1612356?utm_source=thdaily&utm_medium=email&utm_campaign=nl

. . .

It sounded great.

Of course, it also sounds great when a Nigerian prince offers to give you millions of dollars to help him get money into the United States. Unfortunately, those Nigerian princes with the funny names won't make you any richer, just as Presidents with funny names won't improve your health care. They'll just tell you lies like these.

1) Obamacare will cut the cost of your health care. If only. When Obamacare goes into effect next year, many Americans can expect STEEP increases in the cost of health care.

President Obama (promised)...that the cost of insurance would go down “by $2,500 per family per year.” ...In fact, the average 25 and 40-year-old will pay double under Obamacare what they would need to pay today, based on rates posted at eHealthInsurance.com (NASDAQ:EHTH). More specifically, for the typical 25-year-old male non-smoker, the average Obamacare “bronze” exchange plan in California will cost between 64 and 117 percent more than the cheapest five plans on eHealth. For 40-year-old male non-smokers, it’s between 73 and 146 percent more.

2) Obamacare will not increase the deficit. Calling for a massive new government program to cut costs is sort of like moving to Death Valley for the reduced air conditioning bills. Alas, it's not so.

Obamacare will increase the long-term federal deficit by $6.2 trillion, according to a Government Accountability Office (GAO) report released today.

Senator Jeff Sessions (R., Ala.), who requested the report, revealed the findings this morning at a Senate Budget Committee hearing. The report, he said, “confirms everything critics and Republicans were saying about the faults of this bill,” and “dramatically proves that the promises made assuring the nation that the largest new entitlement program in history would not add one dime to the deficit were false.”

President Obama and other Democrats attempted to win support for the health-care bill by touting it as a fiscally responsible enterprise. “I will not sign a plan that adds one dime to our deficits — either now or in the future,” Obama told a joint-session of Congress in September 2009. “I will not sign it if it adds one dime to the deficit, now or in the future, period.”

You mean Obama lied to us AGAIN? Who would have ever guessed?

3) "If you like your doctor, you will be able to keep your doctor. Period." Soon, many Americans will be happy if they can find A DOCTOR, much less THEIR DOCTOR.

Eighty-three percent of American physicians have considered leaving their practices over President Barack Obama’s health care reform law, according to a survey released by the Doctor Patient Medical Association.

 

The DPMA, a non-partisan association of doctors and patients, surveyed a random selection of 699 doctors nationwide. The survey found that the majority have thought about bailing out of their careers over the legislation, which was upheld last month by the Supreme Court.

Even if doctors do not quit their jobs over the ruling, America will face a shortage of at least 90,000 doctors by 2020. The new health care law increases demand for physicians by expanding insurance coverage. This change will exacerbate the current shortage as more Americans live past 65.

What good is health care, even the bad health care we'll get through Obamacare, if you can't find a doctor to see you when you're sick?

4) Obamacare will create jobs. That would be true if you added "...at the IRS" to the end of it, but companies have already begun to move millions of workers from full to part time to avoid punitive new costs under Obamacare.

Retailers are cutting worker hours at a rate not seen in more than three decades — a sudden shift that can only be explained by the onset of ObamaCare’s employer mandates.

 

Nonsupervisory employees logged an average 30.0 hours per week in April, the shortest retail workweek since early 2010, Labor Department data out Friday show.

…This reversal doesn’t appear related to the economy, which has been consistently mediocre. Instead, all evidence points to the coming launch of ObamaCare, which the retail industry has warned would cause just such a result.

...One way for employers to minimize the costs of providing “affordable” coverage to modest-wage workers is to shift more work to part-time, defined as less than 30 hours per week under ObamaCare.

So not only are they going to get crummy health care, they're getting their hours cut back, too. Thanks, Obama!

5) If you like your health care plan, you'll be able to keep it. According to Obama, even though the government is about to come crashing into the health care market like a Blue Whale bellyflopping into a pond, it isn't going to have any impact at all on the insurance companies that were already swimming along. Why, if you like your own insurance, then there is nothing to worry about because you can keep it.

Yet, just last week Fox News reported,

New health insurance rules under ObamaCare could lead to a host of personal insurance plans being canceled as early as this fall, a scenario expected to cause consumer confusion.

 

Under the federal overhaul, those policies that cannot meet new insurance plan standards may be discontinued. This means individuals, and some small businesses, that rely on those plans will have to find new ones.

The goal is to ensure that most insurance policies offer a basic set of coverage, as part of the Obama administration's plan to cover most of the nation's 50 million uninsured.

Yet it also seems to run afoul of one of the president's best-known promises on the law: "If you like your health care plan, you'll be able to keep your health care plan."

In fact, state insurance commissioners largely are giving insurers the option of canceling existing plans or changing them to comply with new federal requirements. Large employer plans that cover most workers and their families are unlikely to be affected.

The National Association of Insurance Commissioners says it is hearing that many carriers will cancel policies and issue new ones because administratively that is easier than changing existing plans.

..."You're going to be forcibly upgraded," said Bob Laszewski, a health care industry consultant. "It's like showing up at the airline counter and being told, 'You have no choice, $300 please. You're getting a first-class ticket, why are you complaining?'"

On a personal note, as someone who buys his own insurance, the cost of my policy has gone up $50 a month since Obamacare passed and I expect it to be cancelled this fall, but I guess it's a small price to pay for us little people if it allows Barack Obama to feel like he finally accomplished something "historic."

Obamacare hasn't fully taken effect yet, but when it does, it's only going to get worse. Everything from death panels to unimaginably long waits for surgeries to bureaucrats denying effective, relatively common, currently in use treatments because they are "too expensive" are all coming down the pike. Obamacare is too much of a disaster to truly fix; so the best thing we can do right now is let this nightmare become reality, let people see how bad it is and then insist on a repeal or bust. Either the Democrats live with the disaster they've inflicted on the American people at the ballot box long term or they do the right thing and allow us to repeal this monstrosity before it does even more damage to our country.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


"ObamaCare's Troubles Are Only Beginning:  Be prepared for eligibility, payment and information protection debacles—and longer waits for care," by Michael J. Boskin, The Journal of Accountancy, December 15, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304403804579260603531505102?mod=djemEditorialPage_h

The White House is claiming that the Healthcare.gov website is mostly fixed, that the millions of Americans whose health plans were canceled thanks to government rules may be able to keep them for another year, and that in any event these people will get better plans through ObamaCare exchanges. Whatever the truth of these assertions, those who expect better days ahead for the Affordable Care Act are in for a rude awakening. The shocks—economic and political—will get much worse next year and beyond. Here's why:

The "sticker shock" that many buyers of new, ACA-compliant health plans have experienced—with premiums 30% higher, or more, than their previous coverage—has only begun. The costs borne by individuals will be even more obvious next year as more people start having to pay higher deductibles and copays.

If, as many predict, too few healthy young people sign up for insurance that is overpriced in order to subsidize older, sicker people, the insurance market will unravel in a "death spiral" of ever-higher premiums and fewer signups. The government, through taxpayer-funded "risk corridors," is on the hook for billions of dollars of potential insurance-company losses. This will be about as politically popular as bank bailouts.

The "I can't keep my doctor" shock will also hit more and more people in coming months. To keep prices to consumers as low as possible—given cost pressures generated by the government's rules, controls and coverage mandates—insurance companies in many cases are offering plans that have very restrictive networks, with lower-cost providers that exclude some of the best physicians and hospitals.

Next year, millions must choose among unfamiliar physicians and hospitals, or paying more for preferred providers who are not part of their insurance network. Some health outcomes will deteriorate from a less familiar doctor-patient relationship.

More IT failures are likely. People looking for health plans on ObamaCare exchanges may be able to fill out their applications with more ease. But the far more complex back-office side of the website—where the information in their application is checked against government databases to determine the premium subsidies and prices they will be charged, and where the applications are forwarded to insurance companies—is still under construction. Be prepared for eligibility, coverage gap, billing, claims, insurer payment and patient information-protection debacles.

The next shock will come when the scores of millions outside the individual market—people who are covered by employers, in union plans, or on Medicare and Medicaid—experience the downsides of ObamaCare. There will be longer waits for hospital visits, doctors' appointments and specialist treatment, as more people crowd fewer providers.

Those with means can respond to the government-driven waiting lines by making side payments to providers or seeking care through doctors who do not participate in insurance plans. But this will be difficult for most people.

Next, the Congressional Budget Office's estimated 25% expansion of Medicaid under ObamaCare will exert pressure on state Medicaid spending (although the pressure will be delayed for a few years by federal subsidies). This pressure on state budgets means less money on education and transportation, and higher state taxes.

The "Cadillac tax" on health plans to help pay for ObamaCare starts four years from this Jan. 1. It will fall heavily on unions whose plans are expensive due to generous health benefits.

In the nearer term, a political iceberg looms next year. Insurance companies usually submit proposed pricing to regulators in the summer, and the open enrollment period begins in the fall for plans starting Jan. 1. Businesses of all sizes that currently provide health care will have to offer ObamaCare's expensive, mandated benefits, or drop their plans and—except the smallest firms—pay a fine. Tens of millions of Americans with employer-provided health plans risk paying more for less, and losing their policies and doctors to more restrictive networks. The administration is desperately trying to delay employer-plan problems beyond the 2014 election to avoid this shock.

Meanwhile, ObamaCare will lead to more part-time workers in some industries, as hours are cut back to conform to arbitrary definitions in the law of what constitutes full-time employment. Many small businesses will be cautious about hiring more than 50 full-time employees, which would subject them to the law's employer insurance mandate.

On the supply side, medicine will become a far less attractive career for talented young people. More doctors will restrict practice or retire early rather than accept lower incomes and work conditions they did not anticipate. Already, many practices are closed to Medicaid recipients, some also to Medicare. The pace of innovation in drugs, medical devices and delivery is expected to slow significantly, as higher taxes and even rationing set in.

The repeated assertions by the law's supporters that nobody but the rich would be worse off was based on a beyond-implausible claim that one could expand by millions the number of people with health insurance, lower health-care costs without rationing, and improve quality. The reality is that any squeezing of insurance-company profits, or reduction in uncompensated emergency-room care amounts to a tiny fraction of the trillions of dollars extracted from those people overpaying for insurance, or redistributed from taxpayers.

The Affordable Care Act's disastrous debut sent the president's approval ratings into a tailspin and congressional Democrats in competitive districts fleeing for cover. If the law's continuing unpopularity enables Republicans to regain the Senate in 2014, the president will be forced to veto repeated attempts to repeal the law or to negotiate major changes.


It is exceptionally difficult -- for all practical purposes, impossible," writes Eberstadt, "for a medical professional to disprove a patient's claim that he or she is suffering from sad feelings or back pain. In other words, many people are gaming or defrauding the system. This includes not only disability recipients but health care professionals, lawyers and others who run ads promising to get you disability benefits. Between 1996 and 2011, the private sector generated 8.8 million new jobs, and 4.1 million people entered the disability rolls.
Michael Barone, "Men Find Careers in Collecting Disability," --- Click Here
http://townhall.com/columnists/michaelbarone/2012/12/03/men_find_careers_in_collecting_disability?utm_source=thdaily&utm_medium=email&utm_campaign=nl
 
Jensen Comment
 Even after one or more spine surgeries it is virtually impossible to determine whether remaining pain is real or faked. I can claim first hand that after 15 spine surgeries and metal rods from neck to hip that my wife's suffering is real. However, I know of at least two instances where the disability careers are faked in order to get monthly lifetime disability payments and access to Medicare long prior to age 65. This seems to be one of the unsolvable problems in society that becomes even more problematic when a disability career is easier to enter than a job-like career.


Two  Ivy League Professors Slugging It Out in a Political Arena

Harvard History Professor Niall Ferguson --- http://en.wikipedia.org/wiki/Niall_Ferguson
Princeton Economics Professor Paul Krugman --- http://en.wikipedia.org/wiki/Paul_Krugman

"Kinds Of Wrong," by Paul Krugman, The New York Times, August 21, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/21/kinds-of-wrong/

Looking at the comments on my Niall Ferguson takedown (see Ezra Klein, Matthew O’Brien, James Fallows, and Noah Smith for more), I found my memory jogged about a point I’ve been meaning to make about the nature of error in economics.

It seems to me that when readers declare that some piece of economics commentary is “wrong”, they often confuse three different notions of wrongness, which are neither intellectually nor morally equivalent.

First, there’s the ordinary business of expressing a view about the economy that the reader disagrees with – e.g., “Krugman is wrong, because the government can’t create jobs”; or, if you prefer, “Casey Mulligan is wrong, because we’re suffering from demand problems, not supply problems.” Obviously it’s OK to say things like this, and sometimes the criticism is correct. (I’m not wrong, but Mulligan is!) But equally obviously, there’s nothing, er, wrong about being wrong in this sense: people will disagree, and that’s legitimate.

Second, and much less legitimate, is the kind of wrongness that involves making assertions that are logically or empirically indefensible. I’d put the Cochrane/Fama claims that government spending can’t increase demand as a matter of accounting in this category; this is a basic conceptual error, which goes beyond mere difference of opinion. And economists who are wrong in this sense should pay a professional price.

That said, I don’t think it’s realistic to expect the news media to be very effective at policing this kind of wrongness. If professors with impressive-sounding credentials spout nonsense, it’s asking too much of a newspaper or magazine serving the broader public to make the judgment that they actually have no idea what they’re talking about.

Matters are quite different when it comes to the third kind of wrongness: making or insinuating false claims about readily checkable facts. The case in point, of course, is Ferguson’s attempt to mislead readers into believing that the CBO had concluded that Obamacare increases the deficit. This was unethical on his part – but Newsweek is also at fault, because this is the sort of thing it could and should have refused to publish.

Now, I don’t expect a publication that responds to daily or weekly news to do New Yorker-style fact checking. But it should demand that anyone who writes for it document all of his or her factual assertions – and an editor should check that documentation to see that it actually matches what the writer says.

Continued in article

 

"Unethical Commentary, Newsweek Edition," by Paul Krugman, The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/

There are multiple errors and misrepresentations in Niall Ferguson’s cover story in Newsweek I guess they don’t do fact-checking — but this is the one that jumped out at me. Ferguson says:

The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.

Readers are no doubt meant to interpret this as saying that CBO found that the Act will increase the deficit. But anyone who actually read, or even skimmed, the CBO report (pdf) knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for.

Now, people on the right like to argue that the CBO was wrong. But that’s not the argument Ferguson is making — he is deliberately misleading readers, conveying the impression that the CBO had actually rejected Obama’s claim that health reform is deficit-neutral, when in fact the opposite is true.

More than that: by its very nature, health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. So of course reform comes with a positive number for subsidies — finding that this number is indeed positive says nothing at all about the impact on the deficit unless you ask whether and how the subsidies are paid for. Ferguson has to know this (unless he’s completely ignorant about the whole subject, which I guess has to be considered as a possibility). But he goes for the cheap shot anyway.

Continued in article

Jensen Comment
The CBO assumes that the requirement (just upheld by a Supreme Court decision) that all people in the United States have health insurance or otherwise will have health insurance premiums deducted from their tax refunds that will fund the added cost of covering current poor people needing subsidies for health insurance coverage. This is what Krugman means above when he assumes "the insurance subsidies are fully paid for." This is why the Affordable Health Care Act (ACA) tried to get states to raise the number of people receiving state subsidies for Medicaid. About half the states, however, are refusing to along with the expanded coverage under Medicaid. This means that more higher-end low income people will depend on the ACA "subsidies" instead of Medicaid coverage from federal and state Medicaid funding.

It seems to be a matter of semantics whether these tax return add-ons are a tax or not, but Krugman (probably rightfully) ignores this matter of semantics. But since about half the taxpayers in the U.S. pay no income taxes and over 90% of them are below the median in earnings it's not clear whether enough insurance premiums expected to be collected will really be collected. The CBO may have been planning on an economic recovery that perhaps will never materialize in this new era of global competition with Asia. The CBO expectations of lower unemployment may not materialize (currently there are nearly 13 million unemployed people not counting the many who've simply given up looking for work or received fraudulent Social Security lifetime disability awards). The required subsidies in reality may greatly exceed the added premiums "tax" collected. But nobody, including the CBO, knows what deficits will become.

Also it's not at all clear that the CBO correctly estimated health care claims given the double-digit inflation in the cost of medical services. This is the real Achilles Heel of the Affordable Health Care Act. The costs of actually providing the promised services in the future may greatly exceed expectations.

What may be more subject to dispute is how accurate the CBO is on estimating future costs of bringing on people who have prior conditions that prevent them from currently being able to obtain health care coverage. I'm definitely in favor of providing affordable coverage to these people with prior conditions. But I think the eventual coverage costs will exceed CBO estimates since many of them need high-cost organ transplants and other very expensive medical services.

Professor Krugman has a very loyal crowd of liberal followers who seldom disagree with his liberal politics.
The comment of NS
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
 

I am very surprised by the hysterical reaction of many readers to Krugman's comment. The point of the argument is what the HBO report says. Does Ferguson lie about the HBO report in his Newsweek article? Either Ferguson or Krugman is correct. I would expect readers disagreeing with Krugman to provide quotations from the HBO report showing that he is wrong and that Ferguson is right.

Instead of that I see a lot of ideological delirium in too many of the comments.

NS, Paris, France

 

Comment of Laurie Wick
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/

I cancelled my subscription to Newsweek today. I do not need this kind of uninformed blather in my home. If I feel the need to read/hear totally unfactual, biased reporting, I can just turn on FOX news at any hour of the day or night. Which I will never do.

Laurie Wick

Jensen Comment
Actually, since Tina Brown became editor, Newsweek became a liberal feminist magazine. Niall Ferguson's column is only there for tokenism. The Ferguson cover story is most likely a desperate attempt to recover the millions of conservative subscribers who've defected since Tina Brown took over. One of the recent cover's of Newsweek accuses Candidate Romney of "being a Wimp." Are you sure you want to cancel Newsweek Laurie?

The Comment of J. Philip
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/

FTA: "health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. "

And, exactly,. Mr. Krugman, where do you think those subsidies are gonna come from? You can continue to carry Obama's water that's what you get paid to do, but the rest of us know a TAX when we see one.

J. Phillip

Closing Jensen Comment
I wish the Democrats had rammed a national health care plan down our throats in that short window of time 2008-2010 when they controlled the entire executive and legislative branches of the federal government. Instead we ended up with a bastardized public-private ACA that pleases neither the left nor the right. I am inclined to believe that the ACA will always have insurance premiums falling way short of costs of delivering medical services. Whether or not this adds to the deficit is simply a matter of accounting gimmicks the familiar governmental accounting shell game ---
http://faculty.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting

Bob Jensen's threads on the ACA are at
http://faculty.trinity.edu/rjensen/Health.htm


Paul Ryan on the Affordable Health Care Act --- http://www.youtube.com/watch?v=zPxMZ1WdINs

The larger reality is that Medicare cannot and will not continue as it is, as the President used to admit. A sampler of his rhetoric from the town-hall summer of 2009: "Mark my words," he declared in Grand Junction, Colorado, "Medicare in about eight to nine years goes into the red. . . . It is going broke." He added in Portsmouth, New Hampshire, that "What is truly scary—what is truly risky—is if we do nothing" because Medicare is "unsustainable" and "running out of money." In Belgrade, Montana, he said the program must be reformed "to be there for the next generation, not just for this generation."What he rarely mentions is how he plans to fix Medicare under ObamaCare. First the government will do things like arbitrarily commanding providers to deliver the exact same benefits except for $716 billion less. When that doesn't work, as it surely won't, the feds will take control of the case-by-case decisions currently made between patients and doctors and substitute the judgment of technocrats. (See what's already happening in Massachusetts, "RomneyCare 2.0," August 6.)
"The Mediscare Boomerang," The Wall Street Journal, August 16, 2012 ---
http://professional.wsj.com/article/SB10000872396390444772404577587464183295348.html?mod=djemEditorialPage_t&mg=reno64-wsj

 


It's Unethical as it Gets in the Whitehouse
"Axelrod's ObamaCare Dollars Emails suggest the White House pushed business to the presidential adviser's former firm to sell the health-care law," by Kimberly A. Strassel, The Wall Street Journal, June 21, 2012 ---
http://professional.wsj.com/article/SB10001424052702304765304577480871706139792.html?mod=djemEditorialPage_t&mg=reno-wsj

Rewind to 2009. The fight over ObamaCare is raging, and a few news outlets report that something looks ethically rotten in the White House. An outside group funded by industry is paying the former firm of senior presidential adviser David Axelrod to run ads in favor of the bill. That firm, AKPD Message and Media, still owes Mr. Axelrod money and employs his son.

The story quickly died, but emails recently released by the House Energy and Commerce Committee ought to resurrect it. The emails suggest the White House was intimately involved both in creating this lobby and hiring Mr. Axelrod's firm—which is as big an ethical no-no as it gets.

Mr. Axelrod—who left the White House last year—started AKPD in 1985. The firm earned millions helping run Barack Obama's 2008 campaign. Mr. Axelrod moved to the White House in 2009 and agreed to have AKPD buy him out for $2 million. But AKPD chose to pay Mr. Axelrod in annual installments—even as he worked in the West Wing. This agreement somehow passed muster with the Office of Government Ethics, though the situation at the very least should have walled off AKPD from working on White-House priorities.

It didn't. The White House and industry were working hand-in-glove to pass ObamaCare in 2009, and among the vehicles supplying ad support was an outfit named Healthy Economy Now (HEN). News stories at the time described this as a "coalition" that included the Pharmaceutical Research and Manufacturers of America (PhRMA), the American Medical Association, and labor groups—suggesting these entities had started and controlled it.

House emails show HEN was in fact born at an April 15, 2009 meeting arranged by then-White House aide Jim Messina and a chief of staff for Democratic Sen. Max Baucus. The two politicos met at the Democratic Senatorial Campaign Committee (DSCC) and invited representatives of business and labor.

A Service Employees International Union attendee sent an email to colleagues noting she'd been invited by the Baucus staffer, explaining: "Also present was Jim Messina. . . . They basically want to see adds linking HC reform to the economy. . . . there were not a lot of details, but we were told that we wd be getting a phone call. well that call came today."

The call was from Nick Baldick, a Democratic consultant who had worked on the Obama campaign and for the DSCC. Mr. Baldick started HEN. The only job of PhRMA and others was to fund it.

Meanwhile, Mr. Axelrod's old firm was hired to run the ads promoting ObamaCare. At the time, a HEN spokesman said HEN had done the hiring. But the emails suggest otherwise. In email after email, the contributors to HEN refer to four men as the "White House" team running health care. They included John Del Cecato and Larry Grisolano (partners at AKPD), as well as Andy Grossman (who once ran the DSCC) and Erik Smith, who had been a paid adviser to the Obama presidential campaign.

In one email, PhRMA consultant Steve McMahon calls these four the "WH-designated folks." He explains to colleagues that Messrs. Grossman, Grisolano and Del Cecato "are very close to Axelrod," and that "they have been put in charge of the campaign to pass health reform." Ron Pollack, whose Families USA was part of the HEN coalition, explained to colleagues that "the team that is working with the White House on health-care reform. . . . [Grossman, Smith, Del Cecato, Grisolano] . . . would like to get together with us." This would provide "guidance from the White House about their messaging."

According to White House visitor logs, Mr. Smith had 28 appointments scheduled between May and August—17 made through Mr. Messina or his assistant. Mr. Grossman appears in the logs at least 19 times. Messrs. Del Cecato and Grisolano of AKPD also visited in the spring and summer, at least twice with Mr. Axelrod, who was deep in the health-care fight.

A 2009 PhRMA memo also makes clear that AKPD had been chosen before PhRMA joined HEN. It's also clear that some contributors didn't like the conflict of interest. When, in July 2009, a media outlet prepared to report AKPD's hiring, a PhRMA participant said: "This is a big problem." Mr. Baldick advises: "just say, AKPD is not working for PhRMA." AKPD and another firm, GMMB, would handle $12 million in ad business from HEN and work for a successor 501(c)4.

A basic rule of White House ethics is to avoid even the appearance of self-dealing or nepotism. If Mr. Axelrod or his West Wing chums pushed political business toward Mr. Axelrod's former firm, they contributed to his son's salary as well as to the ability of the firm to pay Mr. Axelrod what it still owed him. Could you imagine the press frenzy if Karl Rove had dome the same after he joined the White House?

Continued in article


"Study: Obama's Health Care Law Would Raise Deficit," SmartPros, April 10, 2012 ---
http://accounting.smartpros.com/x73682.xml

Reigniting a debate about the bottom line for President Barack Obama's health care law, a leading conservative economist estimates in a study to be released Tuesday that the overhaul will add at least $340 billion to the deficit, not reduce it.

Charles Blahous, who serves as public trustee overseeing Medicare and Social Security finances, also suggested that federal accounting practices have obscured the true fiscal impact of the legislation, the fate of which is now in the hands of the Supreme Court.

Officially, the health care law is still projected to help reduce government red ink. The Congressional Budget Office, the government's nonpartisan fiscal umpire, said in an estimate last year that repealing the law actually would increase deficits by $210 billion from 2012 to 2021.

The CBO, however, has not updated that projection. If $210 billion sounds like a big cushion, it's not. The government has recently been running annual deficits in the $1 trillion range.

The White house dismissed the study in a statement late Monday. Presidential assistant Jeanne Lambrew called the study "new math (that) fits the old pattern of mischaracterizations" about the health care law.

Blahous, in his 52-page analysis released by George Mason University's Mercatus Center, said, "Taken as a whole, the enactment of the (health care law) has substantially worsened a dire federal fiscal outlook.

"The (law) both increases a federal commitment to health care spending that was already unsustainable under prior law and would exacerbate projected federal deficits relative to prior law," Blahous said.

The law expands health insurance coverage to more than 30 million people now uninsured, paying for it with a mix of Medicare cuts and new taxes and fees.

Blahous cited a number of factors for his conclusion:

- The health care's law deficit cushion has been reduced by more than $80 billion because of the administration's decision not to move forward with a new long-term care insurance program that was part of the legislation. The Community Living Assistance Services and Supports program raised money in the short term, but would have turned into a fiscal drain over the years.

- The cost of health insurance subsidies for millions of low-income and middle-class uninsured people could turn out to be higher than forecast, particularly if employers scale back their own coverage.

- Various cost-control measures, including a tax on high-end insurance plans that doesn't kick in until 2018, could deliver less than expected.

The decision to use Medicare cuts to finance the expansion of coverage for the uninsured will only make matters worse, Blahous said. The money from the Medicare savings will have been spent, and lawmakers will have to find additional cuts or revenues to forestall that program's insolvency.

Under federal accounting rules, the Medicare cuts are also credited as savings to that program's trust fund. But the CBO and Medicare's own economic estimators already said the government can't spend the same money twice.

Continued in article

 


Freakonomics
"Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/

In a new working paper called “Technology Growth and Expenditure Growth in Health Care” (abstract here, PDF here), Amitabh Chandra and Jonathan S. Skinner offer an explanation:

In the United States, health care technology has contributed to rising survival rates, yet health care spending relative to GDP has also grown more rapidly than in any other country.  We develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth.  We show that health care productivity depends on the heterogeneity of treatment effects across patients, the shape of the health production function, and the cost structure of procedures such as MRIs with high fixed costs and low marginal costs.  The model implies a typology of medical technology productivity:  (I) highly cost-effective “home run” innovations with little chance of overuse, such as anti-retroviral therapy for HIV, (II) treatments highly effective for some but not for all (e.g.  stents), and (III) “gray area” treatments with uncertain clinical value such as ICU days among chronically ill patients.  Not surprisingly, countries adopting Category I and effective Category II treatments gain the greatest health improvements, while countries adopting ineffective Category II and Category III treatments experience the most rapid cost growth. Ultimately, economic and political resistance in the U.S. to ever-rising tax rates will likely slow cost growth, with uncertain effects on technology growth.

This paper strikes me as sensible, explanatory, and non-ideological to the max. It would be nifty if the people who work in Washington read it, and thought about it, and maybe even acted on it. (And it would be nifty if the Knicks beat the Celtics too, but I’m not holding my breath for either outcome …)

Here’s a very good paragraph from the paper:

The science section of a U.S. newspaper routinely features articles on new surgical and pharmaceutical treatments for cancer, obesity, aging, and cardiovascular diseases, with rosy predictions of expanded longevity and improved health functioning (Wade, 2009). The business section, on the other hand, features gloomy reports of galloping health insurance premiums (Claxton et al., 2010), declining insurance coverage, and unsustainable Medicare and Medicaid growth leading to higher taxes (Leonhardt, 2009) and downgraded U.S. debt (Stein, 2006). Not surprisingly, there is some ambiguity as to whether these two trends, in outcomes and in expenditures, are a cause for celebration or concern.

And the authors offer good specific examples of what they built their argument on, noting the …

Continued in article


"The Truth About Health Care Reform and the Economy:  Separating economic fact from economic myth," by Veronique de Rugy, Reason Magazine, April 15, 2011 --- http://reason.com/archives/2011/04/15/the-truth-about-health-care-re

Myth 1: Health care reform will reduce the deficit.

Fact 1: Health care reform will increase the deficit.

The Patient Protection and Affordable Care Act includes many provisions that have nothing to do with health care: the CLASS act, a student loan overhaul, and many new taxes. These provisions don't change the health care system. They just raise money to pay for the new law. Strip them away and the law’s actual health care provisions don't lower the deficit—they increase it!

The chart below uses data from Congressional Budget Office (CBO) to clarify the fiscal consequences of health care reform.

. . .

As you can see, from 2012 to 2021, the Congressional Budget Office estimates that the health care act will reduce deficits by $210 billion (note that this estimate differs from the widely cited $143 billion figure used during the lead-up to the passage of the act). During this same time period, however, the actual health care reform provisions of the law will increase deficits by $464 billion.

Of course, one should not evaluate the health care legislation on its fiscal impacts alone. In theory we should get some fiscal benefits. But the key question is how they net out. Still, no matter what you think about the benefits of the health care legislation, it is incorrect to claim that health care reform will save money. It won’t.

Myth 2: The U.S. health care system is a free-market system.

Fact 2: Roughly half of all U.S. health care is currently paid for by the government.

. . .

Even in the absence of the health care reform law, government programs including Medicare and Medicaid already fund almost half of American health care. Roughly a third of the remaining expenditures are funded by private insurers—mainly through subsidized and highly regulated employee plans. Not exactly a free market.

As this chart shows, state and federal entities make up over half of the health insurance market. Of course, the Patient Protection and Affordable Care Act will only increase the share of government involvement in the health care market.

Myth 3: Medicare spending increases life expectancy for seniors. Reductions in Medicare spending will therefore reduce their life expectancy.

Fact 3: Increases in life expectancy for seniors are due to increased access to health care, not to Medicare.

While Medicare spending has certainly decreased seniors’ out of pocket health care expenses (by 1970, Medicare reduced out of pocket expenses by an estimated 40 percent relative to pre-Medicare levels), the program’s effect on mortality is much less clear.

. . .

Continued in article


"Mayberry OMG:  Those false ads cost taxpayers $3.5 million," The Wall Street Journal, March 25, 2011 ---
|http://online.wsj.com/article/SB10001424052748704604704576220640964310506.html#mod=djemEditorialPage_t

President Obama met with the winner of the "save award" in the Oval Office the other day, the contest for federal employees who find ways to make government more efficient. Trudy Givens, of Portage, Wisconsin, suggested that the feds stop mailing out paper copies of the Federal Register (available online since 1994) to the provinces. Her good idea will cut about $4 million a year in printing and postage.

We don't work for the government, but here's our "save" suggestion: How about not spending some $3.5 million to deceptively promote ObamaCare?

It turns out it cost the Health and Human Services Department $2.78 million to buy airtime for three cable TV ads last year, featuring Andy Griffith praising the new entitlement. The "Matlock" eminence rendered his services pro bono, but Porter Novelli didn't. The media consulting firm racked up 668 billable hours and earned $404,384.40 producing the spots, according to documents released by the outside GOP advocacy group Crossroads GPS through the Freedom of Information Act.

At least Porter Novelli didn't charge taxpayers for fact-checking. Among Mr. Griffith's many deceptive claims, he tells his fellow seniors that their Medicare benefits won't change (they will, most immediately in Medicare Advantage) and that ObamaCare strengthens the program's finances (it doesn't, according to the chief Medicare actuary). Lovable ol' Andy of Mayberry then says "that new health-care law sure sounds good" to him, in a transparent bid to win over senior voters in advance of the 2010 election.

The next time the President wants to run misleading ads ahead of an election, he might hit up the Democratic Party or use his bully pulpit, rather than passing the bill to taxpayers. Meantime, an Administration functionary says in a new promotional Web video for the save award—how much did that one cost to produce?—that "Something that seems relatively small if replicated over the full length of the federal government can really result in substantial savings."

How about we go one better and save several trillion dollars by repealing a health-care bill that Americans still hate despite Sheriff Andy's endorsement?


"PolitiFiction True 'lies' about ObamaCare," The Wall Street Journal, December 23, 2010 ---
http://online.wsj.com/article/SB10001424052748703886904576031630593433102.html?mod=djemEditorialPage_t

So the watchdog news outfit called PolitiFact has decided that its "lie of the year" is the phrase "a government takeover of health care." Ordinarily, lies need verbs and we'd leave the media criticism to others, but the White House has decided that PolitiFact's writ should be heard across the land and those words forever banished to describe ObamaCare.

"We have concluded it is inaccurate to call the plan a government takeover," the editors of PolitiFact announce portentously. "'Government takeover' conjures a European approach where the government owns the hospitals and the doctors are public employees," whereas ObamaCare "is, at its heart, a system that relies on private companies and the free market." PolitiFact makes it sound as if ObamaCare were drawn up by President Friedrich Hayek, with amendments from House Speaker Ayn Rand.

This purported debunking persuaded Stephanie Cutter, a special assistant to the President. If "opponents of reform haven't been shy about making claims that are at odds with the facts," she wrote on the White House blog, "one piece of misinformation always stood out: the bogus claim . . ." We'll spare you the rest.

PolitiFact's decree is part of a larger journalistic trend that seeks to recast all political debates as matters of lies, misinformation and "facts," rather than differences of world view or principles. PolitiFact wants to define for everyone else what qualifies as a "fact," though in political debates the facts are often legitimately in dispute.

For instance, everyone can probably agree that Medicare's 75-year unfunded liability is somewhere around $30.8 trillion. But that's different from a qualitative judgment, such as the wisdom of a new health-care entitlement that was sold politically as a way to reduce entitlement spending. But anyway, let's try to parse PolitiFact's ObamaCare reasoning.

Evidently, it doesn't count as a government takeover unless the means of production are confiscated. "The government will not seize control of hospitals or nationalize doctors," the editors write, and while "it's true that the law does significantly increase government regulation of health insurers," they'll still be nominally private too.

In fact—if we may use that term without PolitiFact's seal of approval—at the heart of ObamaCare is a vast expansion of federal control over how U.S. health care is financed, and thus delivered. The regulations that PolitiFact waves off are designed to convert insurers into government contractors in the business of fulfilling political demands, with enormous implications for the future of U.S. medicine. All citizens will be required to pay into this system, regardless of their individual needs or preferences. Sounds like a government takeover to us.

PolitiFact is run by the St. Petersburg Times and has marketed itself to other news organizations on the pretense of impartiality. Like other "fact checking" enterprises, its animating conceit is that opinions are what ideologues have, when in reality PolitiFact's curators also have political views and values that influence their judgments about facts and who is right in any debate.

In this case, they even claim that the government takeover slogan "played an important role in shaping public opinion about the health-care plan and was a significant factor in the Democrats' shellacking in the November elections." In other words, voters turned so strongly against Democrats because Republicans "lied," and not because of, oh, anything the Democrats did while they were running Congress. Is that a "fact" or a political judgment? Just asking.

As long as the press corps is nominating "lies of the year," ours goes to the formal legislative title of ObamaCare, the Patient Protection and Affordable Care Act. For a bill that in reality will raise health costs and reduce patient choice, the name recalls Mary McCarthy's famous line about every word being a lie, including "the" and "and."


"Bachmann Exposes $105 Billion Secret," by Phyllis Schlaffy, Townhall, March 15, 2011 ---
http://townhall.com/columnists/phyllisschlafly/2011/03/15/bachmann_exposes_$105_billion_secret

When ObamaCare was passed by the Senate on Christmas Eve of 2009, senators had less than 72 hours to compare a 383-page package of amendments to the 2,074-page bill. Public outrage over backroom deals (such as the Cornhusker Kickback and the Louisiana Purchase) led to the election of Scott Brown in Massachusetts.

Democrats then cooked up a plan to link the now-2,409-page Senate-passed ObamaCare bill to dozens of amendments contained in a separate 150-page Budget Reconciliation bill that could pass both houses by a simple majority. That's when then-Speaker Nancy Pelosi famously told the then-Democratic majority, "We have to pass the bill so that you can find out what is in it."

When President Obama signed ObamaCare into law, that set in motion a series of funding triggers and money transfers that add up to $105,464,000,000 in pre-authorized appropriations that are scheduled to be paid up through FY2019. In laymen's language, that means writing postdated checks that are guaranteed to be paid out over the next eight years.

This money was divided into dozens of smaller amounts so the big total would not be apparent. For example, Section 2953 of ObamaCare included a pre-funded appropriation of $75 million a year for five years to "educate adolescents" in "adult preparation subjects" such as "stress management" and "the development of healthy attitudes and values about adolescent growth and development, body image, racial and ethnic diversity, and other related subjects."

Section 4101(a) of ObamaCare prefunded $200 million a year over four years for the construction of school-based health centers. In Section 4002, a total of $17,750,000,000 will be deposited over 10 years to a discretionary account controlled by the HHS secretary (currently Kathleen Sebelius), who may spend that money "to provide for expanded and sustained national investment in prevention" and to "help restrain the rate of growth in private and public sector health care costs."

Continued in article

Also see http://townhall.com/columnists/terryjeffrey/2011/03/16/congress_must_stop_$1055_billion_in_automatic_obamacare_spending


White did President Obama turn down IBM's offer to, for free, to detect medical fraud?
Video:  Did White House Snub Fraud Fighter?

http://news.yahoo.com/video/politics-15749652/did-white-house-snub-fraud-fighter-22352314

Is Medicare a "Medicare is a good example of a government program that is highly efficient?"

-----Original Message-----
From: AECM, Accounting Education using Computers and Multimedia [mailto:AECM@LISTSERV.LOYOLA.EDU] On Behalf Of Peters, James M Sent: Thursday, September 23, 2010 10:37 AM

To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: accounting basics

I think it is time to push back against all this anti-government rhetoric that just isn't based on observed evidence. Whether goverments work best or markets work best is a function of the task to be performed and the nature of the product. Governments have proven they can provide better health insurance and health care than the private sector. Medicare is a good example of a goverment program that is highly efficient and spends 97% of your tax dollars on health care while private sector firms spend only 70% to 75% of your premium dollars on health care. Some firms reach 80%, but they are the exception. Government run hospitals in the US are now rated as among the best, if not the best in the nation. The Veterans Hospitals have better records of treatment success and lower costs that the vast majority of private hospitals.

Market advocates seem to forget free market theory. Free markets only work when certain, rather restrictive conditions are met. Among the most frequently violated are equal power and knowledge among all market participants. Even Adam Smith in the Wealth of Nations advocated a strong role for governments in keeping markets free. When conditions are right, markets work brilliantly. However, (a rhetorical question) how many market in the industrialize world really meet the conditions of truly free markets? My answer is very few.

Governments do some things much better than markets. The key is recognizing the market conditions that lead to government advantage and letting governments handle those areas. Auditing is a prime candidate for government intervention because of no auditor can truly be objective when they are being paid by the client. The markets cannot function properly in auditing because the true customer, the general public, isn't a party to the transaction. Audits aren't just for the current owners, they are for perpsective owners as well, which means the general public. The general public needs to be represented at the table when auditors are hired.

The other key is to recognize that governments fail when people fail to be informed voters. All governments, like all markets, are not made equal. Some work better than others. In democracies, the effectiveness of the government is a function of the involvement and knowledge of the electorate. Thus, we are all responsible for our own government's success and failures. The fact that America seems to have a disfunctional government right now is that we have a disfunctional electorate that seems to enjoy mindless shouting matches over informed policy dialog. Other nations don't suffer from this disease.

Let's all join John Stewart in Washington DC for the "Return Sanity to America" rally. It is a start to building a government that can live up to its potential.

Jim

September 23, 2010 reply from Bob Jensen

Hi Jim,

If this is your idea of "observed evidence" then I've no hope for you in the academy. For one thing a good academic would be more precise about definitions like “better health care.” For example, some other nations come out “better” in infant mortality because they throw away very premature small babies and don’t count them into survival rates. What does “better” mean in terms of who invents the latest and greatest medications to fight cancer?

Medicare, for example, is one of the least-efficient government programs that arguably has the worst internal accounting controls of all other government programs except, possibly, the defense program. An "efficient" program would have stellar internal controls preventing fraud and error.

President Obama repeatedly asserts that "Medicare and Medicaid are largest deficit drivers" ---
http://www.politifact.com/truth-o-meter/statements/2009/jun/25/barack-obama/obama-says-medicare-and-medicaid-are-largest-defic/

And Medicare is not a very good example of "government" efficiency since the private sector delivers virtually all the medical services. The Medicare service providers are notoriously inefficient by prescribing billions of dollars in unneeded services, medications, non-existent medical equipment, and lifetime disability benefits to crooks that are not disabled.

I don't care to continue on in the AECM with debates over extreme political dogma since this is truly outside what subscribers expect from the AECM. They wanted to learn more about the PwC re-branding and the future of auditing/assurance services. I doubt that they want to hear a rant about joining a Glenn Beck-bashing by Jon Stewart in Washington DC. Most of us do not support the extremes of Beck or Stewart and certainly do not want the AECM to be a rallying call for either extreme. That is not in the mission of the AECM.

Also I see no need to censor the other subscribers of the AECM if they happen to disagree with Jim Peterson’s political dogma. Even if I were a Glenn Beck supporter (which I’m not) I would not urge AECM subscribers to join me in Beck’s big Washington DC rally (where you would never find me).

It’s a free country, and I suspect you will be among the Glenn Beck bashers at Jon Stewart’s rally for liberals. But I don’t think you should plead with AECM subscribers to join you in this political burning of Beck’s books.

Bob Jensen

 

 


In 2009 President Barack Obama is engineering a universal health care bill by appealing to the with blatant and deceitful estimates of costs in a muddled up system of inclusions of social services that are only remotely linked to health care (such as marriage counseling).

Note that I’m not in favor of repealing the recent legislation. But I am in favor of adding a public option so long as taxation and insurance premiums are added to fully cover the annual costs of health insurance. And let's stop the BS on the left and on the right side of this debate.

Some of the blatant lies are as follows:

 

The health care bill recently unveiled by Speaker Nancy Pelosi is over 1,900 pages for a reason. It is much easier to dispense goodies to favored interest groups if they are surrounded by a lot of legislative legalese. For example, check out this juicy morsel to the trial lawyers (page 1431-1433 of the bill):

Section 2531, entitled “Medical Liability Alternatives,” establishes an incentive program for states to adopt and implement alternatives to medical liability litigation. [But]…… a state is not eligible for the incentive payments if that state puts a law on the books that limits attorneys’ fees or imposes caps on damages.

So, you can’t try to seek alternatives to lawsuits if you’ve actually done something to implement alternatives to lawsuits. Brilliant! The trial lawyers must be very happy today!

While there is debate over the details, it is clear that medical malpractive lawsuits have some impact on driving health care costs higher. There are likely a number of procedures that are done simply as a defense against future possible litigation. Recall this from the Washington Post:

“Lawmakers could save as much as $54 billion over the next decade by imposing an array of new limits on medical malpractice lawsuits, congressional budget analysts said today — a substantial sum that could help cover the cost of President Obama’s overhaul of the nation’s health system. New research shows that legal reforms would not only lower malpractice insurance premiums for medical providers, but would also spur providers to save money by ordering fewer tests and procedures aimed primarily at defending their decisions in court, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, wrote in a letter to Sen. Orrin Hatch (R-Utah).”

Longtime readers will recall that we caught Kristof playing similar games with statistics back in January 2005, when he claimed that the U.S. infant-mortality rate was worse than communist Cuba's and much worse than European rates. We pointed out that a central reason U.S. rates are high is that American physicians make heroic efforts to save extremely premature infants, who nonetheless have a mortality rate in excess of 50%. In other countries, these babies are simply discarded and not even counted in the statistics.
Wall Street Journal Editors Newsletter, November 6, 2009

Sampling Only

President Obama tried to sell his health care overhaul in prime time, mangling some facts in the process. He also strained to make the job sound easier to pay for than experts predict.

Note: This is a summary only. The full article with analysis, images and citations may be viewed on the above Fact Check Websites.



December 31, 2020

Digital health startup GoodRx is going public

The startup, which provides telehealth and discount prescription services, filed paperwork for an initial public offering in August. It would trade on the NASDAQ under the ticker "GDRX."

In an updated filing on Monday, GoodRx noted that it is looking to price its public offering between $24 and $28 per share. At $26, the midpoint of that range, GoodRx and its investors stand to make $900 million. 

The updated filing also noted that private equity firm Silver Lake has agreed to purchase $100 million in stock coinciding with the IPO. 

GoodRx now joins the growing parade of companies in healthcare and technology that have filed to go public in 2020, marking a banner year for public offerings as markets continue to surpass all-time highs.

Digital health and telehealth companies, in particular, have seen a surge in public market activity as the coronavirus pandemic has ushered in what some are calling a new era for the healthcare industry. Coronavirus-induced shutdowns have driven wary patients from doctor's offices and waiting rooms in favor of at-home care, spurring growth in an industry that had been previously considered niche.

GoodRx's filing came just days after telehealth giant and Teladoc competitor American Well filed to go public with $100 million in funding from Google, an unusual deal that spoke to the tech giant's optimistic outlook on telehealth even once the pandemic subsides.

GoodRx is best known for pulling together cash prices for medications at different pharmacies as a price-comparison tool for people paying out-of-pocket, but recently added virtual visits and other elements of telehealth to its services. It has also been adding direct-to-consumer prescription services, like Lemonaid and Hims, to its comparisons. 

Continued in article

 

 


Random Critical Analysis on Health Care ---
https://marginalrevolution.com/marginalrevolution/2020/02/random-critical-analysis-on-health-care.htm


Walmart will begin offering health insurance to consumers ---
https://www.businessinsider.com/walmart-breaks-into-health-insurance-2020-7?IR=T&utm_medium=email&utm_term=BII_Daily&utm_source=Triggermail&utm_campaign=BII Weekender 2020.7.10 - Marketing


The Fiscal Effects Of The Public Option ---
https://www.hoover.org/research/fiscal-effects-public-option-0


Wharton School at the University of Pennsylvania:  Bernie Sanders 'Medicare for all' plan could shrink GDP by as much as 24% ---
https://budgetmodel.wharton.upenn.edu/issues/2020/1/30/sanders-medicare-for-all

Over 85% of the non-home capital markets value is owned by the theTop 10%: 
Why is this much more of a problem for Bernie Sanders and Elizabeth Warren than if the Top 10% only owed 10% of the capital markets value instead of 85%+?

National Bureau of Economic Research

HOUSEHOLD WEALTH TRENDS IN THE UNITED STATES, 1962 TO 2016: HAS MIDDLE CLASS WEALTH RECOVERED ---

https://www.nber.org/papers/w24085.pdf

The top 10 percent of families as a group accounted for about 85 to 90 percent of stock shares, bonds, trusts, and business equity, and over 80 percent of non-home real estate. Moreover, despite the fact that almost half of all households owned stock shares either directly or indirectly through mutual funds, trusts, or various pension accounts, the richest 10 percent of households controlled 84 percent of the total value of these stocks, though less than its 93 percent share of directly owned stocks and mutual funds.

Democratic socialists like AOC, Bernie Sanders, and Elizabeth Warren want to spend over $20 trillion per year in cash (perhaps only $10 trillion annually before open borders are factored in) or green initiatives (think solar panels and batteries everywhere), Medicare-for-All (think cash for doctors, hospitals, and medications), College-for-All (think tuition plus other aid), Housing-for-All (think of all the new homes required), Guaranteed Annual Incomes, free meals for all the children of the USA, and all else that is added on for open borders when tens of millions of unrestrained immigrants pouring into  USA ---

https://berniesanders.com/issues/ (for each initiative click on the Details button)
The Atlantic:  Sanders is a Marxist of the old school of dialectical materialism, from the land that time forgot ---
https://www.theatlantic.com/ideas/archive/2020/01/bernie-sanderss-biggest-challenges/605500/

These democratic socialists want to raise as much as possible from the Top 10% before taxing the middle and lower income citizens.
Here lies the problem: If the Top10% owned only 10% of capital markets value the capital markets might survive when Sanders or Warren wipe out the Top 10% of the wealthy.
But in reality wiping out the Top 10% will crash over 84% of the capital markets value!

This alone will cause most of the USA private sector labor force to become unemployed and force Sanders or Warren to make good on promises for government to pay all pensions of those unemployed. They promise to take on all pension liabilities even for business firms who have not paid anything into the government's Pension Benefit Guarantee fund ---
https://www.pbgc.gov/

Let's consider the example of the General Motors (GM) 2008 bankruptcy--- https://en.wikipedia.org/wiki/General_Motors#Chapter_11_bankruptcy

In theory the economic crash of GM shares in 2008 should not legally have forced GM into bankruptcy when share prices crashed, but the economic reality is that if stock values crash companies like GM that have a lot of debt will be forced into bankruptcy. That in turn could have resulted in unemployment for over 500,000 employees of GM factories, dealers, suppliers, and others impacted by GM closures. In addition the Federal government would've had to pick up the pensions of most of those employees ---
https://www.pbgc.gov/

To  prevent such massive unemployment and pension impacts the Government bailed out GM in 2008 ---
 https://en.wikipedia.org/wiki/General_Motors#Chapter_11_bankruptcy 

Through the Troubled Asset Relief Program the US Treasury invested $49.5 billion in General Motors and recovered $39 billion when it sold its shares on December 9, 2013 resulting in a loss of $10.3 billion.

Jensen Comment
The good news is that the USA economic crash of 2008 did not wipe out anywhere close to 85% of the value of the capital markets of the USA.  The government bailed out GM and some other other companies. The bailouts enticed investors, especially the Top 10%, to put more cash into capital investments like GM shares.
But commencing to take $20 trillion annually after 2023 will out wipe out over over 85% of those capital markets in order to pay cash  for all of the initiatives of Bernie Sanders or Elizabeth Warren ---
https://berniesanders.com/issues/
The Top 10% will not have any cash left to put into hopeless capital markets.

The real problem is that the $20+ trillion initiatives of Sanders or Warren require cash. If the government confiscated the wealth of the Top 10% and did not not need so much cash it could keep the $20+trillion iinvested in stock shares, bonds, trusts, and business equity, and non-home real estate. But having to covert all that $20+ trillion in value into cash will essentially wipe out the capital markets of the USA.

Sanders and Warren realize this and only propose taking a fraction of the wealth of the Top 10% (although AOC, Omar, and Michael Moore want to take it all and are totally unaware of the consequences). This is why Sanders and Warren know they have to get most of the needed $20+ trillion annually from the middle and lower income taxpayers.

But $20+ plus trillion per year is just too much for the USA to take on beyond the roughly $4.5 trillion being spent currently by the Federal government. Trying to take so much more cash out of wages and the USA capital markets will totally destroy the USA economy with hyoer inflation. What can be worse than living in socialist Venezuela in 2020 hyper inflation? What can be worse? The answer is living in the democratic socialist world of Sanders or Warren in 2025 USA hyper inflation.
Inflation risk is exacerbated by having the Top 10% owning 85%+ of the capital markets value in 2020 rather than a mere 10% rather than 85%+ --- such that wiping out the Top 10% of investors for democratic socialist initiatives will cause hyper inflation and destroy the USA economy.

It's no wonder that Barack Obama and the majority of the Democratic Party are trying to prevent Bernie Sanders from winning the 2020 nomination. If they're smart they will also stop other big spending, open-border advocates like Elizabeth Warren from being nominated.

Please don't make us vote for Donald Trump just to block doomsday spenders lik Bernie Sanders and Elizabeth Warren in 2020.

Open immigration can’t exist with a strong social safety net; if you’re going to assure healthcare and a decent income to everyone, you can’t make that offer global ---
Paul Krugman
https://www.goodreads.com/quotes/724654-open-immigration-can-t-exist-with-a-strong-social-safety-ne

And it can't exist with a $20+ trillion annual social program offer for those already in the USA


NYT:  It Looks Like Health Insurance, but It’s Not. ‘Just Trust God,’ Buyers Are Told ---
https://www.nytimes.com/2020/01/02/health/christian-health-care-insurance.html

Canada will not allow spending limits on "essential health care services" ---
https://www.healthcare.gov/coverage/what-marketplace-plans-cover/

Jensen Comment
It appears that the USA is not as restrictive when outlawing spending limits in medical care relative to many other nations, although most nations may dispute what is defined as an "essential service" or an "essential medication." Experimental services and drugs may be declared as non-essential. Services for the very ill may be curtailed in most nations. For example, should an insurance company or government pay for new hips to a patient deemed to be dying from bone cancer?

Libertarians might argue that insured customers wanting lower-cost coverage made an informed choice if the spending limits were made absolutely clear when they signed their insurance contract.  It all boils down to having choices regarding both coverage and costs. Progressives might argue that no choices should be allowed when such things as medical insurance coverage and physical safety are concerned, This of course raises the costs to somebody and limits choice as to cost and quality of service.

Literally every health care insurance plan entails some service rationing and often some sharing of costs. For example, Medicare requires patients to pay 20%, and that can become quite expensive for long hospital stays. Also Medicare does not pay long-term nursing costs when the patient is released from a hospital into a nursing care facility for more than 100 days.

Always keep in mind that insurance companies or national health care providers do not ultimately pay for enormous medical bills. Those expenses are passed on into rates paid by other customers or paid by taxpayers.

I recall an instance where an insurance company was losing so much money annually on seven mentally ill or disabled children in nursing care  that it dropped covering employees and families of the entire university. Some would argue that a national health care plan would not have such an option. Cost of mental health care is very high in the USA, especially long-term live-in institution costs ---
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4236908/

Disputes often arise regarding how long to keep some patients artificially alive ---
https://en.wikipedia.org/wiki/End-of-life_care

Parents Fight Canadian Hospital for Child's Survival ---
https://abcnews.go.com/Health/baby-josephs-treatment-sparks-controversy-pediatric-end-life/story?id=13032001

 



December 31, 2019

Obamacare's Individual Mandate Ruled Unconstitutional (the requirement that individuals must have health insurance) ---
https://www.ozy.com/opinion/donald-dossier-all-roads-lead-to-roberts/95512/?utm_term=OZY&utm_source=Sailthru&utm_medium=email&utm_campaign=PDB%20%282019-12-19%2012:43:36%29
Health insurance can now be dropped in favor of buying a Smart TV or a new car.


The Prescription Escalator ---
https://marginalrevolution.com/marginalrevolution/2019/11/the-prescription-escalator.html

Between 1982 and 2015, for example, the US saw the launch of 719 new drugs, the most of any country in the sample; Israel had about half as many launches ---
https://marginalrevolution.com/marginalrevolution/2019/04/peter-thiel-on-medicine-and-longevity.html

 


Leading Leftist Economists Split over Feasibility of Medicare-for-All
 

Lawrence Summers --- https://en.wikipedia.org/wiki/Lawrence_Summers

 

Paul Krugman --- https://en.wikipedia.org/wiki/Paul_Krugman

 

Former Harvard University President and USA Treasury Secretary under President Obama argues that Medicare-for-All replacement of private sector coverage is not feasible  ---
https://theintercept.com/2019/11/03/joe-biden-larry-summers-elizabeth-warren-medicare-for-all/
Also see his comments on a wealth tax intended to partially fund Medicare-for-All
https://marginalrevolution.com/marginalrevolution/2019/10/summers-on-the-wealth-tax.html

 

Former Princeton Nobel Economist and New York Times Columnist Paul Krugman argues that Medicare-for-All replacement of private sector coverage is feasible ---

https://www.nytimes.com/2019/11/01/opinion/did-warren-pass-the-medicare-test-i-think-so.html

 

Jensen Comment
By the way, the radical Paul Krugman will no longer be subjected to the editorial restraints of the New York Times--

https://krugman.blogs.nytimes.com/2017/12/06/the-blog-moves-on/?module=BlogPost-Title&version=Blog Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body

A message for regular readers of this blog: unless something big breaks later today, this will be my last day blogging AT THIS (NYT) SITE. The Times is consolidating the process, so future blog-like entries will show up at my regular columnist page. This should broaden the audience, a bit, maybe, and certainly make it easier for the Times to feature relevant posts.

It will also, for technical reasons, make my life simpler — you’d be surprised how many hoops I have to go through to get these (NYT) things posted. But that’s not the reason.

Anyway, I expect to be doing the same sort of thing, mixing regular columns with stuff, usually wonkish, that doesn’t belong in the regular paper. Old blog posts will remain available

Paul Krugman

Jensen Comment

One of the things I don't like about Paul Krugman is his inconsistency in bending his economics to fit his political agenda.

The "social safety net" includes such things as free medical care, free education, food stamps, housing subsidies, and welfare.

Open immigration can’t exist with a strong social safety net; if you’re going to assure healthcare and a decent income to everyone, you can’t make that offer global ---
Paul Krugman
https://www.goodreads.com/quotes/724654-open-immigration-can-t-exist-with-a-strong-social-safety-net

 

But now that Paul Krugman wants Elizabeth Warren or Bernie Sanders to be President of the USA he changed his tune about a global offer and promotes a honey pot of safety nets to anybody who can sneak across the USA border, including free medical care, free education, food stamps, housing subsidies, and guaranteed annual income.

 

You can't have it both ways on global offers Paul.

 

Nancy Pelosi Is 'Not a Big Fan of Medicare For All’ ---
https://townhall.com/tipsheet/juliorosas/2019/11/01/nancy-pelosi-is-not-a-big-fan-of-medicare-for-all-n2555747?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=11/02/2019&bcid=b16c6f948f297f77432f990d4411617f&recip=17935167

 


On a state-by-state basis, the cost differential for nursing home care is far steeper, ranging from $67,525 a year on average for a private room in Oklahoma to $362,628 a year in Alaska

Cheapest States for Long-Term Care: 2019 ---
https://www.thinkadvisor.com/2019/10/29/15-cheapest-states-for-long-term-care-2019/?slreturn=20190931094107

Medicare, unlike Medicaid, does not pay for long-term nursing care, but with years of planning many estates are siphoned off by heirs to get loved ones poor enough for Medicaid ---
https://longtermcare.acl.gov/medicare-medicaid-more/medicaid/medicaid-eligibility/

 


 

The Atlantic:  But the profits of health insurers are not that exorbitant compared with other parts of the health-care system. And in fact, many scholars suggest that American health care is so dysfunctional because it simply costs too much. That’s the fault of doctors, drugmakers, and hospitals, too, not just insurers ---
https://www.theatlantic.com/health/archive/2019/07/kamala-harris-blames-health-insurers-she-right/595252/?utm_source=newsletter&utm_medium=email&utm_campaign=politics-daily-newsletter&utm_content=20191101&silverid-ref=NTk4MzY1OTg0MzY5S0

 


How to Mislead With Political False Promises

Elizabeth Warren Finally Says How She'll Pay for Medicare for All

https://www.bloomberg.com/news/articles/2019-11-01/warren-pays-for-medicare-for-all-by-taxing-companies-wealthy?cmpid=BBD110119_BIZ&utm_medium=email&utm_source=newsletter&utm_term=191101&utm_campaign=bloombergdaily

Senator Elizabeth Warren said she would fund her version of Medicare for All with taxes on large corporations and the wealthy, a tax evasion crackdown, a reduction in defense spending and by putting newly legalized immigrants on the tax rolls.

 

Her advisers also lowered the estimate of Medicare for All’s price-tag to $20.5 trillion over 10 years from the $34 trillion the Urban Institute predicted, by using the new Medicare-for-All negotiating power to slash administrative spending, drug prices and provider payments.

 

Jensen Comment

She also promises that there will be zero taxes on the middle class to pay for Medicare-for-All, Free. Plus she did not factor in the additional trillions for Green Initiatives, Free College, Guaranteed Annual Income, Reparations, and on and on and on.

 

Her promise of zero taxes on the middle class is misleading. Who does she think ultimately pays for the taxes on large corporations (think Walmart, Amazon, and Exxon)? Large corporations don't pay taxes. They collect taxes in prices to their customers which in most cases are the poor and the middle class customers. Warren will even collect from transactions that are exempt from sales tax such as when the Pentagon pays billions to Boeing for aircraft and Microsoft for cloud services.

 

And what happens if you confiscate the wealth of Americans. They have to liquidate their investments in stocks and real estate, thereby confiscating the pensions and savings of the poor and middle class.
 

 “80% of the assets of the rich are publicly traded stocks, bonds, real estate (upon which most of the USA's pension and savings plans depend) ---
https://www.factcheck.org/2019/06/facts-on-warrens-wealth-tax-plan/

 

 

Notice that she never says how she will keep savings investments pension pension incomes viable when the stock markets crash for good!

 

Facts on Warren’s Wealth Tax Plan ---
https://www.factcheck.org/2019/06/facts-on-warrens-wealth-tax-plan/

 

. . .

How would the (wealth) tax revenues be spent?

Warren is banking on a $2.75 trillion revenue projection from Zucman and Saez to fund a host of her priorities. In speeches, she has laid out those beneficiaries:

 

The Warren campaign estimates the first three programs — dealing with child care and universal pre-K — would cost about $700 billion over 10 years. And the next three — free public college tuition, money for historically black colleges and canceling most student loan debt — would cost about $1.25 trillion over 10 years. That would leave more than about $750 billion for the Green New Deal and Medicare for All, the campaign says. That’s not enough to fully fund either one, but Warren says it is enough for a “down payment” on each.

How reliable is Warren’s $2.75 trillion revenue forecast?

Whether Warren’s plan would actually raise $2.75 trillion is a matter of debate among economists.

Th$2.75 trillion forecast comes from Zucman and Saez. To estimate how much revenue the tax would generate on wealth over $50 million, the economists used data from the Survey of Consumer Finances from the Federal Reserve Board and the Distributional National Accounts recently created by economist Thomas Piketty, Saez and Zucman. To estimate the revenue from the tax on billionaires, the economists used the Forbes 400 list of the richest 400 Americans in 2018.

 

Zucman and Saez estimated that people would reduce their reported wealth by 15% “through a combination of tax evasion and tax avoidance.” The authors wrote that “recent research shows that the extent of wealth tax evasion/avoidance depends crucially on loopholes and enforcement. The proposed wealth tax has a comprehensive base with no loopholes and is well enforced through a combination of systematic third party reporting and audits. Therefore, the avoidance/evasion response is likely to be small.”

 

But some economists think that assumption is too rosy.

While neither the Tax Policy Center nor the Tax Foundation has yet released a full analysis of Warren’s plan, economists at both said there is reason to believe Warren’s revenue estimate is too high.

Kyle Pomerleau, chief economist and vice president of economic analysis at the nonprofit, pro-business Tax Foundation, said that the assumption of 15% tax evasion/avoidance is “actually the average avoidance for the entire U.S. tax system, which is primarily the income tax and payroll tax. These taxes are, in principle, much harder to avoid than a wealth tax because the transaction (income) is hard to game or hide from the tax authorities. There is a good record of how much you are being paid by your employer.”

“A wealth tax, on the other hand, is much harder to enforce,” Pomerleau said. “For one, much of the wealth tax base doesn’t have a market price. For example, we don’t really know how much a particular privately-held business is worth because equity (stocks) in that company are not regularly traded on the open market.”

Pomerleau also warned that because the wealth tax is a significant tax on savings, it will discourage people from holding on to assets. “This effect will reduce the potential tax base,” Pomerleau said, a trend that was not accounted for in Warren’s estimate.

Howard Gleckman, a senior fellow at the nonpartisan Tax Policy Center, has similar concerns.

“First, while her plan anticipates some tax avoidance, it will be very difficult for the IRS to keep up with the tax planning that highly-paid lawyers and accountants can devise,” Gleckman told us via email. “With so much money at risk, the wealthy will have powerful incentives to hire smart advisers to help avoid, or at least reduce, their tax liability.

“Second, a large share of wealth held by the high net worth taxpayers is in the form of privately held businesses,” he said. “And these are notoriously difficult to value. In effect, the IRS would have to prove that a taxpayer’s valuation is unreasonably low.”

“I suspect she would collect less revenue than she predicts, but I cannot say how much less,” Gleckman told us.

In an op-ed published in the Washington Post on April 4, Lawrence Summers, a Harvard University professor who was treasury secretary from 1999 to 2001 and an economic adviser to President Barack Obama in 2009 and 2010, and Natasha Sarin, an assistant professor of law at the University of Pennsylvania Law School and an assistant professor of finance at the Wharton School, took direct aim at the $2.75 trillion estimate.

“Common-sense revenue estimates by economists who are not very deeply steeped in revenue estimation tend to be overly optimistic,” Summers and Sarin wrote.

The two looked at the U.S. experience with estate tax data and concluded Warren’s wealth tax would only raise about 40% of the amount estimated by Saez and Zucman. And that’s being “maximally optimistic about the wealth tax’s revenue potential,” Summers and Sarin wrote.

“We suspect that to a great extent it reflects the myriad ways wealthy people avoid paying estate taxes that in some form will be applicable in any actually legislated wealth tax,” Summers and Sarin wrote. “These include questionable appraisals; valuation discounts for illiquidity and lack of control; establishment of trusts that enable division of assets among family members with substantial founder control; planning devices that give some income to charity while keeping the remainder for the donor and her beneficiaries; tax-advantaged lending schemes; and other complex devices known only to sophisticated investors. Except for reducing a naive calculation by 15 percent, Saez and Zucman do not seem to take account of these devices.”

“If our suspicion is correct, such a wealth tax will not yield the revenue that its proponents hope for, and that when actual scorekeepers score actual proposals, their estimates will disappoint advocates,” they concluded.

“In our view, the $2.75T is not realistic,” Sarin wrote to us in an email. “The closest we get based on extrapolation from the estate tax (which seems relevant because it involves a very similar population and thus many of the same evasion incentives and possibilities) is around 40% of this estimate.”

In an email response to FactCheck.org, Saez challenged the Summers and Sarin use of the estate tax to estimate the effects of Warren’s wealth tax proposal.

“It is well known that the estate tax is very poorly enforced and that the rich manage to largely avoid/evade it by giving to heirs before death, spouses, and charity, using lots of trick to discount assets,” Saez wrote.

“We have assumed an evasion rate of 15% based on the best literature on the question (as we discuss in our letter and in more detail here),” Saez added.

Saez said the Summers-Sarin estimate that the tax on those with assets worth more than $50 million would bring in just $25 billion a year implicitly assumes “that over 90% of the wealth will be hidden.” That’s not reasonable, Saez said, because “80% of the assets of the rich are publicly traded stocks, bonds, real estate for which there are clear market values

 

Continued in article

 

Urban Institutue: From Incremental to Comprehensive Health Reform: How Various Reform Options Compare on Coverage and Costs ---
https://www.urban.org/research/publication/incremental-comprehensive-health-reform-how-various-reform-options-compare-coverage-and-costs

Report:
From Incremental to Comprehensive Health Insurance Reform: How Various Reform Options Compare on Coverage and Costs

Brief:
Comparing Health Insurance Reform Options: From “Building on the ACA” to Single Payer

Blog Post:
Don’t Confuse Changes in Federal Health Spending with National Health Spending

Policymakers, including candidates in the 2020 presidential campaign and members of Congress, have proposed a variety of options to address the shortcomings of the current health care system. These range from improvements to the Affordable Care Act to robust single-payer reform.

There are numerous challenging trade-offs when choosing an approach to health care reform, including covering the uninsured, improving the affordability of health care, and raising the government funding required to implement them. The public and policymakers alike need more information about the potential effects of various health reform proposals.

This study, funded by the Commonwealth Fund, analyzes eight health care reforms and their potential effects on health insurance coverage and spending. Each of the analyzed reform proposals makes health insurance considerably more affordable by reducing people’s premiums and cost sharing. Some reforms also reduce US health care costs, and all require additional federal dollars.

Key findings:

·         Within the existing public-private health care system, near universal coverage and improved affordability could be achieved with moderate increases in national health spending. Under one of the plans modeled in the report, which proposes a mix of private and public health insurance, everyone in the US could be covered except for undocumented immigrants. The plan would enable workers to opt for subsidized nongroup coverage instead of their employer’s insurance plan. It would also improve the ACA’s subsidies to help people afford coverage, cover people in states that have not expanded Medicaid, require everyone to have insurance with an auto-enrollment backup, offer a public insurance option, and cap provider payment rates.

Coverage and costs:
This reform plan achieves universal coverage for people legally present in the US, covering 25.6 million people who would otherwise be uninsured. However, the plan leaves 6.6. million undocumented immigrants without coverage. National spending on health care would decrease modestly, by $22.6 billion or 0.6 percent, compared with current law in 2020. Federal government spending would increase by $122.1 billion in 2020, or $1.5 trillion over 10 years.

·         One single-payer approach would leave no one uninsured and largely eliminate consumers’ out-of-pocket medical costs but would require much greater federal spending to finance. The modeled “enhanced” single-payer system would cover everyone, including undocumented immigrants. The reform would include benefits more comprehensive than Medicare’s—including adult dental, vision, hearing, and long-term services and supports—with no premiums or cost sharing. All current forms of insurance for acute care would be eliminated, including private insurance, Medicaid, and Medicare, and everyone residing in the US would be covered by a new public insurance program. Providers would be paid rates closer to Medicare’s. Health spending by employers would be eliminated, and household and state health spending would decline considerably while federal spending would increase significantly.

Coverage and costs:
This reform option covers the entire US population. National spending on health care would grow by about $720 billion in 2020. Federal government spending would increase by $2.8 trillion in 2020, or $34.0 trillion over 10 years.

·         A second single-payer approach can be constructed with lower federal and system-wide costs. In addition to the enhanced single-payer plan above, researchers examined a single-payer “lite” plan that is similar to the enhanced version but includes cost sharing for out-of-pocket expenses based on income, adds fewer new covered benefits, and only covers legally residing US residents. Single-payer “lite” lowers total national health spending, decreasing health spending by households, employers, and state governments and increasing federal government spending by less than the enhanced single-payer reform.

Coverage and costs:
This reform plan achieves universal coverage for people legally present in the US, covering 25.6 million people who were uninsured. However, the plan leaves all 10.8 million undocumented immigrants without coverage (due to the elimination of private insurance). National spending on health care would decrease by $209.5 billion, or 6 percent, in 2020. Federal government spending would increase by $1.5 trillion in 2020, or by $17.6 trillion over 10 years. The analysis demonstrates that there is more than one effective approach to achieving universal health care coverage in the United States and highlights the trade-offs of different reform strategies.

The analysis demonstrates that there is more than one effective approach to achieving universal health care coverage in the United States and highlights the trade-offs of different reform strategies.

Continued in article

Rob Rrownstein:  The Eye-Popping Cost of Medicare for All According to new figures: more than the federal government will spend over the coming decade on Social Security, Medicare, and Medicaid combined ---
https://www.theatlantic.com/politics/archive/2019/10/high-cost-warren-and-sanderss-single-payer-plan/600166/?utm_source=newsletter&utm_medium=email&utm_campaign=politics-daily-newsletter&utm_content=20191016&silverid-ref=NTk4MzY1OTg0MzY5S0

The Urban Institute estimates that a single-payer plan would require $32 trillion in new tax revenue over the coming decade.

 

How big a lift is it to raise $32 trillion? It’s almost 50 percent more than the total revenue the CBO projects Washington will collect from the personal income tax over the next decade (about $23.3 trillion). It’s more than double the amount the CBO projects Washington will collect over the next decade from the payroll tax that funds Social Security and part of Medicare (about $15.4 trillion).

Jensen Comment
And the Medicare for All Spending initiative is a relatively small part of what most 2020 Presidential Candidates (except for Biden) want to spend on social programs. To the average $3.2 trillion annual cost of Medicare for All the annual cost of their Green Initiatives, free medications, student loan forgiveness followed by free college for everybody, guaranteed annual income for 350+ USA residents, housing-for all, reparations for African and Native Americans, and billions for new subsidized housing on top of existing safety nets such as food stamps and welfare and housing. 

 

Add to this the free medical care, free college, housing, and food advertising for poor people all over the world in cross-over-the-border invitations and you're easily talking over $20 trillion per year. Whereas President Obama deported over a million undocumented immigrants, the 2020 candidates are inviting people to cross over the USA borders.

 

The most misleading statement in the October 15, 2019 debates was Elizabeth Warren's comment that she will not promote any "spending program that taxes the middle class." But notice that she says nothing about destruction of the middle class pensions dependent upon stock market prices (think CREF and CalPERS). She's probably right about middle income retirees not paying more taxes. We won't have any incomes left to tax if you destroy the stock markets.

 

And when the stock markets are destroyed unemployment will soar because business firms will lose the ability to raise capital necessary for operating businesses. Businesses can turn to government for capital, but the cupboard will be bare due to all the social programs draining $20 trillion from the economy.

 


Largest Health Care Scam Ever: Fake Genetic Testing Result Scheme Results in $2.1 Billion in Medicaid Losses ---
https://www.newsweek.com/largest-health-care-scam-ever-fake-genetic-testing-result-scheme-results-21-billion-medicaid-1461901

Jensen Comment
Essential to the scheme were unbelievably greedy doctors.

 


Walmart is launching its first standalone primary care clinic ---
https://www.businessinsider.com/walmart-unveils-new-primary-care-clinic-2019-9

Jensen Comment
It's not yet clear to me whether Walmart is going to provide primary care doctors who will also make hospital rounds when you're hospitalized.

There are considerable advantages to having doctor offices attached to hospitals. One is the convenience for doctors to make hospital rounds. Two is the convenience for patients to have medical lab, X-ray, and other hospital services in the same building and on the same computer networks as the hospital itself --- that's what happens with my primary care doctor. It's also convenient to have other primary care clinics in the same hospital cover for my doctor's partnership when they're out of town for one reason or another. Our local hospital has more than one primary care clinic apart from Critical Care and Emergency Room divisions of the hospital. Conveniently under one roof there are other offices for specialists in ophthalmology, obstetrics, dermatology, orthopedics, cardiology, etc.

The rents provided by doctor offices in the hospital also help our hospital cover losses from charity medicine and limited insurance that does not cover full costs (think Medicaid). I think medical clinics in Walmart, CVS, etc. in some ways make it more difficult for local hospitals to avoid red ink --- especially when Walmart and CVS pass along all their charity patients to the local hospital. Walmart's standalone primary care clinics will skim off the easy profits at the expense of our local hospitals who serve the charity patients.

Hospital funding is complicated and variable. None of my property tax is currently diverted to our local hospital. However, when I lived in San Antonio a goodly share of my property tax was diverted to the Bexar County Hospital to cover some of that hospital's enormous losses from charity medicine.
 


Nate Silver:  Medicare For All Isn’t That Popular — Even Among Democrats
https://fivethirtyeight.com/features/medicare-for-all-isnt-that-popular-even-among-democrats/
Jensen Comment
Having a government medical insurance option is not so unpopular, but contrary to Bernie Sanders ranting it turns out employees really don't want to lose their employer-funded private health insurance.

Bernie Sanders: "You’re Damn Right We’re Going to Destroy Private Health Insurance" --- 
Click Here

Nancy Pelosi on single-payer health care: "How do you pay for that?" ---
https://fivethirtyeight.com/features/medicare-for-all-isnt-that-popular-even-among-democrats/


The Future Looks Terrible for U.S. Nursing Home Costs ---
https://www.bloomberg.com/news/articles/2019-06-25/u-s-nursing-home-costs-may-get-worse-thanks-to-a-labor-shortage?cmpid=BBD062519_BIZ&utm_medium=email&utm_source=newsletter&utm_term=190625&utm_campaign=bloombergdaily


Finland’s government collapses over failed health care reform ---
https://www.politico.eu/article/finlands-government-collapses-over-failed-health-care-reform/?fbclid=IwAR3ZUM2rsGzcoIVMFVHwwTfE15MAxpo_9poClu2d7pjzFdrz84WORKZTSX0


Bernie Sanders: "You’re Damn Right We’re Going to Destroy Private Health Insurance" ---
Click Here
And he will limit the number of doctors by regulating what they're allowed to earn.


Reason Magazine's Really Important Concerns about Medicare-for-All
The Contradiction at the Heart of Bernie Sanders' Medicare for All Plan ---

https://reason.com/2019/04/24/the-contradiction-at-the-heart-of-bernie-sanders-medicare-for-all-plan/

There is a huge contradiction at the heart of Bernie Sanders' Medicare for All plan.

On the one hand, Sanders not only wants to expand government-provided coverage to everyone in the country, he wants that coverage to be significantly more generous than Medicare, private insurance, or comparable government-run systems in other countries. On the other hand, he wants to drastically cut payments to hospitals, many of which lose money on Medicare right now, making up for the program's relatively low payments by charging much higher prices to private insurers.

What Sanders is proposing, in other words, is that the government finance a significant increase in government services while also radically reducing the amount it pays for those services. Even making generous assumptions, it's almost impossible to see how his plan could work.

Let's start with the promises Sanders makes about Medicare for All. No networks, premiums, deductibles, or copayments. Under his plan, essentially all non-cosmetic services would be free at the point of care for everyone.

Sanders calls this Medicare for All, but what he's describing isn't Medicare as we now know it. As The New York Times noted earlier this year upon the release of a Sanders-inspired Medicare for All bill in the House, the new program would "drastically reshape Medicare itself," changing both what it pays for and how. In many ways, it would be a completely different program. Medicare for All, in other words, isn't really Medicare.

And that program would be far more expansive and expensive than nearly any other comparable system. It would cover more, and require less direct financial outlays (not including taxes), than either today's Medicare or typical private insurance plans in the U.S.

It would also be substantially more generous than the national health systems set up in other countries. Sanders likes to unfavorably contrast America's mixed public-private health care system with foreign systems where the government is more directly involved. When he announced the 2017 version of his Medicare for All plan, for example, he bemoaned the state of affairs in the United States "a time when every other major country on earth guarantees health care to every man, woman, and child." Discussions about health care policy on social media often include some variant of the question, "If every other country with a developed economy can do it, why can't the United States?"

The problem with this line of questioning is that what Sanders is proposing isn't what other countries do. Canada, for example, has a single-payer system, but it doesn't cover dental care, vision, drugs, or any number of other services. A majority of Canadians carry private insurance in order to cover those services. In Britain, which offers a fully socialized medical system where health care providers are government employees, many resident still buy private coverage. Sanders, on the other hand, would effectively wipe out private coverage in the space of just four years.

There are similar limitations on coverage in other countries, like the Netherlands. It's also true in Australia, where patients typically pay a percentage of the cost of specialty services. It's true that in these countries, government plays a more central role in health care financing. But their systems have also reckoned with costs and tradeoffs in a way that Sanders, after so many years, has not.

Indeed, the main trade-off that Sanders seems willing to discuss is the elimination of insurance companies, which he portrays as greedy middlemen driving up the cost of health care. Wiping out the industry in one fell swoop, as Sanders has proposed, would be a unprecedented and disruptive move that would have significant economic repercussions, including the probable loss of thousands of insurance industry jobs. But it still wouldn't do much to bring down the cost of health care, because so much money in the nation's health care system is tied up in provider payments, especially hospitals.

And therein lies the (first) contradiction.

Most people probably think of hospitals as places where you go to get health care services. Politically and economically, however, they also fulfill another role: They are hubs for stable middle-class jobs, paying reasonably good wages to thousands of highly trained workers, most of whom are not doctors or specialists earning stratospheric salaries.

To acquire the revenue to pay for all these jobs, hospitals rely on a mix of private and public payments. Public payments make up a somewhat larger share of total hospital budgets, but private payers are typically charged much higher prices.

Hospitals like to argue that Medicare and Medicaid payments are too low to cover their costs, and that as a result, higher private payments effectively subsidize public health coverage. Critics (with some evidence) often respond that hospitals either overstate or don't really understand their own costs, and that this is just a ploy to extract more money from government health programs and private payers.

But when considering Medicare for All, the particulars of this debate are largely beside the point, because there is simply no question that eliminating private insurance and payment for all services would drastically reduce the amount of revenue for hospitals.

Yet that is exactly what Sanders wants to do. His plan calls for paying for health care services at Medicare rates, which means that, practically overnight, hospitals would end up with far, far less revenue. Exactly how much is unclear, but one estimate indicated that payments could drop by as much as 40 percent.

That would leave hospitals with a couple of difficult choices. They could eliminate services. They could try to force some employees to take pay cuts. They could fire large numbers of workers. Or they could simply shut down. As a recent New York Times report on how Medicare for All would affect hospitals noted, rural hospitals—many of which are already struggling to stay afloat—would be particularly at risk of closing.

Whatever ended up happening, there is simply no way most hospitals would or could continue operating as they do now under the payment regime that Sanders envisions. Lots of middle class jobs would disappear. Services would be eliminated or cut back. 

Yet Sanders not only imagines that hospitals would continue to operate as they do now, but that they would expand their services to even more people, since more people would have coverage. And since he also imagines a system with no deductibles or copays, those people would almost certainly end up dramatically increasing utilization of hospital services.

Studies of health insurance have consistently shown that expansions of health insurance result in increased demand for (and use of) health care services; more people with coverage means more people lining up to get care. (Relatedly, introducing even very small copays—on the order of just a few dollars—can reduce the number of visits to doctors and hospitals.) Greater utilization of health care services does not necessarily translate into measurably better physical health outcomes. But it does increase the strain on the health care delivery system—which is to say, it puts a huge amount of pressure on hospitals.

Continued in article

Jensen Comment
Another contradiction is that to pay for Medicare-for-All program Bernie Sanders wants to tax most of what high-income workers earn, and the highest income professionals in the USA on average are physicians. There is currently a shortage of physicians. This shortage will become critical as medical care becomes virtually free and often overused as a free service by hundreds of million residents of the USA.

Here's the second contraction

Taxing physician income at 70% or more will discourage students from becoming physicians and will give existing physicians incentives to retire early or work at leisurely part-time doctoring. Far better work two days per week and pay a 30% income tax rate than to be a 60--hour week highly stressed, and overworked physician being taxed at 70% of every extra dollar earned.

Medicare-for-All is a Tragedy of the Commons ---
https://en.wikipedia.org/wiki/Tragedy_of_the_commons


Vox:  The Bernie Sanders national medical plan has lots of details about what single-payer would cover. It has less information on how to pay for it (well over $3 trillion per year and growing for more generous coverage than all other national health plans) ---
https://www.vox.com/2019/4/10/18304448/bernie-sanders-medicare-for-all

. . .

Medicare, employer coverage, and these other countries show that nearly every insurance scheme we’re familiar with covers a smaller set of benefits with more out-of-pocket spending on the part of citizens. Private insurance plans often spring up to fill these gaps (in Canada, for example, vision and dental insurance is often sponsored by employers, much like in the United States).

The reason they went this way is clear: It’s cheaper to run a health plan with fewer benefits. The plan Sanders proposes has no analog among the single-payer systems that currently exist. By covering a more comprehensive set of benefits and asking no cost sharing of enrollees, it is likely to cost the government significantly more than programs other countries have adopted

. . .

But who pays how much more is a key question this Sanders bill doesn’t answer yet. Until there is a version that does, we can’t know whether the health system the Vermont senator envisions could actually become reality.

Jensen Comment
The Sanders plan eliminates all private-sector medical insurance companies and eliminates Medicare and Medicaid.

The good news for us retired folks is that long-term care insurance that is not covered presently under Medicare will cover us retired folks. Hooray for Bernie! I can eat, drink, and be merry on my long-term care savings.

Two things Bernie does not like to discuss is the impact on doctors and hospitals. At present many (most?) of the top physicians and hospitals refuse Medicaid patients because of caps placed on fees. Many also reject Medicare patients, but more of them are covered because of supplemental private insurance benefits that can be added to Medicare insurance. Presently Erica and I pay over $1,200 for supplemental benefits that will not be allowed under the Sanders' plan.

I think Sanders does not like to discuss caps that will be placed on physician billings and hospital rates because the medical profession would otherwise crank up an huge lobbying effort against his plan. The medical profession has only begun to fight.

Also Sanders does not like to discuss the shortage of physicians and hospital services that will arise when bringing tens of millions of people into his plan (think nearly 20 million undocumented residents that will be covered in rural areas already underserved with doctors and hospitals).

Also Sanders does not like to discuss the transition costs in creating the vast government bureaucracy that does not exist for processing medical insurance claims. At present Medicare and Medicaid outsource claims processing to the private sector. Bernie plans to kill that outsourcing sector.

Bernie Sanders: "You’re Damn Right We’re Going to Destroy Private Health Insurance" ---
Click Here
And he will limit the number of doctors by regulating what they're allowed to earn.

And Bernie plans on taxing high income earners in the USA by taking away 70% or more of what they now earn. What will be the incentive for spending years of misery to become a physician good at a craft that will be taxed to death rather than rewarded after all those years of misery?

The problem with becoming a physician is not just the cost of medical school. The problem is the ordeal --- those years of education and training needed to become masters of their crafts. The time needed varies with specialties, but you don't become a neurosurgeon without years of ordeal in training before you can bill your first paying patient. And there's a lot of blood, sweat, and tears in those training years. Even worse is that there's a lot of weekly tension and risk of burn out in the years of practice that follow. Tell that to the advocates of Medicare-for-All combined with soaring taxes!

Why did Cuba abandon its socialist/communist dream of equality for everybody?
The Guardian:  This was the egalitarian dream of Cuba in the 1960s: For years in Cuba, jobs as varied as farm workers and doctors only had a difference in their wages of the equivalent of a few US dollars a month.

https://www.theguardian.com/world/2008/jun/12/cuba 
Jensen Comment
Only now is Cuba backtracking from its egalitarian dream by uncapping wages and legalizing profits while liberals in the USA want to return again to the 1960s Cuban dream.

But is Denmark socialist? …Denmark doesn’t at all fit the classic definition of socialism, which involves government ownership of the means of production. It is, instead, social-democratic: a market economy where the downsides of capitalism are mitigated by government action, including a very strong social safety net. …The simple fact is that there is far more misery in America than there needs to be. Every other advanced country has universal health care and a much stronger social safety net than we do.
Paul Krugman
https://www.nytimes.com/2015/10/19/opinion/something-not-rotten-in-denmark.html
Jensen Comment
What Krugman does not mention is that Denmark is mostly a homogeneous (white) nation of less than 6 million people. It's much more difficult and expensive to afford and maintain a similar safety net with over 300 million highly diverse people located on top of a very porous border with thousands trying to sneak in daily to enjoy the safety nets.

Welfare Leads to Slower Growth in the Nordic Nations ---
https://mises.org/wire/paul-krugman-learns-wrong-lesson-denmark

The Swedish Welfare State Leads to Poor Immigrant Assimilation ---
https://mises.org/wire/swedish-welfare-state-leads-poor-immigrant-assimilation

Ending Jensen Comment
But don't get me wrong! Erika and I will vote for Bernie Sanders since our possible expensive long-term health care not funded by Medicare will soon be free. To hell with the future economic engine of the USA. Bring on the Bernie Sanders' socialism since I'm too old to witness the chaos and economic destruction that follows in its path. Since Democrats are promising free everything why shouldn't Erika and I get in on the free everything?

Listen to Big Rock Candy Mountain' performed by Burl Ives ---
Big Rock Candy Mountain' Burl Ives

 

"But (American) virtuous feelings have been played on by some facts with more fiction; they have been the dupes of artful maneuvers, and made for a moment to be willing instruments in forging chains for themselves.”
Thomas Jefferson
William J. Watkins, Jr., Winter 1999, “The Kentucky and Virginia Resolutions:  Guideposts of Limited Government,” The Independent Review, Vol. III, No. 3, pp. 406-407.

 


How to Mislead With Statistics

Here's how much money doctors across the US make ---
https://www.businessinsider.com/how-much-money-do-doctors-make-gender-pay-gap-doximity-study-2019-3

Jensen Comment
This article is a great example of how statistical reports can be misleading if they only focus on mean averages without added information about standard deviations and skewness and missing variables. For example, consider neurosurgery. My wife's spine surgeon in Boston is what he calls a "big-back" surgeon. He performs spinal surgeries that 95+% of the back surgeons in the USA refuse to perform. He actually broke Erika's spine into three pieces and then attached four rods from her hips to her neck. Afterwards, however, she can still pick up a tissue off of the floor when bending her spine. Needless to say his rates, sometimes exceeding tens of thousands of dollars per surgery, are greater than the rates of "little-back" surgeons who also work out his office. By the way, he's not on the faculty of the Harvard Medical School. However, every time I've spoken with him he was followed by two or three Harvard Medical School neurosurgery residency physicians who were what I called his "puppies."

By the way, it might be interesting to study details of his malpractice insurance premiums and lawsuits. He's amazing because he has the guts to be a "last-chance" neurosurgeon in spite of the circling lawyers. By last chance I mean when patients can no longer find a neurosurgeon who will operate on their spines he's their "last chance." Erika had over a dozen spine surgeries before she at last found this "big-back" surgeon in Boston.

There are also many other troubles with the above article. For example, malpractice insurance is very high priced in the USA relative to all other nations. And malpractice insurance costs vary greatly with specialties such as being very high for obstetrics (lawyers sue for every bad baby) versus neurosurgery versus psychiatry versus primary care physicians.

Let's consider an example. According to the study the average pay for a neurosurgeon is $617,000. But that does not account for differences in whether that salary is net of malpractice insurance premiums. Such netting out is complicated because many neurosurgeons make this much or much more without having to pay malpractice insurance premiums. My wife's spine surgeon who installed her morphine pump  is an employee of the Dartmouth Hitchcock Medical Center that pays malpractice insurance for virtually all employees and medical school faculty. However, many neurosurgeons who operate in that same medical center are not employees and must pay their own malpractice insurance. Similarly, there's a nearby Veterans Hospital where VA neurosurgeons do not have to pay their own malpractice insurance. But if the VA has to outsource a particular type of surgery that surgeon's bill to the VA will include malpractice insurance.

Incomes of many specialists vary when they must pay for their own staff versus have no expenses for staff. For example, the Dartmouth Hitchcock Medical Center pays for all staff such as receptionists, nurses, technicians, accountants, etc.  It even pays for lawyers when needed. The private-practice physicians who may also perform surgeries at this medical center must pay for their own office space and staff. How do you compare a salaried employee of that medical center with the profits of a private-practice physician?

I might point out a political problem related to all of this. There's an old saying:  "Show me a bad doctor, and I'll show you a rich professional." The point is that even at the lowest end of the income distribution medical doctors in the USA are well paid.

The Democratic candidates for the 2020 presidential nomination have created a paradox.
Most, not all, students are drawn to medical school in anticipation of relatively high after-tax incomes. The politicians advocating Medicare-for-All want to fund this $30+ trillion cost with greatly increased taxes (think 70% of a physician's income). At the same time more than twice as many physicians will be needed to staff Medicare-for-All, especially with 76,000 new patients crossing the border each month at current rates estimated by the NYT ---
https://www.nytimes.com/2019/03/05/us/border-crossing-increase.html
Eventually, the progressives will also legislate free medical school education. But how many students will flock to medical schools even if they are free? My guess is very few if you are gong to tax or regulate away 70% of their income when they at long last begin to practice medicine.

The problem with becoming a physician is not just the cost of medical school. The problem is the ordeal --- those years of education and training needed to become masters of their crafts. The time needed varies with specialties, but you don't become a neurosurgeon without years of ordeal in training before you can bill your first paying patient. And there's a lot of blood, sweat, and tears in those training years. Even worse is that there's a lot of weekly tension and risk of burn out in the years of practice that follow. Tell that to the advocates of Medicare-for-All combined with soaring taxes!

If you want to double the number of physicians in the USA you not only have to make medical school free; You have to let them be the highest paid professionals on average after taxes.

PS
You can read more about Erika's ordeal with pain and surgeries at
http://www.cs.trinity.edu/rjensen/Tidbits/ErikaBob/ErikaPain/Set01/Set01.htm
I might add that the electronic pain stimulator installed eventually proved to be worthless. The same surgeon who installed it removed it and replaced it with a morphine pump. The pump is no magic bullet, but its more effective than the electronic wiring up and down her spine.

 


March 21, 2019
Hi Elliot,,

You must also realize that when the wealthy people fund the new ventures they are also taking on highe financial risks. For some the payout is more wealth. For others there are huge losses. Bill Gates and Warren Buffet and other billionaires lost big time in Theranos. But Theranos and other more successful ventures got a chance that they would never get in Europe due to all the regulations and red tape entanglements and high taxes. 

How many innovative ventures that succeeded and failed have been funded by European nations like the Nordic nations? And in China and Russia these new ventures probably could not get started without having the best ideas stolen/hacked from the USA.

You raised the question:
"At what point do most people take Sen. Warren or Rep. AOC more seriously and consider
their solutions as reasonable instead of fringe?"

Do you really think Warren and AOC have thought out "their solutions" even to the satisfaction of their own party?

Most Democrats consider AOC and Warren economics fringe and worry that at adding $100+ trillion in social spending might destroy the USA economic engine.

Consider Medicare-for-All.

The sensible liberal press argues as follows:

The New York Times' David Brooks:  ‘Medicare for All’: The Impossible Dream ---
https://www.nytimes.com/2019/03/04/opinion/medicare-for-all.html?action=click&module=Opinion&pgtype=Homepage

Washington Post:  You can’t have it all — even with Medicare-for-all ---
https://www.washingtonpost.com/opinions/you-cant-have-it-all--even-with-medicare-for-all/2019/01/31/b0551dcc-24c4-11e9-ad53-824486280311_story.html?utm_term=.7d24dfad68da

 

If the nation were building a health-care system from scratch, single-payer might be the rational choice. Even now, with many Americans reasonably satisfied with their employer-sponsored coverage, politicians can make an argument that they’d be better off in a different system. But they should not make that argument by exaggerating the benefits or lowballing the costs of single-payer, as Medicare-for-all advocates so often do. Any system will demand tradeoffs and constraints.

 


Canadian doctors still make dramatically less than U.S. (and UK and German) counterparts: study ---
https://nationalpost.com/news/canada/canadian-doctors-still-make-dramatically-less-than-u-s-counterparts-study
Canadian doctors make less than the OECD average, although they do not pay nearly as much as USA physicians for malpractice insurance, office space, and labor assistants like office nurses ---
https://en.wikipedia.org/wiki/Physicians_in_Canada

. . .

Canada should not ignore the wage gap, as a sudden shortage of certain specialists in the States could trigger a drain from here, said Dr. John Haggie, president of the Canadian Medical Association. Canada saw a net loss of doctors to the U.S. in the 1990s, as provinces instituted doctor pay caps and tried to rein-in fee increases as a way to corral health costs.

But Dr. Haggie voiced no particular envy Tuesday at the statistics just published in the journal Health Affairs

Jensen Comment
I read where there are 72,000+ physicians employed in the Canadian health system having 86,000 physicians. The population of Canada is 37+ million residents spread over nearly 4 million square miles.
In the USA
Patients experience long waits (months) for doctor appointments largely due to the shortage of Canadian physicians. Delays for elective procedures such as knee and hip replacements are so long that many Canadians use their own savings to get such surgeries performed in the USA.

In the USA there are over 950,000+ physicians who, on average, are the highest paid professionals in the USA..
https://en.wikipedia.org/wiki/Physicians_in_the_United_States#Demographics
The population of the USA is nearly 10 times that if Canada if you include the undocumented immigrants. USA residents are spread over roughly the same number of square miles as Canada, although the distribution is not as skewed as that of Canada is skewed toward the south.

 

Bernie Sanders: "You’re Damn Right We’re Going to Destroy Private Health Insurance" ---
Click Here
And he will limit the number of doctors by regulating what they can earn.

 


Politico:  Progressives want a government-managed single payer insurance program to replace (in two years) all USA private sector medical insurance companies  ---
https://www.politico.com/story/2019/02/26/house-democrats-medicare-for-all-1189139

Here's one of the problems as they also plan to cut back on what hospitals, drug companies, physicians earn in the USA ---
https://www.businessinsider.com/highest-paying-job-in-every-us-state-2019-2
 

Related to the above problem is will be the shortage of physicians and hospitals to serve the expected increase in services expected by wider coverage and the attraction of hordes undocumented immigrants primarily coming to the USA for needed medical services like dialysis and transplants.

How do you attract more students to become physicians (especially in rural USA) when you plan to cut back on what physicians earn with caps on billings and higher taxes on the earnings of physicians.

With physicians the problem is huge because of the long ordeal it takes to become a licensed specialist and the likelihood of early burnout.
I'm especially aware of this problem because one of our top regional hospital general surgeons, frightfully overworked, in these mountains just flamed out before reaching the age of 50.



Support for Medicare-for-All will evaporate once voters become aware that confiscating the wealthy and high earners will only pay a tiny fraction for the cost and that, when combined with other progressive programs like the green initiative, guaranteed income, student loan forgiveness, housing subsidies, free college, cash reparations to African and Native Americans, etc. the price tags aggregate way over $100 trillion on top of the existing $100+ trillion in contracted entitlements for Medicaid, Medicare, Veterans Benefits, Social Security, Disability Payments, unfunded pensions, etc.

 

How to Mislead With Statistics
Three reasons why people fall for politicians’ lies about statistics ---

https://theconversation.com/3-reasons-why-people-fall-for-politicians-lies-about-statistics-110014
Jensen Comment
A reason for being misled (related to letting emotions rule) is hoping that the politician will become powerful enough to make the lie come true. For example, many people are falling for statistics cited and the promises made by promises of guaranteed income for everybody in the USA (think AOC and Kamela Harris). Nancy Pelosi warns of the hazards of believing those lies.
 

The Democratic Party is Split
“You have to make decisions that you’re going to reach certain goals, and some of our goals
we think are achievable
Nancy Pelosi (when criticizing Alexandria's Green New Deal and Basic (Guaranteed) Income Medicare-for-All)
Click Here



Added Jensen Comment

I suspect progressives will eventually make medical schools much cheaper. However, this will not solve the problem since these same progressives also want to tax what physicians make at 70+% and put severe caps on what they can charge for medical services (makes me think of rent control disasters).  It's like making physicians pay their own fees
https://www.businessinsider.com/highest-paying-job-in-every-us-state-2019-2


 

What progressives can't do much about is to take what discourages medical students the most --- the years of ordeal it takes to master their crafts. 

One almost certain solution for the USA will be what my biologist colleague calls the "French solution" --- which Jagdish tells us is also the "Indian solution." Physicians commence medical school within one year out of high school (or in some instances zero years after high school).  Medical students don't have "waste" 3-5 years as undergraduates. Johns Hopkins has a small experimental program something like the French solution.

 

Another possible help to physicians that progressives are divided over is malpractice insurance and lawsuit pots of gold. The Canadians virtually cut the lawyers out of the equation (except in outlier instances) that makes malpractice insurance in Canada almost nothing compared to the USA. Medical boards in Canada pay victims for damages but no punitive damage awards. 

Amazingly, however, the State of Texas passed a constitutional amendment severely capping punitive damages. The NYT reported that almost immediately medical school graduates started seeking jobs in Texas.

 

What will make malpractice insurance relief difficult is that most of our USA federal and state legislators are lawyers. It amazed me that the lawyers in Texas let the punitive-damage pot of gold slip through their fingers in the Lone Star State.

The WSJ reports that progressive support for eliminating private sector medical insurance companies is waning due to the massive cost of replacing it with a government bureaucracy.

Physicians and hospitals have barely had a chance to fight but will fight tooth and nail if Medicare-for-All ever becomes a threat to them. 

 

The real test is Bernie Sanders. 
He still favors eliminating the private sector in medical insurance and ignores the fact that even Medicare and Medicaid outsource insurance claims to the private sector
that's currently geared up with the trained employees and software to process such claims

 

It's not so much that Bernie Sanders is a threat as the threat that hordes of socialists are also elected to the House and Senate if Bernie becomes wildly popular. The reason progressives like Bernie are currently vague about funding Medicare-for-All is that they know that they will lose millennial support once it's revealed that middle income and maybe even poor people will be taxed for their medical coverage or copays will be charged (as they are in many other nations like Canada). 

Or some nations like Germany greatly limit what's covered in the national plan, thereby forcing those who can afford it to buy secondary medical insurance from the private sector to pay for better services (like not having to wait years for a knee or hip replacement).

 


Kaiser Family Foundation:  People love Medicare-for-All until they're told it'll raise their taxes to  the $30+ trillion cost:  Then support nosedives  ---
https://www.businessinsider.com/ap-poll-support-for-medicare-for-all-fluctuates-with-details-2019-1
Jensen Comment
Virtually all nations with national health plans raise the funds needed with taxation at all levels of income. Estimates of USA's cost run $30+ trillion over ten years, but a lot depends upon who is covered (severely ill or disabled immigrants crossing the border illegally for dialysis or other expensive health care), what is covered (think long-term nursing care). and capital costs (will government build hospitals and medical centers?).

Wealth Tax --- https://en.wikipedia.org/wiki/Wealth_tax

Even if wildly successful Senator Warren's wealth tax would only pay $2.75 trillion of the $30+ trillion cost ten-year cost of Medicare-for-All
Elizabeth Warren's proposed wealth tax would raise $2.75 trillion over a ten-year period from about 75,000 families, or less than 0.1 percent of U.S. households ---
https://www.cnbc.com/2019/01/24/elizabeth-warren-to-propose-new-wealth-tax-economic-advisor.html
Jensen Comment
This could have all sorts of economic consequences. One is that most of those 75,000 wealthy USA families have their wealth tied up in long-term investments like real estate (think of Trump hotels, Ted Turner's ranches in Australia, Amazon's many shares owned by Jeff Bezos), etc.  Warren's Wealth tax could force liquidation of these long-term investments to pay the $2.75 trillion wealth tax. If you want your top millionaires and billionaires to move out of the USA this is a sure-fire way to wave bye bye to them and the $2.75 trillion that becomes uncollectable.
Wealthy taxpayers are probably not worried with a conservative Supreme Court.  Arguably her proposal requires an amendment to the USA Constitution because her wealth tax proposal is extremely disproportional.---
https://en.wikipedia.org/wiki/Wealth_tax#United_States
You can read more about wealth taxes at
https://en.wikipedia.org/wiki/Thomas_Piketty
Why did liberal Sweden axe its wealth tax while at the same time lowering its top income tax rate from 87% (1979) to 65% (1990) to 56% (2002)? ? ---
http://ftp.iza.org/dp11475.pdf
Elizabeth Warren would probably prefer that you do not study experiences of all disastrous Scandinavian wealth taxes and very high marginal income tax rates that were later greatly reduced to stimulate the economy (called supply side (Laffer Curve) economics) ---
http://www.econlib.org/library/Enc/MarginalTaxRates.html

PS
Those 75,000 wealthy taxpayers now invest in hundreds of billions in tax-exempt bonds (called municipal bonds) that underlie the building of most schools and municipal buildings in the USA. The muni bond market would nosedive if most of those 75,000 people sold their tax-exempt bonds and moved these hundreds of billions in investments off shore on their way out of the USA. That's not a cost that the naive Elizabeth Warren factored into her proposed wealth. What's the incentive for a billionaire who moved to Switzerland to continue to invest hundreds of millions of dollars in the USA muni market?

I suspect that Elizabeth Warren knows that her wealth tax would be an economic disaster. I think she's just trying to get votes from financially-ignorant voters. It's all politics and no sense other than she's trying to fend off the radical anti-capitalist "young" left wing of the Democratic Party.

Rand Study of Medicare-for-All --- A Look at the Fine Print  ---
https://www.rand.org/blog/2018/10/misconceptions-about-medicare-for-all.html

Misconception 1:  Health care would be free

Care would not be free in a single-payer system—it would be paid for differently. Instead of paying insurance premiums, people would pay taxes, which would be collected by a government agency and used to pay for health care on behalf of the population. Some in higher tax brackets might pay more under a single-payer system than under the current system, while others might pay less.

Many single-payer proposals, including Sen. Bernie Sanders' “Medicare for All” proposal, cover a comprehensive range of services with no or very low co-pays and deductibles. While common in many proposals (PDF), a single-payer system would not necessarily eliminate all out-of-pocket expenses. In fact, the current Medicare program, which some consider a form of single payer, has deductibles and co-pays.

Misconception 2:  Health care spending would dramatically increase (or decrease).

A single-payer system could push health spending up or down, or not have much effect. Spending could increase if a national single-payer system expanded coverage to more people, leading to higher use of health services. If the single-payer plan cuts deductibles and co-pays, currently insured people would also use more services. But a single-payer system might also reduce or eliminate administrative expenses, such as insurer marketing, billing and claims processing, which would push spending down. A single-payer plan could also cut spending by negotiating lower prices with providers and drug companies.

Two recent studies estimated that in a single-payer system, total spending could decline by a few percentage points.

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Two recent studies, a national-level analysis by the Mercatus Center and RAND's analysis of a single-payer proposal for New York state, estimated that total spending could decline by a few percentage points. Regardless of whether total spending goes up or down, federal spending would almost surely increase, because the government would be responsible for paying the bills.

Misconception 3:  People with employer insurance would have fewer benefits covered.

If the United States adopted a single-payer plan, employer-sponsored insurance would become less relevant because people would have an alternative source of coverage. As a result, many employers would drop health insurance coverage (PDF).

However, workers would not lose access to insurance—they would have coverage through the single-payer plan. Many single-payer plans, including Sanders' “Medicare for All” proposal, cover more than most current employer insurance plans, which have an average deductible of $1,573 for single coverage.

Some single-payer proposals explicitly prohibit employers and private insurers from offering health insurance coverage, to avoid a two-tiered system in which wealthier people have access to more services and providers. Other proposals would allow private insurance to offer coverage for services not included in the single-payer plan (such as elective surgeries), or to provide faster or improved services for those who wish to supplement their benefits.

For example, in Australia (and Germany), all residents are eligible for basic health services provided through a single payer, but those with higher income are encouraged to buy additional, private coverage that provides access to private providers and hospitals.

Misconception 4:  Doctors would become government employees.

None of the leading Medicare for All proposals require that doctors and other health care professionals become government employees, as is the case in the United Kingdom's National Health Service. Under Sanders' Medicare for All proposal, private practices and hospitals would continue to operate independently. Other single-payer proposals require hospitals to convert to nonprofit status (PDF), but could remain privately run.

Misconception 4:  People would lose access to their doctors.

Enrollees generally would be able to choose among providers participating in the program, and—if all providers participated—there would be no need to worry about out-of-network charges. However, changes in payment rates under a single-payer system could affect doctors' willingness to supply services, and could make it more difficult to get appointments.

We see this effect in our current system—in 2015, only 45 percent of primary care physicians accepted Medicaid patients, due in part to Medicaid's relatively low payment rates. In contrast, 72 percent of primary care physicians accepted new Medicare patients and 80 percent accepted new commercial patients.

Even if overall provider payment levels were reduced, payments to each individual provider would depend on their existing mix of patients. Payment might go up for some providers, such as those who see Medicaid patients, and could be about the same for those who see Medicare patients.


Jodi L. Liu is an associate policy researcher at the nonprofit, nonpartisan RAND Corporation. Christine Eibner is the Paul O'Neill-Alcoa chair in policy analysis at RAND and a professor at the Pardee RAND Graduate School.

This commentary originally appeared on USA Today on October 26, 2018. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.

 

Jensen Comment
Many (most?) people in the USA are not aware that current Medicare and Medicaid government insurance claims are processed in the private sector rather than by government agencies. This is important, since there will be an enormous cost for a new government bureaucracy in the USA to be formed to process medical insurance claims if the government does not outsource Medicare-for-All claims processing. I don't think researchers to date have confronted the issue of the huge startup cost of having the government process Medicare-for-All claims.

There also is the issue of the many places in the USA where medical care is substandard due to lack of physicians and hospitals and other providers. Everybody keeps saying the government will not have to build hospitals in these places and provide a sufficient number of providers to run these hospitals. Don't count on that when the lawyers start suing over unequal quality of medical care across the USA. Eventually the Federal government will have to finance new hospitals and provide health care providers in those hospitals.

Many (most?) people in the USA are not aware that they might lose their employer-provided medical insurance under Medicare-for-All insurance. Medical insurance would no longer be a fringe benefit provided by employers.

Medicare patients currently must pay 20% of their medical bills or pay for supplemental private insurance to pay part of this 20%. Costs of such supplemental insurance vary with the degree of coverage desired. For Erika and me the supplemental insurance is over $1,200 per month for our premium supplemental plans plus we have to pay over $200 per month for our Medicare Insurance itself. Even though we were taxed for Medicare since 1965 until we retired at 65 years of age, Medicare is not free in our retirement years. Most people in the USA think that Medicare coverage is free after retirement. That is a serious misconception.

 Of course there are variations of the Medicare-for-All plan. 2020 Presidential Candidate Kamela Harris proposed eliminating all private medical insurance contracts and then quickly reversed herself when learning how many of the 177 million insured people in the USA were happy with their private sector insurance companies. She then proposed that public sector insurance contracts only be made available as an option in competition with private sector plans that often give more choices in choosing doctors and hospitals.

Physicians and hospitals do not have to accept Medicare Patients, Medicaid patients, Obamacare patients, or any patients wanting to pay with insurance. Medicaid and Obamacare patients are likely to have a tougher time finding physicians and hospitals than Medicare patients due primarily to severe fee restrictions on for Medicaid and Obamacare patients. Many hospitals complain that they lose money for every Medicaid patient and Obamacare patient.

Major Chicago Hospitals Not In 2017 Obamacare Marketplace Plans ---
https://www.wbez.org/shows/wbez-news/major-chicago-hospitals-not-in-2017-obamacare-marketplace-plans/f55d6c23-d9b1-452f-8c75-73635bd83d07

Some of Chicago’s largest hospitals said they will not be part of any Cook County Affordable Care Act marketplace plans in 2017.

 

University of Chicago Medical Center and Rush University Medical Center both said they don’t plan to be in network for any Obamacare marketplace plans next year. 

 

 

The change means patients with doctors at those hospitals will either need to find a plan off the marketplace, and lose Obamacare subsides, or find a new doctor.

 

Northwestern Memorial Hospital said it will also be out of the marketplace, but will have exceptions for some of its partner hospitals.

Continued in article

Personally, I think Medicare-for-All will significantly increase what is paid for medical services in the USA. Primarily this is because there is a $2+ trillion underground economy where workers are paid unreported cash for services that are not subjected to payroll taxes or income taxes. Much of this is for part-time work (think house cleaners and unregistered day care providers) although there are many full-time workers whose services are not reported to the government. I lived in San Antonio for 24 years where there are various street corners  where employers meet with workers taken to jobs day-after-day such as roofing jobs, construction jobs, landscaping jobs, etc. Such workers save (illegally) on paying income and payroll taxes but also receive no benefits such as medical insurance, unemployment insurance, and Social Security contributions. This begs the question of why law enforcement does not move in to end this enormous illegal practice. The suspected reason is that closing it down those street corner opportunities will hurt millions of families with children across the USA who are vitally dependent upon such cash-payment jobs. Many of those workers, certainly not all, are undocumented immigrants who find it harder to find traditional jobs with benefits or expose themselves to ICE deportations.

Presumably millions of workers in the $2+ trillion underground economy who do not presently have health insurance would be covered under Medicare-for-All. Unreliable stimates of the undocumented immigrants in the USA are reported to be around 11 million, but realistic estimates run much higher than that. Certainly many undocumented workers do not depend upon the underground economy for jobs, but a huge proportion rely upon that underground economy.

What is not clear is whether physicians and hospitals could refuse Medicare-for-All patients. Health care providers are allowed pick and choose what insurance they will accept at the moment, and many refuse Medicaid and Obamacare patients. When we lived in San Antonio we had an outstanding dermatologist that did not accept any insurance plans. Patients paid their own bills and then were on their own when appealing for reimbursements from their insurance plans.

What nobody, including the Rand study above, seems to want to discuss is the wide range of cost possibilities for Medicare-for-All coverage. For example, the 800-lb gorilla lurking in the shadows is the cost of long-term-nursing care. Currently Medicare does not cover long-term nursing care claims. Medicaid does cover long-term nursing care but severely limits what will be paid for each day of care. As a result many Medicaid patients must accept pretty lousy nursing homes or pretty lousy home-care providers. Medicare-for-All costs will explode exponentially if long-term care is provided in quality nursing homes. Presently long-term nursing care insurance plans are very expensive luxuries.

One of the big worries is the magnetic attraction Medicare-for-All will have on very expensive long-term treatment patients. For example, one can imagine the many dialysis patients around the world who will seek to cross the USA borders just for free free kidney dialysis treatments for the rest of their lives. One can imagine all the people in the world who cannot get organ transplants or brain surgeries without crossing into the USA.

Howard Schultz
One interesting political event of the times is the interview with multibillionaire Howard Schultz on CBS Sixty minutes ---
https://www.cbs.com/shows/60_minutes/video/MD3ISxVkJXgLBsH4lNDrLYsRQWmCJy_X/howard-schultz-small-satellites-big-data-jerry-and-marge-selbee/

Schultz (think Starbucks) was always viewed as a liberal Democrat. But now he's scaring Democrats by threatening to use his billions to run for President as an independent. One of the major reasons he gave for possibly running is the math of Medicare-for-All. He views Medicare-for-All as an economic disaster for the USA along with other wild spending schemes now contemplated by Maxine Waters like trillions for reparations for blacks and native Americans, free college education for all, massive spending on subsidized housing, zero-carbon regulations, open borders, etc. etc.

All these are good causes, but those politicians advocating those causes understand the math the least.

A Federal Shutdown Is an Annoyance (that can be solved) — Interest on $22 Trillion in Debt Is a Problem (that cannot be solved) ---
https://www.cato.org/publications/commentary/federal-shutdown-annoyance-interest-22-trillion-debt-problem

The U.S. Treasury is set to borrow $1 trillion for a second year to finance the government's unprecedented budget deficit ---
https://www.bloomberg.com/news/articles/2019-01-28/another-year-another-1-trillion-in-new-debt-for-u-s-to-raise?cmpid=BBD012819_BIZ&utm_medium=email&utm_source=newsletter&utm_term=190128&utm_campaign=bloombergdaily

FiveThirtyEight Blog:  The Young Left’s Anti-Capitalist Manifesto: Its goal is to remake our economic system — and the Democratic Party ---
https://fivethirtyeight.com/features/the-young-lefts-anti-capitalist-manifesto/

In my opinion, Schultz does not want to run for President. He just wants to scare the Democratic Party to come to its senses on the math.

I think he Shultz will threaten to run until the Democratic platform becomes more math sensible.

The bottom line is that the USA needs some taxpayer funded medical coverage across the USA. The worry is that, like climate change proposals, that we will become committed to programs that end up being self-defeating. It's like the family that keeps borrowing and borrowing for the big house, expensive cars, luxury cruises, etc. etc. until the day comes when they find themselves in bankruptcy court.

 


 

 




December 31, 2018

NYT:  Choosing the Right Health Savings Account ---
https://www.nytimes.com/2018/12/07/your-money/health-savings-account-hsa.html

NYT:  Fixing Medicare
https://www.nytimes.com/2011/11/21/opinion/fixing-medicare.html


Medicare for All: Administrative Costs Are Much Higher than You Think ---
https://mises.org/wire/medicare-all-administrative-costs-are-much-higher-you-think?utm_source=Mises+Institute+Subscriptions&utm_campaign=8a83a2b8d3-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-8a83a2b8d3-228708937

Democrats’ 8 plans for universal health care. Here’s how they work ---
https://www.vox.com/2018/12/13/18103087/democrats-universal-health-care-sanders-jayapal

Obamacare funneled a significant amount of money to hospitals and insurers, while a single-payer system like the one proposed by Sen. Bernie Sanders (I-V.T.) would cut provider payments and largely put private health insurers out of business ---
http://reason.com/blog/2018/12/12/even-democrats-are-divided-over-medicare

How to Mislead With Statistics
Left-Leaning VOX: The $21 trillion Pentagon accounting error that can’t pay for Medicare-for-all, explained ---
https://www.vox.com/policy-and-politics/2018/12/3/18122947/pentagon-accounting-error-medicare-for-all

The US military budget is such a bloated monstrosity that it contains accounting errors that could finance two-thirds of the cost of a government-run single-payer health insurance system. All Americans could visit an unlimited array of doctors at no out of pocket cost. At least that’s a notion spreading on left-wing Twitter and endorsed and amplified by newly elected Rep. Alexandria Ocasio-Cortez, one of Democrats’ biggest 2018 sensations and an undeniable master at the fine art of staying in the public eye.

 

Unfortunately, it’s not true.

 

The idea spread like a game of telephone from a Nation article to the US Congress while losing a crucial point of detail: The Pentagon’s accounting errors are genuinely enormous, but they’re also just accounting errors — they don’t represent actual money that can be spent on something else.

Proponents of this vision have the political wind at their backs and continue to deploy the idea effectively to win intra-party arguments without really making any headway on the core obstacles to writing a Medicare-for-all bill that could become law. That said, to the extent that political power rather than concrete legislation is the goal, that’s probably for the best.

Misunderstandings fly around on Twitter all the time, and AOC’s level of policy knowledge is pretty typical for a member of Congress. But this particular flub is telling about progressive frustration over the double standard on military versus non-military spending, and also the fraught state of play regarding the push for a Medicare-for-all program.

The Pentagon’s mystery $21 trillion, explained

The underlying article by Dave Lindorff in the Nation that kicked this off is an investigative report into the Defense Department’s accounting practices. Lindorff reveals that Pentagon accounting is quite weak, that the department keeps flunking outside audits, that funds are shifted between accounts without proper oversight, and that overall documentation of what’s actually happening with the Pentagon’s vast budget is extremely poor.

Lindorff goes beyond these observations to allege that what’s happening amounts to deliberate fraud, the purpose of which is to persuade Congress to increase appropriations levels beyond what would otherwise be approved.

Continued in article

Jensen Comment
We really cannot compare proposed Medicare-for-All plan without more specific definitions of "Medicare-for-All" and the "cared for population." For example, Medicare currently does not pay for the enormous cost of long-term nursing care. Medicare only pays 80% of most of the things it does cover like hospital and doctor care.

Also Medicare has built up trust funds over the 50 years using payroll deductions from individuals and employers. The trust funds are not sustainable at predicted usage rates, but it's not like the existing Medicare program did not accumulate any finds for the elderly and disabled. A Medicare-for-All plan does not have 50 years of payroll deductions to help pay for an abrupt shock to the system.

Advocates of Medicare-for-All never mention that Medicare for all is mostly a private sector program where claims are serviced in the private sector along with private sector doctor, nursing, and medicine delivery of goods and services. Medicare is not like the U.K. system where most services are delivered by government employees.

The Nation's analysis of the Defense Department's expenses ignores the fact that even if we entirely eliminated the current Army, Navy, and Air Force the government's obligations to retired and disabled former military personnel would carry on for hundreds of billions of dollars into the indefinite future. And how long would the USA and its Medicare-for-All program survive without any Army, Navy, and Air Force?

The Nation's analysis is an example of totally irresponsible and misleading statistics.

WaPost fact-checker gives Ocasio-Cortez four Pinocchios for Pentagon claim ---
https://thehill.com/homenews/media/419730-wapost-fact-checker-gives-ocasio-cortez-four-pinocchios-for-pentagon-claim


Krugman redefines ‘Medicare for all,’ but gets it wrong ---
http://pnhp.org/news/krugman-redefines-medicare-for-all-but-gets-it-wrong/

. . .

Comment:

By Don McCanne, M.D.

“Medicare for all…would mean allowing individuals and employers to buy into Medicare – basically a big public option.” Who says? Well Paul Krugman and many others. This is not simply a debate about labels. This is a debate about fundamental policy. Are we going to accept the status quo with the tweak of a public option, or are we going to address the fundamental defects in our system that have driven up costs, perpetuated mediocrity, and left tens of millions vulnerable with impaired access to health care with all of its consequences and often with intolerable financial hardship?

This is similar to the debate that took place within the Democratic Party just before Hillary Clinton and Barack Obama began jockeying for the 2008 presidential nomination. The Democratic Party machine was in complete control of the policy debate on health care reform. The neoliberal party elite had decided that we were going to “build on what works” – employer-sponsored and union-supported plans – and reject single payer based on their concepts of what was politically feasible. Those of us advocating for the expanded and improved Medicare for all single payer approach were ejected from the conversations (often rudely so – they were in charge!).

Similarly, with the contest for the 2016 Democratic presidential nomination, the debate at the platform committee confirmed that the battle had not changed. The neoliberal leadership, represented by Neera Tanden, was successful in rejecting the single payer Medicare for all plank.

Tanden, of the Center of American Progress, has continued the fight for control of the policy debate by releasing their new proposal, “Medicare Extra For All.” Although some of the tweaks proposed seem beneficial, it basically continues the current dysfunctional, fragmented financing system, but with one important political change. They have stolen the “Medicare for all” label! This has contributed to the ubiquitous deception that the public option is Medicare for all. When the current candidates campaign on Medicare for all but behind the scenes are supporting an option to buy into Medicare while accepting campaign funds from the insurance and pharmaceutical industries, we need to call them on their deception.

It is no wonder the public is confused, even if they do not realize it. When Nobel laureate Paul Krugman jumps in and says Medicare for all is allowing individuals and employers to buy into Medicare as a public option, then we know that the political campaigns are corrupted with deceptions. How can we get the public to understand that a well designed, single payer national health program – a bona fide Improved Medicare for All – is the reform that they crave?

 


Bernie Care Versus Canada Care ---
https://mises.org/wire/3-ways-bernie-care-makes-canadian-healthcare-look-good-comparison?utm_source=Mises+Institute+Subscriptions&utm_campaign=08ad8fda7b-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-08ad8fda7b-228708937


How to mislead with statistics
The median cost of a private nursing home room has reached $100,375 per year,---
https://www.cnbc.com/2018/10/19/this-retirement-expense-has-hit-100000-annually-and-its-continuing-to-rise.html
Actuarial models of long-term care insurance providers greatly underestimated the rapid rise in costs and recently had to more than double the monthly rates for such insurance. The "median cost" of $100,375 is misleading in that this cost has a wide overall variance and a median that differs substantially between the 50 USA  states. In fairness the article touches on this point slightly (such as pointing the high cost of nursing homes in Alaska). There's also extreme variability in terms of quality of care. This, in part, is due to the high worker turnover in nursing homes and the tendency for many to hire unskilled workers at minimum wage. My point is that comparing nursing homes is a lot like comparing sweet cherries with sour lemons.

Sadly, parents that made the most sacrifices for their adult children often are the least-supported in their own times of needs years later.

The good news is that with professional guidance more than five years in advance, heirs can legally confiscate Grandma's estate so that she's eligible later on for Medicaid-provided long-term nursing care. The bad news is that the quality of many nursing homes that accept Medicaid patients is often the worst in the USA. Maybe we should be more like the Germans who sometimes ship their gaga grandmas and grandpas to to relatively good lower-priced nursing homes in Poland.

Nursing Home and Hospital Elderly-Care Fraud
Elderly residents given intensive therapy in the last weeks of life jumped 65 percent, a study shows, raising questions about financial incentives.  ---
https://www.bloomberg.com/news/articles/2018-10-09/nursing-homes-are-pushing-the-dying-into-pricey-rehab?cmpid=BBD100918_BIZ&utm_medium=email&utm_source=newsletter&utm_term=181009&utm_campaign=bloombergdaily


NY Times:  ‘Don’t Get Too Excited’ About Medicare for All ---
https://www.nytimes.com/2018/10/19/opinion/sunday/medicare-single-payer-health-care.html?fb=1&recb=published-assets-bq.thompson_sampling&recid=1Bq8s0acvT5uUy8yUSJ8MCz16wy&mi_u=10527319
Jensen Comment
There are just too many uncertainties about its coverage and cost. People advocating Medicare don't understand it. For example, Medicare claims and services are administered by the private sector, not the public sector. It might take more than a decade and cost over a trillion  to prepare the public sector to take on the administrative chores plus increase the capacity of physicians, hospitals, and support staff. Secondly, there's tremendous uncertainty about coverage. Currently Medicare does not cover the tremendously expensive cost of long-term care either at home or in nursing homes.

All nations that have nationalized health care are much smaller and do not have the millions of undocumented immigrants that we have in the USA. Bringing them on board will be immensely costly and, worse, will be a magnet for virtually all the sick people to enter the USA illegally. Nations that have nationalized health care do a much better job at policing their borders and do not have sanctuary cities to protect undocumented immigrants from being deported.

 


Government Medical Research Spending Favors Women ---
https://marginalrevolution.com/marginalrevolution/2018/08/government-medical-research-spending-favors-women.html


How Alphabet, Amazon, Apple, and Microsoft are shaking up healthcare — and what it means for the future of the industry ---
https://www.businessinsider.com/alphabet-amazon-apple-and-microsofts-influence-in-healthcare-2018-7 


How to Mislead With Statistics
American Life Expectancy vs. Europe: It's Not About "Socialized Medicine" ----
https://mises.org/wire/american-life-expectancy-vs-europe-its-not-about-socialized-medicine?utm_source=Mises+Institute+Subscriptions&utm_campaign=ecd0810c45-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-ecd0810c45-228708937

Everything You Know About Obesity Is Wrong ---
https://highline.huffingtonpost.com/articles/en/everything-you-know-about-obesity-is-wrong/


Jensen Comment
Unlike Medicaid, Medicare does not provide long-term care benefits. |

However some benefits may change for the good for some Medicare patients.

From the CFO Journal's Morning Ledger on August 7, 2018

Good morning. General Motors Co. is upending the traditional benefits set up by striking a deal with Detroit-based Henry Ford Health System to offer a new coverage option to employees in an attempt to lower costs and improve care, reports the WSJ's Anna Wilde Matthews.

 

Cutting out the middle man: GM's new approach is a departure from the typical health-benefits arrangement in which companies hire insurers for access to a broader network of health-care providers. In those cases, insurers negotiate the prices with hospitals, doctors and other providers, and the employers rarely have access to the terms that govern their medical costs.

 

Lofty savings: The plan would cost employees $300 to $900 less in annual payroll contributions than GM's current cheapest plan and would require them to get all their health care, including surgeries, through Henry Ford Health System, or pay expensive out-of-network rates, reports the Detroit Free Press.

 

Let's make a deal: Other employers, such as Walmart Inc., have crafted limited direct deals with hospital systems to perform particular procedures, such as back surgeries. A smaller number of companies, including Walt Disney Co., Boeing Co. and Intel Corp., have taken the more-ambitious approach of having the health-care provider manage nearly all of the care of enrolled employees. And Amazon.com Inc., JPMorgan & Chase Co. and Berkshire Hathaway Inc. have joined forces to launch a venture aimed at lowering their employees health-care costs. 

 

More to come: 11% of employers said they plan to do such broad deals with health-care providers next year, according to a survey of 170 large employers to be released Tuesday by the National Business Group on Health. That's up from 3% in last year’s poll, the group said.


Medicare Allows More Benefits for Chronically Ill, Aiming to Improve Care for Millions ---
https://www.nytimes.com/2018/06/24/us/politics/medicare-chronic-illness-benefits.html

WASHINGTON — Congress and the Trump administration are revamping Medicare to provide extra benefits to people with multiple chronic illnesses, a significant departure from the program’s traditional focus that aims to create a new model of care for millions of older Americans.

The changes — reflected in a new law and in official guidance from the Department of Health and Human Services — tackle a vexing and costly problem in American health care: how to deal with long-term illnesses that can build on one another, and the social factors outside the reach of traditional medicine that can contribute to them, like nutrition, transportation and housing.

To that end, the additional benefits can include social and medical services, home improvements like wheelchair ramps, transportation to doctor’s offices and home delivery of hot meals.

The new law is a rare instance of bipartisan cooperation on a major policy initiative, embraced by members of Congress from both parties. The changes are also supported by Medicare officials and insurance companies that operate the fast-growing Medicare Advantage plans serving one-third of the 60 million Medicare beneficiaries.

 

“This is a way to update and strengthen Medicare,” said Senator Ron Wyden, Democrat of Oregon and an architect of the law, the Chronic Care Act, which was included in budget legislation signed recently by President Trump. “It begins a transformational change in the way Medicare works for seniors who suffer from chronic conditions. More of them will be able to receive care at home, so they can stay independent and out of the hospital.”

Half of Medicare patients are treated for five or more chronic conditions each year, and they account for three-fourths of Medicare spending, according to Kenneth E. Thorpe, the chairman of the health policy department at Emory University.

Under the new law and Trump administration policy, most of the new benefits will be reserved for Medicare Advantage plans, which will be able to offer additional benefits tailored to the needs of people with conditions like diabetes, Alzheimer’s, Parkinson’s disease, heart failure, rheumatoid arthritis and some types of cancer.

“This is a big win for patients,” said Seema Verma, the administrator of the Centers for Medicare and Medicaid Services.

Officials hope that combining social and medical services will produce better outcomes for patients and save money for Medicare.

Continued in article


An ER patient can be charged thousands of dollars in “trauma fees” — even if they weren’t treated for trauma ---
https://www.vox.com/2018/6/28/17506232/emergency-room-bill-fees-health-insurance-baby
Jensen Comment
Another questionable practice, common in small hospitals, is to support the overhead of Intensive Care Units (ICUs) with admissions that really are questionable in terms of the need for ICU services (when a regular hospital room would be sufficient). ER doctors and surgeons are sometimes guilty of supporting the hospital's revenues with such admissions that sock it to Medicare and other insurance providers. My neighbor, a retired cardiologist from Boston, tells me this is common practice among physicians.

Amazon's deal will immediately give the retail giant a nationwide drug network, threatening to upend the entire industry ---
https://www.bloomberg.com/news/articles/2018-06-28/amazon-makes-big-foray-into-health-care-with-pillpack-purchase?cmpid=BBD062818_BIZ&utm_medium=email&utm_source=newsletter&utm_term=180628&utm_campaign=bloombergdaily

Harvard:  The costs of health care are now the greatest financial concern for most Americans—more than the costs for housing, food or retirement ---
https://hms.harvard.edu/news/hidden-savings

The HHS Office of Inspector General (OIG) has found that, by exploiting Obamacare’s expansion of the program, California has enrolled hundreds of thousands of ineligible adults in Medicaid. Consequently, the state has bilked the federal government out of more than $1 billion in funding to which the state was not entitled.
https://spectator.org/california-commits-massive-medicaid-fraud/
 


What Your State Spends on Your Health ---
https://247wallst.com/special-report/2018/07/25/what-your-state-spends-on-your-health/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=JUL262018A&utm_campaign=DailyNewsletter

In 2015, state governments across the country spent a combined $605 billion on health care, or about $1,880 per resident.

The physical and mental well-being of the population is the single largest financial obligation of state governments, and comprises well over one-quarter of total state direct spending. As is the case with most expenditures, health spending varies at the state level dramatically, from just over $1,000 per capita to well over $3,000 per person.

The major categories of health spending at the state level include Medicaid coverage, state-run hospitals and medical schools, and finally other health expenses and programs addressing needs such as community wellness, substance abuse, health inspection, and pollution control.

Among these three categories, it is Medicaid spending that accounts for the largest portion of total state expenditure, at about 80% of annual state health costs. 24/7 Wall St. reviewed health spending in all 50 states, ranked from lowest total combined state health expenditure per capita to highest. This measure includes only direct state spending, which excludes local and federal spending.

Generally, states spent more if they had more expansive Medicaid eligibility and benefits. This was particularly the case for those states that opted to expand Medicaid coverage under the Affordable Care Act. Only one of the states spending the most per capita on health care, Mississippi, did not opt to expand Medicaid. Of the 20 states that spent the least on health care, 12 have not expanded Medicaid.

Those states with more poor, disabled, and elderly residents, also often spent more per capita. Disabled people and those over 65 are the ones who most commonly need health care and receive state Medicaid spending. In all, nearly 25% of Medicaid recipients are 65 or older, institutionalized, or disabled

 

50. South Dakota
> 2015 state health spending: $1,022 per capita ($877 million)
> State government spending, all programs: $5,448 per capita (11th lowest)
> Population 65 and over: 15.9% (23rd highest)
> Population with a disability: 12.2% (19th lowest)
> Population with health insurance: 91.3% (21st lowest)

 

49. Nebraska
> 2015 state health spending: $1,186 per capita ($2.2 billion)
> State government spending, all programs: $5,511 per capita (12th lowest)
> Population 65 and over: 14.9% (13th lowest)
> Population with a disability: 11.9% (16th lowest)
> Population with health insurance: 91.4% (22nd lowest)

 

. . .

2. New York
> 2015 state health spending: $2,911 per capita ($57.6 billion)
> State government spending, all programs: $9,376 per capita (7th highest)
> Population 65 and over: 15.3% (22nd lowest)
> Population with a disability: 11.5% (11th lowest)
> Population with health insurance: 93.9% (17th highest)

 

1. New Mexico
> 2015 state health spending: $3,225 per capita ($6.7 billion)
> State government spending, all programs: $9,613 per capita (5th highest)
> Population 65 and over: 16.5% (13th highest)
> Population with a disability: 15.1% (11th highest)
> Population with health insurance: 90.8% (14th lowest)


 

 

 

March 31, 2018

Drug R&D No Longer Pays (soaring costs and declining discovery rates) ---
https://undark.org/article/peak-pharma-drug-discovery/

Vermont Voted to Buy Its Prescription Drugs from Canada, and the Pharmaceutical Industry Is Not Pleased ---
http://reason.com/blog/2018/05/16/vermont-voted-to-buy-its-prescription-dr



December 31, 2017

Finding and Using Health Statistics --- http://www.nlm.nih.gov/nichsr/usestats/index.htm

The Medicaid and Pension Monsters That Divert Funding by States for Education, Roads, and Bridges

Tapper:  Democrats' Obamacare Pitch Was Dishonest ---
Jake Tapper, CNN
http://freebeacon.com/issues/tapper-democrats-obamacare-dishonest/


The Atlantic:  The top 5 percent of Americans who spend the most on health care account for 50.3 percent of all health care expenditures in the USA
.This critical five percent of the U.S. population is key to solving the nation's health care spending crisis.  ---
https://www.theatlantic.com/projects/the-five-percent/
This article is not free

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 --- 
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/
National health care plans such as those in Canada, Denmark, Germany, and the U.K. spend a lot less (proportionately) on keeping dying patients alive.


Nate Silver's 5:38 Blog:  Obamacare’s Struggles In Iowa Could Be A Preview Of What’s To Come ---
https://fivethirtyeight.com/features/obamacares-struggles-in-iowa-could-be-a-preview-of-whats-to-come/

In an article last week looking at the health of the state insurance marketplaces set up by the Affordable Care Act, I wrote about why Iowa’s was in a dire situation. Three of its insurers recently said they may exit the Obamacare marketplaces, which threatens to leave tens of thousands of people with no way to buy the subsidized insurance promised by the law. The situation there is actually far more tenuous and could be a glimpse of what’s to come in other states. In 94 of Iowa’s 99 counties, insurers have said they may not sell new plans on the individual market at all, even outside the subsidized markets set up by the ACA.

This is a serious concern for people who buy insurance on the individual market, because as Congress debates how to repeal and replace the ACA, just about every policy scenario assumes that the individual markets will continue to exist through 2018. And although the markets were already in trouble in some places, the White House’s decision not to take actions that could stabilize them could continue to scare off insurers, resulting in more states facing a situation like Iowa’s.

People who don’t get health insurance from an employer or qualify for a public insurance program such as Medicaid or Medicare have long turned to the individual market to buy plans. Obamacare set up open marketplaces where these people could receive subsidies to buy insurance if they qualified based on income. But many insurers also sold individual plans outside of the ACA marketplace to people who didn’t qualify for subsidies.

Continued in article

Fact Checking Health-Care Hysteria:   It’s as if Democrats didn’t even bother reading the GOP bill before attacking it ---
https://www.wsj.com/articles/fact-checking-health-care-hysteria-1494455688?mod=djemMER

After the House voted last week to repeal and replace ObamaCare, Democrats quickly launched a barrage of false attacks. Minority Leader Nancy Pelosi asserted that the bill would “gut” protections for patients with pre-existing conditions. Never one to shy away from melodrama, she added: “This is deadly. This is deadly.”

Apparently the GOP proposal is the second health-care bill Mrs. Pelosi didn’t read. The legislation makes clear: “Nothing in this Act shall be construed as permitting health insurance issuers to limit access to health coverage for individuals with preexisting conditions.”

On Fox News Sunday, the MIT economist Jonathan Gruber came from a different angle, alleging it was dangerous to grant states waivers from some ObamaCare requirements. He suggested insurers could now “literally say, just because the genes you were born with, you’re going to pay more for health insurance.”

Apparently Mr. Gruber is also averse to reading. States may seek waivers from some ObamaCare provisions, but the law explicitly prohibits waivers on pre-existing-condition protections. To receive a waiver insurers must prove it would lower or stabilize premiums, increase coverage, or expand the choice of health plans.

People in waiver states who never had insurance or let their policies lapse would be guaranteed coverage, but to keep them from gaming the system, insurers could take their health into account when determining premiums. After one year, premiums would drop to the standard rate. This rare occurrence is a long way from Mr. Gruber’s charge that people would pay “many, many multiples more.”

The bill also includes $8 billion over five years to help states with waivers set up high-risk pools to cover people with expensive illnesses. Mr. Gruber dismissed this as “trivial.” Yet the Kaiser Family Foundation found in 2011—before ObamaCare kicked in—that 35 states had high-risk pools covering 226,000 people with $2.6 billion in claims. Some $1.4 billion was covered by the premiums these patients paid, and the states had to toss in only $1.2 billion. That’s $400 million less than would be available each year under the GOP bill. Even the New York Times reported that if states tapped all the bill’s available money for high-risk pools, it would total $138 billion. And who thinks 35 states will seek waivers?

This hardly exhausts Democratic complaints. Rep. Richard Neal (D., Mass.) said last week that Republicans had voted to impose an “age tax,” because the bill would allow premiums for older ObamaCare policyholders to be five times those of younger people. (Now insurers can charge older people only three times as much.) Yet the older age group’s health expenses are, on average, nearly five times as high. Today everyone under 50 on ObamaCare is paying higher premiums to subsidize the policies of those above 50.

So in reality, Republicans are repealing the “age tax” Democrats placed on the younger 80% of ObamaCare policyholders to subsidize the older 20%. This despite that older ObamaCare policyholders are in their prime earning years and likely have higher incomes, greater wealth and lower child-rearing expenses.

There is also Mr. Gruber’s startling claim that the Republican bill will cause 24 million people to lose their insurance. How can 24 million people lose ObamaCare coverage when only 11 million people bought the policies? The claim is a distortion of the Congressional Budget Office’s estimate that abolishing ObamaCare’s individual mandate would lead 24 million people to forgo purchasing insurance in the future. Freed of ObamaCare’s penalty—a 3% tax on their income—people may decide to do something else with their money.

The CBO is notoriously bad at estimating the benefits, such as lower prices, that come from a consumer-driven system. The Republican bill would enable more competition, expand health savings accounts and promote inexpensive catastrophic coverage.

Mr. Gruber was similarly misleading in claiming “the House bill cuts Medicaid by $880 billion over the next 10 years,” hinting the program would wither away. Federal Medicaid spending this fiscal year is $389 billion. Under the GOP bill, it will be $469 billion in fiscal year 2027. The bill restrains future Medicaid growth. It doesn’t reduce spending.

From his academic bubble, Mr. Gruber said last year that ObamaCare is “working as designed” and “there’s no sense in which it needs to be fixed.” Yet since its passage, Americans have lost plans and doctors and watched as their premiums and deductibles skyrocketed.

Continued in article


"Health Care vs. Higher Ed," by Rick Seltzer, Inside Higher Ed, April 12, 2017 ---
https://www.insidehighered.com/news/2017/04/12/medicaid-funding-changes-pressure-state-higher-ed-funding?utm_source=Inside+Higher+Ed&utm_campaign=5bea54615f-DNU20170412&utm_medium=email&utm_term=0_1fcbc04421-5bea54615f-197565045&mc_cid=5bea54615f&mc_eid=1e78f7c952

. . .

When states adopted their budgets for the 2017 fiscal year, their share of Medicaid spending was expected to grow by 4.4 percent on average, according to an April report from the Kaiser Family Foundation. The increase was expected in large part because of the decrease in federal funding for Medicaid expansion.

While 4.4 percent might not sound like an overwhelming increase, Medicaid spending is a massive portion of states’ budgets. Medicaid spending across all states totaled $509 billion in the 2015 fiscal year, according to the Kaiser Family Foundation. States paid 38 percent of the costs, with the federal government picking up the rest.

That means states spent about $193.4 billion on Medicaid in 2015. That dwarfs state higher education appropriations, which totaled about $83.6 billion across the country in 2016-17.

State legislators are essentially locked into spending on Medicaid. So when costs in that program rise, lawmakers have to either raise revenue through taxes and fees or find money in their discretionary budgets to reallocate. Higher education represents one of the few big-ticket discretionary items from which they can draw.

“They’re going to get the money somewhere,” Pernsteiner said. “Where they make the cuts is higher ed.”

Within individual states that expanded Medicaid, projections show costs mounting in coming years. Kentucky’s expenditures for Medicaid expansion are projected at $77.2 million for the 2016-17 fiscal year -- a year in which the federal match rate only falls below 100 percent for six months. The expenditures under current law are expected to rise to $180.1 million in 2018, $224 million in 2019 and $306.3 million in 2020, according to state projections.

Kentucky is dealing with other budget pressures as well. By some estimates, the state has the worst-funded pension system of any state in the country -- even worse than Illinois and New Jersey. Many believe dealing with that issue will be a major drain on state coffers.

The state’s Republican governor, Matt Bevin, has already shown a willingness to take funding that would have gone to higher education and put it toward pensions, said Robert L. King, president of the Kentucky Council on Postsecondary Education. Budget pressures add up, including from Medicaid, King said.

“Because it’s a mandated expenditure, it gets paid,” King said. “So our universities have been taking cuts consistently for the last decade. I can’t tell you that they are directly caused by Medicaid, but it certainly is a contributing factor.”

King has been watching trends between Medicaid funding and higher education funding since he was chancellor of the State University of New York System in the early 2000s.

“I remember reading studies at the time that showed that there was a pretty straight-line correlation between the growth in Medicaid costs and the reduction in state support for higher education,” he said.

A 2003 Brookings report found every new dollar in state Medicaid spending was related to a decline in higher education appropriations of about 6 cents to 7 cents.

In West Virginia, which also expanded Medicaid eligibility under the Affordable Care Act, health-care costs were wrapped up in a long budget standoff that left leaders worried about higher education funding. State revenue has been declining with energy markets, causing stress on the budget and a possible pinch on higher education funding, according to a spokesman for West Virginia University.

Continued in article

Jensen Comment
Actually two non-discretionary spending burdens are overwhelming state budgets. The first is Medicaid whether or not a state expanded coverage under the ACA. The second is unfunded pensions for public employees, baby boomers that are now retiring in droves.

California Road-Tax Hike Is Really A Pension Tax ---
http://reason.com/archives/2017/04/07/california-road-tax-hike-is-really-a-pen

Gov. Jerry Brown and Democratic legislators have caused a stir with their plan, which passed the legislature on Thursday, to increase taxes to pay for the state's unquestionably decrepit infrastructure of roads and bridges. Instead of thinking of this as a new transportation tax, however, Californians should see it as a pension tax, given the extra money plugs a hole caused by growing retirement payments to public employees.

Consider this sobering news from the CalMatters' Judy Lin in January: "New projections show the state's annual bill for retirement obligations is expected to reach $11 billion by the time Brown leaves office in January 2019—nearly double what it was eight years earlier." That's the state's "annual bill," i.e., the direct costs taken from the general-fund budget. That number doesn't even include those "unfunded" pension liabilities that according to some estimates top $1 trillion.

 Continued in article

Jensen Comment
What's sad is that many of those pension timings (retire at age 50) and amounts (think over $500,000 per year) are fraudulent ---
http://cfif.org/v/index.php/commentary/61-state-issues/1415-report-multi-million-dollar-california-pension-fraud

 


Harvard:  The Cost of Drugs for Rare Diseases Is Threatening the U.S. Health Care System ---
https://hbr.org/2017/04/the-cost-of-drugs-for-rare-diseases-is-threatening-the-u-s-health-care-system?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date&spMailingID=16971604&spUserID=MTkyODM0MDg0MAS2&spJobID=1000756883&spReportId=MTAwMDc1Njg4MwS2

. . .

In the United Kingdom, the National Institute for Health and Care Excellence (NICE) determines the cost effectiveness, or value, of newly approved drugs based on their impact on quality-adjusted life years. These determinations inform the National Health System’s (NHS) treatment-coverage decisions. In contrast, the FDA is prohibited from considering cost or value in its decision making, and there is no U.S. governmental equivalent of NICE.

The Institute for Clinical and Economic Review (ICER), a small Boston-based nonprofit, has taken a step towards value-based pricing by creating a NICE-like model. Development of a NICE or ICER-like post-approval value review, incorporating appropriate oversight and accountability, would help ensure coverage decisions remain fair and cost-effective, but it won’t be enough. The NHS is likely to impose care rationing because of escalating health and pharmaceutical costs. Any successful plan to manage rising drug costs must address multiple aspects of the problem, including value-based pricing, transparency, drug re-importation, and the reform of the Orphan Drug Act, to name a few.

The FDA and other federal payers, including Medicare, must be empowered to consider drug costs and outcomes, and this process should factor in federal investment in drug discovery. (Ionis and Cold Spring Harbor received federal grant funding to support the early development of nusinersen.)

Federal government payers should also be allowed to negotiate price discounts and re-import drugs (with provisions for adequate quality control). In a disappointing move, President Trump, who had promised to let Medicare negotiate bulk pricing discounts for prescription drugs, abandoned this pledge after meeting with pharmaceutical industry lobbyists and executives.

Pharmaceutical companies must be required to disclose and justify development costs, particularly those seeking the substantial benefits under the ODA. There are numerous examples of pharmaceutical companies taking advantage of ODA provisions to repurpose inexpensive medications for rare diseases, often at extraordinary, unjustified costs. Marathon proposed a price of $89,000 for deflazacort, which is already available in Europe and Canada for $1,000 to $2,000, a 6,000% price increase. (After several members of Congress complained, the launch of the drug was delayed.) Senator Chuck Grassley, chairman of the Senate Judiciary Committee, is rightly leading an inquiry into this practice and other ODA abuses.

A health care system’s goal should be to provide the best patient-centered care. Coverage decisions and resource allocations must prioritize value to patients — not insurers’ or pharma companies’ profits. If we are committed as a society to curing diseases such as SMA, dangling treatments like nusinersen just out of patients’ reach is cruel. Collectively, government, pharma, insurers, hospital systems and physicians all have a role to play in providing access to the right care at justifiable cost.

Jensen Question
Is there a study of where national health care plans like those in Canada and Finland are drawing the line on paying for very costly medications such as a cancer drug costing over $100,000 per year?


Bernie Sanders:  Medicare for All: Leaving No One Behind ---
https://berniesanders.com/issues/medicare-for-all/

Bernie estimates a cost of $1.38 trillion per year for covering doctors, hospitals, ambulances, and medications of roughly 350 million people give or take depending upon the coverage of undocumented residents.

But since Medicare and Medicaid currently costs $1.14 trillion per year Bernie must have left out all the people currently covered by Medicare and Medicaid. Adding $1.38 trillion to $1.14 trillion brings the total cost to $2.52 trillion. However, since currently Medicare only does not pay 20% of the expenses we need to add another $228 billion bringing the total estimated cost to $2.52+$0.23 = $2.75 trillion per year.

Dividing $2.75 trillion by 350 million means the estimated cost is nearly $8,000 cost per person ignoring medical expense inflation. For a family of four this would be $32,000 in average outlays per year. There are also uncertainties regarding how much of mental health, home nursing care, and nursing home care would be covered. Plus Medicare D only covers a portion of medication costs per person such that it is not unrealistic to assume that the Bernie Sanders proposal would start out costing about $10,000 on average for every man, woman, and child in the United States plus the added costs of nursing home care and long-term mental health coverage.Plus Bernie did not add in the hundre of billions paid for malpractice insurance and claims that are paid by hospitals, doctors, and liability insurance companies.

Of course my estimates are subject to a huge margin of error. However, the bottom line is that the funding proposal proposed by Bernie Sanders would only pay for a small portion of the cost extending Medicare coverage to every man, woman, and child in the USA.

On top of that the USA medical system does not have the capacity to provide anything but lowest quality care on average to 350 million people. Hospitals currently lose a considerable amount serving ACA and Medicaid patients --- which is why so many doctors and hospitals refuse to serve ACA and Medicaid patients

 

Harvard:  Where Both the ACA and AHCA Fall Short, and What the Health Insurance Market Really Needs ---
https://hbr.org/2017/03/where-both-the-aca-and-ahca-fall-short-and-what-the-health-insurance-market-really-needs?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date&spMailingID=16826969&spUserID=MTkyODM0MDg0MAS2&spJobID=981683047&spReportId=OTgxNjgzMDQ3S0

Jensen Comment
The biggest problem for Medicaid and other lower-end covered ACA people is that the medical coverage is crap coverage.

Major hospitals in Chicago will no longer serve patients insured in Obamacare exchanges (except in true emergencies) ---
http://beta.hotair.com/archives/2016/10/24/chicago-hopenchange-major-hospitals-bail-obamacare-2017/?utm_source=hadaily&utm_medium=email&utm_campaign=nl

News Item Prior to November 8 Election of President Trump
Major Chicago Hospitals Not In 2017 Obamacare Marketplace Plans -
--
https://www.wbez.org/shows/wbez-news/major-chicago-hospitals-not-in-2017-obamacare-marketplace-plans/f55d6c23-d9b1-452f-8c75-73635bd83d07

Some of Chicago’s largest hospitals said they will not be part of any Cook County Affordable Care Act marketplace plans in 2017.

 

University of Chicago Medical Center and Rush University Medical Center both said they don’t plan to be in network for any Obamacare marketplace plans next year. 

 

 

The change means patients with doctors at those hospitals will either need to find a plan off the marketplace, and lose Obamacare subsides, or find a new doctor.

 

Northwestern Memorial Hospital said it will also be out of the marketplace, but will have exceptions for some of its partner hospitals.

Continued in article


According to emergency room physicians Obamacare made it much worse for emergency rooms.
American College of Emergency Room Physicians
The Uninsured: Access to Medical Care Fact Sheet ---
http://newsroom.acep.org/fact_sheets?item=30032

 

Medicaid Is Free. So Why Does It Require a Mandate?
https://www.wsj.com/articles/medicaid-is-free-so-why-does-it-require-a-mandate-1489529946?mod=djemMER

The Congressional Budget Office is out with its analysis of the House Republicans’ ObamaCare replacement, the American Health Care Act (AHCA). The CBO’s report includes an implicit but powerful indictment of Medicaid, America’s second-largest health care entitlement.

Medicaid has been around since 1965; it was a core part of LBJ’s Great Society entitlement expansion. The program’s idiosyncratic design requires states to chip in around 40% of the program’s funding, while only getting to control about 5% of how the program is run. The federal Medicaid law—Title XIX of the Social Security Act—mandates a laundry list of benefits that states must provide through Medicaid, and bars states from charging premiums. Copays and deductibles cannot exceed a token amount.

Medicaid is the largest or second-largest line item in nearly every state budget. But for all practical purposes, the main tool states have to control costs is to pay doctors and hospitals less than private insurers pay for the same care. As a result, fewer doctors accept Medicaid patients, making it very hard for Medicaid enrollees to get access to care when they need it. Poor access, in turn, means that Medicaid enrollees—remarkably—have no better health outcomes than those with no insurance at all.

That brings us back to the AHCA. According to the CBO, able-bodied adults on Medicaid receive about $6,000 a year in government health-insurance benefits. They pay no premiums and minimal copays. You’d think that eligible individuals would need no prodding to sign up for such a benefit.

And yet, according to its analysis of the GOP ObamaCare replacement, the CBO believes that there are five million Americans who wouldn’t sign up for Medicaid if it weren’t for ObamaCare’s individual mandate. You read that right: Five million people need the threat of a $695 fine to sign up for a free program that offers them $6,000 worth of subsidized health insurance. That’s more than 1 in 5 of the 24 million people the CBO (dubiously) claims would end up uninsured if the AHCA supplanted ObamaCare.

On its face, there’s reason to doubt the CBO’s view. The mandate is enforced through the income-tax system, and enforcement of the mandate has been spotty for those in low tax brackets. Many of those eligible for Medicaid don’t work or file returns. Under rules established by the Obama administration, those who do can leave the “I have insurance” box blank and face no penalty.

Still, it’s remarkable that the CBO believes people need to be fined into signing up for Medicaid. That tells us something about the CBO’s assessment of Medicaid’s value to those individuals—and it buttresses the GOP’s case that Medicaid needs substantial reform.

Not coincidentally, the AHCA represents the most significant Medicaid reform since 1965, and thereby the most significant entitlement reform in American history. The 1996 welfare reform law is hailed by many conservatives as the most important domestic policy achievement of the past 25 years. Fiscally speaking, the AHCA is 10 times as significant.

The AHCA would put Medicaid on a budget, increasing Medicaid spending per beneficiary at the same rate as the medical component of the Consumer Price Index. This isn’t a far-right concept; President Clinton first proposed reforming Medicaid this way in 1995, as an alternative to the GOP idea of block grants. The 1996 law ended up including neither provision.

Combined with administrative reforms that may come from the Department of Health and Human Services, the bill would give states more flexibility to manage Medicaid’s costs in ways that could increase access to doctors and other providers, while reducing Medicaid spending by hundreds of billions in its first decade and trillions thereafter.

Ultimately, Medicaid for able-bodied low-income adults should be merged into the system of tax credits that the AHCA proposes for those above the poverty line. In that way, all Americans, rich and poor, would have the ability to choose the health coverage and care that reflects their needs, and build nest eggs in health savings accounts that could be passed on to their heirs.

 


"Chuck Schumer: Passing Obamacare in 2010 Was a Mistake:  The Senate’s No. 3 Democrat says that his party misused its mandate," by Sarah Mimms, National Journal, November 25, 2014 ---
http://www.nationaljournal.com/congress/chuck-schumer-passing-obamacare-in-2010-was-a-mistake-20141125

Chuck Schumer upbraided his own party Tuesday for pushing the Affordable Care Act through Congress in 2010.

While Schumer emphasized during a speech at the National Press Club that he supports the law and that its policies "are and will continue to be positive changes," he argued that the Democrats acted wrongly in using their new mandate after the 2008 election to focus on the issue rather than the economy at the height of a terrible recession.

"After passing the stimulus, Democrats should have continued to propose middle-class-oriented programs and built on the partial success of the stimulus, but unfortunately Democrats blew the opportunity the American people gave them," Schumer said. "We took their mandate and put all of our focus on the wrong problem—health care reform."

The third-ranking Senate Democrat noted that just about 5 percent of registered voters in the United States lacked health insurance before the implementation of the law, arguing that to focus on a problem affecting such "a small percentage of the electoral made no political sense."

The larger problem, affecting most Americans, he said, was a poor economy resulting from the recession. "When Democrats focused on health care, the average middle-class person thought, 'The Democrats aren't paying enough attention to me,' " Schumer said.

Continued in article

"Sen. Chuck Schumer: Obamacare Focused 'On The Wrong Problem,' Ignores The Middle Class" by  Avik Roy, Forbes, November 26, 2014 ---
http://www.forbes.com/sites/theapothecary/2014/11/26/sen-chuck-schumer-obamacare-focused-on-the-wrong-problem-ignores-the-middle-class/

Despite the enduring unpopularity of Obamacare, Congressional Democrats have up to now stood by their health care law, allowing that “it’s not perfect” but that they are proud of their votes to pass it. That all changed on Tuesday, when the Senate’s third-highest-ranking Democrat—New York’s Chuck Schumer—declared that “we took [the public’s] mandate and put all our focus on the wrong problem—health care reform…When Democrats focused on health care, the average middle-class person thought, ‘The Democrats aren’t paying enough attention to me.’”

Sen. Schumer made his remarks at the National Press Club in Washington. “Democrats blew the opportunity the American people gave them…Now, the plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed,” Schumer maintained. “But it wasn’t the change we were hired to make. Americans were crying out for the end to the recession, for better wages and more jobs—not changes in health care.”

“This makes sense,” Schumer continued, “considering 85 percent of all Americans got their health care from either the government, Medicare, Medicaid, or their employer. And if health care costs were going up, it really did not affect them. The Affordable Care Act was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote…it made no political sense.”

The response from Obama Democrats was swift. Many, like Obama speechwriters Jon Lovett and Jon Favreau and NSC spokesman Tommy Vietor, took to Twitter. “Shorter Chuck Schumer,” said Vietor, “I wish Obama cared more about helping Democrats than sick people.”

The Economist Magazine in March 2017:  Admit it: Republicans’ proposed Obamacare overhaul offers relief for some middle earners ---
http://www.economist.com/blogs/freeexchange/2017/03/obamacare-s-squeezed-middle

WHAT is the best part of House Republicans’ proposed reform of Obamacare? There isn’t one, if you believe much of this week’s commentary. The bill will benefit the young and healthy, by bringing their premiums down, but only at the cost of the old and sickly. But most writers are overlooking the help the bill would offer to one group that has clearly suffered unfairly under Obamacare. So long as Paul Ryan’s reform does not send the market into a death spiral—which is not a sure thing (see article)—this group will get some needed financial assistance under the Republican plan.

I'm talking about people who buy health insurance for themselves, rather than through an employer, and who do not get the subsidies which shield those on low incomes from Obamacare’s high premiums. It is easy to overlook this group, because the vast majority of the 10m people who buy insurance through Obamacare’s websites (or "exchanges") receive subsidies. For example, here is Jared Bernstein, Vice-President Joe Biden's former chief economist, in the Washington Post:

Of course, there’s the infamous, headline-generating 2017 premium increases in the non-group market. After growing 2 and 7 percent in 2015 and 2016, insurers in the state-based exchanges raised the cost of the benchmark plan by an average of 25 percent. To Obamacare critics, this was proof of the program’s unsustainability. But because 85 percent of participants in this market (state exchanges) receive premium tax credits to offset the cost of coverage, they do not face the full shock. 

What Mr Bernstein does not mention is that another 8m Americans buy coverage directly from insurers, without going through the exchanges. These buyers get no subsidies. But they must pay the same prices as those who do, because the law forces everybody in the individual marketplace—on or off the exchanges—into the same “risk-pool”. 

In total, there are 9m unsubsidised buyers for whom criticisms of Obamacare resonate strongly. Most of these people are not rich: a family-of-four stops receiving subsidies at an income of just under $100,000. Obamacare forced such buyers onto the same plans as a lot of people with pre-existing medical conditions who could not previously afford insurance. That pushed their premiums and deductibles up—and they have risen further over time. Here’s an example from a piece I wrote last September:

Before the law, Brian Anderson, a 30-something orthodontist from Nashville, paid $80 a month for insurance that came with a $5,000 deductible. In 2014 his insurer cancelled the plan, as it did not now comply with the law. His new plan, from healthcare.gov, provides, in his view, essentially the same coverage—the deductible is in fact higher—but costs fully $201 per month. Mr Anderson says he is glad many more people now have insurance. But the estimated 2.6m others whose plans were cancelled that year may not all be as understanding.  

Since I wrote that, Mr Anderson’s insurer has dropped out of his local marketplace, and he has had to switch to a plan costing over $400 a month. You can understand why someone who has seen their premium go up by over 300% would be disillusioned with the law.

Does this matter?  A family-of-four earning $100,000 is clearly not poor. However, they face very high prices for health insurance. In much of Arizona, for instance, they would have to pay over $22,000 per year—almost a quarter of their pre-tax income—for “silver” coverage, according to the Kaiser Family Foundation’s Obamacare calculator.  And that is before you count their out-of-pocket medical costs. When Donald Trump says that Obamacare is a “disaster”, such a family would look at their health insurance options and agree.

The House Republican plan offers this group some help. Individuals earning less than $75,000, and couples earning less than $150,000, will get a big tax credit to help them with their premiums. (Minnesota has already passed “premium relief” for such buyers).

Is that a good thing? Obamacare explicitly tries to spread the costs of health insurance around, in order to increase coverage. Unfortunately, it does so only in the individual market. The 155m Americans who get health insurance through their employers need not foot the bill for unhealthy people on the exchanges. Not only that, but this coddled group also gets a tax break on their coverage. People in the individual market have a right to feel hard done by. The best thing about Mr Ryan’s tax credit is that it begins to redress the imbalance. 

I am not suggesting that helping this group justifies removing means-tested subsidies for the poor. But I am pushing back on the idea that Obamacare's redistribution only hurt the "rich". Here is Matthew Yglesias at Vox (emphasis added):

Policy-minded conservatives have serious criticisms of President Obama’s health care law. They think it taxes rich people too much, and coddles Americans with excessively generous, excessively subsidized health insurance plans. They want a world of lower taxes on millionaires while millions of Americans put “skin in the game” in the form of higher deductibles and copayments. Exactly the opposite, in other words, of what Republican politicians have been promising.

Mr Yglesias portrays Obamacare's redistribution as flowing primarily from rich to poor. But his chart shows something else: that it hurts middle-income groups most. That is consistent with the experience of millions of Americans in the individual market who have seen their premiums soar while they have received no help from the government. They are treated unfairly by the system as it stands, and should not be ignored when thinking about health care reform.

Continued in article


Will 90 Become the New 60?
http://nautil.us/issue/46/balance/will-90-become-the-new-60-rp
What will this do to Social Security, Medicare, and Medicaid as well as job turnover (think tenure)?

Wharton:  Will the USA Face a Shortage of Nursing Homes for Baby Boomers?
http://knowledge.wharton.upenn.edu/article/will-u-s-face-shortage-nursing-homes-baby-boomers/
Capacity of nursing homes is on the decline (think of a changing regulatory climate that causes costs to soar) in the face of demand building up like flood water behind a dam that eventually overflow with gaga old folks.

Jensen Comment
It would seem that some national healthcare plans that fund nursing home care might have more capacity to handle increases in the aging population. However, there are some reports that in nations like Canada and the U.K. the rise in demand for funding long-term  nursing care is reaching crisis levels ahead of the USA ---
https://www.canadian-nurse.com/en/articles/issues/2016/october-2016/canadas-long-term-care-funding-crisis


.A senator found Medicare blowing hundreds of millions on a loser drug — and no one even got a slap on the wrist ---
http://www.businessinsider.com/tim-scott-letter-on-acthar-and-medicare-waste-2017-4

 

 


March 31, 2017

Bernie Sanders:  Medicare for All: Leaving No One Behind ---
https://berniesanders.com/issues/medicare-for-all/

Bernie estimates a cost of $1.38 trillion per year for covering doctors, hospitals, ambulances, and medications of roughly 350 million people give or take depending upon the coverage of undocumented residents.

But since Medicare and Medicaid currently costs $1.14 trillion per year Bernie must have left out all the people currently covered by Medicare and Medicaid. Adding $1.38 trillion to $1.14 trillion brings the total cost to $2.52 trillion. However, since currently Medicare only does not pay 20% of the expenses we need to add another $228 billion bringing the total estimated cost to $2.52+$0.23 = $2.75 trillion per year.

Dividing $2.75 trillion by 350 million means the estimated cost is nearly $8,000 cost per person ignoring medical expense inflation. For a family of four this would be $32,000 in average outlays per year. There are also uncertainties regarding how much of mental health, home nursing care, and nursing home care would be covered. Plus Medicare D only covers a portion of medication costs per person such that it is not unrealistic to assume that the Bernie Sanders proposal would start out costing about $10,000 on average for every man, woman, and child in the United States plus the added costs of nursing home care and long-term mental health coverage.Plus Bernie did not add in the hundre of billions paid for malpractice insurance and claims that are paid by hospitals, doctors, and liability insurance companies.

Of course my estimates are subject to a huge margin of error. However, the bottom line is that the funding proposal proposed by Bernie Sanders would only pay for a small portion of the cost extending Medicare coverage to every man, woman, and child in the USA.

On top of that the USA medical system does not have the capacity to provide anything but lowest quality care on average to 350 million people. Hospitals currently lose a considerable amount serving ACA and Medicaid patients --- which is why so many doctors and hospitals refuse to serve ACA and Medicaid patients

 

Medicaid Is Free. So Why Does It Require a Mandate?
https://www.wsj.com/articles/medicaid-is-free-so-why-does-it-require-a-mandate-1489529946?mod=djemMER

The Congressional Budget Office is out with its analysis of the House Republicans’ ObamaCare replacement, the American Health Care Act (AHCA). The CBO’s report includes an implicit but powerful indictment of Medicaid, America’s second-largest health care entitlement.

Medicaid has been around since 1965; it was a core part of LBJ’s Great Society entitlement expansion. The program’s idiosyncratic design requires states to chip in around 40% of the program’s funding, while only getting to control about 5% of how the program is run. The federal Medicaid law—Title XIX of the Social Security Act—mandates a laundry list of benefits that states must provide through Medicaid, and bars states from charging premiums. Copays and deductibles cannot exceed a token amount.

Medicaid is the largest or second-largest line item in nearly every state budget. But for all practical purposes, the main tool states have to control costs is to pay doctors and hospitals less than private insurers pay for the same care. As a result, fewer doctors accept Medicaid patients, making it very hard for Medicaid enrollees to get access to care when they need it. Poor access, in turn, means that Medicaid enrollees—remarkably—have no better health outcomes than those with no insurance at all.

That brings us back to the AHCA. According to the CBO, able-bodied adults on Medicaid receive about $6,000 a year in government health-insurance benefits. They pay no premiums and minimal copays. You’d think that eligible individuals would need no prodding to sign up for such a benefit.

And yet, according to its analysis of the GOP ObamaCare replacement, the CBO believes that there are five million Americans who wouldn’t sign up for Medicaid if it weren’t for ObamaCare’s individual mandate. You read that right: Five million people need the threat of a $695 fine to sign up for a free program that offers them $6,000 worth of subsidized health insurance. That’s more than 1 in 5 of the 24 million people the CBO (dubiously) claims would end up uninsured if the AHCA supplanted ObamaCare.

On its face, there’s reason to doubt the CBO’s view. The mandate is enforced through the income-tax system, and enforcement of the mandate has been spotty for those in low tax brackets. Many of those eligible for Medicaid don’t work or file returns. Under rules established by the Obama administration, those who do can leave the “I have insurance” box blank and face no penalty.

Still, it’s remarkable that the CBO believes people need to be fined into signing up for Medicaid. That tells us something about the CBO’s assessment of Medicaid’s value to those individuals—and it buttresses the GOP’s case that Medicaid needs substantial reform.

Not coincidentally, the AHCA represents the most significant Medicaid reform since 1965, and thereby the most significant entitlement reform in American history. The 1996 welfare reform law is hailed by many conservatives as the most important domestic policy achievement of the past 25 years. Fiscally speaking, the AHCA is 10 times as significant.

The AHCA would put Medicaid on a budget, increasing Medicaid spending per beneficiary at the same rate as the medical component of the Consumer Price Index. This isn’t a far-right concept; President Clinton first proposed reforming Medicaid this way in 1995, as an alternative to the GOP idea of block grants. The 1996 law ended up including neither provision.

Combined with administrative reforms that may come from the Department of Health and Human Services, the bill would give states more flexibility to manage Medicaid’s costs in ways that could increase access to doctors and other providers, while reducing Medicaid spending by hundreds of billions in its first decade and trillions thereafter.

Ultimately, Medicaid for able-bodied low-income adults should be merged into the system of tax credits that the AHCA proposes for those above the poverty line. In that way, all Americans, rich and poor, would have the ability to choose the health coverage and care that reflects their needs, and build nest eggs in health savings accounts that could be passed on to their heirs

 


"Chuck Schumer: Passing Obamacare in 2010 Was a Mistake:  The Senate’s No. 3 Democrat says that his party misused its mandate," by Sarah Mimms, National Journal, November 25, 2014 ---
http://www.nationaljournal.com/congress/chuck-schumer-passing-obamacare-in-2010-was-a-mistake-20141125

Chuck Schumer upbraided his own party Tuesday for pushing the Affordable Care Act through Congress in 2010.

While Schumer emphasized during a speech at the National Press Club that he supports the law and that its policies "are and will continue to be positive changes," he argued that the Democrats acted wrongly in using their new mandate after the 2008 election to focus on the issue rather than the economy at the height of a terrible recession.

"After passing the stimulus, Democrats should have continued to propose middle-class-oriented programs and built on the partial success of the stimulus, but unfortunately Democrats blew the opportunity the American people gave them," Schumer said. "We took their mandate and put all of our focus on the wrong problem—health care reform."

The third-ranking Senate Democrat noted that just about 5 percent of registered voters in the United States lacked health insurance before the implementation of the law, arguing that to focus on a problem affecting such "a small percentage of the electoral made no political sense."

The larger problem, affecting most Americans, he said, was a poor economy resulting from the recession. "When Democrats focused on health care, the average middle-class person thought, 'The Democrats aren't paying enough attention to me,' " Schumer said.

Continued in article

"Sen. Chuck Schumer: Obamacare Focused 'On The Wrong Problem,' Ignores The Middle Class" by  Avik Roy, Forbes, November 26, 2014 ---
http://www.forbes.com/sites/theapothecary/2014/11/26/sen-chuck-schumer-obamacare-focused-on-the-wrong-problem-ignores-the-middle-class/

Despite the enduring unpopularity of Obamacare, Congressional Democrats have up to now stood by their health care law, allowing that “it’s not perfect” but that they are proud of their votes to pass it. That all changed on Tuesday, when the Senate’s third-highest-ranking Democrat—New York’s Chuck Schumer—declared that “we took [the public’s] mandate and put all our focus on the wrong problem—health care reform…When Democrats focused on health care, the average middle-class person thought, ‘The Democrats aren’t paying enough attention to me.’”

Sen. Schumer made his remarks at the National Press Club in Washington. “Democrats blew the opportunity the American people gave them…Now, the plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed,” Schumer maintained. “But it wasn’t the change we were hired to make. Americans were crying out for the end to the recession, for better wages and more jobs—not changes in health care.”

“This makes sense,” Schumer continued, “considering 85 percent of all Americans got their health care from either the government, Medicare, Medicaid, or their employer. And if health care costs were going up, it really did not affect them. The Affordable Care Act was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote…it made no political sense.”

The response from Obama Democrats was swift. Many, like Obama speechwriters Jon Lovett and Jon Favreau and NSC spokesman Tommy Vietor, took to Twitter. “Shorter Chuck Schumer,” said Vietor, “I wish Obama cared more about helping Democrats than sick people.


 

The Economist Magazine in March 2017:  Admit it: Republicans’ proposed Obamacare overhaul offers relief for some middle earners ---
http://www.economist.com/blogs/freeexchange/2017/03/obamacare-s-squeezed-middle

WHAT is the best part of House Republicans’ proposed reform of Obamacare? There isn’t one, if you believe much of this week’s commentary. The bill will benefit the young and healthy, by bringing their premiums down, but only at the cost of the old and sickly. But most writers are overlooking the help the bill would offer to one group that has clearly suffered unfairly under Obamacare. So long as Paul Ryan’s reform does not send the market into a death spiral—which is not a sure thing (see article)—this group will get some needed financial assistance under the Republican plan.

I'm talking about people who buy health insurance for themselves, rather than through an employer, and who do not get the subsidies which shield those on low incomes from Obamacare’s high premiums. It is easy to overlook this group, because the vast majority of the 10m people who buy insurance through Obamacare’s websites (or "exchanges") receive subsidies. For example, here is Jared Bernstein, Vice-President Joe Biden's former chief economist, in the Washington Post:

Of course, there’s the infamous, headline-generating 2017 premium increases in the non-group market. After growing 2 and 7 percent in 2015 and 2016, insurers in the state-based exchanges raised the cost of the benchmark plan by an average of 25 percent. To Obamacare critics, this was proof of the program’s unsustainability. But because 85 percent of participants in this market (state exchanges) receive premium tax credits to offset the cost of coverage, they do not face the full shock. 

What Mr Bernstein does not mention is that another 8m Americans buy coverage directly from insurers, without going through the exchanges. These buyers get no subsidies. But they must pay the same prices as those who do, because the law forces everybody in the individual marketplace—on or off the exchanges—into the same “risk-pool”. 

In total, there are 9m unsubsidised buyers for whom criticisms of Obamacare resonate strongly. Most of these people are not rich: a family-of-four stops receiving subsidies at an income of just under $100,000. Obamacare forced such buyers onto the same plans as a lot of people with pre-existing medical conditions who could not previously afford insurance. That pushed their premiums and deductibles up—and they have risen further over time. Here’s an example from a piece I wrote last September:

Before the law, Brian Anderson, a 30-something orthodontist from Nashville, paid $80 a month for insurance that came with a $5,000 deductible. In 2014 his insurer cancelled the plan, as it did not now comply with the law. His new plan, from healthcare.gov, provides, in his view, essentially the same coverage—the deductible is in fact higher—but costs fully $201 per month. Mr Anderson says he is glad many more people now have insurance. But the estimated 2.6m others whose plans were cancelled that year may not all be as understanding.  

Since I wrote that, Mr Anderson’s insurer has dropped out of his local marketplace, and he has had to switch to a plan costing over $400 a month. You can understand why someone who has seen their premium go up by over 300% would be disillusioned with the law.

Does this matter?  A family-of-four earning $100,000 is clearly not poor. However, they face very high prices for health insurance. In much of Arizona, for instance, they would have to pay over $22,000 per year—almost a quarter of their pre-tax income—for “silver” coverage, according to the Kaiser Family Foundation’s Obamacare calculator.  And that is before you count their out-of-pocket medical costs. When Donald Trump says that Obamacare is a “disaster”, such a family would look at their health insurance options and agree.

The House Republican plan offers this group some help. Individuals earning less than $75,000, and couples earning less than $150,000, will get a big tax credit to help them with their premiums. (Minnesota has already passed “premium relief” for such buyers).

Is that a good thing? Obamacare explicitly tries to spread the costs of health insurance around, in order to increase coverage. Unfortunately, it does so only in the individual market. The 155m Americans who get health insurance through their employers need not foot the bill for unhealthy people on the exchanges. Not only that, but this coddled group also gets a tax break on their coverage. People in the individual market have a right to feel hard done by. The best thing about Mr Ryan’s tax credit is that it begins to redress the imbalance. 

I am not suggesting that helping this group justifies removing means-tested subsidies for the poor. But I am pushing back on the idea that Obamacare's redistribution only hurt the "rich". Here is Matthew Yglesias at Vox (emphasis added):

Policy-minded conservatives have serious criticisms of President Obama’s health care law. They think it taxes rich people too much, and coddles Americans with excessively generous, excessively subsidized health insurance plans. They want a world of lower taxes on millionaires while millions of Americans put “skin in the game” in the form of higher deductibles and copayments. Exactly the opposite, in other words, of what Republican politicians have been promising.

Mr Yglesias portrays Obamacare's redistribution as flowing primarily from rich to poor. But his chart shows something else: that it hurts middle-income groups most. That is consistent with the experience of millions of Americans in the individual market who have seen their premiums soar while they have received no help from the government. They are treated unfairly by the system as it stands, and should not be ignored when thinking about health care reform.


CBO’s Prophecies, Demystified The budget gnomes tend to underestimate market incentives, especially in health care ---
https://www.wsj.com/articles/cbos-prophecies-demystified-1489446596?mod=djemMER

The white smoke rose Monday afternoon from the Congressional Budget Office as the fiscal forecasters published their cost-and-coverage estimates of the GOP health-care reform bill. Awaiting such predictions—and then investing them with supposed clairvoyance—are Beltway rituals. The coverage numbers weren’t great for Republicans, but they shouldn’t allow an outfit that historically underestimates the benefits of market forces to drive policy.

The good news is that CBO estimates that the American Health Care Act would cut the budget deficit by $337 billion over 10 years as the bill replaces ObamaCare’s subsidies with tax credits, rationalizes its Medicaid expansion and repeals its tax increases. The bill would cut taxes by nearly $900 billion while cutting spending by $1.2 trillion.

The bad news is that CBO thinks 14 million people on net would be uninsured in 2018 relative to the ObamaCare status quo. How many people may “lose coverage” is the debate progressives want to have, as if that’s the only relevant question in U.S. health care.

The CBO attributes “most” of this initial coverage plunge to “repealing the penalties associated with the individual mandate.” If people aren’t subject to government coercion to buy insurance or else pay a fine, some “would choose not to have insurance because they chose to be covered by insurance under current law only to avoid paying the penalties, and some people would forgo insurance in response to higher premiums.”

What this finding says about the value Americans attach to ObamaCare-compliant health insurance is damning. If CBO is right, some 14 million people would rather spend their money on something else, despite the subsidies.

But CBO also has too much faith in the mandate as an effective policy tool. In ObamaCare practice, the mandate isn’t pulling “free riders” into the insurance markets. The IRS reports that in 2015 some 12.7 million taxpayers claimed one or more exemptions from the mandate, such as “hardship,” while merely 6.5 million paid the fine.

The GOP wager is that the stability of the individual insurance market would improve with better incentives and if people want to participate. Deregulation would free up insurers to offer more options at many price points that meet different needs. Instead of brute force, Republicans think more people would join the market because if it offers alternatives worth the cost.

CBO’s budget gnomes don’t share these assumptions and they don’t get built into their models. CBO models are not a writ carved in stone by a finger of light, but merely an educated economic guess about how consumers and businesses will behave differently in response to new health-care policies.

Thus this cost estimate should be part of the larger debate, not taken as gospel. Last year the more market-friendly Center for Health and Economy scored the House GOP’s “Better Way” health plan, which this bill closely resembles. The center model was designed by the University of Minnesota’s Stephen Parente, the leading expert in modeling premium support-style health reforms.

The center estimated that the individual market would grow by about a million on net compared to current law in 2018 and by 13 million in 2026. Tax credits and deregulation may well be more powerful than mandates in practice.

The center did find that per-capita Medicaid block grants would cause about four million fewer insured individuals in total by 2026, which is more modest than CBO. Over time, according to CBO, coverage losses would rise to 21 million in 2020 and then to 24 million in 2026 as states rolled back ObamaCare’s Medicaid expansion.

But there are more than a few reasons to doubt CBO’s fortune-telling, especially in health care. Precisely because its models give too much weight to government coercion and too little to free markets, its projections have often missed the mark.

In February 2013, CBO predicted that ObamaCare enrollment in the individual market would be 13 million in 2015, 24 million in 2016 and 26 million in 2017. The actual enrollment for those years were, respectively, 11 million, 12 million and 10 million. As recently as March 2016, CBO was projecting an enrollment boom of 15 million for this year.

CBO also failed to predict how many people would game ObamaCare’s insurance rules and mandates, signing up for coverage just before they need expensive procedures like knee replacements then dropping coverage. On paper they shouldn’t behave that way, but the real world works differently than CBO’s models.

CBO was also badly wrong about the 2003 Medicare prescription drug benefit, which unlike ObamaCare used incentives, markets and private competition to control public costs. The drug benefit cost about 40% less over its first decade than CBO projected.

Democrats in 2009-2010 wasted months gaming the CBO scoring process to hide the enormous true costs of ObamaCare with budget gimmicks, which is a spectacle the GOP ought to avoid. Opponents in Congress weren’t any more convinced than the public, and the delays crowded out other priorities. If Republicans try to juke the coverage estimates, they’ll be making the same mistake.

Continued in article

From the CFO Journal's Morning Ledger on May 3, 2017

Aetna to pull back further from health exchanges
Health insurer Aetna Inc. plans to scale back its presence in the Affordable Care Act exchanges from 2018 onward. It also said it expects losses on the business this year, even though enrollment on individual plans fell.

Jensen Comment

Nearly all of Obama's startup insurance companies for the health exchanges have dropped out of the market. This left only the large established companies in the exchange markets. The one to watch is Blue Cross Anthem that is now the only insurer left in many of the exchange markets. Anthem is also threatening to pull out if Obamacare rates are not increased to cover losses. The media tends to play down this enormous problem that plagued Obamacare from get go. Low insurance rates in turn led to low reimbursement rates for providers --- which is why so many doctors and hospitals (think nearly all of Chicago) will not serve patients insured by Obamacare


"Bernie Sanders' healthcare plan would cost $13.8 trillion over 10 years," by Eric Pianin, The Fiscal Times,  January 20, 2016 ---
http://www.businessinsider.com/bernie-sanders-healthcare-would-cost-138-trillion-over-10-years-2016-1

Jensen Comment
Add to this another $10 trillion for free college education for all and you've got a monumental obligation to be paid by government. But there's really no sweat since the Fed has already proven that printing money is the best way to pay government bills to avoid taxation and debt.


No Free Lunch
"ObamaCare’s $1,200 Pay Cut:  The cost of insuring everybody's 26-year-olds is more than you thought," The Wall Street Journal, January 26, 2016 ---
http://www.wsj.com/articles/obamacares-1-200-pay-cut-1452643649?mod=djemMER

. . .

Among the law’s few popular features, even among Republicans, is the mandate to cover adult children through age 26 on the insurance plans of their parents. This benediction is sold as a gratuity, but somebody must ultimately pay, and new research suggests the hidden costs—in the form of lower take-home pay—are far higher than advertised.

In a working paper, Gopi Shah Goda and Jay Bhattacharya of Stanford and Monica Farid of Harvard exploit the fact that some 37 states had extended dependent-coverage mandates of varying rigor and comprehensiveness before the Affordable Care Act. They explore these differences to estimate the results of the uniform national mandate that was imposed in 2010.

“We find evidence that employees who were most affected by the mandate, namely employees at large firms, saw wage reductions of approximately $1,200 per year,” the researchers observe. As a wave of young adults hit the employer-based insurance rolls, the cost of coverage inevitably climbed and businesses were obliged to dial back cash wages as a share of overall compensation to accommodate the influx. Large businesses were a particular casualty because before ObamaCare they were largely exempt from state-level mandates.

The study also found that the costs of the adult-kid mandate weren’t “only borne by parents of eligible children or parents more generally.” They’re spread over all workers including other young people, the childless and late middle-aged.

No study is definitive, though the authors are careful about their methods and assumptions. The eternal lessons are that no alleged government benefit is free and people should be allowed to make the trade-offs for themselves. Another is that the next President has plenty of running room to improve the American economy, if he cares to make better decisions.


Data USA (community demographics, such as Medicare reimbursements by county) --- https://datausa.io/
Deloitte played a major role in developing this database on poverty, health, and many other data categories

Surprise! How Obamacare is beginning to look a lot like Medicaid ---
https://theconversation.com/surprise-how-obamacare-is-beginning-to-look-a-lot-like-medicaid-86508

Media Keep Butchering the Facts About Obamacare ---
http://reason.com/archives/2017/07/28/media-keep-butchering-the-facts-about-ob

Fewer than half of Coloradans now get their health insurance through employers ---
https://www.bizjournals.com/denver/news/2017/09/19/fewer-than-half-of-coloradans-now-get-their-health.html

How Americans Get Health Insurance Nationwide---
http://ritholtz.com/2017/08/americans-get-health-insurance/
Only 43.3 million are on Medicare (not free even in retirement) whereas 62.4 million have Medicaid (free for basics)
https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html

Historical NHE (National Health Expenditures), 2015:

·         NHE grew 5.8% to $3.2 trillion in 2015, or $9,990 per person, and accounted for 17.8% of Gross Domestic Product (GDP).

·         Medicare spending grew 4.5% to $646.2 billion in 2015, or 20 percent of total NHE.

·         Medicaid spending grew 9.7% to $545.1 billion in 2015, or 17 percent of total NHE.

·         Private health insurance spending grew 7.2% to $1,072.1 billion in 2015, or 33 percent of total NHE.

·         Out of pocket spending grew 2.6% to $338.1 billion in 2015, or 11 percent of total NHE.

·         Hospital expenditures grew 5.6% to $1,036.1 billion in 2015, faster than the 4.6% growth in 2014.

·         Physician and clinical services expenditures grew 6.3% to $634.9 billion in 2015, a faster growth than the 4.8% in 2014.

·         Prescription drug spending increased 9.0% to $324.6 billion in 2015, slower than the 12.4% growth in 2014.

·         The largest shares of total health spending were sponsored by the federal government (28.7 percent) and the households (27.7 percent).   The private business share of health spending accounted for 19.9 percent of total health care spending, state and local governments accounted for 17.1 percent, and other private revenues accounted for 6.7 percent.

·         For further detail see NHE Tables in downloads below.

Projected NHE, 2016-2025:

·         National health spending is projected to grow at an average rate of 5.6 percent per year for 2016-25, and 4.7 percent per year on a per capita basis.

o    Health spending is projected to grow 1.2 percentage points faster than Gross Domestic Product (GDP) per year over the 2016-25 period; as a result, the health share of GDP is expected to rise from 17.8 percent in 2015 to 19.9 percent by 2025.

o    Throughout the 2016-25 projection period, growth in national health expenditures is driven by projected faster growth in medical prices (from historically low growth in 2015 of 0.8 percent to nearly 3 percent by 2025). This faster expected growth in prices is partially offset by projected slowing growth in the use and intensity of medical goods and services.

·         Although the largest health insurance coverage impacts from the Affordable Care Act’s expansions have already been observed in 2014-15, the insured share of the population is projected to increase from 90.9 percent in 2015 to 91.5 percent in 2025.

o    This expectation is mainly a result of continued anticipated growth in private health insurance enrollment, in particular for employer-sponsored insurance, during the first half of the decade in response to faster projected economic growth.

·         Health spending growth by federal and state & local governments is projected to outpace growth by private businesses, households, and other private payers over the projection period (5.9 percent compared to 5.4 percent, respectively) in part due to ongoing strong enrollment growth in Medicare by the baby boomer generation coupled with continued government funding dedicated to subsidizing premiums for lower income Marketplace enrollees.

·         National health spending growth is projected to have decelerated from 5.8 percent in 2015 to 4.8 percent in 2016 as the initial impacts associated with the Affordable Care Act’s major coverage expansions fade. Medicaid spending growth is projected to have decelerated sharply from 9.7 percent in 2015 to 3.7 percent in 2016 as enrollment growth in the program slowed significantly. Similarly, private health insurance spending growth is projected to have slowed from 7.2 percent in 2015 to 5.9 percent in 2016 (also largely attributable to slowing expected growth in enrollment).

·         Health spending is projected to grow 5.4 percent in 2017 related to faster growth in Medicare and private health insurance spending.

·         Health expenditures are projected to grow at an average rate of 5.9 percent for 2018-19, the fastest of the sub-periods examined, as projected spending growth in Medicare and Medicaid accelerates.

·         Through the second half of the projection (2020-25), increasing medical prices are offset by projected decelerations in growth in the use and intensity of medical goods and services, leading to average growth of 5.8 percent per year for national health expenditures.

For further detail see NHE projections 2016-2025 in downloads below.

NHE by Age Group and Gender, Selected Years 2002, 2004, 2006, 2008, 2010, and 2012:

·         Per person personal health care spending for the 65 and older population was $18,988 in 2012, over 5 times higher than spending per child ($3,552) and approximately 3 times the spending per working-age person ($6,632).

·         In 2012, children accounted for approximately 25 percent of the population and slightly less than 12 percent of all PHC spending.

·         The working-age group comprised the majority of spending and population in 2012, almost 54 percent and over 61 percent respectively.

·         The elderly were the smallest population group, nearly 14 percent of the population, and accounted for approximately 34 percent of all spending in 2012.

·         Per person spending for females ($8,315) was 22 percent more than males ($6,788) in 2012.

·         In 2012, per person spending for male children (0-18) was 9 percent more than females.  However, for the working age and elderly groups, per person spending for females was 28 and 7 percent more than for males.

For further detail see health expenditures by age in downloads below.

NHE by State of Residence, 1991-2014:

·         In 2014, per capita personal health care spending ranged from $5,982 in Utah to $11,064 in Alaska.   Per capita spending in Alaska was 38 percent higher than the national average ($8,045) while spending in Utah was about 26 percent lower; they have been the lowest and highest, respectively, since 2012.

·         Health care spending by region continued to exhibit considerable variation. In 2014, the New England and Mideast regions had the highest levels of total per capita personal health care spending ($10,119 and $9,370, respectively), or 26 and 16 percent higher than the national average.   In contrast, the Rocky Mountain and Southwest regions had the lowest levels of total personal health care spending per capita ($6,814 and $6,978, respectively) with average spending roughly 15 percent lower than the national average.

·         For 2010-14, average growth in per capita personal health care spending was highest in Alaska at 4.8 percent per year and lowest in Arizona at 1.9 percent per year (compared with average growth of 3.1 percent nationally).

·         The spread between the highest and the lowest per capita personal health spending across the states has remained relatively stable over 2009-14. Accordingly, the highest per capita spending levels were 80 to 90 percent higher per year than the lowest per capita spending levels during the period.

·         Medicare expenditures per beneficiary were highest in New Jersey ($12,614) and lowest in Montana ($8,238) in 2014.

·         Medicaid expenditures per enrollee were highest in North Dakota ($12,413) and lowest in Illinois ($4,959) in 2014.

For further detail, see health expenditures by state of residence in downloads below.

NHE by State of Provider, 1980-2014:

·         Between 2009 and 2014, U.S. personal health care spending grew, on average, 3.9 percent per year, with spending in North Dakota growing the fastest (6.7 percent) and spending in Rhode Island growing the slowest (2.5 percent).

·         In 2014, California’s personal health care spending was highest in the nation ($295.0 billion), representing 11.5 percent of total U.S. personal health care spending. Comparing historical state rankings through 2014, California consistently had the highest level of total personal health care spending, together with the highest total population in the nation. Other large states, New York, Texas, Florida, and Pennsylvania, also were among the states with the highest total personal health care spending.

·         Wyoming’s personal health care spending was lowest in the nation (as has been the case historically), representing just 0.2 percent of total U.S. personal health care spending in 2014. Vermont, Alaska, North Dakota, and South Dakota were also among the states with the lowest personal health care spending in both 2014 and historically. All these states have smaller populations.

·         Gross Domestic Product (GDP) by state measures the value of goods and services produced in each state. Health spending as a share of a state’s GDP shows the importance of the health care sector in a state’s economy. As a share of GDP, Maine ranked the highest (22.3 percent) and Wyoming ranked the lowest (9.3 percent) in 2014.  

For further detail, see health expenditures by state of provider in downloads below.


As a Doctor, I’m Sick of All The Health Care Freeloaders ---
https://www.texasobserver.org/chip-doctor-texas-kids/
Jensen Comment
Many hospitals will not serve Medicaid patients or patients insured by Obamacare exchanges due to losing so much money on those patients. Those medical clinics that do serve such patients may be cutting costs by making those patients be served by physicians assistants who are not doctors. This is not ipso facto a bad thing for screening patients, but it becomes questionable when medications and other treatments are being given to patients without seeing more qualified medical service providers.

Major Chicago Hospitals Not In 2017 Obamacare Marketplace Plans ---
https://www.wbez.org/shows/wbez-news/major-chicago-hospitals-not-in-2017-obamacare-marketplace-plans/f55d6c23-d9b1-452f-8c75-73635bd83d07

Some of Chicago’s largest hospitals said they will not be part of any Cook County Affordable Care Act marketplace plans in 2017.

 

University of Chicago Medical Center and Rush University Medical Center both said they don’t plan to be in network for any Obamacare marketplace plans next year. 

 

 

The change means patients with doctors at those hospitals will either need to find a plan off the marketplace, and lose Obamacare subsides, or find a new doctor.

 

Northwestern Memorial Hospital said it will also be out of the marketplace, but will have exceptions for some of its partner hospitals.

Continued in article


According to emergency room physicians Obamacare made it much worse for emergency rooms.
American College of Emergency Room Physicians
The Uninsured: Access to Medical Care Fact Sheet ---
http://newsroom.acep.org/fact_sheets?item=30032


One of Obamacare's biggest nightmares is back ---
http://www.businessinsider.com/obamacare-exchanges-virginia-empty-optima-2017-9

Optima — a Virginia-based health insurer — will exit a slew of Obamacare exchanges in the state for 2018, the company announced  Wednesday. 

The insurer said it would leave many rural areas of the state, following the exits of large insurers like Anthem from the same areas. The company cited the other insurer exits as well as "uncertainty in Washington" as reasons for the exit.

"The decisions we made were challenging ones given the recent changes and ambiguities in the marketplace," Optima CEO Michael Dudley said in a statement. "Our most recent filing with the state reflects these dynamic changes, as would be expected in these circumstances."

According to The Kaiser Family Foundation, a nonpartisan health policy think tank, the exit will leave 63 counties in the state with no insurer. Just over 70,000 people enrolled in Obamacare exchange plans in 2017 in these counties, per Kaiser, leaving them at risk of having no coverage next year.

Optima's exit also brings back the possibility of empty coverage areas in 2018 after states like Nevada, Indiana, and Ohio found insurers to fill their potentially barren counties.

The possibility of counties going without an insurer has long been one of the biggest potential setbacks for the Obamacare exchanges, since there is no back up option for individuals in areas without an insurer.

Continued in article


Compare Long-Term Care Costs Across the USA ---
https://www.genworth.com/about-us/industry-expertise/cost-of-care.html
Thank you for the heads up Scott Bonacker

Jensen Comment
This is an example of how to mislead with statistics. The main problem is that there are such variable alternatives for long-term care costs in any state, and the pricing may or may not vary greatly.
https://www.genworth.com/about-us/industry-expertise/cost-of-care.html
Even more variable than pricing is quality of care. Rural nursing centers often rely on minimum-wage workers who are at the bottom of the barrel in terms of skills and attitude. Many can't get local jobs anywhere else. Nursing homes are often booked to capacity such that it's necessary to travel to other towns to find an available bed. My mother had short stays in three different small Iowa town nursing centers. The fees were roughly the same for greatly (I mean GREATLY) differing quality of care. Some minimum wage workers are very caring and terrific nursing home workers. Others are lousy. Interestingly, the locals seem to know which centers to avoid but you have to dig to get those locals to reveal what they know. One problem is that often patients cannot reveal quality of care issues unless you look for their bruises and sniff for their body odors. They typically just don't know where they're living. My mother was quite bruised before we got her out of one facility. In many ways it was a relief that she passed on after only six months in nursing homes. At the time my father had to deal with troublesome issues since I was living in Texas at the time. Fortunately he himself never had to live in one of those places.

 




December31, 2016

Finding and Using Health Statistics --- http://www.nlm.nih.gov/nichsr/usestats/index.htm

Bob Jensen's threads on economic statistics and databases ---
http://faculty.trinity.edu/rjensen/Bookbob1.htm#EconStatistics

Medicare Fraud is Rampant ---
 http://townhall.com/columnists/stevesherman/2016/02/05/medicare-fraud-is-rampant-n2115375?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=


Russia's Bad Health Care System Is Getting Worse ---
http://www.newsweek.com/2016/12/02/dire-russia-health-care-523380.html


From the CFO Journal's Morning Ledger on December 2, 2016

Obamacare’s bright spots and drawbacks
Here’s the good news: Thanks to the Affordable Care Act, or Obamacare, more Americans have access to health care than ever before, Leemore Dafny and Dr. Thomas Lee write for Harvard Business Review. The bad news? The care itself hasn’t improved much. Despite the hard work of dedicated providers, our health-care system remains chaotic, unreliable, inefficient and crushingly expensive.


Nation's Top Hospitals Refuse Obamacare-Insured Patients ---
http://www.newsmax.com/Newsfront/Obamacare-hospitals-plans-coverage/2013/11/01/id/534327/

Something you will never hear in a speech by President Obama
Major hospitals in Obama's home town of Chicago will no longer serve patients insured in Obamacare exchanges (except in true emergencies) ---
http://beta.hotair.com/archives/2016/10/24/chicago-hopenchange-major-hospitals-bail-obamacare-2017/?utm_source=hadaily&utm_medium=email&utm_campaign=nl

News Item Prior to November 8 Election of President Trump
Major Chicago Hospitals Not In 2017 Obamacare Marketplace Plans -
--
https://www.wbez.org/shows/wbez-news/major-chicago-hospitals-not-in-2017-obamacare-marketplace-plans/f55d6c23-d9b1-452f-8c75-73635bd83d07

Some of Chicago’s largest hospitals said they will not be part of any Cook County Affordable Care Act marketplace plans in 2017.

 

University of Chicago Medical Center and Rush University Medical Center both said they don’t plan to be in network for any Obamacare marketplace plans next year. 

 

 

The change means patients with doctors at those hospitals will either need to find a plan off the marketplace, and lose Obamacare subsides, or find a new doctor.

 

Northwestern Memorial Hospital said it will also be out of the marketplace, but will have exceptions for some of its partner hospitals.

Continued in article


According to emergency room physicians Obamacare made it much worse for emergency rooms.
American College of Emergency Room Physicians
The Uninsured: Access to Medical Care Fact Sheet ---
http://newsroom.acep.org/fact_sheets?item=30032


"Sen. Chuck Schumer: Obamacare Focused 'On The Wrong Problem,' Ignores The Middle Class" by  Avik Roy, Forbes, November 26, 2014 ---
http://www.forbes.com/sites/theapothecary/2014/11/26/sen-chuck-schumer-obamacare-focused-on-the-wrong-problem-ignores-the-middle-class/

Despite the enduring unpopularity of Obamacare, Congressional Democrats have up to now stood by their health care law, allowing that “it’s not perfect” but that they are proud of their votes to pass it. That all changed on Tuesday, when the Senate’s third-highest-ranking Democrat—New York’s Chuck Schumer—declared that “we took [the public’s] mandate and put all our focus on the wrong problem—health care reform…When Democrats focused on health care, the average middle-class person thought, ‘The Democrats aren’t paying enough attention to me.’”

Sen. Schumer made his remarks at the National Press Club in Washington. “Democrats blew the opportunity the American people gave them…Now, the plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed,” Schumer maintained. “But it wasn’t the change we were hired to make. Americans were crying out for the end to the recession, for better wages and more jobs—not changes in health care.”

“This makes sense,” Schumer continued, “considering 85 percent of all Americans got their health care from either the government, Medicare, Medicaid, or their employer. And if health care costs were going up, it really did not affect them. The Affordable Care Act was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote…it made no political sense.”

The response from Obama Democrats was swift. Many, like Obama speechwriters Jon Lovett and Jon Favreau and NSC spokesman Tommy Vietor, took to Twitter. “Shorter Chuck Schumer,” said Vietor, “I wish Obama cared more about helping Democrats than sick people.


Medicaid Explodes New enrollments vastly exceed estimates, and states are on the hook. ---
http://www.wsj.com/articles/medicaid-explodes-1479426939?mod=djemMER

On Donald Trump’s victory Republicans in Congress are primed for an ambitious agenda, and not a moment too soon. One immediate problem is ObamaCare’s expansion of Medicaid, which has seen enrollment at least twice as high as advertised.

Most of the insurance coverage gains from the law come from opening Medicaid eligibility beyond its original goal of helping the poor and disabled to include prime-age, able-bodied, childless adults. The Supreme Court made this expansion optional in 2012, and Governors claimed not joining would leave “free money” on the table because the feds would pick up 100% of the costs of new beneficiaries.

In a new report this week for the Foundation for Government Accountability, Jonathan Ingram and Nicholas Horton tracked down the original enrollment projections by actuaries in 24 states that expanded and have since disclosed at least a year of data on the results. Some 11.5 million people now belong to ObamaCare’s new class of able-bodied enrollees, or 110% higher than the projections.

Analysts in California expected only 910,000 people to sign up, but instead 3.84 million have, 322% off the projections. The situation is nearly as dire in New York, where enrollment is 276% higher than expected, and Illinois, which is up 90%. This liberal state triumvirate is particularly notable because they already ran generous welfare states long before ObamaCare.

Continued in article

Jensen Comment
President Obama baited the hook by claiming the Federal Government would pay for Medicaid expansion. But the states that took the bait are now on the hook. Medicaid is not the largest single expense item in most states, and the expense that will go completely out of control (heavily due to fraud) will be the cost of caring for older people where medical expenses are greatest, especially since Medicaid foots sometimes years of all  nursing home and medication costs.


"How to Fix the Scandal of Medicaid and the Poor," by Scott W. Atlas, The Wall Street Journal, March 15, 2016 ---
http://www.wsj.com/articles/how-to-fix-the-scandal-of-medicaid-and-the-poor-1458080771?mod=djemMER

Many doctors won’t take the insurance, and the care patients do receive is inferior. Here’s a solution.

The two principal expenditures of the Affordable Care Act so far include $850 billion for insurance subsidies and a similar outlay for a massive Medicaid expansion. The truth is that Medicaid—a program costing $500 billion a year that rises to $890 billion in 2024—funnels low-income families into substandard coverage. Instead of providing a pathway to excellent health care for poor Americans, ObamaCare’s Medicaid expansion doubles down on their second-class health-care status.

Already 55% of doctors in major metropolitan areas refuse new Medicaid patients, according to the 2014 Merritt Hawkins annual survey. Even of those providers signed up with Medicaid, 56% of primary-care doctors and 43% of specialists are not available to new patients. Moreover, numerous studies have found that the quality of medical care is inferior under Medicaid, compared with private insurance. Lower quality means more in-hospital deaths, more complications from surgery, shorter survival after treatment, and longer hospital stays than similar patients with private insurance.

The two principal expenditures of the Affordable Care Act so far include $850 billion for insurance subsidies and a similar outlay for a massive Medicaid expansion. The truth is that Medicaid—a program costing $500 billion a year that rises to $890 billion in 2024—funnels low-income families into substandard coverage. Instead of providing a pathway to excellent health care for poor Americans, ObamaCare’s Medicaid expansion doubles down on their second-class health-care status.

Already 55% of doctors in major metropolitan areas refuse new Medicaid patients, according to the 2014 Merritt Hawkins annual survey. Even of those providers signed up with Medicaid, 56% of primary-care doctors and 43% of specialists are not available to new patients. Moreover, numerous studies have found that the quality of medical care is inferior under Medicaid, compared with private insurance. Lower quality means more in-hospital deaths, more complications from surgery, shorter survival after treatment, and longer hospital stays than similar patients with private insurance.
.
Legislation signed by President Bill Clinton in 1996 transformed the federal welfare program into a pathway to self-sufficiency. In the same way, Medicaid should be redesigned as a bridge toward affordable private insurance. First, the new Medicaid should include a private-insurance option with catastrophic coverage but few coverage mandates for all enrollees.

Second, new Medicaid should establish and put initial funds into health savings accounts using part of the current federal dollars already going into Medicaid. This will empower beneficiaries and give them incentives to follow healthy lifestyles to protect those new assets. With these reforms, doctors and hospitals would receive payments from the same insurance as from non-Medicaid patients. Because health providers receive the same payments whether they treat Medicaid or non-Medicaid patients, the limited access and substandard treatment options under Medicaid would be eliminated.

To ensure availability of the same coverage to both Medicaid and non-Medicaid beneficiaries, federal funding would go only to eligible people in states that offer these same coverage choices to the entire state population. Federal money will be contingent on states meeting thresholds for the number of Medicaid enrollees moved into private coverage. Federal funds would go directly into beneficiary HSAs or to premium payments, rather than into state bureaucracies. States should want this new program because it will reduce the administrative costs of running a separate insurance program and, most important, provide access to quality health care for their residents.

Ultimately, traditional Medicaid would be eliminated as new enrollees move into private coverage. These reforms would change the purpose and culture of Medicaid agency offices from running government-administered plans to establishing HSAs and finding private insurance for beneficiaries.

Why focus on lower-cost, high-deductible health insurance coupled with HSAs? Published studies have shown that pairing HSAs with high-deductible coverage reduces health-care costs. Patient spending averages 15% lower in high-deductible plans, with even more savings when paired with HSAs—without any consequent increases in emergency visits or hospitalizations and without a harmful impact on low-income families. Secondarily, wellness programs that HSA holders more commonly use improve chronic illnesses, reduce health claims and save money.

Continued in article

 


Stanford University:  Long-term care can be ruinously expensive, and the odds of needing it are high. So why don’t seniors buy insurance to cover it? ---
https://www.gsb.stanford.edu/insights/whats-behind-americas-elder-care-crisis?utm_source=Stanford+Business&utm_campaign=62b269bea9-Stanford-Business-Impact-Issue-101-11-27-2016&utm_medium=email&utm_term=0_0b5214e34b-62b269bea9-70265733&ct=t(Stanford-Business-Impact-Issue-101-11-27-2016)

. . .

What’s Wrong Today

The flaws in existing long term care insurance policies are many. One common gripe is that premiums are too high relative to benefits. But Tonetti’s model shows that demand for long-term care insurance isn’t very sensitive to price — increasing premiums by 30% over the actuarially fair price had little effect on purchases.

The bigger deterrent, surely, is that the policies one can buy today don’t actually eliminate risk. “Those earlier studies basically assumed we all have access to a state-contingent asset and choose not to buy it,” Tonetti says. “But these aren’t state-contingent assets at all. They work on a reimbursement model. You pay for the care yourself and then hope to get your money back.”

Stories abound of insurance companies denying claims or dragging out the process. “It can get adversarial,” Tonetti says, “and you might be in no shape to fight back or might be dying and have a short horizon.”

Short stays in a facility, the most common case, are not covered because of deductibles. Long stays, often needed for patients with cognitive decline — the most expensive case — are not covered because benefits end after one to five years. Within those bounds, there are limits on the services paid for and where they can be delivered. And, oh, your premiums might be raised at any time; fail to pay and you lose your coverage.

Future Potential

Tonetti says those flaws don’t entirely explain the under-insurance puzzle. When the better policy was explained to test subjects, not all those predicted to want it said they’d actually buy it. But that gap arose mainly among the wealthiest individuals, who can rely on their own resources.

For the majority of elderly Americans, the introduction of an improved form of long-term care insurance would offer a tremendous increase in quality of life, not to mention peace of mind. And by lightening the load on Medicaid, it would be a relief for state and federal finances as well.

That’s not to say it would be easy. These papers don’t analyze why the market appears to be failing, but fears of “adverse selection” are likely a factor; that’s when coverage is purchased mainly by people who expect to cash in on the benefits, making it unprofitable. But Tonetti and his colleagues have convincingly demonstrated that there’s an unmet demand for long-term care insurance — a big opportunity for any insurer who can figure it out.

Christopher Tonetti is an assistant professor of economics at Stanford Graduate School of Business. His coauthors on the papers “Long-Term Care Utility and Late-in-Life Saving” and “Late-in-Life Risks and the Under-Insurance Puzzle” are John Ameriks, Vanguard; Joseph Briggs, New York University; Andrew Caplin, New York University & NBER; and Matthew D. Shapiro, University of Michigan & NBER.

Jensen Comment
One thing the article does not mention is a tactic taken by many, many folks approaching possible long-term care (usually in nursing homes but sometimes at home). The tactic is to plan ahead and push all the assets to the heirs before long-term care is needed. Then the heirs support the old folks until if and when those "impoverished" old folks now qualify for Medicaid to pay all the long-term care bills. Their Medicare will not pay for long-term care but their Medicaid will pay for all long-term care. A friend of mine insists this tactic is perfectly legal. But if it's legal (I'm not entirely convinced) its certainly not ethical to shield the savings of older folks from the expenses of their long-term care.

Younger folks such as severely disabled young adults generally can be turned over to states to pay for their long-term care. This is all perfectly legal. And in my opinion it's ethical since these unfortunates generally do not have their own savings for such purposes. Decades ago parents usually had to pay for the long-term care of their disabled children, and some still do contribute to their long-term care. But this is less and less common.

In other nations like Canada and the United Kingdom long-term care expenses created crises in funding.

Nationalized healthcare is not all it's cracked up to be ---
http://www.businessinsider.com/nationalized-healthcare-is-not-all-its-cracked-up-to-be-2016-9

. . .

Back home, though, Canadians seem far more critical of the system. If you follow the internal Canadian debate, you’ll hear the word “crisis.” In fact, many Canadian healthcare economists warn that their system is headed for a major collapse. The aging population has continued to stress an already fragile system. This is the same system that many proponents of the Affordable Care Act, or Obamacare, pointed to as a model.

Another model of national health care cited by fans of the ACA is the UK’s National Health Service (NHS). Like the Canadian system, there seems to be one attitude for export and another for domestic consumption. You may recall the odd tribute to the UK’s National Health Service (NHS) in the opening ceremony of the 2012 Olympics. The NHS was portrayed as a sea of Mary Poppins bliss. At home, though, Brits had reason to complain. The UK was rated as having the worst patient care and lowest cancer survival rates in the Western World.

The NHS is in even worse shape now, and complaints are growing louder. According to the committee that represents UK hospitals, the NHS is on the verge of collapse. The former health minister Paul Burstow warned of this outcome two years ago. At the time, increases in the NIH budget were limited to the rate of inflation. But that did not allow for the increased cost of a growing elderly population. The NIH effort to find £30 billion in “efficiency savings” was already putting enormous strains on the system.

When a healthcare system is overloaded, it’s not just the aged who suffer. A Lancashire man operated on himself when he was put on a long waitlist for a surgery that he badly needed. With waitlists growing, the Royal College of Surgeons reports that financially challenged clinical groups are denying services to patients who are obese or smoke. Often, delayed treatment will increase medical costs in the long run.  

So it shouldn’t be surprising that the Affordable Care Act, which was inspired by the Canadian and British systems, is in deep trouble. Though I predicted it, it is worrisome when the act’s biggest supporters, including The New York Times, admit the program’s flaws.

The growing aged population is a huge financial burden

Obamacare doesn’t deal with the real source of rising healthcare costs: the increase in age-related diseases due to a growing elderly population. It is mathematically impossible to cut societal medical costs while at the same time providing adequate healthcare to a growing and increasingly expensive older population.

This is not just a problem with health care. Social Security and pension funds are running deficits, which will also worsen. Alan Greenspan, former chairman of the Federal Reserve, recently said that he has lost the optimism that he has long been known for. The reason is that “we have a 9 percent annual rate of increase in entitlements, which is mandated by law.  It has got nothing to do with the economy. It has got to do with age and health and the like.”

Greenspan points out that politicians refuse to deal with the “third rail” of entitlements. I agree, but I think there’s a solution. Politicians claim that voters won’t accept delayed retirement. But the evidence shows that most people would like to work longer and save more to pay their own way. Zoya Financial reports that almost two thirds of Americans have to retire earlier than planned, largely due to problems with their own health or a spouse’s.

Anti-aging biotechnologies are in labs right now that could lengthen health spans and working careers. This would allow us to save our entitlement systems. But economists and politicians still have no clue about the biotechnological progress that has marked the start of the 21st century. This will change because it must… but I hope it happens soon

50% of health and social-care funding is spent on 4% of people . . . About 25% of all hospital inpatient spending during a person’s lifetime occurs in the final three months.
"The (British) National Health Care Service is a Mess," The Economist, September 10, 2016, pp. 48-49 ---
http://www.economist.com/news/britain/21706563-nhs-mess-reformers-believe-new-models-health-care-many-pioneered

. . .

Like health-care systems around the world, the National Health Service (NHS) is struggling to provide good care at low cost for patients such as Mrs Evans (not her real name). Its business model has not kept up with the changing burden of disease. For as more people enter and live longer in their dotage, demand increases for two costly types of care. The first is looking after the dying. About 25% of all hospital inpatient spending during a person’s lifetime occurs in the final three months. The second is caring for those with more than one chronic condition. About 70% of NHS spending goes on long-term illnesses. More than half of over-70s have at least two and a quarter have at least three. In south Somerset 50% of health and social-care funding is spent on 4% of people.

. . .

If one fallacy about the NHS is that it is the envy of the world, as its devotees claim, another is that it is a single organisation. In fact it is a series of interlocking systems. Public health, hospitals, general practitioners (or GPs, the family doctors who provide basic care outside hospitals) and mental-health services all have separate funding and incentives. Social care, which includes old-folks’ homes and the like, is run by local councils, not the NHS

. . .

So the NHS must do more with what it already spends. A sign of inefficiency is the 6,000 patients in English hospitals who are ready to go home but not yet discharged, up from 4,000 in 2013. They cost the service hundreds of millions of pounds per year and obstruct others from treatment. The bed-blockers themselves are harmed, too. Elderly patients lose up to 5% of muscle strength for every day they are laid up in hospital. Some delays are the result of council cuts: about 400,000 fewer old people receive social care than in 2010, meaning that hospitals are sometimes used as expensive alternatives to care homes. But most are due to how hospitals are run.

. . .

On average, the framework made GPs some of the highest-paid family doctors in the world when it was introduced in 2004. But since then it has become less generous. GPs’ real-terms income has fallen by one-fifth. This, and poor planning, has led to a shortage of them. England needs 5,000 more in the next five years. The NHS is mulling a deal with Apollo, whereby the Indian health-care firm supplies enough doctors to fill the gap.

. . .

The move from “volume to value”—that is, from paying providers for the procedures they carry out to paying them for the outcomes they achieve—has helped to stem the cost of Medicare, the American health system for pensioners. The expansion of ACOs as part of Obamacare led to reduced mortality rates and savings for providers of about 1-2%. But Dan Northam Jones, a visiting fellow at Harvard, warns that the potential for savings is greater in systems like Medicare, where there is no cap on spending.

And yet ACOs reflect a growing belief that if you want radically to improve health care you have to change how you pay for it. They will not solve all the problems of the NHS, some of which are inherent in its taxpayer-funded model. But perhaps its business model may yet catch up with how illness is changing. The NHS should forget being the envy of the world, and instead learn from it.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

"Germany Is Exporting Its Grandmas (to Poland)," by Naomi, Kresge, Bloomberg Business Week, September 26, 2013 ---
http://www.businessweek.com/articles/2013-09-26/germany-exports-its-seniors-to-nursing-homes-abroad

"Government Medicine vs. the Elderly:  In Britain in 2007-08, 16.5% of deaths came after 'terminal sedation," by Rupert Darwall, The Wall Street Journal, September 14, 2009 ---
http://online.wsj.com/article/SB10001424052970203917304574412680569936844.html?mod=djemEditorialPage

Rarely has the Atlantic seemed as wide as when America's health-care debate provoked a near unanimous response from British politicians boasting of the superiority of their country's National Health Service. Prime Minister Gordon Brown used Twitter to tell the world that the NHS can mean the difference between life and death. His wife added, "we love the NHS." Opposition leader David Cameron tweeted back that his plans to outspend Labour showed the Conservatives were more committed to the NHS than Labour.

This outbreak of NHS jingoism was brought to an abrupt halt by the Patients Association, an independent charity. In a report, the association presented a catalogue of end-of-life cases that demonstrated, in its words, "a consistent pattern of shocking standards of care." It provided details of what it described as "appalling treatment," which could be found across the NHS.

A few days later, a group of senior doctors and health-care experts wrote to a national newspaper expressing their concern about the Liverpool Care Pathway, a palliative program being rolled out across the NHS involving the withdrawal of fluids and nourishment for patients thought to be dying. Noting that in 2007-08, 16.5% of deaths in the U.K. came after "terminal sedation," their letter concluded with the chilling observation that experienced doctors know that sometimes "when all but essential drugs are stopped, 'dying' patients get better" if they are allowed to.

The usual justification for socialized health care is to provide access to quality health care for the poor and disadvantaged. But this function can be more efficiently performed through the benefits system and the payment of refundable tax credits.

The real justification for socialized medicine is left unstated: Because health-care resources are assumed to be fixed, those resources should be prioritized for those who can benefit most from medical treatment. Thus the NHS acts as Britain's national triage service, deciding who is most likely to respond best to treatment and allocating health care accordingly.

It should therefore come as no surprise that the NHS is institutionally ageist. The elderly have fewer years left to them; why then should they get health-care resources that would benefit a younger person more? An analysis by a senior U.K.-based health-care expert earlier this decade found that in the U.S. health-care spending per capita goes up steeply for the elderly, while the U.K. didn't show the same pattern. The U.K.'s pattern of health-care spending by age had more in common with the former Soviet bloc.

A scarcity assumption similar to the British mentality underlies President Barack Obama's proposed health-care overhaul. "We spend one-and-a-half times more per person on health care than any other country, but we aren't any healthier for it," Mr. Obama claimed in his address to Congress last Wednesday, a situation that, he said, threatened America's economic competitiveness.

This assertion is seldom challenged. Yet what makes health care different from spending on, say, information technology—or any category of consumer service—such that spending on health care is uniquely bad for the American economy? Distortions like malpractice suits that lead to higher costs or the absence of consumer price consciousness do result in a misallocation of resources. That should be an argument for tackling those distortions. But if high health-care spending otherwise reflects the preferences of millions of consumers, why the fuss?

The case for ObamaCare, as with the NHS, rests on what might be termed the "lump of health care" fallacy. But in a market-based system triggering one person's contractual rights to health care does not invalidate someone else's health policy. Instead, increased demand for health care incentivizes new drugs, new therapies and better ways of delivering health care. Government-administered systems are so slow and clumsy that they turn the lump of health-care fallacy into a reality.

According to the 2002 Wanless report, used by Tony Blair's government to justify a large tax hike to fund the higher spending, the NHS is late to adopt and slow to diffuse new technology. Still, NHS spending more than doubled to £103 billion in 2009-10 from £40 billion in 1999-2000, equivalent to an average growth rate of over 7% a year after inflation.

In 1965, economist (and future Nobel laureate) James Buchanan observed of the 17-year old NHS that "hospital facilities are overcrowded, and long delays in securing treatment, save for strictly emergency cases, are universally noted." Forty-four years later, matters are little improved. The Wanless report found that of the five countries it looked at, the U.S. was the only one to be both an early adopter and rapid diffuser of new medical techniques. It is the world's principal engine driving medical advance. If the U.S. gets health-care reform wrong, the rest of the world will suffer too.

Mr. Darwall, a London-based strategist, is currently writing a book on the history of global warming, to be published by Quartet Books in Spring 2010.

Jensen Plea
If and when I become gaga please sedate me to the max (meaning euthanize me)! I fear my wife, who is quite religious, will not allow that to happen.


From the CFO Journal's Morning Ledger on December 2, 2016

Obamacare’s bright spots and drawbacks
Here’s the good news: Thanks to the Affordable Care Act, or Obamacare, more Americans have access to health care than ever before, Leemore Dafny and Dr. Thomas Lee write for Harvard Business Review. The bad news? The care itself hasn’t improved much. Despite the hard work of dedicated providers, our health-care system remains chaotic, unreliable, inefficient and crushingly expensive.

 


Medicaid Explodes New enrollments vastly exceed estimates, and states are on the hook. ---
http://www.wsj.com/articles/medicaid-explodes-1479426939?mod=djemMER

On Donald Trump’s victory Republicans in Congress are primed for an ambitious agenda, and not a moment too soon. One immediate problem is ObamaCare’s expansion of Medicaid, which has seen enrollment at least twice as high as advertised.

Most of the insurance coverage gains from the law come from opening Medicaid eligibility beyond its original goal of helping the poor and disabled to include prime-age, able-bodied, childless adults. The Supreme Court made this expansion optional in 2012, and Governors claimed not joining would leave “free money” on the table because the feds would pick up 100% of the costs of new beneficiaries.

In a new report this week for the Foundation for Government Accountability, Jonathan Ingram and Nicholas Horton tracked down the original enrollment projections by actuaries in 24 states that expanded and have since disclosed at least a year of data on the results. Some 11.5 million people now belong to ObamaCare’s new class of able-bodied enrollees, or 110% higher than the projections.

Analysts in California expected only 910,000 people to sign up, but instead 3.84 million have, 322% off the projections. The situation is nearly as dire in New York, where enrollment is 276% higher than expected, and Illinois, which is up 90%. This liberal state triumvirate is particularly notable because they already ran generous welfare states long before ObamaCare.

Continued in article

Jensen Comment
President Obama baited the hook by claiming the Federal Government would pay for Medicaid expansion. But the states that took the bait are now on the hook. Medicaid is not the largest single expense item in most states, and the expense that will go completely out of control (heavily due to fraud) will be the cost of caring for older people where medical expenses are greatest, especially since Medicaid foots sometimes years of all  nursing home and medication costs.


"Accountability for ObamaCare:   Democrats should pay a political price for this historic failure," The Wall Street Journal, October 25, 2016 --- |
http://www.wsj.com/articles/accountability-for-obamacare-1477435661?mod=djemMER 

ObamaCare has suddenly been injected back into the 2016 election debate, on the news of the law’s 25%-plus average premium increase for 2017. Even Donald Trump is talking about it. With only two weeks to go, this is a moment for voters to hold accountable the Democrats who imposed this debacle on the country over voter objections.

Next year’s enormous price increases are merely the latest expression of ObamaCare’s underlying problems, and the dysfunction is undermining the health security of Americans who lack employer coverage. A wave of major insurers have quit the exchanges, and those that are left have raised deductibles and copays and restricted choices of doctors and hospitals. The public is witnessing—and the unlucky are experiencing—the collapse of one progressive promise after another.

At every stage of the ObamaCare saga, liberals said not to worry. Sure, the law was unpopular when Democrats rammed it through Congress on a partisan vote in 2009-10, but voters would learn to love it once the subsidies started rolling. That didn’t happen, and in 2014 President Obama tried to buck up Democrats by saying that “five years from now” people will look back on the law as “a monumental achievement.” Two years later it’s worse.

Nothing could shake the liberal faith in their supposed landmark: Not the Healthcare.gov website fiasco of 2013, or the millions of individual health plans that were cancelled despite President Obama’s promise about keeping them. The left kept the faith as the entitlement subtracted from economic growth, hurt incomes and killed jobs. MIT economist Jonathan Gruber called the critics stupid, and Mr. Obama denigrates anyone who disagrees with him as illegitimate or politically motivated.

Now reality is confirming what the critics predicted. ObamaCare’s regulatory mix—benefit mandates, requiring insurers to sell coverage to all comers, and narrow ratings bands that limit how much premiums can vary by health status—was tried by several states in the 1980s and ’90s. Every one saw the same results that are now unspooling nationally: high and rising costs, low and declining enrollment, and less insurer and provider competition.

The Affordable Care Act was supposed to solve these predictable disruptions with subsidies and a mandate to buy insurance or pay a penalty. But most people don’t think ObamaCare plans provide value for the money, especially if they are non-subsidized.

So now the liberal line is that ObamaCare has a few problems, but don’t worry: The same geniuses who wrote the law know how to fix it. The Bernie Sanders-Elizabeth Warren left wants a new “public option,” higher subsidies, more price controls and even more intrusive regulatory control. Hillary Clinton has endorsed all of this.

“The Affordable Care Act has done what it was designed to do,” Mr. Obama declared last week in Miami, apparently meaning that the law has reduced the number of uninsured. But most of the coverage gains have come from dumping patients into Medicaid, a failing program that provides substandard care. Nominally private exchange plans increasingly resemble Medicaid too.

Mrs. Clinton may be horse-whispering Ms. Warren now, but ObamaCare’s failures aren’t likely to bring the U.S. closer to their single-payer nirvana any time soon. ObamaCare was the best Democrats could do when they had a 60-vote Senate supermajority and bought off interest groups like the insurers, hospitals, drug makers and American Medical Association.

The only way to break the ObamaCare status quo is if the public returns a Republican Congress to Washington. If Republicans can hold the Senate amid a Clinton victory, they’d be in a better position to negotiate solutions along the lines of the House GOP “Better Way” blueprint that would start to repair the individual market and create incentives for more choice and competition.

Take Wisconsin, where Democrat Russ Feingold cast the deciding 60th vote for ObamaCare and voters fired him for it in 2010. He’s back hoping voters forget. Evan Bayh, who also cast the deciding vote before retiring to become a superlobbyist, is back facing Indiana voters and Hoosiers can deliver a verdict.

In Arizona, premiums will rise a mind-boggling 116%, only two insurers are still selling plans, and John McCain has made ObamaCare a major theme. His opponent, Congresswoman Ann Kirkpatrick, calls ObamaCare her “proudest vote.” Katie McGinty likes to say Pennsylvanians should be “proud of ObamaCare,” though the commonwealth is slated for a 53% increase. A memo about ObamaCare pride month must have gone out from Democratic HQ.

Mr. Trump has missed a chance by not prosecuting a consistent case against ObamaCare, despite Mrs. Clinton’s past as the chief architect of its HillaryCare prototype in the 1990s. As that episode shows, the longstanding progressive goal has been to centralize political control over American health care.

Now voters are finally seeing what happens when the planners try to design a single health-care solution for a large and diverse country. Mr. Obama called ObamaCare “a starter home” in Miami. Republicans ought to campaign as the bulldozer.


Something you will never hear in a speech by President Obama
Major hospitals in Obama's home town of Chicago will no longer serve patients insured in Obamacare exchanges (except in true emergencies) ---
http://beta.hotair.com/archives/2016/10/24/chicago-hopenchange-major-hospitals-bail-obamacare-2017/?utm_source=hadaily&utm_medium=email&utm_campaign=nl

Nation's Top Hospitals Refuse Obamacare-Insured Patients ---
http://www.newsmax.com/Newsfront/Obamacare-hospitals-plans-coverage/2013/11/01/id/534327/


“You’ve got this crazy (Obamacare) system where all of a sudden 25 million more people have health care and then the people are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half,” Mr. Clinton told voters. “It’s the craziest thing in the world.”For years I've been a proponent of a national healthcare plan supplemented with discretionary private insurance much like the system in Germany. Some other national healthcare plans are falling apart
Bill Clinton (former President of the USA)
http://www.washingtontimes.com/news/2016/oct/3/bill-clinton-bashes-obamacare-as-crazy-system-whil/?mod=djemBestOfTheWeb
Jensen Comment
All these years I've advocated the German combination of national healthcare with private insurance discretionary supplements.
I think Bill Clinton is copping my stuff at
http://faculty.trinity.edu/rjensen/Health.htm
Read the Introduction

Nationalized healthcare is not all it's cracked up to be ---
http://www.businessinsider.com/nationalized-healthcare-is-not-all-its-cracked-up-to-be-2016-9

. . .

Back home, though, Canadians seem far more critical of the system. If you follow the internal Canadian debate, you’ll hear the word “crisis.” In fact, many Canadian healthcare economists warn that their system is headed for a major collapse. The aging population has continued to stress an already fragile system. This is the same system that many proponents of the Affordable Care Act, or Obamacare, pointed to as a model.

Another model of national health care cited by fans of the ACA is the UK’s National Health Service (NHS). Like the Canadian system, there seems to be one attitude for export and another for domestic consumption. You may recall the odd tribute to the UK’s National Health Service (NHS) in the opening ceremony of the 2012 Olympics. The NHS was portrayed as a sea of Mary Poppins bliss. At home, though, Brits had reason to complain. The UK was rated as having the worst patient care and lowest cancer survival rates in the Western World.

The NHS is in even worse shape now, and complaints are growing louder. According to the committee that represents UK hospitals, the NHS is on the verge of collapse. The former health minister Paul Burstow warned of this outcome two years ago. At the time, increases in the NIH budget were limited to the rate of inflation. But that did not allow for the increased cost of a growing elderly population. The NIH effort to find £30 billion in “efficiency savings” was already putting enormous strains on the system.

When a healthcare system is overloaded, it’s not just the aged who suffer. A Lancashire man operated on himself when he was put on a long waitlist for a surgery that he badly needed. With waitlists growing, the Royal College of Surgeons reports that financially challenged clinical groups are denying services to patients who are obese or smoke. Often, delayed treatment will increase medical costs in the long run.  

So it shouldn’t be surprising that the Affordable Care Act, which was inspired by the Canadian and British systems, is in deep trouble. Though I predicted it, it is worrisome when the act’s biggest supporters, including The New York Times, admit the program’s flaws.

The growing aged population is a huge financial burden

Obamacare doesn’t deal with the real source of rising healthcare costs: the increase in age-related diseases due to a growing elderly population. It is mathematically impossible to cut societal medical costs while at the same time providing adequate healthcare to a growing and increasingly expensive older population.

This is not just a problem with health care. Social Security and pension funds are running deficits, which will also worsen. Alan Greenspan, former chairman of the Federal Reserve, recently said that he has lost the optimism that he has long been known for. The reason is that “we have a 9 percent annual rate of increase in entitlements, which is mandated by law.  It has got nothing to do with the economy. It has got to do with age and health and the like.”

Greenspan points out that politicians refuse to deal with the “third rail” of entitlements. I agree, but I think there’s a solution. Politicians claim that voters won’t accept delayed retirement. But the evidence shows that most people would like to work longer and save more to pay their own way. Zoya Financial reports that almost two thirds of Americans have to retire earlier than planned, largely due to problems with their own health or a spouse’s.

Anti-aging biotechnologies are in labs right now that could lengthen health spans and working careers. This would allow us to save our entitlement systems. But economists and politicians still have no clue about the biotechnological progress that has marked the start of the 21st century. This will change because it must… but I hope it happens soon

Continued in article


ACA insurance companies are offering over-priced policies with enormous deductibles that discourage patients from having medial treatments except in emergencies. It sounds great in election campaigns to say that nearly all Americans are now insured due to the ACA. It does not sound as great to admit that most of the new insured cannot afford to use the insurance they're now paying for unless they've been added to free health care coverage on Medicaid. But that's not much help for the middle class.


PwC Study Maligned by Liberals in 2009 is Vindicated by Events of 2016

From the Left-Leaning Website Called Vox
"Obamacare was built to fail," by Avik Roy, Vox, October 7, 2016---
http://www.vox.com/the-big-idea/2016/10/7/13191250/obamacare-exchanges-crisis-arrogant-progressives

. . .

In October 2009, analysts at PricewaterhouseCoopers published a report estimating that by 2016, the Senate Finance Committee bill would increase individual-market health insurance premiums by 47 percent. Today, we would describe that figure as a lowball estimate. In fact, cumulatively, median premiums for "silver plans" have nearly doubled in the ACA’s first four plan years (49 percent in 2014, 7 percent in 2015, 11 percent in 2016, and a projected 10 percent in 2017).

But in 2009, the ACA’s cheerleaders described it in much different terms.

"We couldn’t stop intellectual saboteurs from introducing new lies into the debate," wrote Cohn. "But I think we were able to expose those lies just a little more quickly." Cohn and others slammed the PwC report as the work of corrupt health insurance lobbyists seeking to sink reform — as an example of "the insurance industry declaring war." In the Washington Post, Ezra Klein, who went on to found Vox.com, compared the PwC report to lies promulgated by the tobacco and oil industries.

What was remarkable about all this controversy is that PricewaterhouseCoopers' findings were quite reasonable. The ACA’s insurance market regulations were going to drive up the underlying cost of individually purchased insurance.

For example, forcing insurers to charge their youngest customers no less than one-third of their oldest customers meant that premiums for young people would double, because on average, 19-year-olds consume one-sixth as much health care as 64-year-olds. Mandating that insurers cover a federally-prescribed suite of health care services, regardless of whether enrollees need coverage for those services, meant that premiums would go up. Requiring that insurers charge the same prices to the healthy and the sick meant that healthy people in particular would pay more.

By contrast, the law’s individual mandate, forcing consumers to buy that costlier insurance, was going to be phased in over time. As a result, premiums would spike and enrollment would suffer.

But Obamacare’s cheerleaders, fearing that this information might sink the bill’s fate in Congress, decided to shoot the messenger. They brought in Jonathan Gruber, the MIT economist, to assure everyone that "what we know for sure the bill will do is that it will lower the [underlying] cost of buying non-group health insurance" — that is, the cost before any subsidies.

As a political matter, the aggressive critiques of PwC worked. "Within hours of [the report’s] publication," Cohn recounted, "several blogs, including this one, had published critiques … [they] circulated in Washington and provoked a backlash against the insurers. Wavering Democrats said they were offended by the effort at political sabotage; the Finance Committee went on the pass the bill, as it had originally planned."

The exchanges punish middle-income Americans

But as a matter of policy, PwC was right and the cheerleaders and Democratic policymakers were wrong. The ACA’s exchanges were designed poorly, and premiums did become unaffordable for millions. It is true that many people with incomes near the poverty line, whose premiums were nearly fully subsidized by other taxpayers, gained coverage through the law, many through the deeply flawed Medicaid program, whose health outcomes are no better than those of people without health insurance.

But millions of uninsured, taxpaying Americans don’t qualify for Medicaid or the ACA’s exchange subsidies. Still others — typically those with incomes between 250 and 400 percent of the federal poverty level — qualify for partial subsidies that don’t make up for the fact that ACA exchange insurance costs so much more. As Bill Clinton put it, "You’ve got this crazy system where … people that are out there busting it —sometimes 60 hours a week — wind up with their premiums doubled and their coverage cut in half." That’s why ACA exchange enrollment has fallen 9 million short of initial estimates.

The people who implemented the markets were ignorant and arrogant, too

And Obamacare didn’t suffer only from a flawed blueprint. It was also implemented by people with poor knowledge of how health insurance markets worked.

Continued in article


PwC Study Maligned by Liberals in 2009 is Vindicated in 2016

"Brouhaha erupts over PwC private health insurance report," AccountingWeb, October 21, 2009 ---
http://www.accountingweb.com/topic/cfo/brouhaha-erupts-over-pwc-private-health-insurance-report

PricewaterhouseCoopers (PwC) has found itself at the center of a controversy over its estimates of cost increases in private health insurance premiums if certain provisions of the heath care reform bill passed by the Senate Finance Committee become law.  PwC was engaged to conduct the study, "Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage," by the American Health Insurance Plans (AHIP).  Critics have questioned the methodology used by PwC, saying it does not take into consideration some of the cost containment measures in the bill and potential behavioral responses that could affect premium increases. 

AHIP president and CEO Karen Ignagni told ABC News, "One of the most important things that should be done is for PricewaterhouseCoopers, a world class firm, to speak for itself about methodology."

PwC defends its analysis and conclusions in a statement provided to AccountingWEB, citing the specific parameters of the study, saying that "America's Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:

* Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.
* An excise tax on employer-sponsored high value health plans.
* Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.
* New taxes on health sector entities.

The study concluded that collectively the four provisions would raise premiums for private health insurance coverage.  As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis."

By 2019, the study says, after analysis of these four provisions, the cost of single coverage is expected to increase by $1,500 more than it would under the current system and the cost of family coverage is expected to increase by $4,000 more than it would under the current system.  This amounts to an additional 18 percent increase in premiums by 2019. The overall 18 percent increase is a composite of increases by market segment as follows:

* 49% increase for the non-group (individual) market;
* 28% increase for small employers (those firms with fewer than 50 employees);
* 11% increase for large employers with insured coverage; and,
* 9% increase for self-insured employers.

The highest increase would be for individuals covered by private insurance.

In its discussion of a "Strong Workable Coverage Requirement," the study acknowledges it methodology as it does elsewhere in the report.  "The reform packages under consideration have other provisions that we have not included in this analysis.  We have not estimated the impact of the new subsidies on the net insurance cost to households.  Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated."  The analysis of the coverage requirement shows the potential impact on premiums for individuals without a broad coverage requirement."

PwC says that impacts identified in the study assume payment of tax on high-value plans, cost-shifting of cuts to public programs, and full pass-through of industry taxes. 

The PwC study also states that it factored in the excise tax but not any anticipated behavioral changes:  "We have estimated the potential impact of the tax on premiums," the study says.  "Although we expect employers to respond to the tax by restructuring their benefits to avoid it, we demonstrate the impact assuming it is applied."

In an earlier study based on AHIP data, PwC estimated that structural reforms, such as improved wellness and prevention, disease management, value based payment reform, improvements in health information technology, comparative effectiveness, and malpractice reform, could mitigate growth in healthcare costs by between 0.5 and 1.0 percent per year after an initial investment period.  See PricewaterhouseCoopers "A Review of AHIP Savings Estimates" in Appendix to AHIP, "A Shared Responsibility," 2008.


"Sen. Chuck Schumer: Obamacare Focused 'On The Wrong Problem,' Ignores The Middle Class" by  Avik Roy, Forbes, November 26, 2014 ---
http://www.forbes.com/sites/theapothecary/2014/11/26/sen-chuck-schumer-obamacare-focused-on-the-wrong-problem-ignores-the-middle-class/

Despite the enduring unpopularity of Obamacare, Congressional Democrats have up to now stood by their health care law, allowing that “it’s not perfect” but that they are proud of their votes to pass it. That all changed on Tuesday, when the Senate’s third-highest-ranking Democrat—New York’s Chuck Schumer—declared that “we took [the public’s] mandate and put all our focus on the wrong problem—health care reform…When Democrats focused on health care, the average middle-class person thought, ‘The Democrats aren’t paying enough attention to me.’”

Sen. Schumer made his remarks at the National Press Club in Washington. “Democrats blew the opportunity the American people gave them…Now, the plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed,” Schumer maintained. “But it wasn’t the change we were hired to make. Americans were crying out for the end to the recession, for better wages and more jobs—not changes in health care.”

“This makes sense,” Schumer continued, “considering 85 percent of all Americans got their health care from either the government, Medicare, Medicaid, or their employer. And if health care costs were going up, it really did not affect them. The Affordable Care Act was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote…it made no political sense.”

The response from Obama Democrats was swift. Many, like Obama speechwriters Jon Lovett and Jon Favreau and NSC spokesman Tommy Vietor, took to Twitter. “Shorter Chuck Schumer,” said Vietor, “I wish Obama cared more about helping Democrats than sick people.


USA Today: The Cascade of 2017 Obamacare Premium Hikes Has Arrived ---
http://townhall.com/tipsheet/guybenson/2016/10/20/usa-today-the-cascade-of-obamacare-premium-hikes-has-arrived-n2234719?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm&newsletterad=

. . .

Based on that chart, only a small handful of states will have the supposed 'good fortune' of experiencing single-digit hikes.  The vast majority will experience cost surges in the double-digits, with roughly half of all states getting slammed with increases of at least 20 percent.  Time magazine reviews the eight states where consumes will suffer the most next year, where regulators have imposed rate jumps of at least 30 percent.  The piece's opening sentence says it all: "The Affordable Care Act is getting a lot less affordable for many Americans."  Meanwhile, many Arizonans find themselves in Obamacare's crosshairs, getting rocked by the double-whammy of soaring costs and dwindling-to-nonexistent choices:

Continued in article


Affordable Care Act of 2010 (Obamacare) --- https://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act

Probably the worst whore economists was Johathon Gruber of MIT --- https://en.wikipedia.org/wiki/Jonathan_Gruber_(economist)

Jensen Comment
In addition to the dire predictions of PwC in 2009, some respected leftist-leaning media were warning against the lousy numbers of the Obama-Controlled House Budget Committee. I mean warnings from one of my favorite statistician named John Cassidy who writes for The New Yorker. Robert Pear also voiced warnings in The New York Times.

"ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---
http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

. . .

Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.

The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.

The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”

Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.

My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.

Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.

Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)

If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”

So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.

The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.

Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)

In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.

Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.

The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.

Continued in article

"Senate Bill Sets a Plan to Regulate Premiums," by Robert Pear, The New York Times, April 20, 2010 --- http://www.nytimes.com/2010/04/21/health/policy/21healt

. . .

Grace-Marie Turner, president of the Galen Institute, a research center that advocates free-market health policies, said the Democrats’ proposal was unlikely to succeed in lowering insurance costs.

“Capping premiums without recognizing the forces that are driving up costs would be like tightening the lid on a pressure cooker while the heat is being turned up,” Mrs. Turner said.

Mrs. Feinstein said her bill would close what she described as “an enormous loophole” in the new law. And she said health insurance should be regulated like a public utility.

“Water and power are essential for life,” Mrs. Feinstein said. “So they are heavily regulated, and rate increases must be approved. Health insurance is also vital for life. It too should be strictly regulated so that people can afford this basic need.”

The 6 Biggest Whoppers In Gruber's ObamaCare Comic Book ---
http://news.investors.com/ibd-editorials-obama-care/120114-728618-the-6-biggest-whoppers-in-gruber-obamacare-comic-book.htm

. . .

What the reviewers failed to mention is that the book is also chock-a-block with misinformation and outright falsehoods about the law Gruber helped construct — many of which Gruber himself exposed later on. Among the most glaring:

• Gruber claims that for individuals and small firms qualifying for a tax credit, "this bill will lower your health care costs." But Gruber would later go on to tell several states the opposite. One of them was Wisconsin, where he said fewer than 6% would see lower premiums, and 41% would get hit with hikes of 50% or more. Meanwhile, millions learned that Gruber's claim was a fantasy last year, when they confronted ObamaCare's sky-high premiums after seeing their existing plans canceled.

• Gruber declares that the law doesn't raise taxes on anyone "with incomes below $200,000 per year." Yet several of the dozens of tax hikes stuffed into the bill hit the middle class, or soon will. Americans for Tax Reform counted seven big ones.

• In the section on the Cadillac tax, which depicts Gruber tooling around in a Caddy, he claims this tax would apply "only to the top few percent of health insurance plans" and would hit more only if premiums climb faster than inflation.

But in videotaped comments, Gruber explains that the tax was purposely designed to start small and then eventually hit all employer plans, "essentially getting rid of the exclusion for employer-sponsored plans."

• Gruber emphatically declares that ObamaCare will cut the federal deficit by $1 trillion over its second decade because "the deficit-reducing effects of this legislation grow over time."

But all the Congressional Budget Office said was that a "rough outlook" for ObamaCare's second decade resulted in deficit cuts "in a broad range of around one-half percent of GDP." And that assumed the law was enacted exactly as written, and worked exactly as predicted, both of which have already failed to come true.

When the Government Accountability Office ran the numbers using more realistic scenarios, it found ObamaCare adding significantly to the long-term deficit. The CBO, meanwhile, has given up making even short-term forecasts of ObamaCare's impact on the deficit.

• Throughout the book, Gruber cites CBO projections of ObamaCare's effects on premiums and coverage, calling it "the best independent source for evaluating bills like the ACA." What he doesn't mention is that when the CBO developed its health care forecasting model in 2007, Gruber had a role in creating it. It even credits Gruber for his "helpful comments and feedback ... throughout the model's development."

And in a 2011 paper, Gruber himself said that his own health care model "mirrors the CBO approach to modeling health reform."

• Gruber says that if the law's many cost-control measures work as expected, "the ACA will end up solving our cost problem in the U.S." But earlier this year Gruber told the Washington Post that it was "misleading" to say ObamaCare will save money. "The law isn't designed to save money," he said. "It's designed to improve health, and that's going to cost money."


Read More At Investor's Business Daily:
http://news.investors.com/ibd-editorials-obama-care/120114-728618-the-6-biggest-whoppers-in-gruber-obamacare-comic-book.htm#ixzz3KllqGGBp

 

Emergency Room (ER) --- https://en.wikipedia.org/wiki/Emergency_department 

Emergency departments have many of the best doctors in the USA. It's common to outsource those doctors to ER practicing partnerships.  In the USA ERs, especially urban trauma centers, in hospitals are being stressed to the point of breaking. Much, albeit certainly not all, of the blame falls on the Affordable Care Act.

American College of Emergency Room Physicians
The Uninsured: Access to Medical Care Fact Sheet ---
http://newsroom.acep.org/fact_sheets?item=30032   

Jensen Comment
Here are a few tidbits in the above report.:

Emergency care is the safety net of the nation’s health care system, caring for everyone, regardless of ability to pay.

Emergency physicians provide the most uncompensated care for uninsured and underinsured patients of all physicians.

America’s emergency departments are under severe stress, facing soaring demands. They are essential to every community and must have adequate resources.

Having health insurance does not mean you have access to medical care.

. . .

The federal government estimates that the number of uninsured in the United States has declined by about 15 million since 2013[iii].  In the first three months of 2015, 29 million people were uninsured.  That was seven million fewer than in 2014. While the uninsured are expected to drop to about 23 million by 2023 as a result of the ACA, according to the Centers for Medicare & Medicaid Services, many American will still not be able to afford their healthcare needs. [iv]

24.3 percent of the uninsured are Hispanic

15.9 percent are black

9.8 percent are white

9.8 percent of children younger than 19 in poverty

7 percent of children under 19 who are not in poverty

. . .

Hospitals and physicians shoulder the financial burden for the uninsured by incurring billions of dollars in bad debt or “uncompensated care” each year. Hospitals provided over $50 billion in uncompensated care in 2013.

In the past, hospitals shifted uncompensated care costs to insured patients to make up the difference. However, cost shifting no longer is a viable option because managed care and other health plans have instituted strict price controls, leaving little margin to shift costs. More than one-third of emergency physicians lose an average of $138,300 each year from EMTALA-related bad debt, according to a May 2003 American Medical Association study.]

. . .

With projections that health care costs will double the nation is faced with how it will continue to provide care for all Americans, not just the disadvantaged. Emergency departments provide an essential community service, similar to fire departments, police departments, and public utilities. The nation cannot afford to allow the emergency care system to collapse because of a lack of funding. It is too high a price to pay in terms of public health effects and human suffering.

Medicaid patients are having Analysis of hospital financial reporting and member surveys from hospital associations indicates that, through 2014, payer mix is shifting in ways that will likely reduce hospital uncompensated care costs, according to the Dept. of Health and Human Services (HHS). Moreover, a projection model developed by ASPE suggests that the large observed declines in the uninsured and increases in Medicaid coverage have led to substantial declines in hospital uncompensated care in 2014.

Medicaid expansion states account for $5 billion of the estimated $7.4 billion reduction in uncompensated care costs attributed to ACA coverage expansions.

. . .

Most undocumented immigrants are unable to obtain health insurance and this means many are
unable to pay – contributing to uncompensated care, especially in Border States, such as California,
Texas and Arizona. Billions of dollars of uncompensated care has resulted in the closure of hundreds
of emergency departments in America, which is reducing capacity and threatening everyone’s access
to lifesaving care.

. . .

People who cannot afford physicians’ fees and who do not have health insurance are often turned away from private offices and urgent care clinics. With no other options, they turn to emergency departments, which serve as a vital part of America’s health care safety net. Emergency departments are mandated by law to medically evaluate and provide stabilizing treatment of emergency conditions for everyone. Language and economic barriers also often limit undocumented immigrants’ access to health care. Furthermore, many undocumented immigrants become migrant farm workers and their transient living arrangements jeopardize residency requirements for some community health clinics.  In addition, fear of detection by immigration authorities may account for why as few as one-fourth of them use other health services.  ACEP opposes initiatives to require physicians or health care facilities to report suspected, undocumented persons to immigration authorities

. . .

See the reference links at the end of the article

Jensen Comment
The above report judiciously avoids mentioning that one of the major stresses on ER departments and their doctors is the high cost of malpractice insurance now being heavily funded by the middle class. You need only watch the constant stream of advertisements on television of law firms seeking medical punitive damages to know that some law firms are totally depend on punitive damages settlements, except in Texas. Early on the many lawyers in the USA Congress warned that the Affordable Healthcare Act would never pass if the ACA messed with the law firm gravy train of punitive damages. National healthcare plans such as those in Canada and Scandinavia limit malpractice settlements to actual damages. This greatly reduces the cost of malpractice insurance in those national plans. But this will never happen in the USA (except for Texas where punitive damages unbelievably are limited by a constitutional amendment) ---
http://www.nytimes.com/2007/10/05/us/05doctors.htm

Four years after Texas voters approved a constitutional amendment limiting awards in medical malpractice lawsuits, doctors are responding as supporters predicted, arriving from all parts of the country to swell the ranks of specialists at Texas hospitals and bring professional health care to some long-underserved rural areas. “It was hard to believe at first; we thought it was a spike,” said Dr. Donald W. Patrick, executive director of the medical board and a neurosurgeon and lawyer. But Dr. Patrick said the trend — licenses up 18 percent since 2003, when the damage caps were enacted — has held, with an even sharper jump of 30 percent in the last fiscal year, compared with the year before. Ralph Blumenthal, "More Doctors in Texas After Malpractice Caps," The New York Times, October 5, 2007.

Canadian Malpractice Insurance Takes Profit Out Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
Click Here

The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

 

 


President Obama's End Run on the Separation of Powers:  Attempts to Spend Billions Not Appropriated by the Congress
The Administration will do anything to rescue its flailing Affordable Care (Obamacare) Act, and nothing so meager as the law will interfere. This damage to the separation of powers, not a health-care bill, will be President Obama’s abiding legacy ---
http://www.wsj.com/articles/an-illegal-bailout-for-obamacare-1475276262?mod=djemMER

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm 


ObamaCare’s Meltdown Has Arrived ---
http://www.wsj.com/articles/obamacares-meltdown-has-arrived-1475709560?mod=djemMER

Tennessee is ground zero for ObamaCare’s nationwide implosion. Late last month the state insurance commissioner, Julie Mix McPeak, approved premium increases of up to 62% in a bid to save the exchange set up under the Affordable Care Act. “I would characterize the exchange market in Tennessee as very near collapse,” she said.

Then last week BlueCross BlueShield of Tennessee announced it would leave three of the state’s largest exchange markets—Nashville, Memphis and Knoxville. “We have experienced losses approaching $500 million over the course of three years on ACA plans,” the company said, “which is unsustainable.” As a result, more than 100,000 Tennesseans will be forced to seek out new coverage for 2017.

BlueCross is only the latest insurer to head for the exits. Community Health Alliance, the insurance co-op established under ObamaCare, is winding down due to financial failure, leaving 30,000 people without coverage. UnitedHealthcare said in April it is departing Tennessee’s exchange after significant losses. That’s another 41,000 people needing new plans.

All told, more than 60% of our state’s ObamaCare consumers will lose their coverage heading into 2017. When they go in search of a replacement plan, they will confront two unfortunate realities: a dearth of options and skyrocketing costs.

Seventy-three out of Tennessee’s 95 counties will have only one insurer on the exchange, meaning no meaningful competition whatsoever. In regions where BlueCross BlueShield is pulling out, there will be two remaining major carriers, Cigna CI -0.80 % and Humana. HUM 0.33 % The only large metro area with more options will be Chattanooga.

Then there are the premiums. State regulators have already approved the highest annual rise in the nation, a weighted average of nearly 56%, according to data at ACASignups.net. The rate increases authorized in late August include an average of 62% for BlueCross BlueShield, 46% for Cigna and 44% for Humana. The latter two companies could ask to revise their rates upward depending on how many former BlueCross consumers they pick up.

The bottom line is that Tennesseans on ObamaCare must choose from fewer, and increasingly unaffordable, options. Some exchange buyers, those covered by subsidies, will bear only part of this additional cost. For the roughly 30,000 Tennesseans who are ineligible for subsidies, the higher price will come completely out of their own pockets. Not to mention that all ObamaCare consumers face rising deductibles, which aren’t covered by subsidies and can range up to $6,850 for the most “affordable” family plans.

It’s easy to imagine Commissioner McPeak’s fear of an outright exchange collapse coming true in the near future. The more unaffordable plans become, the angrier consumers will get. BlueCross BlueShield’s $500 million losses won’t disappear when the company leaves the market. Instead, the red ink will flow toward the remaining insurers as they pick up those customers. Cigna and Humana have not publicly said whether their exchange plans have turned a profit.

Naturally, this chain of events has Tennessee lawmakers clamoring for change. One of the loudest demands—coming from Democrats like Nashville’s U.S. Rep. Jim Cooper—is that the state double down on ObamaCare by expanding Medicaid. But this is a cure worse than the disease, since it would force many Tennesseans into a second-class health-care system while jeopardizing state finances for years to come.

More important, ObamaCare’s unraveling shows the danger of a one-size-fits-all federal program. What’s happening in Tennessee is only a nationwide harbinger. Every single neighboring state will have less competition on its ObamaCare exchanges next year. The entire state of Alabama will have only one insurer. Almost all are facing double-digit premium increases: in Mississippi a weighted average of 16%; in Kentucky 25%; in Georgia 33%.

 Continued in article

 


From the CFO Journal's Morning Ledger on September 29, 2016

Why the $600 EpiPen costs $69 in Britain
The EpiPen allergy shot costs less than its leather case in Britain, Bloomberg reports. The price of an EpiPen two-pack has surged to more than $600 in the U.S., sparking a political outcry. While the manufacturer, Mylan NV, says it takes home about $274, in the U.K. a similar pair of injectors costs the state-funded National Health Service $69. The numbers highlight the stark differences in the way drugs are priced in the U.S. and Britain, where the government negotiates with pharmaceutical companies to limit costs.

Jensen Comment
Such pricing would never work worldwide because somebody has to pay for Mylan's corporate jets and conferences in Ritz hotels around the world. "Cost Plus" pricing all depends upon what outlays are included in what you call "cost." Accountants are notoriously creative when it comes to "measuring" cost.

From The Wall Street Journal on September 27, 2016
"Mylan Clarifies EpiPen's Profit"

. . .

Testifying before a congressional committee last week, CEO Heather Bresch said Mylan's profit was $100 for a two-pack of injectors, despite a $608 price in the USA (versus $69 in the U.K.)

Continued in article

Jensen Comment
As usual USA prices include all the allocations of corporate jets, conferences in luxury hotels, factory depreciation, equipment depreciation, R&D, etc. Screwing USA customers and third parties (think Aetna, Blue Cross, Medicare, and Medicaid) is the name of the game in the USA.


Healthcare Kickbacks
From the CFO Journal's Morning Ledger on October 4, 2016

Tenet agrees to kickbacks fines
Tenet Healthcare Corp. said it would pay states and the federal government $514 million to settle allegations that its hospitals in Georgia and South Carolina paid kickbacks for obstetric referrals of low-income patients. Under the settlement, which must be approved by a court, two Tenet subsidiaries will plead guilty to one count of conspiracy to violate federal kickback laws, the company said. The agreement settles a criminal investigation and civil litigation.


 


 

September 30, 2016

From the CFO Journal's Morning Ledger on September 15, 2016

Health-care costs no joke
The average cost of health coverage offered by employers pushed above $18,000 for a family plan this year, though the growth was slowed by the accelerating shift into high-deductible plans, according to a major survey. Annual premium cost rose 3% to $18,142 for an employer family plan in 2016, according to the annual poll of employers performed by the nonprofit Kaiser Family Foundation along with the Health Research & Educational Trust

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm 


GAO Report on Obamacare Fraud ---
http://www.zerohedge.com/news/2016-09-13/

Our undercover testing for the 2016 coverage year found that the eligibility determination and enrollment processes of the federal and state marketplaces we reviewed remain vulnerable to fraud, as we previously reported for the 2014 and 2015 coverage years. For each of our 15 fictitious applications, the marketplaces approved coverage, including for 6 fictitious applicants who had previously obtained subsidized coverage but did not file the required federal income-tax returns. Although IRS provides information to marketplaces on whether health-care applicants have filed required returns, the federal Marketplace and our selected state marketplace allowed applicants to instead attest that they had filed returns, saying the IRS information was not sufficiently current. The marketplaces we reviewed also relaxed documentation standards or extended deadlines for filing required documentation. After initial approval, all but one of our fictitious enrollees maintained subsidized coverage, even though we sent fictitious documents, or no documents, to resolve application inconsistencies.

 

For each of our 15 fictitious applications, the federal or state-based marketplaces approved coverage at time of application—specifically, 14 applications for qualified health plans, and 1 application for Medicaid.  Each of the 14 applications for qualified health plans was also approved for APTC subsidies. These subsidies totaled about $5,000 on a monthly basis, or about $60,000 annually. These 14 qualified-health-plan applications also each obtained CSR subsidies, putting the applicants in a position to further benefit if they used medical services.

 


Obamacare:  More and more limited access to doctors and hospitals
From the CFO Journal's Morning Ledger on September 1, 2016

Why put off until January what you can do today? Under intense pressure to curb costs that have led to losses on the Affordable Care Act exchangesinsurers are accelerating their move toward plans that offer limited choices of doctors and hospitals. A new McKinsey & Co. analysis of regulatory filings for 18 states and the District of Columbia found that 75% of the offerings on their exchanges in 2017 will likely be health-maintenance organizations or a similar plan design known as an exclusive provider organization, or EPO. Both typically require consumers to use an often-narrow network of health-care providers – in some cases, just one large hospital system and its affiliated facilities and doctors.

Only a quarter of the exchange plans next year would still be broader designs such as preferred-provider organizations, or PPOs, which generally offer larger selections of doctors and hospitals and include out-of-network coverage, the McKinsey analysis found. Across the states McKinsey examined, about 15% of exchange-eligible consumers are expected to have no PPOs to choose from. A spokesman for the Department of Health and Human Services said that many surveys have shown that exchange enrollees are satisfied with the array of health-care providers in their plans, and insurers are adjusting their offerings based on consumer demand. Offering a smaller selection of health-care providers holds down costs, in part because hospitals and specialists with the highest reimbursement rates can be cut out.

Jensen Comment
One of the big selling points for Obamacare legislation was that Obamacare would ease the long-lines at emergency rooms.

What is happening now is that those lines are getting longer for access to quality MDs ---
https://www.heartland.org/publications-resources/publications/research--commentary-is-the-affordable-care-act-helping-emergency-rooms


From the CFO Journal's Morning Ledger on August 17, 2016

Health care a sticky wicket
Many companies are cutting jobs in response to rising health-care costs spurred by the Affordable Care Act, according to a new survey by the Federal Reserve Bank of New York. Roughly one-fifth of service sector and manufacturing company executives said they are reducing the number of workers in response to provisions in the health-care law, Vipal Monga reports. The results add to a bevy of bad news related to the Obama administration’s signature health-care law.


The government just announced some big changes to try to fix Obamacare ---
http://www.businessinsider.com/obamacare-changes-cms-insurance-markets-2016-8

The government is offering some ideas to try to fix the Affordable Care Act, the healthcare law known as Obamacare, amid a series of missteps that have befallen President Barack Obama's signature legislative achievement.

With Obamacare having being dogged by negative news over the past few weeks — as major insurers have pulled out of some public exchanges and regulators have said the exchanges are "near collapse" the US Centers for Medicare and Medicaid Services, or CMS, proposed a series of changes on Monday to try to correct some of the exchange issues.

CMS, the division of the US Department of Health and Human Services that oversees the exchanges, proposed tweaks that would make it less risky for insurers in the marketplace to take on sick patients.

Two of the biggest problems for the exchanges have been a lack of young people, who help offset higher-cost patients, signing up for insurance and generally sicker-than-expected people getting coverage through the exchanges, leading to huge losses for some insurers.

A few of the 14 total proposals include:

  1. Using some of the fees from the federally funded marketplace for outreach to get more young people to sign up.
  2. Strengthening rules for signing up for insurance outside the open-enrollment period to ensure that people are not waiting until they are sick to get coverage.
  3. Take prescription-drug use into account when evaluating the risk profile of potential patients. Previously, this had not been taken into account, and insurers argued that it prevented them from getting a full picture of possible patients' health status.
  4. Creating more flexibility for insurers in their bronze plan offerings to reduce cost burdens.

Kevin Counihan, the insurance marketplace CEO at the CMS, said the proposed changes would fix numerous issues with the exchanges.

"These proposed actions and others we have taken over the last six months would help to: support issuers with high-cost enrollees, while updating risk adjustment; strengthen the risk pool; promote additional enrollment; and support issuers in entering the Marketplace or growing their Marketplace business," Counihan wrote in a post summarizing the proposals.

 Continued in article


50% of health and social-care funding is spent on 4% of people . . . About 25% of all hospital inpatient spending during a person’s lifetime occurs in the final three months.
"The (British) National Health Care Service is a Mess," The Economist, September 10, 2016, pp. 48-49 ---
http://www.economist.com/news/britain/21706563-nhs-mess-reformers-believe-new-models-health-care-many-pioneered

. . .

Like health-care systems around the world, the National Health Service (NHS) is struggling to provide good care at low cost for patients such as Mrs Evans (not her real name). Its business model has not kept up with the changing burden of disease. For as more people enter and live longer in their dotage, demand increases for two costly types of care. The first is looking after the dying. About 25% of all hospital inpatient spending during a person’s lifetime occurs in the final three months. The second is caring for those with more than one chronic condition. About 70% of NHS spending goes on long-term illnesses. More than half of over-70s have at least two and a quarter have at least three. In south Somerset 50% of health and social-care funding is spent on 4% of people.

. . .

If one fallacy about the NHS is that it is the envy of the world, as its devotees claim, another is that it is a single organisation. In fact it is a series of interlocking systems. Public health, hospitals, general practitioners (or GPs, the family doctors who provide basic care outside hospitals) and mental-health services all have separate funding and incentives. Social care, which includes old-folks’ homes and the like, is run by local councils, not the NHS

. . .

So the NHS must do more with what it already spends. A sign of inefficiency is the 6,000 patients in English hospitals who are ready to go home but not yet discharged, up from 4,000 in 2013. They cost the service hundreds of millions of pounds per year and obstruct others from treatment. The bed-blockers themselves are harmed, too. Elderly patients lose up to 5% of muscle strength for every day they are laid up in hospital. Some delays are the result of council cuts: about 400,000 fewer old people receive social care than in 2010, meaning that hospitals are sometimes used as expensive alternatives to care homes. But most are due to how hospitals are run.

. . .

On average, the framework made GPs some of the highest-paid family doctors in the world when it was introduced in 2004. But since then it has become less generous. GPs’ real-terms income has fallen by one-fifth. This, and poor planning, has led to a shortage of them. England needs 5,000 more in the next five years. The NHS is mulling a deal with Apollo, whereby the Indian health-care firm supplies enough doctors to fill the gap.

. . .

The move from “volume to value”—that is, from paying providers for the procedures they carry out to paying them for the outcomes they achieve—has helped to stem the cost of Medicare, the American health system for pensioners. The expansion of ACOs as part of Obamacare led to reduced mortality rates and savings for providers of about 1-2%. But Dan Northam Jones, a visiting fellow at Harvard, warns that the potential for savings is greater in systems like Medicare, where there is no cap on spending.

And yet ACOs reflect a growing belief that if you want radically to improve health care you have to change how you pay for it. They will not solve all the problems of the NHS, some of which are inherent in its taxpayer-funded model. But perhaps its business model may yet catch up with how illness is changing. The NHS should forget being the envy of the world, and instead learn from it.


More than 40 medical insurance companies are fleeing Obamacare in 2016 ---
http://www.wsj.com/articles/the-aetna-mugging-1471475229?mod=djemMER 

From the CFO Journal's Morning Ledger on August 16, 2016

Aetna bails on many Obamacare exchanges
Aetna Inc. will withdraw from 11 of the 15 states where it currently offers plans through the Affordable Care Act exchanges, becoming the latest of the major national health insurers to pull back sharply from the law’s signature marketplaces after steep financial losses. Aetna’s move will sharpen concerns about competitive options in the exchanges—and it puts at least one county at risk of having no insurers offering exchange plans in 2017.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm 


Feds break up $1 billion (with a "b") Medicare scam in Miami — biggest in U.S. history ---
http://www.miamiherald.com/news/local/community/miami-dade/article91231277.html#storylink=cpy


Massive ObamaCare Rate Hikes (and Fewer Choices) Are A Good Thing, White House Says ---
http://www.investors.com/politics/editorials/massive-obamacare-rate-hikes-are-a-good-thing-white-house-says/
Jensen Comment
That's because those rate hikes will be passed along to taxpayers.


Yeah Right! As if There's Much Competition Without the Health Insurer Mergers

From the CFO Journal's Morning Ledger on July 2, 2016

The Justice Department is suing to put the kibosh on two health-insurance megamergers, in what will be a high-stakes legal. The DOJ on Thursday filed a pair of lawsuits in a Washington, D.C., federal court challenging Anthem Inc.’s proposed acquisition of Cigna Corp. and Aetna Inc.’s planned combination with Humana Inc., alleging the mergers would harm consumers, employers and health-care providers with an unacceptable reduction in competition.

“If these mergers were to take place, the competition among these insurers that has pushed them to provide lower premiums, higher quality care and better benefits would be eliminated,” Attorney General Loretta Lynch said. The lawsuits counter aggressive efforts by the health insurers to consolidate. The deals would have turned the top five national health insurers into three giant companies, each with revenue of more than $100 billion a year.

 


The Big Medical Insurance Companies are Pushing Out Obamacare's Smaller ACA Plans

From the CFO Journal's Morning Ledger on July 20, 2016

ACA dings UnitedHealth
UnitedHealth Group Inc. on Tuesday posted a strong earnings beat as revenue continued to surge in its pharmacy-services business, and it lifted the low end of its profit guidance for the year. It also raised the low end of its earnings guidance. But amid the positive news, the company included one ongoing dark spot: Affordable Care Act plans, which it will almost completely stop selling next year
. The insurer booked another $200 million in full-year ACA-plan losses in the second quarter, but more than that, costs mounted because enrollees were even sicker than projected, with more chronic conditions than last year.


This makes me wonder why some of the states (Arkansas, Alabama, Kentucky, Tennesee, Maine, and Missouri) have the highest percentages of people declared permanently disabled and on Social Security and Medicare benefits for the rest of their lives? I can possibly understand West Virginia due to black lung and other mining ailments.

Florida, I think, has the worst reputation for fraud in this regard due to a higher concentration of doctors and lawyers who will commit fraud for disability-declaration fees. A close friend's chronically unemployable adult son (40 years old) was denied his bid for SS disability benefits in Kansas. So he went to Florida and found a Cuban refugee doctor and a lawyer who eventually got him declared disabled for spinal cord pain. I have to chuckle to myself when I see him shoveling snow in the driveway of his parents. I don't think he's really permanently disabled.

States with the highest proportions of residents on lifetime Social Security Disability Benefits and Medicare ---
http://247wallst.com/special-report/2016/07/15/states-with-the-most-americans-on-disability-2/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=JUL152016A&utm_campaign=DailyNewsletter

Jensen Comment
Percentages range from 2.8% in Hawaii to 8.9% in West Virginia.

My wife started receiving SS disability benefits and Medicare when she was approximately 53 years old --- when she went off worker compensation benefits for a spine injury on the job. I can personally vouch for that her disability is genuine. Medicare now has invested way over a million dollars in 12 of her 16 spine surgeries.

I have another relative whose mental illness SS disability payments may be more controversial. Mental illness according to what I read is not necessarily permanently disabling with newer treatments and medications. Personally I think she could go back to work given her personal activities these days. But she cannot go back to work for risk of losing her lifetime SS and Medicare benefits. That's a shame because I think she would be more happy back in her job.

My point is that SS permanent disability and Medicare benefits may be dysfunctional to people who would be happier back on the job.


 

 


 



June 30, 2016

A recently published deposition from a top tax official provides more evidence that the Obama administration not only acted illegally when deciding to pay Obamacare subsidies to insurers—but that they did so knowing full well that the move was not justified . . . The administration’s argument in this case is essentially that even though Congress rejected its request for an appropriation, and even though the health law does not provide them with any clear and discrete appropriate for its cost-sharing subsidies, they can nevertheless cobble together a hazy justification under which it is somehow “appropriate” to do so. The administration’s argument for its actions, in other words, is all but an admission that what it is doing is not legal or justifiable—and that when it comes to Obamacare, it simply doesn’t care.
Peter Suderman
https://reason.com/blog/2016/06/01/the-irs-warned-the-obama-administration 


Insurers have begun to propose big premium increases for Obamacare coverage next year under the 2010 health law, as some struggle to make money in a market where their costs have soared.
Louise Radnofsky and Anna Wilde Mathews
http://www.wsj.com/articles/health-insurers-struggle-to-offset-new-costs-1462404298


Uh Oh: Double-Digit Premium Hikes Projected For Low-Cost Obamacare Plans Next Year ---
http://townhall.com/tipsheet/mattvespa/2016/06/15/uh-oh-doubledigit-premium-hike-projected-for-lowcost-obamacare-plans-next-year-n2179069?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=

Jensen Comment
This begs the question of the need for such high premium increases for low-cost Obamacare plans that insured people don't use much due to the extremely high deductibles if they go to a doctor.

 
T
he deductibles on low-cost Obamacare plans are so huge (40% to 60%) that insured people put off getting medical care until absolutely necessary --- thereby greatly reducing the number of claims to be processed and paid.

"ObamaCare’s Wallet-Buster Health Plans:  While insurance premiums and deductibles soar, Hillary Clinton takes credit for the president’s mess," by Nathan Nascimento, The Wall Street Journal, January 31, 2016 ---
http://www.wsj.com/articles/obamacares-wallet-buster-health-plans-1454282540?mod=djemMER

. . .

Freedom Partners Chamber of Commerce, where I work, has analyzed all publicly available information for health-insurance premiums from healthcare.gov and state insurance departments. It then calculated the weighted averages for all health-insurance plans available on the Affordable Care Act’s exchanges. The weighted average gives a more accurate view of overall premium increases, because it takes into account each insurance plan’s market share.

The findings: Nationally, premiums for individual health plans increased on average between 2015 and 2016 by 14.9%.

Consumers in every state except Mississippi faced increased premiums, and in no fewer than 29 states the average increases were in the double digits. For a third of states, the average premiums rose 20% or more.

Health-insurance premiums rose by more than 30% in Alaska and Hawaii; Oregon’s average rate increase was 23.2%. California’s premiums on average rose by a modest 1.5%.

Consumers in Kansas, Missouri, Iowa and Illinois faced increases exceeding 20% on average. The East Coast north of Maryland was the least hard hit (New York’s average premium increase was 6%), although Pennsylvania and New Jersey consumers faced premium increases of 14.6% and 13.1% respectively.

In 11 of the 16 states defined as southern by the U.S. Census Bureau, premiums rose by more than 10%. Premiums rose on average by 13.9%, and by more than 20% in Maryland, Delaware, West Virginia, Alabama, North Carolina and Oklahoma. In Texas, where data was only available for 98.5% of individual-market health-care plans, premiums rose by 14.1%.

Average premiums in Tennessee rose 35.2%—mostly because of the state’s largest individual-market insurer, BlueCross BlueShield of Tennessee, which sold 82% of all exchange plans in 2015. After losing $141 million on these plans last year, the company had little choice but to request average premium increases of 36.3%. The state insurance commission approved this request, lest the company leave the exchange altogether and leave 231,000 Tennesseans in the lurch.

Minnesota holds the dubious honor of having the highest year-over-year premium increases, 47.7%. Why? Because that state’s BlueCross BlueShield, the largest insurer, with over 90% of the market, lost tens of millions of dollars during the Affordable Care Act’s first two years. The company requested an average 49% rate increase, which was approved by state regulators.

Remember: These premium increases are only one piece of the health-care cost puzzle. Deductibles are also rising under the Affordable Care Act. Silver plans—the most popular on the exchanges—had average deductibles of nearly $3,000 in 2016, according to the Robert Wood Johnson Foundation. This represents an 8% increase over last year.

Millions of Americans are coming to believe that the Affordable Care Act’s costs far outweigh its benefits. In 2014, the latest year for which data is available, roughly 7.5 million Americans paid the IRS penalty rather than purchase the law’s insurance. This penalty is rising to an average $969 per household in 2016 in an attempt to force people onto the exchanges. Yet even a $1,000 fine is cheap compared to thousands—and sometimes tens of thousands—of dollars for an Affordable Care Act-compliant plan.

Nevertheless, Mrs. Clinton refuses to acknowledge the law’s widespread problems. At the Dec. 19 Democratic presidential debate, she responded to a question about rising premiums and deductibles by calling them “glitches,” and a month later she was claiming credit for the health-care law altogether. But if ObamaCare is HillaryCare by a different name, shouldn’t voters hold her responsible?

 


"Is It Time for Universities to Get Out of the Hospital Business?" by Paul Voosen, Chronicle of Higher Education, May 31, 2016 ---
http://chronicle.com/article/Is-It-Time-for-Universities-to/236643?cid=wb&utm_source=wb&utm_medium=en&elqTrackId=ea499ecc25004518ae166fdfd04ffd07&elq=3a968fb192df42cb8023e4ce1e55fbff&elqaid=9255&elqat=1&elqCampaignId=3235

A couple of years ago, the leaders of Vanderbilt University faced a difficult decision: Their academic medical center was successful, a hub of research and life-saving treatment. But the health industry was in turmoil, and the changes presented new risks to the university, whose vast medical operation approached four-fifths of Vanderbilt’s entire budget. And that number was projected to grow.

The Affordable Care Act, passed in 2010, was accelerating changes already underway. Research financing was tight. Mergers were rampant among hospitals, insurers, and drug companies. The vast sums of clinical income that prestigious university hospitals had used to buttress themselves — and often the university’s other missions — seemed likely to dry up. Everything was up for reinvention. Did Vanderbilt open itself up to such risks?

No, the leaders decided. And so last month Vanderbilt University Medical Center completed its separation from its parent. The hospital is still located on the campus and is tightly affiliated with the medical school, but now the university’s trustees will have to spend less time studying the intricacies of, say, disproportionate-share hospital payments, or lobbying the state legislature to expand Medicaid access.

Continued in article

Jensen Comment
One of the problems is third party on pricing, especially Obamacare, Medicaid and Medicare pricing limits that are driving patients under these plans to be losing propositions. In New Hampshire nearly half the hospitals turn away patients on Obamacare insurance plans except in dire emergencies. University hospitals for a variety of reasons usually must accept those patients and eat the losses.

There are, of course, some ways university hospitals try to limit these losses. For example the Dartmouth Hitchcock Medical Center will only accept patients referred by doctors, usually family physicians. You cannot get an appointment for brain surgery or dermatology treatments at the DHMC without a referral except in dire emergencies.

Before Obamacare there was Romneycare (Mittcare) in Massachusetts. Because of price controls some hospitals in Massachusetts dropped losers. The biggest loser in most hospitals is obstetrics due to the high cost of malpractice insurance for obstetrics. Parents tend to sue for defective babies even when the hospital did nothing wrong. Another loser may be emergency room services. Some Boston-area hospitals that once had emergency services dropped their emergency rooms where patients tend to go when they have no insurance or price-controlled insurance plans like Medicaid and Medicare.

My long-time ophthalmologist with offices in our regional hospital now turns me away because I have Medicare insurance.

University hospitals face larger hurdles when dropping medical services having financial losses. Apart from the public relations disaster arising from dropped services there are other problems such as need to provide those services for educational purposes. For example, most obstetrics students in a university's medical school need somewhere to learn obstetrics first hand.

Time and time again history shows that price controls have adverse effects on supply. Either quality deteriorates (such as having medical services from a provider less than a licensed physician) or the service disappears entirely (such as not serving Obamacare, Medicaid, or Medicare patients). Drug manufacturers will sometimes sell a drug at below variable cost if the loss can be absorbed by other products the company sells. However, if the losses become huge the company might stop making an unprofitable medication. This is a growing problem with certain specialized cancer medications that are extremely expensive to manufacture and are also extremely unprofitable at prices paid by Medicaid and Medicare.

And thus university hospitals that were once cash cows for medical schools have become cash hemorrhages.

Bob Jensen's threads on healthcare ---
http://faculty.trinity.edu/rjensen/health.htm


Here’s What You’ll Pay for Health Care In Retirement (Social Security benefits won't even cover your health care costs if you add supplemental Medicare insurance (that I recommend by the way)) ---
http://time.com/money/4340299/what-youll-pay-healthcare-in-retirement/

Forget about retiring on Social Security. Health care costs alone will devour the entire lifetime benefits—and then some—of a 45-year-old couple when they retire, according to projections released Wednesday by HealthView Services, a Danvers, Mass.- based company that provides retirement health care cost data and tools to financial advisers.

Social Security payments will stretch farther for current retirees, but the numbers are still stark: In 2016, the average 66-year-old couple will require 57% of their lifetime, pre-tax Social Security benefits to pay for health care costs, according to HealthView Services. The average 45-year-old couple, by contrast, will need 116% of lifetime Social Security payments to cover health care costs.

Total retirement health care expenses for that 45-year-old couple planning to retire at age 65 will come to $592,275 in today’s dollars and $1.6 million in future dollars, HealthView Services projects. The projection assumes the male member of the couple will live to 87 and the female to 89.

The total tab includes premiums for Medicare Part B, which covers doctors’ visits, Part D, which covers drugs, and Part F, which is the most comprehensive supplemental insurance. It also includes expenses not covered by Medicare, such as dental work and hearing aids. Notably, it does not include long-term care costs. Medicare does not pay for long-term stays in nursing homes, or for assisted living facilities.

Of course, these averages won’t reflect everyone’s experience. People’s individual health status will influence how much they pay. What’s more, not everyone will choose to buy a Part F Medigap policy. It’s a popular but expensive choice, with monthly premiums that vary widely by region but average around $200.

While expensive, Part F plans eliminate a lot of the uncertainty of medical expenses. Premiums are predictable and cover most of beneficiaries’ out-of-pocket expenses. Without a supplemental plan, beneficiaries could be on the hook for even more if they have a big medical episode, such as a stroke, or a serious diagnosis like cancer.

On Plan F, “if you never have a problem and drop dead at 110, you’ll have wasted a lot of money,” said Ron Mastrogiovanni, founder and CEO of HealthView Services. A more likely scenario, he said, is that, “We’re not going to stay healthy throughout retirement.”

Continued in article


Sorry, Bernie fans. His health care plan is short $17,000,000,000,000. The studies, published jointly by the nonpartisan Tax Policy Center and the Urban Institute in Washington, concludes that Sanders's plans are short a total of more than $18 trillion over a decade ---
Max Ehrenfreund. Washington Post ---
https://www.washingtonpost.com/news/wonk/wp/2016/05/09/the-17-trillion-problem-with-bernie-sanderss-health-care-plan-2/

 

 

 


The doctor shortage in the US will soon hit crisis levels ---
http://www.businessinsider.com/us-doctor-shortage-getting-worse-2016-4

States Where Doctors Earn the Most (and Least) ---
http://247wallst.com/special-report/2016/03/30/doctor-pay-by-state/#ixzz44bLJI7RD
Or try ---
http://247wallst.com/special-report/2016/03/30/doctor-pay-by-state/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=APR012016A&utm_campaign=DailyNewsletter

01 - Alaska
02 - South Dakota
03 - Iowa
04 - Nebraska
05 - Iowa

. . .

46 - Maine
47 - Maryland
48 - Michigan
49 - Delaware
50 - West Virginia

Jensen Comment
I think this ranking is probably more misleading than helpful. Physicians, especially the most successful physicians, typically are in private business where they have their own billings and staff. They may own their own office buildings or rent office space from others such as medical clinics. The point here is that they are on not on salary.

ER physicians are often in partnerships where hospitals contract with the partnerships to cover the ER services. Billings may vary with demand for those ER services. Partners in turn share the profits.

Like other salary rankings such as ranking of professor compensation by university, the rankings are meaningless unless other things are factored in such as the cost of housing. For example, we can hardly compare the salaries at Stanford University (read that Silicon Valley) with the salaries at Dartmouth or the University of New Hampshire where housing is expensive within the State of New Hampshire but hardly comparable with Silicon Valley housing costs. Also other things must be factored in such as housing subsidies and fringe benefits.

Having said this it did surprise me that states not having large cities (like the top five states ranked above) came out higher than states having large cities like California, New York, Texas, and Ohio.

 

 



March 31, 2016

Medicare Fraud is Rampant ---
 http://townhall.com/columnists/stevesherman/2016/02/05/medicare-fraud-is-rampant-n2115375?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=


Obamacare Fraud is Rampant
Obama Administration Breaks Law to Enrich Health Insurers ---
by Betsy McCaughey
Creaters, February 24. 2016
https://www.creators.com/read/betsy-mccaughey/02/16/obama-administration-breaks-law-to-enrich-health-insurers

The Obama administration will tell any lie and break any law to prevent the president's signature health program from collapsing. Insurance companies, such as UnitedHealthcare and Aetna, are losing billions trying to sell Obamacare plans, and the risk is they'll drop out at the end of 2016. No insurance companies means no Obamacare. In 2014, the White House tried to avert that disaster by promising insurers a bailout funded with taxpayer dollars, but public outrage and quick action by Senator Marco Rubio put a stop to it. Now the administration is at it again.

Desperate to keep insurers on board, the administration scrambled to find another source of money. Unfortunately, a big part of that money pot belongs to the public. Disregarding that fact, the administration announced on Feb. 12 that the money will be handed out to insurers — a whopping $7.7 billion this year alone. That huge handout to the insurance industry violates the law.

This is money you and everyone else who already has insurance is forced to pay, called a reinsurance fee. You pay the fee whether you buy your own plan or get covered at work, even if your employer self-insures. You may be clueless about it, but the fee is buried in your premium or taken out of your compensation.

The language of section 1341 of the Affordable Care Act, which details what this money can be used for, is clear as a bell. Some of these annual fees — adding up to billions a year — belong to the public, not the insurance companies. The law states a fixed share "shall be deposited into the general fund of the Treasury of the United States and may not be used" to offset insurance companies' losses. But the administration gave all of it to the insurance companies last year, and got away with that heist. So they're trying it again.

Anyone in the corporate world who misused funds that way would be headed to prison. This rogue administration is going to any length — including running afoul of the law — to keep insurers hooked into Obamacare.

In the words of University of Houston law professor Seth Chandler, who tried to call attention to the crime several months ago, this is an illegal "diversion of funds to enrich insurers." Last year alone, Cross Blue Shield of Texas got $549 million of these reinsurance funds, while Anthem Blue Cross of California got $401 million.

How did this fly under the radar last year? Because no one — especially members of Congress — has read the law. Insurance companies weren't about to object to getting more money than the law allows. Plus, the announcements of these payments were buried in mind-numbing federal agency releases. The latest such disclosure came late on the Friday of a holiday weekend. The business press reported the announcement but didn't go back to read section 1341 of the law and find that the payouts are illegal.

Last week, a few health scholars took notice, including Doug Badger, senior fellow at the Galen Institute. He says the illegal maneuver is "designed to keep a sinking ship from hitting rock bottom."

Congress should step in immediately and exercise its oversight duties to stop this looting. The next payments to insurers are promised for March. No time to waste.

Obamacare was sold on lies: You can keep your health plan if you like it. And you can keep your doctor if you like your doctor. Then, once it was passed, the administration resorted to a long string of lawless executive actions to keep an unworkable scheme going, despite the damage being done to employers, doctors and consumers.

The administration's diversion of public funds to its insurance company cronies is just the latest defiance of the law. The president has illegally delayed the employer mandate repeatedly. He's handing out free Obamacare plans to illegal immigrants. Statutory deadlines are routinely ignored, and funds are slyly shifted from one program to another — the law be damned.


"How to Fix the Scandal of Medicaid and the Poor," by Scott W. Atlas, The Wall Street Journal, March 15, 2016 ---
http://www.wsj.com/articles/how-to-fix-the-scandal-of-medicaid-and-the-poor-1458080771?mod=djemMER

Many doctors won’t take the insurance, and the care patients do receive is inferior. Here’s a solution.

The two principal expenditures of the Affordable Care Act so far include $850 billion for insurance subsidies and a similar outlay for a massive Medicaid expansion. The truth is that Medicaid—a program costing $500 billion a year that rises to $890 billion in 2024—funnels low-income families into substandard coverage. Instead of providing a pathway to excellent health care for poor Americans, ObamaCare’s Medicaid expansion doubles down on their second-class health-care status.

Already 55% of doctors in major metropolitan areas refuse new Medicaid patients, according to the 2014 Merritt Hawkins annual survey. Even of those providers signed up with Medicaid, 56% of primary-care doctors and 43% of specialists are not available to new patients. Moreover, numerous studies have found that the quality of medical care is inferior under Medicaid, compared with private insurance. Lower quality means more in-hospital deaths, more complications from surgery, shorter survival after treatment, and longer hospital stays than similar patients with private insurance.

The two principal expenditures of the Affordable Care Act so far include $850 billion for insurance subsidies and a similar outlay for a massive Medicaid expansion. The truth is that Medicaid—a program costing $500 billion a year that rises to $890 billion in 2024—funnels low-income families into substandard coverage. Instead of providing a pathway to excellent health care for poor Americans, ObamaCare’s Medicaid expansion doubles down on their second-class health-care status.

Already 55% of doctors in major metropolitan areas refuse new Medicaid patients, according to the 2014 Merritt Hawkins annual survey. Even of those providers signed up with Medicaid, 56% of primary-care doctors and 43% of specialists are not available to new patients. Moreover, numerous studies have found that the quality of medical care is inferior under Medicaid, compared with private insurance. Lower quality means more in-hospital deaths, more complications from surgery, shorter survival after treatment, and longer hospital stays than similar patients with private insurance.
.
Legislation signed by President Bill Clinton in 1996 transformed the federal welfare program into a pathway to self-sufficiency. In the same way, Medicaid should be redesigned as a bridge toward affordable private insurance. First, the new Medicaid should include a private-insurance option with catastrophic coverage but few coverage mandates for all enrollees.

Second, new Medicaid should establish and put initial funds into health savings accounts using part of the current federal dollars already going into Medicaid. This will empower beneficiaries and give them incentives to follow healthy lifestyles to protect those new assets. With these reforms, doctors and hospitals would receive payments from the same insurance as from non-Medicaid patients. Because health providers receive the same payments whether they treat Medicaid or non-Medicaid patients, the limited access and substandard treatment options under Medicaid would be eliminated.

To ensure availability of the same coverage to both Medicaid and non-Medicaid beneficiaries, federal funding would go only to eligible people in states that offer these same coverage choices to the entire state population. Federal money will be contingent on states meeting thresholds for the number of Medicaid enrollees moved into private coverage. Federal funds would go directly into beneficiary HSAs or to premium payments, rather than into state bureaucracies. States should want this new program because it will reduce the administrative costs of running a separate insurance program and, most important, provide access to quality health care for their residents.

Ultimately, traditional Medicaid would be eliminated as new enrollees move into private coverage. These reforms would change the purpose and culture of Medicaid agency offices from running government-administered plans to establishing HSAs and finding private insurance for beneficiaries.

Why focus on lower-cost, high-deductible health insurance coupled with HSAs? Published studies have shown that pairing HSAs with high-deductible coverage reduces health-care costs. Patient spending averages 15% lower in high-deductible plans, with even more savings when paired with HSAs—without any consequent increases in emergency visits or hospitalizations and without a harmful impact on low-income families. Secondarily, wellness programs that HSA holders more commonly use improve chronic illnesses, reduce health claims and save money.

Continued in article


Inspector General's report warns that billions in federal loans might not be repaid.
"Obamacare’s Government-Backed Nonprofit Health Plans Are a Disaster—and Could Cost Taxpayers Billions," by Peter Suderman, Reason Magazine, July 31, 2015 ---
http://reason.com/blog/2015/07/31/obamacares-government-backed-nonprofit-h 

The federal government shelled out $2.4 billion in loans to a series of non-profit health plans under Obamacare, but now they’re struggling to stay alive.

The plans, dubbed CO-OPs (Consumer Operated and Oriented Plans) were intended to increase competition in the insurance market and serve as a check on private insurers by providing an alternative that wasn’t focused on profit. They were a compromise measure intended to satisfy liberals who wanted the law to set up a fully government-run health insurance option. 

As it turns out, Obamacare’s CO-OPs weren’t focused on profit—or, it seems, financial viability of any kind.

The CO-OPs have struggled to meet enrollment targets, with 13 of the 23 non-profit plans showing “considerably lower” enrollment than projected, according to a report by the Health and Human Services Inspector General. Finances were shaky all around with 21 of 23 plans incurring losses through the end of 2014, the report says.

This isn’t just a problem for the CO-OPs. It’s a problem for the taxpayers. The $2.4 billion in loans given to these startup plans were supposed to be repaid to the government with interest. Loans given to start the plans were supposed to be repaid in five years; “solvency” loans were supposed to be repaid in 15 years.

Continued in article

 


"ObamaCare’s Wallet-Buster Health Plans:  While insurance premiums and deductibles soar, Hillary Clinton takes credit for the president’s mess," by Nathan Nascimento, The Wall Street Journal, January 31, 2016 ---
http://www.wsj.com/articles/obamacares-wallet-buster-health-plans-1454282540?mod=djemMER

. . .

Freedom Partners Chamber of Commerce, where I work, has analyzed all publicly available information for health-insurance premiums from healthcare.gov and state insurance departments. It then calculated the weighted averages for all health-insurance plans available on the Affordable Care Act’s exchanges. The weighted average gives a more accurate view of overall premium increases, because it takes into account each insurance plan’s market share.

The findings: Nationally, premiums for individual health plans increased on average between 2015 and 2016 by 14.9%.

Consumers in every state except Mississippi faced increased premiums, and in no fewer than 29 states the average increases were in the double digits. For a third of states, the average premiums rose 20% or more.

Health-insurance premiums rose by more than 30% in Alaska and Hawaii; Oregon’s average rate increase was 23.2%. California’s premiums on average rose by a modest 1.5%.

Consumers in Kansas, Missouri, Iowa and Illinois faced increases exceeding 20% on average. The East Coast north of Maryland was the least hard hit (New York’s average premium increase was 6%), although Pennsylvania and New Jersey consumers faced premium increases of 14.6% and 13.1% respectively.

In 11 of the 16 states defined as southern by the U.S. Census Bureau, premiums rose by more than 10%. Premiums rose on average by 13.9%, and by more than 20% in Maryland, Delaware, West Virginia, Alabama, North Carolina and Oklahoma. In Texas, where data was only available for 98.5% of individual-market health-care plans, premiums rose by 14.1%.

Average premiums in Tennessee rose 35.2%—mostly because of the state’s largest individual-market insurer, BlueCross BlueShield of Tennessee, which sold 82% of all exchange plans in 2015. After losing $141 million on these plans last year, the company had little choice but to request average premium increases of 36.3%. The state insurance commission approved this request, lest the company leave the exchange altogether and leave 231,000 Tennesseans in the lurch.

Minnesota holds the dubious honor of having the highest year-over-year premium increases, 47.7%. Why? Because that state’s BlueCross BlueShield, the largest insurer, with over 90% of the market, lost tens of millions of dollars during the Affordable Care Act’s first two years. The company requested an average 49% rate increase, which was approved by state regulators.

Remember: These premium increases are only one piece of the health-care cost puzzle. Deductibles are also rising under the Affordable Care Act. Silver plans—the most popular on the exchanges—had average deductibles of nearly $3,000 in 2016, according to the Robert Wood Johnson Foundation. This represents an 8% increase over last year.

Millions of Americans are coming to believe that the Affordable Care Act’s costs far outweigh its benefits. In 2014, the latest year for which data is available, roughly 7.5 million Americans paid the IRS penalty rather than purchase the law’s insurance. This penalty is rising to an average $969 per household in 2016 in an attempt to force people onto the exchanges. Yet even a $1,000 fine is cheap compared to thousands—and sometimes tens of thousands—of dollars for an Affordable Care Act-compliant plan.

Nevertheless, Mrs. Clinton refuses to acknowledge the law’s widespread problems. At the Dec. 19 Democratic presidential debate, she responded to a question about rising premiums and deductibles by calling them “glitches,” and a month later she was claiming credit for the health-care law altogether. But if ObamaCare is HillaryCare by a different name, shouldn’t voters hold her responsible?


"Bernie Sanders' healthcare plan would cost $13.8 trillion over 10 years," by Eric Pianin, The Fiscal Times,  January 20, 2016 ---
http://www.businessinsider.com/bernie-sanders-healthcare-would-cost-138-trillion-over-10-years-2016-1

Jensen Comment
Add to this another $10 trillion for free college education for all and you've got a monumental obligation to be paid by government. But there's really no sweat since the Fed has already proven that printing money is the best way to pay government bills to avoid taxation and debt.


No Free Lunch
"ObamaCare’s $1,200 Pay Cut:  The cost of insuring everybody's 26-year-olds is more than you thought," The Wall Street Journal, January 26, 2016 ---
http://www.wsj.com/articles/obamacares-1-200-pay-cut-1452643649?mod=djemMER

. . .

Among the law’s few popular features, even among Republicans, is the mandate to cover adult children through age 26 on the insurance plans of their parents. This benediction is sold as a gratuity, but somebody must ultimately pay, and new research suggests the hidden costs—in the form of lower take-home pay—are far higher than advertised.

In a working paper, Gopi Shah Goda and Jay Bhattacharya of Stanford and Monica Farid of Harvard exploit the fact that some 37 states had extended dependent-coverage mandates of varying rigor and comprehensiveness before the Affordable Care Act. They explore these differences to estimate the results of the uniform national mandate that was imposed in 2010.

“We find evidence that employees who were most affected by the mandate, namely employees at large firms, saw wage reductions of approximately $1,200 per year,” the researchers observe. As a wave of young adults hit the employer-based insurance rolls, the cost of coverage inevitably climbed and businesses were obliged to dial back cash wages as a share of overall compensation to accommodate the influx. Large businesses were a particular casualty because before ObamaCare they were largely exempt from state-level mandates.

The study also found that the costs of the adult-kid mandate weren’t “only borne by parents of eligible children or parents more generally.” They’re spread over all workers including other young people, the childless and late middle-aged.

No study is definitive, though the authors are careful about their methods and assumptions. The eternal lessons are that no alleged government benefit is free and people should be allowed to make the trade-offs for themselves. Another is that the next President has plenty of running room to improve the American economy, if he cares to make better decisions.


Choosing to Go Without Medical Insurance Under 2016 Obamacare
"Many See I.R.S. Fines as More Affordable Than Insurance," by Abby Goodnough, The New York Times, January 3, 2015 ---
http://www.nytimes.com/2016/01/04/us/many-see-irs-fines-as-more-affordable-than-insurance.html

Clint Murphy let the deadline for getting health insurance by the new year pass without a second thought.

Mr. Murphy, an engineer in Sulphur Springs, Tex., estimates that under the Affordable Care Act, he will face a fine of $1,800 for going uninsured in 2016. But in his view, paying that penalty is worth it if he can avoid buying an insurance policy that costs $2,900 or more. All he has to do is stay healthy.

“I don’t see the logic behind that, and I’m just not going to do it,” said Mr. Murphy, 45, who became uninsured in April after leaving a job with health benefits to pursue contract work. “The fine is still going to be cheaper.”

Two years after the Affordable Care Act began requiring most Americans to have health insurance, 10.5 million who are eligible to buy coverage through the law’s new insurance exchanges were still uninsured this fall, according to the Obama administration.

That number appears to be shrinking: Administration officials said last month that about 2.5 million new customers had bought insurance through HealthCare.gov, the federal exchange serving 38 states, since open enrollment began on Nov. 1. The number of new enrollees is 29 percent higher than last year at this time, suggesting that the threat of a larger penalty may be motivating more people to get covered.

Continued in article

Jensen Comment
Emergency room is free to low income people, and insurance companies now cannot refuse applicants for pre-existing conditions. This means that if expensive medical problems when not covered by insurance arise people can quickly sign up for health insurance to pay future billings after the pre-existing condition is discovered.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm

 



December 31, 2015

Finding and Using Health Statistics --- http://www.nlm.nih.gov/nichsr/usestats/index.htm

Bob Jensen's threads on economic statistics and databases ---
http://faculty.trinity.edu/rjensen/Bookbob1.htm#EconStatistics


"Clinton and Sanders Offer Competing Visions of Health Care," by Sam Frizell, Time Magazine, September 22, 2015 ---
http://time.com/4043242/hillary-clinton-bernie-sanders-health-care/?xid=newsletter-brief

Jensen Comment
Hillary Clinton wants to greatly expand the subsidies for people well above poverty lines whereas Bernie Sanders wants a more efficient governmental single-payer system like that of Canada and European health care plans that are almost entirely taxpayer funded.  I prefer the Sanders single-payer alternative that cuts out the private sector for the taxpayer-funded basic health plan.

However, I also prefer the German plan that allows the private sector to fund premium insurance that does such things as speed up elective procedures (think new knees and hips) that are typically long-delayed in most single-payer basic insurance plans ---
http://faculty.trinity.edu/rjensen/Health.htm

The German plan is a lot like the USA Medicare plan in that supplements can be purchased from the private sector (I purchase my supplements from Blue Cross Anthem for about $1,200 per month for Erika and me. However, when folks over 64  years of age go on Medicare they must pay a monthly premium above and beyond what taxpayers pay for their Medicare coverage. Medicare, unlike Medicaid, does not have free coverage even for the base plan.

Both the German plan supplements and the Medicare supplements make it possible to use physicians and hospitals that would otherwise not serve patients only covered by the single-payer base plan. One of the problems with Obamacare is that unless the Cadillac tax is paid a great many doctors and hospitals refuse to serve patients only having Obamacare coverage. Nearly half the hospitals in New Hampshire and many of the best doctors will not serve Obamacare patients. Medicaid is especially problematic for hospitals across the USA since the payments for patient care cover less than half of the cost.


Cadillac Tax --- https://en.wikipedia.org/wiki/Cadillac_insurance_plan

From the CFO Journal's Morning Ledger on September 9, 2055

“Cadillac” health-tax fight heats up
http://www.wsj.com/articles/cadillac-health-tax-fight-heats-up-1441755692?mod=djemCFO_h
A looming tax on generous employer health plans could imperil flexible spending accounts, a popular benefit that lets employees set aside tax-free money for certain medical expenses. The tax threshold takes into account not just the value of premiums, but also other benefits offered by employers—including money put in flexible spending accounts.

From the CFO Journal's Morning Ledger on September 2, 2015

Employers across the U.S are rushing to calculate just how hard they will be hit by the forthcoming “Cadillac tax” on generous employee health plans. The Affordable Care Act levy starts in 2018. As CFO Journal’s Maxwell Murphy and Emily Chasan report, both public and private employers will have to pay a tax of 40% on the amount by which the cost of their health-care plans exceed $10,200 for individuals and $27,500 for families.

The Congressional Budget Office predicts a Cadillac tax bill in excess of $3 billion in its first year. But, with health-care costs likely to grow faster than inflation, it expects the burden on employers to rise, doubling to $6 billion in 2019. Such predictions have set finance chiefs to work on reducing employee health-care costs below government-set thresholds. Boston’s tax bill would be around $6 million in 2018, if no changes to its health plans were made. The city of Washington’s total payments could be at or below $10 million through 2021. In San Antonio, the Cadillac tax will cost $71 million between 2018 and 2024 unless the city makes changes.

More than a quarter of U.S. companies are likely to face the Cadillac tax on at least one of their health plans if they don’t make sweeping benefits changes, and 42% will be hit by the tax a decade later, according to a report last week from the Kaiser Family Foundation, a nonprofit health-policy think tank.


From the CPA Newsletter on August 21, 2015

How the Affordable Care Act changed Medicare taxes
http://www.thetaxadviser.com/issues/2015/aug/navigating-murky-medicare-tax-waters-for-small-business-owners.html
The health care law added an additional Medicare tax on wages above a certain threshold for high-income taxpayers and the net investment income tax, which applies to unearned income. This article explains how these new taxes affect high-income individuals and small-business owners. The Tax Adviser (8


From the CFO Journal's Morning Ledger on August 26, 2015

More than a quarter of employers expected to face “Cadillac tax.”
http://blogs.wsj.com/cfo/2015/08/25/more-than-a-quarter-of-employers-expected-to-face-cadillac-tax/?mod=djemCFO_h
One in four companies are likely to be impacted by the “Cadillac tax” on high-cost health plans when it begins in 2018—and that could almost double in 10 years, CFO Journal’s Emily Chasan reports.


From the CFO Journal's Morning Ledger on August 27, 2015

Insurers win big health-rate increases
http://www.wsj.com/articles/insurers-win-big-health-rate-increases-1440628848?mod=djemCFO_h
Several insurance regulators throughout the country have approved big premium increases sought by the largest health plans in their states for the new health-law sign-up season that begins Nov. 1.


"ObamaCare Undercover:   How to fake an application and get an insurance subsidy," The Wall Street Journal, July 31, 2015 ---
http://www.wsj.com/articles/obamacare-undercover-1438386617?tesla=y

. . .

Last year the Senate Finance Committee asked investigators at the Government Accountability Office, or GAO, to test the Affordable Care Act’s internal eligibility and enrollment controls. So they created a dozen fictitious identities and applied for insurance subsidies—and 11 fake claimants got them.

The GAO didn’t know ObamaCare’s verification protocols in advance, so they weren’t trying to exploit some known security hole. Online or over the phone, they simply supplied invalid Social Security numbers, doctored citizenship status or misstated their income on tax documents.

The federal exchanges paid some $2,500 a month or $30,000 per year to each John Doe. When it came time to re-enroll at the end of 2014, the 11 fake applicants were able to extend their plans and, in some cases, even received more generous subsidies without providing additional documentation.

The exchanges are supposed to verify income and identity because the dollar value of subsidies is tied to those data. If people can burn taxpayers for money they don’t qualify for, ObamaCare will be far more expensive than it has already become.

Yet the GAO notes with its dry wit that “we circumvented the initial identity-proofing control,” though the exchanges are “required to seek post-approval documentation in the case of certain application ‘inconsistencies.’” The GAO also reports that the follow-up was often unclear or inaccurate and didn’t turn off the subsidies. The GAO even includes transcripts of their sleuths bluffing the clueless customer service reps.

Continued in article

Jensen Comment
What big government program is not a giant piñata for tens of millions of fraudsters?

Bob Jensen's Fraud Updates ---
http://faculty.trinity.edu/rjensen/FraudUpdates.htm

 

"Obamacare’s Government-Backed Nonprofit Health Plans Are a Disaster—and Could Cost Taxpayers Billions," by Peter Suderman, Reason Magazine, July 31, 2015 ---
http://reason.com/blog/2015/07/31/obamacares-government-backed-nonprofit-h 

The federal government shelled out $2.4 billion in loans to a series of non-profit health plans under Obamacare, but now they’re struggling to stay alive.

The plans, dubbed CO-OPs (Consumer Operated and Oriented Plans) were intended to increase competition in the insurance market and serve as a check on private insurers by providing an alternative that wasn’t focused on profit. They were a compromise measure intended to satisfy liberals who wanted the law to set up a fully government-run health insurance option. 

As it turns out, Obamacare’s CO-OPs weren’t focused on profit—or, it seems, financial viability of any kind.

The CO-OPs have struggled to meet enrollment targets, with 13 of the 23 non-profit plans showing “considerably lower” enrollment than projected, according to a report by the Health and Human Services Inspector General. Finances were shaky all around with 21 of 23 plans incurring losses through the end of 2014, the report says.

This isn’t just a problem for the CO-OPs. It’s a problem for the taxpayers. The $2.4 billion in loans given to these startup plans were supposed to be repaid to the government with interest. Loans given to start the plans were supposed to be repaid in five years; “solvency” loans were supposed to be repaid in 15 years.

Continued in article

'The Unaffordable Care Act:  Premiums are spiking around the country. Obama is in denial," The Wall Street Journal, July 10, 2015 ---
http://www.wsj.com/articles/the-unaffordable-care-act-1436569086?tesla=y

The Affordable Care Act was supposed to make insurance, well, more affordable. But now hard results are starting to emerge: premium surges that often average 10% to 20% and spikes that sometimes run as high as 50% or 60% or more from coast to coast. Welcome to the new abnormal of ObamaCare.

This summer insurers must submit rates to state regulators for approval on the ObamaCare exchanges in 2016—and even liberals are shocked at the double-digit requests, or at least the honest liberals are. Under ObamaCare, year-over-year premium increases above 10% must also be justified to the Health and Human Services Department, and its data base lists about 650 such cases so far.

In a study across 45 states, the research outfit Health Pocket reports that mid-level Exclusive Provider Organization plans are 20% more expensive in 2016 on average. HMOs are 19% more expensive, and for all plan types the average is 14%.

President Obama dropped by Nashville last week to claim Tennessee as a state where “the law has worked better than we expected” and “actually ended up costing less than people expected,” so let’s test the reality of those claims. As a baseline, in 2015 premium increases for Tennessee plans ranged from 7.5% to 19.1%.

For 2016 BlueCross BlueShield of Tennessee—one of the state’s two major insurers—is requesting a 36.3% increase. One product line from Community Health Alliance Mutual is rising 32.8%, while another from Time Insurance Co. hits 46.9%. Offerings from Cigna, Humana and UnitedHealthcare range from 11% to 18%. If this means ObamaCare is working better than the President expected, then what, exactly, was he expecting?

Continued in article

Obama's Whoppers on the ACA --- Click Here
http://townhall.com/columnists/donaldlambro/2015/07/08/obamas-whoppers-will-bite-him-in-the-end-and-the-democrats-too-in-2016-n2022375?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


Cadillac Medical  Insurance Plan --- https://en.wikipedia.org/wiki/Cadillac_insurance_plan

"St. Paul, MN schools may adjust health plans to avoid 'Cadillac tax'," By Josh Verges, TwinCities.com, July 22, 2015 ---
http://www.twincities.com/education/ci_28522319/st-paul-schools-may-adjust-health-plans-avoid

St. Paul Public Schools employees are likely to see their health benefits curtailed as the school district looks to avoid financial penalties set to begin in 2018.

The Affordable Care Act's "Cadillac Tax" provision will charge employers an excise tax on high-cost plans -- 40 percent on every dollar over $10,200 on individual and $27,500 on family plans.

Jeni Simon, a consultant with Aon Hewitt, told school board members Tuesday that companies already are redesigning their health plans in order to avoid paying the tax. A survey found 92 percent of U.S. employers expect their health plans to change by 2018, and 47 percent said they'll be significantly different.

"This could be crippling financially for an organization," Simon said.

The school district has generous health plans that haven't changed in 10 years, Simon said. Among the options for getting under the tax cap are eliminating spousal coverage or flexible savings accounts, or charging higher co-pays or deductibles.

Continued in article


"This Is How Easy It Is to Scam Obamacare:  Federal auditors duped healthcare.gov 11 out of 12 times," by John Tozzi, Bloomberg, July 16, 2015 ---
http://www.bloomberg.com/news/articles/2015-07-16/this-is-how-easy-it-is-to-scam-obamacare?cmpid=BBD071615_BIZ

When healthcare.gov opened in late 2013, it was so crippled by technical problems that critics questioned whether people would be able to sign up for coverage. Now, it may actually be too easy to enroll.

That’s according to a new government audit, presented in testimony from the Government Accountability Office, delivered at a Senate Finance Committee hearing on Thursday. When federal auditors tried to apply for insurance coverage and tax credit subsidies using fictitious applicants, they succeeded 11 out of 12 times. Here are some highlights from the GAO’s undercover investigation:

Fake applicants got through on the phone

The auditors couldn’t get coverage for fake applicants just by going online, because the website couldn’t verify their identities. But investigators successfully completed the fake applications on the phone and got coverage for almost all of them. In the one enrollment that didn’t succeed, the applicant declined to give a Social Security Number, though other cases that had missing or invalid SSNs were approved.

Continued in article

Jensen Comment
Millions of workers in the underground cash economy not only do not pay in income taxes many of them most likely are also getting 100% subsidies for health insurance or are fraudulently on Medicaid. Literally all big government programs are big piñatas for fraudsters.


"Taxpayers' health care costs are rising — and so are the profits of big pharmaceutical companies," by Eric Pianin, The Fiscal Times via Business Insider, July 30, 2015 --- 
http://www.thefiscaltimes.com/2015/07/30/Drug-Company-Profits-Soar-Taxpayers-Foot-Bill#ixzz3hTDtCglN

t was a coincidence hard to overlook: The government released a new report on Tuesday projecting rising health care costs for the coming decade while a major pharmaceutical company issued a new earnings report showing extraordinary profits on the sale of new wonder drugs.

While drug spending increased by a modest 2.5 percent in 2013, it surged by 12.6 percent last year according to estimates in a new report on trends in health care costs by the Centers for Medicare and Medicaid Services.

Read more:
 http://www.thefiscaltimes.com/2015/07/30/Drug-Company-Profits-Soar-Taxpayers-Foot-Bill#ixzz3hTEWcL3G

"Did Senators Commit Health Insurance Fraud? Did Senators and their staff pretend to be “small businesses” to get subsidies?" by Joe Schoffstall," The Wall Street Journal, July 17, 2015 ---
http://www.wsj.com/articles/notable-quotable-obamacare-1437171835?tesla=y

. . .

“The Affordable Care Act (ACA), better known as Obamacare, required that members of Congress and their staff enroll in individual plans through the healthcare exchanges created by the law,” the group said in a press release. “As open enrollment approached in 2014, members and staff realized that by enrolling as individuals, they would no longer receive generous taxpayer-funded contributions to help pay their insurance premiums as they had for decades under the Federal Employees Health Benefits Program. They would instead only qualify for subsidies if their household income was less than 400 percent of the federal poverty level, just like millions of other Americans that had to purchase insurance in the individual market.”

The group notes that senators worked with the White House and the Office of Personnel Management for guidance on how to enroll in the Small Business Health Options Program in order to skirt any obstacles.

On October 2, 2013, the Office of Personnel and Management (OPM) used a federal regulation to deem Congress a small business despite its having more than 12,000 employees and dependents.

Continued in article

Jensen Comment
Surely you don't believe our beloved senators could commit fraud.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


"The New York Times notices that ObamaCare is causing insurance rates to soar," by Robert Laurie, Canada Free Press, July 6, 2015 ---
http://canadafreepress.com/article/73517

There have been plenty of stories about the ways in which ObamaCare is driving up healthcare costs. All across the country, we’ve seen double digit insurance rate hikes and soaring premiums. It’s nothing new, and conservatives have been warning that this would be the case since long before the unpopular law was rammed down America’s throat.

However, acknowledgement of ObamaCare’s failure usually comes from either right-leaning news sources, or insurance industry watchdogs.  We don’t often get it from the far-left paper of record, The New York Times:

Health insurance companies around the country are seeking rate increases of 20 percent to 40 percent or more, saying their new customers under the Affordable Care Act turned out to be sicker than expected. Federal officials say they are determined to see that the requests are scaled back.

  Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota, according to documents posted online by the federal government and state insurance commissioners and interviews with insurance executives.

Huh.  That’s weird. I thought ObamaCare was supposed to lower rates across the board.  Didn’t the President promise that the average household would see their premiums decline by something on the order of $2500.00? Certainly the New York Times must be shocked to discover that these claims were bald-faced lies, and that conservatives were right all along.

Continued in article


"How the Affordable Care Act Is Reducing Competition Five big insurers seem set to become three, as Aetna buys Humana and Anthem eyes Cigna. Thanks, ObamaCare," by Scott Gottlieb, The Wall Street Journal, July 5, 2015 ---
http://www.wsj.com/articles/how-the-affordable-care-act-is-reducing-competition-1436136236?tesla=y

The urge to merge is sweeping managed health care. Aetna announced Friday a $37 billion deal to acquire Humana. Anthem and Cigna are in merger talks and could be next. The national for-profit insurers are on an anxious mission to consolidate. These combinations will sharply reduce competition and consumer choice, as five big insurers shrink, probably, to three.

This trend is a direct consequence of ObamaCare, reflecting the naïveté of its architects and the fulfillment of their myopic vision. For Aetna, the deal is aimed at expanding its footprint in Medicare Advantage, a business that has become more financially attractive now that ObamaCare caps profits in the individual and group insurance markets.

. . .

But now almost every co-op is financially underwater, on the hook for federal loans that amount to more than 100% of the total value of their capital and surplus. Some—like Arizona’s Meritus Mutual Health Partners—are nearing 1,000%, according to rating agency A.M. Best.

All but five co-ops had negative cash flow heading into the end of last year, according to Standard & Poor’s, and nine had medical-loss ratios above 100%, including Iowa’s CoOportunity Health, which has declared bankruptcy. During the last half of 2014 the Health and Human Services Department had to bail out six co-ops with $356 million in emergency funding.

Continued in article

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


"Scotus Fuctus on Obamacare Roberts arrogates god-like powers to himself," by Shikha Dalmia, Reason Magazine, June 25, 2015 ---
http://reason.com/blog/2015/06/25/justice-roberts-plays-god-with-obamacare

"The Supreme Court’s Obamacare Decision Is Already Worth $3 Billion For Insurers," by Leah Libresco, Nate Silver's 5:38 Blog, June 25, 2015 ---
http://fivethirtyeight.com/datalab/the-supreme-courts-obamacare-decision-is-already-worth-3-billion-for-insurers/ 

 

Externalities of Aging (More Disease and More Entitlements Expense)
World's Population Is Getting Sicker, Study Shows ---
http://www.webmd.com/news/20150608/worlds-population-is-getting-sicker-study-shows

Entitlements Actuarial  Lies
A trillion lie here and a trillion lie there and pretty soon you're talking about an unsustainable future covered up by lying in politics.

Entitlements --- http://en.wikipedia.org/wiki/Entitlement

Harvard, Dartmouth:  Social Security forecasts have been too optimistic — and increasingly biased ---
http://hotair.com/archives/2015/05/09/harvard-dartmouth-social-security-forecasts-have-been-too-optimistic-and-increasingly-biased/


The Government Not Exactly Sure Where $3 Billion in Obamacare Subsidies Went --- Click Here
http://townhall.com/tipsheet/katiepavlich/2015/06/16/the-government-has-no-idea-where-3-billion-in-obamacare-subsidies-went-n2013393?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=

. . . Three billion dollars of hard earned tax money you've been sending to subsidize other people's healthcare plans
1) went to the wrong people
2) was paid out in the wrong amounts.

An Inspector General audit of the Department of Health and Human Services revealed today that Obamacare subsidies handled by the agency have been completely unorganized, disfunctional and misplaced. Why? Because HHS never implemented a system to ensure the subsides would be secure, distributed in the right amounts and sent to those who are eligible to receive them. More from the Washington Free Beacon

"[The Centers for Medicare and Medicaid Services] CMS's internal controls did not effectively ensure the accuracy of nearly $2.8 billion in aggregate financial assistance payments made to insurance companies under the Affordable Care Act during the first four months that these payments were made," the OIG said.

"CMS's system of internal controls could not ensure that CMS made correct financial assistance payments," they said.

The OIG reviewed subsidies paid to insurance companies between January and April 2014. The audit found that CMS did not have a process to "prevent or detect any possible substantial errors" in subsidy payments.

The OIG said the agency did not have a system to "ensure that financial assistance payments were made on behalf of confirmed enrollees and in the correct amounts."

In response to the audit, CMS said they issued a regulation to
change their accounting methods.“CMS takes the stewardship of tax dollars seriously and implemented a series of payment and process controls to assist in making manual financial assistance payments accurately to issuers,” they said.

More directly from the report about what was found: 

We determined that CMS’s internal controls (i.e., processes put in place to prevent or detect any possible substantial errors) for calculating and authorizing financial assistance payments were not effective. Specifically, we found that CMS:

-relied on issuer attestations that
-did not ensure that advance CSR payment rates identified as outliers were appropriate,
-did not have systems in place to ensure that financial assistance payments were made on
behalf of confirmed enrollees and in the correct amounts,
-did not have systems in place for State marketplaces to submit enrollee eligibility data for
fina
ncial assistance payments, and
-did not always follow its guidance for calculating advance CSR payments and does not plan to perform a timely reconciliation of these payments.

The internal control deficiencies that we identified limited CMS’s ability to make accurate payments to QHP issuers. On the basis of our sample results, we concluded that CMS’s system of internal controls could not ensure that CMS made correct financial assistance payments during the period January through April 2014.

 

According to the Inspector General, the audit was conducted "to determine whether CMS’s internal controls were effective to ensure the accuracy of financial assistance payments to QHP issuers made during the first 4 months that these payments were made." 

Continued in article

 


"Hospitals Expected More of a Boost From Health Law Expansion of Medicaid hasn’t had the financial impact that was anticipated," by Christian Weaver, The Wall Street Journal, June 3, 2015 ---
http://www.wsj.com/articles/hospitals-expected-more-of-a-boost-from-health-law-1433304242?KEYWORDS=Hospitals

The health law’s expansion of Medicaid in many states hasn’t benefited nonprofit hospitals in those states as expected, according to a new report by Moody’s Investors Service.

Hospitals in the mostly blue states that expanded Medicaid were largely expected to benefit from fewer unpaid bills and more paying customers, but that hasn’t generally translated into better operating margins or cash flow, Moody’s found.

Performance improved across the board—including in the mostly Republican-led states that opted out of the law’s Medicaid expansion—as the economy gained steam last year and unemployment declined.

In expansion states, hospitals’ unpaid bills fell 13% on average last year compared with 2013, the report found. But, their 2014 operating margins didn’t increase any more than hospitals in the 22 states that have sat out the expansion, the report shows.

“Clearly, reducing bad debt is positive, but it is not this silver bullet,” said Daniel Steingart, a Moody’s analyst and author of the report. He said the findings call into question “a narrative out there that Medicaid expansion has lowered bad debt and that is driving [financial] improvements at hospitals.”

Continued in article

Jensen Comment
When I lived in San Antonio, over $1,000 of my property tax billing went to the Bexar County Hospital to cover charity medicine and bad debts of people who were treated but did not pay for the treatments. As a rule there's at least one hospital in larger cities, usually the largest non-profit hospital, that receives local tax dollars to contribute toward the hospital's bad debts.

Obamacare's promise of relieving the burden of local taxpayers for charity medicine turned into another one of the lies. Indeed there are fewer bad debts due to expanded Medicaid coverage such that more Federal dollars are pouring into hospitals who accept Medicaid patients. However, the bad news is that Medicaid only covers (according to the article) about half the cost of treating Medicaid patients in hospitals. This leaves hospitals with tow choices. Provide lower-cost care or ask for more dollars from local taxpayers to cover the added losses of the expanded Medicaid coverage.

It turns out that states who refused to expand Medicaid coverage are better off for having refused.


"Overhead costs exploding under ObamaCare, study finds," by Sarah Ferris, The Hill, May 27, 2015 ---
http://thehill.com/policy/healthcare/243188-overhead-costs-exploding-under-obamacare 

Five years after the passage of ObamaCare, there is one expense that’s still causing sticker shock across the healthcare industry: overhead costs.

The administrative costs for healthcare plans are expected to explode by more than a quarter of a trillion dollars over the next decade, according to a new study published by the Health Affairs blog.

The $270 billion in new costs, for both private insurance companies and government programs, will be “over and above what would have been expected had the law not been enacted,” one of the authors, David Himmelstein, wrote Wednesday.

Those costs will be particularly high this year, when overhead is expected to make up 45 percent of all federal spending related to the Affordable Care Act. By 2022, that ratio will decrease to about 20 percent of federal spending related to the law.

 

The study is based on data from both the government’s National Health Expenditure Projections and the Congressional Budget Office. Both authors are members of Physicians for a National Health Program, which advocates for a single-payer system.

"This number – 22.5 percent of all new spending going into overheard – is shocking even to me, to be honest. It’s almost one out of every four dollars is just going to bureaucracy," the study's other author, Steffie Woolhandler, said Wednesday.

She said private insurers have been expanding their administrative overhead despite some regulations from the Obama administration to control those costs, such as the medical loss ratio, which requires a certain amount of premium dollars to be spent directly on healthcare. She argues that a better approach would be a type of Medicare-for-all system.

The extra administrative costs amount to the equivalent of $1,375 per newly insured person per year, the authors write.

Continued in article


Cadillac Tax --- http://en.wikipedia.org/wiki/Cadillac_insurance_plan
President Obama exempted trade unions for political purposes

From the CFO Journal's Morning Ledger on May 26, 2015

Good morning. A provision of Obamacare set to take effect in 2018 will slap a hefty tax bill on employee health plans that exceed certain cost thresholds, and that has CFOs looking at a range of alternatives, from scaling back current offerings to eliminating the plans altogether, CFO Journal’s Kimberly S. Johnson and Maxwell Murphy report.

“To me, it’s a penalty for giving our employees a generous benefits package,” said Action Environmental Group Chief Financial Officer Brian Giambagno. Action Environmental briefly considered doing away with employee health coverage altogether to save money. “I’d be lying if I said we haven’t had that discussion,” said Mr. Giambagno.


"Obamacare Exchanges on Life Support," by Michelle Malkin, Townhall, May 15, 2015 ---
http://townhall.com/columnists/michellemalkin/2015/05/15/obamacare-exchanges-on-life-support-n1999097?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=

. . .

The miraculous, efficient, cost-saving, innovative 21st-century government-run "marketplaces" were supposed to put the "affordable" in Obama's Affordable Care Act. Know-it-all bureaucrats were going to show private companies how to set up better websites (gigglesnort), implement better marketing and outreach (guffaw), provide superior customer service (belly laugh), and eliminate waste, fraud and abuse (LOLOLOL).

You will be shocked beyond belief, I'm sure, to learn that Obamacare exchanges across the country are instead bleeding money, seeking more taxpayer bailouts and turning everything they touch to chicken poop.

Wait, that's not fair to chicken poop, which can at least be composted.

"Almost half of Obamacare exchanges face financial struggles in the future," The Washington Post reported last week. The news comes despite $5 billion in federal taxpayer subsidies for IT vendors, call centers and all the infrastructure and manpower needed to prop up the showcase government health insurance entities. Initially, the feds ran 34 state exchanges; 16 states and the District of Columbia set up their own.

While private health insurance exchanges have operated smoothly and satisfied customers for decades, the Obamacare models are on life support. Oregon's exchange is six feet under -- shuttered last year after government overseers squandered $300 million on their failed website and shady consultants who allegedly set up a phony website to trick the feds. The FBI and the U.S. HHS inspector general's office reportedly have been investigating the racket for more than a year now.

In the People's Republic of Hawaii, which has been a "trailblazer" of socialized medicine for nearly four decades, the profligate state-run exchange demanded a nearly $30 million cash infusion to remain financially viable after securing $205 million for startup costs. The Hawaii Health Connector accidentally disconnected hundreds of poor patients' accounts and squandered an estimated 8,000 hours on technological glitches and failures. Enrollment projections were severely overinflated like a reverse Tom Brady scandal. After failing to secure a bailout, Hawaii announced this week that its exchange would be shut down amid rising debt.

Continued in article

 


"Massachusetts’ Botched Obamacare Exchange Build May Have Been Illegal As Well As Incompetent," by Peter Suderman, Reason Magazine, May 12, 2015 ---
http://reason.com/blog/2015/05/12/masachusetts-botched-obamacare-exchange

Report finds that state misled federal officials about progress on the $135 million project.

When Obamacare’s health insurance exchanges officially launched in October, 2013, one of the worst performers was, somewhat ironically, located in the one state that already had a functioning health insurance exchange: Massachusetts. The state had been running its own online insurance portal for years as part of RomneyCare, the coverage expansion that would become the model for Obamacare. But the exchange the state already had in place, while functional, didn’t have all of the features required by Obamacare. A total overhaul was required.

But when Obamacare’s exchanges went live, the upgrade turned out to be a downgrade. Despite years of administrative planning and development, funded largely by $135 million federal grants, the Massachusetts Health Connector basically didn’t work at all during the first open enrollment period. Repair efforts stalled, and eventually the entire thing was scrapped so that the state could start all over again on yet another new exchange. The original tech contractor, CGI (which also worked on the botched federal exchange) was fired from the project, and a new team was brought in to start over.

It’s been clear for a while now that the project was massively mismanaged, but it now looks increasingly as if development of the exchange may have involved illegality as well as incompetence.

Not only did the officials in charge of the exchange botch the job, they are now accused of having intentionally misrepresented their progress (or lack thereof) to federal officials. A stinging report released yesterday by the Pioneer Institute, based on official contemporaneous audit reports by an outside consultant and unnamed “whistleblowers” who were interviewed by the report’s author, Josh Archambault, alleges that state officials lied to federal overseers about progress on the project and cheated on a key federal connectivity test, employing what was essentially a dummy system in order to cover for work that had not yet been completed.

Continued in article

Bob Jensen's Fraud Updates --- http://faculty.trinity.edu/rjensen/FraudUpdates.htm


Brookings: The Patient Protection and Affordable Care Act (links to hundreds of studies) ---
 
http://www.brookings.edu/research/topics/affordable-care-act


"One-Third Drop Obamacare in California," by Michael Reagan, Newsmax, April 26, 2015 ---
http://www.newsmax.com/MichaelReagan/obamacare-covered-california-health-insurance/2015/04/26/id/640791/

. . .

The truth is (there’s that word again), over one–third of Covered California policyholders dropped their insurance altogether.

Attkisson contends this is one of the worst retention rates in the nation. And for those poor souls who are still at the mercy of Covered California, the situation doesn’t get any better, 84 percent of the policyholders will be paying increased premiums in 2015.

Continued in article


From the CFO Journal's Morning Ledger on April 27, 2015

Pharmaceutical companies buy rivals’ drugs, then jack up the prices
http://www.wsj.com/articles/pharmaceutical-companies-buy-rivals-drugs-then-jack-up-the-prices-1430096431?mod=djemCFO_h
More pharmaceutical companies are buying up drugs they see as undervalued, and then raising their prices. The WSJ’s Jonathan D Rockoff and Ed Silverman report that the trend is one of a number of tactics being employed by pharmaceutical firms. Companies also regularly raise prices of their own older medicines while demanding high fees for new treatments, driving up the cost of drugs in the process. Since 2008, branded-drug prices have increased 127%, compared with an 11% rise in the consumer price index, according to drug-benefits manager Express Scripts Holding Co.


"The ObamaCare Effect: " by Marty Makary, The Wall Street Journal, April 19, 2015 --
http://www.wsj.com/articles/the-obamacare-effect-hospital-monopolies-1429480447?tesla=y

. . .

Today’s frenzy of hospital mergers and physician practice acquisitions is giving hospital systems even greater leverage to inflate opaque “charge-master” medical bills that even hospitals are sometimes unable to itemize sensibly. With no mechanism to allow free-market forces to keep prices in check, this translates into higher health-insurance deductibles and copays for insured Americans, and in the case of Medicare and Medicaid, higher taxes.

When you’re the only game in town, you call the shots. That is one reason California Attorney General Kamala Harris is insisting on “strong conditions” before approving Prime Healthcare Services’ $843 million takeover of the six-hospital Daughters of Charity Health System. Prime is a hospital management company operating 34 acute-care hospitals in 10 states.

Ms. Harris required Prime to continue operating four Daughters’ facilities as acute-care hospitals with emergency services over the next 10 years. She also required that all six hospitals remain in the state’s Medi-Cal program, maintain charity care benefits at their historical levels, and continue providing essential health services such as reproductive health care.

Those conditions only begin to address the concerns surrounding such a merger. A San Bernardino, Calif., court recently held a Prime hospital, Chino Valley Medical Center, in contempt for needlessly admitting patients through the emergency room. On a national level, physician groups bought by large hospital systems are often prodded to send patients for ambulatory surgery and diagnostic procedures to the departments of their parent hospital, which may charge more than other outpatient centers the doctor might prefer.

A study of more than 150 hospital-owned and physician-owned organizations published last October in the Journal of the American Medical Association found that patient costs are 19.8% higher for physician groups in multi-hospital systems compared with physician-owned organizations.

The Affordable Care Act did not repeal antitrust laws. The Federal Trade Commission prevailed in three litigated hospital mergers in the last three years, and in 2014 it won its first-ever litigated case challenging a health-system acquisition of a physician group. But these victories are few. The great majority of mergers occur with little if any public debate about how they will effect prices or patients.

U.S. Oncology, for example, boasts more than 1,000 oncologists in its network and serves nearly 20% of all U.S. cancer patients. In 2010 it was acquired by McKesson Corp., one of the largest U.S. drug distributors, in what some called a savvy move to get cancer doctors and the drugs they prescribe under the same roof. Specialty hospitals are also sprouting around the country, even franchising, exemplified by the rapid spread of the MD Anderson Cancer Center, which aims to have a center within three hours of every American. But is it wise to have one corporation in charge of cancer care for an entire state or region?

Advocates say such expansion brings standardized care and clinical trials to more of the population, but it also results in an undeniable homogenization that may limit options for patients. If management decides that its doctors can only use one chemo drug for a particular cancer, or if the central leadership elects to not adopt a new surgical technology system-wide, will patients be told about the other options?

As a busy surgeon, I have serious concerns about the race to consolidate America’s hospitals because of the risk that very large organizations may govern without valuing the wisdom of their front-line employees. Already many doctors are frustrated by the electronic medical records, strategic planning and hospital processes that they feel have marginalized their medical insights into their own patients.

We can encourage the good work of hospitals to create networks of coordinated care, while at the same time insist that hospitals compete on price and quality outcomes. Achieving this balance in the wake of the Affordable Care Act is critical to ensure that one-fifth of the U.S. economy functions in a competitive and competent market.

Dr. Makary is a surgeon at Johns Hopkins Hospital and professor of health policy at the Johns Hopkins Bloomberg School of Public Health. He is the author of “Unaccountable: What Hospitals Won’t Tell You and How Transparency Can Revolutionize Health Care“ (Bloomsbury Press, 2013).

Jensen Comment
The word "frenzy" probably overstates the case. In rural areas, however, local hospitals already monopolize local markets in general care. What I see up here is MDs pulling out of primary care practices either by refusing ACA-insured patients or by returning to medical schools to further specialize. Our very best general surgeon just took a year off to return to medical school to further specialize. Chances of his returning to our hospital are zero.

What I see in primary care up here is much wider use of physicians' assistants and osteopathic privary care providers replacing the departing MD providers. ACA and Medicaid rates are driving MDs out of primary care. The only way to make primary care profitable is to make it more factory-like in efficiency in seeing patients.


"Overkill An avalanche of unnecessary medical care is harming patients physically and financially. What can we do about it?" by Atul Gawande, The New Yorker, May 11, 2015 ---
http://www.newyorker.com/magazine/2015/05/11/overkill-atul-gawande

It was lunchtime before my afternoon surgery clinic, which meant that I was at my desk, eating a ham-and-cheese sandwich and clicking through medical articles. Among those which caught my eye: a British case report on the first 3-D-printed hip implanted in a human being, a Canadian analysis of the rising volume of emergency-room visits by children who have ingested magnets, and a Colorado study finding that the percentage of fatal motor-vehicle accidents involving marijuana had doubled since its commercial distribution became legal. The one that got me thinking, however, was a study of more than a million Medicare patients. It suggested that a huge proportion had received care that was simply a waste.

The researchers called it “low-value care.” But, really, it was no-value care. They studied how often people received one of twenty-six tests or treatments that scientific and professional organizations have consistently determined to have no benefit or to be outright harmful. Their list included doing an EEG for an uncomplicated headache (EEGs are for diagnosing seizure disorders, not headaches), or doing a CT or MRI scan for low-back pain in patients without any signs of a neurological problem (studies consistently show that scanning such patients adds nothing except cost), or putting a coronary-artery stent in patients with stable cardiac disease (the likelihood of a heart attack or death after five years is unaffected by the stent). In just a single year, the researchers reported, twenty-five to forty-two per cent of Medicare patients received at least one of the twenty-six useless tests and treatments.

Could pointless medical care really be that widespread? Six years ago, I wrote an article for this magazine, titled “The Cost Conundrum,” which explored the problem of unnecessary care in McAllen, Texas, a community with some of the highest per-capita costs for Medicare in the nation. But was McAllen an anomaly or did it represent an emerging norm? In 2010, the Institute of Medicine issued a report stating that waste accounted for thirty per cent of health-care spending, or some seven hundred and fifty billion dollars a year, which was more than our nation’s entire budget for K-12 education. The report found that higher prices, administrative expenses, and fraud accounted for almost half of this waste. Bigger than any of those, however, was the amount spent on unnecessary health-care services. Now a far more detailed study confirmed that such waste was pervasive.

I decided to do a crude check. I am a general surgeon with a specialty in tumors of the thyroid and other endocrine organs. In my clinic that afternoon, I saw eight new patients with records complete enough that I could review their past medical history in detail. One saw me about a hernia, one about a fatty lump growing in her arm, one about a hormone-secreting mass in her chest, and five about thyroid cancer.

To my surprise, it appeared that seven of those eight had received unnecessary care. Two of the patients had been given high-cost diagnostic tests of no value. One was sent for an MRI after an ultrasound and a biopsy of a neck lump proved suspicious for thyroid cancer. (An MRI does not image thyroid cancer nearly as well as the ultrasound the patient had already had.) The other received a new, expensive, and, in her circumstances, irrelevant type of genetic testing. A third patient had undergone surgery for a lump that was bothering him, but whatever the surgeon removed it wasn’t the lump—the patient still had it after the operation. Four patients had undergone inappropriate arthroscopic knee surgery for chronic joint damage. (Arthroscopy can repair certain types of acute tears to the cartilage of the knee. But years of research, including randomized trials, have shown that the operation is of no help for chronic arthritis- or age-related damage.)

Continued in a very long article

Jensen Comment
Twice my wife was sent from the ER to a night in intensive care when my own suspicions were that she really did not have to spend one night in the hospital let alone the very expensive ICU unit. I think that sometimes ER doctors in small hospitals support the ICU units and the CAT Scan or MRI Scan units beyond what is called for in the science  of medicine. It might be argued that such expensive prescriptions are shields against ambulance-chasing lawyers, but I think in many cases the small hospitals just need more revenues to support unused capacity investments.

"The ‘Michigan Model’ for Malpractice Reform A communication and resolution program reduced claims by 36%," by Allen Kachalia And Sanjay Saint, The Wall Street Journal, May 10, 2015 ---
http://www.wsj.com/articles/the-michigan-model-for-malpractice-reform-1431300074?tesla=y

Doctors have many tests and procedures to choose from when treating you. But is it possible to have too much of a good thing?

It is. Overuse and waste in medical care—which include ordering more tests and treatment than scientific evidence supports—make up as much as 30% of health-care spending according to a 2013 Institute of Medicine report. That’s approximately $750 billion a year, which we all pay for in premiums and taxes to support Medicare and other insurance programs.

A massive new effort to eliminate wasteful spending has begun. This year the Department of Health and Human Services announced plans to pay doctors and hospitals more for quality, not quantity. Private insurers are likely to follow suit.

We recently published findings in the Annals of Internal Medicine from a national survey of hospitalists—physicians who primarily treat patients in the hospital setting—that sheds some light on how medical tests and treatments are overused, and how often.

We asked hospital doctors to imagine two common patient scenarios—a cardiac evaluation before surgery and a patient who suddenly loses consciousness—and asked what they thought most of their colleagues in their hospital would do. Evidence-based guidelines exist for both scenarios.

More often than not, the hospital doctors said that their colleagues would choose the option that meant overuse of testing—not because of a lack of awareness of the guidelines, but to reassure themselves or their patients. This unwarranted testing and treatment can lead to medical complications.

Continued in article

The Texas Model
Texas voters initiated a change in the constitution that caps punitive damages.

"Canadian Malpractice Insurance Takes Profit Out Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
Click Here
http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890  

The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

Why the difference?

In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.

In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.

In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.

Canadian Medical Protective Association

Here’s how it works.

Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium

"We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.

If a doctor is sued, the group pays the claim and provides legal counsel.

In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.

"We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''

But the importance of limiting jury awards may not play into the big picture on health care reform.

Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.

Major Difference

In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.

In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.

A bad outcome in itself is not the basis of a lawsuit.

The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.

In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.

In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.

Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”

For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.

2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.

In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”

Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #



Read more:
http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP

 

Jensen Comment
I'm in favor of fully-funded health care reform that completely nationalizes health insurance phased in reasonably with high tax pay-as-you-go restriction and strict cost-saving caps on punitive damage lawsuits. I really favor former Senator Bill Bradley's long-forgotten Canada-like proposal:

The bipartisan trade-off in a viable health care bill is obvious: Combine universal coverage with malpractice tort reform in health care. Universal coverage can be obtained in many ways — including the so-called public option. Malpractice tort reform can be something as commonsensical as the establishment of medical courts — similar to bankruptcy or admiralty courts — with special judges to make determinations in cases brought by parties claiming injury. Such a bipartisan outcome would lower health care costs, reduce errors (doctors and nurses often don’t report errors for fear of being sued) and guarantee all Americans adequate health care. Whenever Congress undertakes large-scale reform, there are times when disaster appears certain — only to be averted at the last minute by the good sense of its sometimes unfairly maligned members. What now appears in Washington as a special-interest scrum could well become a triumph for the general interest. But for that to happen, the two parties must strike a grand bargain on universal coverage and malpractice tort reform. The August recess has given each party and its constituencies a chance to reassess their respective strategies. One result, let us hope, may be that Congress will surprise everyone this fall.
Bill Bradley, "Tax Reform’s Lesson for Health Care Reform," The New York Times, August 30, 2009 ---
http://www.nytimes.com/2009/08/30/opinion/30bradley.html?_r=1


A $5,000+ surprise from the IRS?
"The ObamaCare Burden Some Americans are in for an especially bad tax season," by James Taranto, The Wall Street Journal, February 18, 2015 ---
http://www.wsj.com/articles/the-obamacare-burden-1424293227?tesla=y

. . .

“Janice Riddle got a nasty surprise when she filled out her tax return this year,” CNN.com reports:

The Los Angeles resident had applied for Obamacare in late 2013, when she was unemployed. She qualified for a hefty subsidy of $470 a month, leaving her with a monthly premium of $1 for the cheapest plan available.
Riddle landed a job in early 2014 at a life insurance agency, but since her new employer didn’t offer health benefits, she kept her Obamacare plan. However, she didn’t update her income with the California exchange, which she acknowledges was her mistake.
Now, she has to pay back the entire subsidy, which is forcing her to dip into her savings.
“I was blindsided that the subsidy has to be paid back,” said Riddle, adding she didn’t even use the coverage, which she had until she qualified for Medicare in October. “I’m in shock . . . but I have no choice. Do I want to argue with the IRS or the Obama administration?”

CNN reports that “between 4.5 million and 7.5 million taxpayers received subsidies,” and an earlier CNN report cites an H&R Block estimate that 3.4 million of them will end up owing the IRS money on the deal. Of course taxpayers who overestimated their income and thus underestimated their subsidies will be due a refund—but one suspects those with an unanticipated income squeeze were likelier to drop their insurance during the year, which means that in some cases they’ll owe the mandate tax.

 


"ObamaCare Pushes Colleges to Dump Student Health Plans," by John Merline, Investor's Business Daily, March 30, 2015 ---
http://news.investors.com/blogs-capital-hill/033015-745676-colleges-dump-student-insurance-plans-because-of-obamacare.htm

College professors and students keep suffering unexpected costly ObamaCare side effects. First, colleges started rolling back faculty hours to avoid the employer mandate, a development the American Association of Association of University Professors called "reprehensible."

Then Harvard professors complained when the college hiked their insurance costs because of "health care reform."

Now colleges are starting to dump their student insurance plans because of ObamaCare.

An AP story notes that four of New Jersey's 11 state public colleges have done so, as have three of Washington state's six, and that many more are likely to follow.

These colleges figure that, since students can get coverage elsewhere, they can just wash their hands of the problem. Those students who had been relying on their college insurance plans now must go to an ObamaCare exchange or onto Medicaid to get coverage.

The problem, as University of Wisconsin, Madison, student health insurance manager Richard Simpson notes, is that college plans are usually a good deal for students, with lower deductibles and more flexibility than cheap ObamaCare plans provide.

"Student plans provide gold or platinum level coverage at a bronze price," Simpson told AP.

So students forced into an exchange are likely to be worse off financially.

True, many of these students will qualify for Medicaid because they earn little or no money. But while getting more Americans dependent on government earlier in life might make the left happy, cramming people who previously had good coverage onto the failing Medicaid system is hardly a sign of progress.

Of course, the other option is for students to join the ranks of the uninsured, which no doubt many will choose.

Jensen College
Even though Obamacare may take away one of the alternatives college students have for healthcare (as described in the above article) for most of those students their college's health insurance plan was probably a bad deal in the first place. For those students who have little or no income to report to the IRS because they are full-time students, the ACA exchange studies provide them with virtually free health insurance which is obviously cheaper than what most of them paid for medical insurance under a college student plan.

The taxpayers are getting hit for those subsidies, but the students themselves have a sweeter deal unless they have enough taxable income to make the ACA subsidies irrelevant.

 


"Screwed by Seniors:  The people expected to pay for Social Security and Medicare can't afford it," by Veronique de Rugy, Reason Magazine, March 2016 ---
http://reason.com/archives/2015/02/06/screwed-by-seniors 

Remember Occupy Wall Street, when thousands across the country took to the streets, sleeping in tents to protest the ultra-rich 1 percent? The occupiers' frustration was real, but their ire was misdirected. They should have launched an Occupy the AARP movement instead.

Government policies that transfer cash from the relatively young and poor to the relatively old and wealthy are the real scandal. In 1970, Social and Medicare accounted for 20 percent of federal spending. They have since grown to 40 percent; by 2030, they will be more than half. And these numbers understate the level of federal spending for the elderly. According to the Centers for Medicare and Medicaid Services, some 28 percent of spending on Medicaid, a program designed to offer health care to families in poverty, goes to older Americans.

But these days, unlike in the era before Social Security and Medicare were created, most seniors are doing just fine, with various general indices of well-being all pointing to higher standards of living for the elderly. When Social Security was born in 1935, the average life expectancy was 65. Today, it's 78.8. In 1959, the U.S. Census Bureau found more than 30 percent of Americans 65 and older living below the poverty line. In 2013, the percentage had dropped to 9.5. According to a report by the Federal Interagency Forum on Aging-Related Statistics, the average net worth of Americans over the age of 65 increased by almost 80 percent between 1988 and 2008. Today's seniors are healthier, better educated, and richer than their predecessors.

Of course some seniors remain poor. But as the University of Chicago economist Bruce Meyer wrote in 2011, "Even over the past 10 years, those 65 and older with the lowest income are now living in bigger houses that are much more likely to be air conditioned and have appliances like a dishwasher and clothes dryer." And seniors aren't just doing well compared to previous generations; they're doing well relative to their younger counterparts.

In short, a group that's better off than ever before is receiving ever more generous benefits subsidized by younger, poorer Americans.

Looking at both consumption and income data to assess changes in living standards, Meyer and the Notre Dame economist James Sullivan find that Americans 65 and older have much lower poverty rates than most other demographic groups, and that these rates have fallen significantly faster for them than for other groups, too.

According to the Pew Research Center, as of 2009 "the typical household headed by an adult 65 or older had $170,494 in net worth, compared with just $3,662 for the typical household headed by an adult younger than 35." This is to be expected, since people generally accumulate assets and pay off debts as they grow older. But the authors were surprised to find that the gap has actually been widening. In 1984, when the Census Bureau began tracking these numbers, "the age-based wealth gap was 10:1. By 2009, it had ballooned to 47:1."

Sadly, this trend is not just a product of older Americans getting wealthier. Younger Americans are getting poorer. According to Pew, the net worth of households headed by people younger than 35 shrunk by 68 percent even as the net worth of households headed by people 65 and older grew by 42 percent. Meanwhile, a 2011 paper by Jeffrey Thompson of the University of Massachusetts Amherst and Timothy Smeeding of the University of Wisconsin–Madison shows that households whose head was under 34 were hit much harder during the recession than households headed by people in other age groups. Thompson and Smeeding also found that younger Americans recovered much more slowly from the damage.

And the situation will get worse as spending on Medicare and Social Security explodes. Without reforms today, vast tax increases will be needed to pay for the unfunded promises made to a steadily growing cohort of seniors.

Fortunately, numerous workable solutions are available to lawmakers. Way back in 2003, Cato Institute scholars Chris Edwards and Tad DeHaven listed several sensible reforms, including adding a system of personal savings accounts to Social Security, liberalizing Medical Savings Accounts, and making the latter permanent "to reduce health care costs by increasing competition between providers and making consumers more responsive to tradeoffs." These options are supposed to encourage families to save more, but also to use their money more responsibly and in a manner more consistent with their long-term needs. And since taxpayers remain in control of their cash, they can also pass it along if they don't use it all before they die—giving the next generation a head start when it comes to building assets.

In the September 2012 issue of reason, Reason TV's Nick Gillespie and I offered a more comprehensive option when we argued against having separate programs for the elderly and the poor. Because the important distinction is the inability to pay, not the age of the beneficiary, we suggested that "the most obvious, effective, and just approach is to end Social Security and Medicare and replace them with a true safety net that would help poor Americans regardless of age. To the extent that seniors qualify for income supplements, food stamps, and other transfer programs, they should be added to those rolls. They can also be added to Medicaid rolls (currently about 9 million seniors are so-called double-dippers, receiving benefits from both Medicaid and Medicare)."

Unfortunately, there is almost no appetite in Congress for even mild reforms of Social Security and Medicare. Most lawmakers won't touch entitlement programs, because older Americans vote. Driven by a desire to get re-elected, politicians refuse to reform the program at the core of our country's future fiscal woes.

Continued in article

Jensen Comment
In addition to paying seniors and the exploding population of people on Medicare that are declared disabled, taxpayers are on the hook for providing free medical services and medicines to the expanded (Obamancare) rolls of Medicaid.

Over a fourth of the California population is now getting totally free medical services and medicines under Medi-Cal.
California's Medi-Cal program for "poor" grows to 12 million. --
http://www.sacbee.com/entertainment/living/health-fitness/article10317917.html

Bob Jensen's threads on entitlements ---
http://faculty.trinity.edu/rjensen/Entitlements.htm


MediCal is California's Version of Medicaid free medical services for poor people. MedicCal also has a price-fixing program that is preventing many doctors and hospitals from providing services to patients insured by MediCal. This is an example of where price fixing either results in either having no goods and services or inferiors goods and service.

Over a fourth of the California population is now getting totally free medical services and medicines under Medi-Cal.
California's Medi-Cal program for "poor" grows to 12 million. --
http://www.sacbee.com/entertainment/living/health-fitness/article10317917.html

Since California embraced the federal health care overhaul, the state's Medicaid program for the poor has added more than 2.7 million people, a surprisingly high number that has left the state to grapple with making sure there are enough doctors to care for all of them.

Medi-Cal, the $95 billion joint federal-state program, covers 12 million people — nearly one in every three residents — for their doctor visits, hospital care, pregnancy-related services, as well as some nursing home care, making California the largest health care purchaser in the state.

The figure accounts for 17 percent of the nation's Medicaid enrollment, even though California has 12 percent of the U.S. population.

Lawmakers and advocates say the safety net program has grown so big, so fast that without major fixes, California won't be able to provide quality health care for its poor.

"Medi-Cal is turning into an empty promise with an insurance card," said Molly Weedn, a spokesman for We Care for California, a coalition of doctors, hospitals, health plans and labor unions pushing for higher payment rates. Democratic Sen. Ed Hernandez of La Puente and Assemblyman Rob Bonta of Alameda plan to introduce legislation Wednesday to raise rates.

Even though the federal government has injected billions into California, doctors and hospitals say the state continues to pay much less than private insurance or Medicare for medical services. That's meant fewer primary care doctors and specialists are willing to treat Medi-Cal patients.

According to the California HealthCare Foundation, a health care philanthropy based in Oakland, 76 percent of primary physicians accept new patients through private insurance, but only 57 percent accept new Medi-Cal patients.

The result is that more Medi-Cal patients are ending up in emergency rooms, which is more expensive and doesn't provide ongoing care for serious diseases and illnesses, according to We Care for California.

Dr. Marc Futernick, who directs emergency services at California Hospital in downtown Los Angeles, said one Medi-Cal patient with advanced colon cancer came into his emergency room four times in five weeks because he was unable to see an oncologist or get the chemotherapy treatments he needed.

"It's much worse than just a couple years ago," Futernick said.

As Democratic legislative leaders look for ways to spend more on social services, Gov. Jerry Brown and Republican lawmakers fret about the state's ability to pay for its commitments. Medi-Cal costs grew 4.3 percent from $17.8 billion last year to $18.6 billion this year, or 16 percent of the state's general fund. The program also faces spiraling costs for seniors and specialty drugs.

While the federal government will pay 100 percent of the costs for newly eligible Medi-Cal recipients until 2016, it will be phasing down to a 90 percent share in 2020. The Brown administration projects it will cost $1.7 billion more for the state to cover the 10 percent.

One way the Brown administration has proposed controlling costs is to limit Medi-Cal enrollment to certain times of the year, similar to open enrollment for private health plans.

Sen. Richard Pan, D-Sacramento, a doctor who has called for Medi-Cal reform, said it would be shortsighted if the state doesn't increase provider payments to save money in the long run. He said the state needs to improve coordination of care, set and measure performance standards for contracting health plans and better manage chronic illnesses to reduce hospitalization rates.

"How can we not afford this?" he asked.

Chris Perrone, director of health reform at the California HealthCare Foundation, said the state's enrollment success stems from its decision to make it easier for low-income people to enroll. For example, the state negotiated a waiver from the federal government to start covering low-income childless adults in a transitional program as early as 2010.

The expansion has helped Richard Olivares, a 33-year-old homeless man in Sacramento. He gained access to a cardiologist for heart spasms and a psychiatrist for schizophrenia, anxiety and anger management issues. Medi-Cal also covered a recent jaw surgery from a fight.

"It's really been a blessing because I have a heart problem and every time I get sick, I'm able to go and see a doctor," he said.

When Medi-Cal expanded last year under President Barack Obama's health reform plan, the state struggled to enroll people fast enough and counties reported being hobbled by a new web-based enrollment system that didn't always work. California's backlog reached as high as 900,000, prompting threats from the federal government and triggering a lawsuit from patients and health care advocates.

Under the expansion, a person can make up to $16,105 or 138 percent of the federal poverty level to qualify for Medi-Cal, or $32,913 for a family of four.

The state Department of Health Care Services, which oversees Medi-Cal, said the backlog has been "virtually cleared." The department declined multiple interview requests to The Associated Press to explain its plan for handling the caseload, which is expected to grow as more immigrants in the country without documentation will be eligible for state-funded health coverage under Obama's executive order not to seek deportation.

Read more here:
http://www.sacbee.com/entertainment/living/health-fitness/article10317917.html#storylink=cpy

"Medi-Cal a waiting game for many low-income Californians," by Tracy Seipel, San Jose Mercury News, February 7, 2015 ---
http://www.mercurynews.com/health/ci_27481258/obamacare-medi-cal-waiting-game-many-low-income 

Julie Moreno felt lucky to be among more than 2.7 million previously uninsured Californians to be added to Medi-Cal, the state's health care program for the poor.

Until she needed cataract surgery.

For three months after her November 2013 diagnosis, the 49-year-old Mountain View resident said, she tried to get an appointment, but each time she called, no slots were available. Desperate and worried, she finally borrowed $14,000 from her boyfriend's mother to have the procedure done elsewhere last February.

One year into the explosive, health law-induced growth of Medi-Cal, it appears one of the most alarming predictions of critics is coming true: The supply of doctors hasn't kept up with demand. One recent study suggests the number of primary care doctors in California per Medi-Cal patient is woefully below federal guidelines.

"If you're pregnant, you get help," Moreno said. "But if you're 49 and not pregnant, you have to wait for everything."

In fact, seven months after Moreno's surgery, her original surgeon's office called just to say they still couldn't fit her in.

At least 1.2 million Californians have signed up for a private insurance plan since enrollment began in October 2013 under the Affordable Care Act, better known as Obamacare. But it's Medi-Cal that has witnessed the largest growth -- 2.7 million since the controversial law opened the program up to many more recipients in January 2014.

By mid-2016, more than 12.2 million people -- nearly a third of all Californians -- will be on Medi-Cal, state health officials say.

Those officials continue to insist that the current delays to see a doctor and crowded emergency rooms are all part of to-be-expected growing pains. But many experts say the problems are so widespread they shouldn't be ignored.

"California did a good job of getting people signed up, but they basically stuck their heads in the sand and assumed that California physicians would just jump right on board and want to take more Medi-Cal patients," said Dr. Del Morris, president of the California Academy of Family Physicians, which represents many of the first-line doctors who treat Medi-Cal patients. "It's unacceptable to say, 'We are not ready for you yet, you'll just have to suffer with your disease.'"

Morris and other experts say the situation is about to get worse, in part because of Medi-Cal's health care reimbursement rates.

For years, the rates paid by Medi-Cal -- called Medicaid in the rest of the country -- have been among the nation's lowest. A provision of Obamacare hiked the rates for primary care doctors to the substantially higher Medicare rates for two years, but those increases ended on Dec. 31. A second blow came last month when the state cut the Medi-Cal reimbursement rate by another 10 percent, a reduction approved by California lawmakers in 2011 but delayed in a court battle that doctors ultimately lost.

Even before the latest cuts, Medi-Cal doctors -- particularly specialists -- in California's rural areas often seemed nearly impossible to find. And the shortage of Medi-Cal physicians appears to be causing spikes in the number of Medi-Cal patients being treated in hospital emergency rooms around the state. Data from the Office of Statewide Health Planning and Development show that in the first three quarters of 2014, "treat and release" visits to emergency rooms by Medi-Cal patients jumped 30 percent from the same period the year before.

At least once a week at the MayView Community Health Center in Mountain View, the clinic is so swamped that it is forced to send Medi-Cal patients to hospital emergency rooms "because they cannot go anywhere else," clinic operations director Harsha Mehta said.

Since January 2014, Axis Community Health in Pleasanton has added about 1,700 new Medi-Cal patients to its five facilities that serve the Tri-Valley area, bringing the total to about 14,000. While 700 of those patients were already being treated at Axis before they enrolled in Medi-Cal, the overall jump in new patients is forcing Dr. Divya Raj, Axis' medical director, to hire more hard-to-find doctors.

A recent report by the California HealthCare Foundation that tried to determine if the state has enough doctors to handle the influx of Medi-Cal patients reinforces Raj's trepidation.

The report found the ratio of patients to full-time primary care doctors participating in Medi-Cal -- including family medicine physicians, general internists, pediatricians and ob/gyns -- was 35 to 49 physicians per 100,000 enrollees, well below the federal guidelines of 60 to 80.

"We had a shortage of primary care doctors before this flood (of Medi-Cal enrollees) came about," said Dr. Steven Harrison, a veteran primary care doctor who directs a residency program for such physicians at Natividad Medical Center in Salinas. "Now we have a dire shortage."

Bait and Switch for Primary Care "Doctors"
Nationwide there was an enormous shortage of primary care doctors before Obamacare. Obamacare greatly increased the demand for such doctors, thereby, making the shortage much worse. This has led to nationwide bait and switch primary care that is similar to three of the medical clinics in Littleton, New Hampshire. Each clinic has one MD and one or more added "physicians assistants" who are not medical doctors but can examine patients and prescribe common medications.

The bait and switch part is that patients in each clinic are not allowed to see the MD at all or must wait much longer for an appointment to see the the MD. In the meantime they are encouraged to be examined by only the physicians assistant or to go to emergency rooms.

Another sad part of the bait and switch tactic is that many specialists such as those at the Dartmouth medical center will only see patients referred by an MD or osteopath. Without such referrals patients are not allowed to make appointments with such specialists such as dermatologists, psychiatrists, and surgeons.

One other clinic up here has a really lousy and uncaring foreign-trained MD and an osteopath. My primary care doctor is the osteopath. He seems pretty good to me, but then my medical needs are fairly simple and routine. Our Littleton Regional Hospital does have an outstanding emergency room, although it's not a trauma center and has to send a relatively large number of patients by helicopter to the Dartmouth medical center about 50 miles away.

Of course patients with serious problems have discovered how to get referrals. The go directly to emergency rooms and maybe wait the better part of a day to be examined. But they eventually leave with a referral to see a specialist provided that specialist will accept their insurance.

The huge problem in New Hampshire is that nearly half (slightly less this year) of the hospitals and specialists will not accept ACA insurance.


"How Obamacare Is Ruining Health Insurance," by John C. Goodman, Forbes, February 11, 2015 ---
http://www.forbes.com/sites/johngoodman/2015/02/11/how-obamacare-is-ruining-health-insurance/

The health insurance market is changing. And the changes are not good. Even before there was Obamacare, most insurers most of the time had perverse incentives to attract the healthy and avoid the sick. But now that the Affordable Care Act has completely changed the nature of the market, the perverse incentives are worse than ever.

Writing in Sunday’s New York Times Elizabeth Rosenthal gives these examples:

But aren’t these insurers worried that if they mistreat their customers, their enrollees will move to some other plan? Here’s the rarely told secret about health insurance in the Obamacare exchanges: insurers don’t care if heavy users of medical care go to some other plan. Getting rid of high-cost enrollees is actually good for the bottom line.

To appreciate how different health insurance has become, let’s compare it to the kind of casualty insurance people buy for their home or their cars.

Dennis Haysbert is the actor I remember best for playing the president of the United States in the Jack Bauer series, 24.  You probably know him better as the spokesman for Allstate. In one commercial he is standing in front of a town that looks like it has been demolished by a tornado. “It took only two minutes for this town to be destroyed,” he says. And he ends by asking “Are you in good hands?”

The point of the commercial is self-evident. Casualty insurers know you don’t care about insurance until something bad happens. And the way they are pitching their products is: Once the bad thing happens, we are going to take care of you.

Virtually all casualty insurance advertisements carry this message, explicitly or implicitly. Nationwide used to run a commercial in which all kinds of catastrophes were caused by a Dennis-the-Menace type kid. In a State Farm ad, a baseball comes crashing through a living room window. Nationwide’s “Life comes at you fast” series features all kinds of misadventures. And of course, the Aflac commercials are all about unexpected mishaps.

The Case Against Obamacare: An eBook From Forbes
Don’t be fooled. The new health law has disrupted coverage for millions, and driven up costs for millions more.

My favorite casualty insurer print ad is sponsored by Chubb. It features a man fishing in a small boat with his back turned to a catastrophe. He is about to go over what looks like Niagara Falls. Here’s the cutline: “Who insures you doesn’t matter. Until it does.”

Now let’s compare those messages to what we see in the health insurance exchange. Federal employees have been obtaining insurance in an exchange, similar to the Obamacare exchanges, for several decades. Every fall, during “open enrollment,” they select from among a dozen or so competing heath plans. In Washington, DC where the market is huge, insurers try to attract customers by running commercials on TV, in print and in other venues.

Continued in article

 

 


"How Obama’s $3 Trillion Health-Care Overhaul Would Work," by John Tozzi, Bloomberg Businessweek, January 26, 2015 ---
http://www.businessweek.com/articles/2015-01-26/how-obama-s-3-trillion-health-care-overhaul-would-work?campaign_id=DN012715

The Obama administration has announced plans to accelerate a shift in how the U.S. pays its $2.9 trillion annual health-care bill. Officials at Medicare, which covers one in six Americans, want to stop paying doctors and hospitals by the number of tests and treatments they do. Instead, the government wants to link payments to how well providers take care of patients, not just how much care they provide.

This transition is already under way. Millions of Americans are now covered in experimental programs created by the Affordable Care Act designed to reduce unnecessary care and incentivize doctors to focus on quality, not quantity. The administration wants to vastly expand such programs to include half of all Medicare payments by the end of 2018. Here’s what you need to know:

Growth has slowed in recent years. Since 2010, per capita health spending has increased at about the same rate as the U.S. economy, a historically low rate for American health spending. Even if that holds steady, 17¢ of every dollar spent in the U.S. goes to health care, far higher than in other countries that have health outcomes as good or better than America’s.

The government’s starting to change how it pays doctors and hospitals

After the Affordable Care Act was passed in 2010, the federal government started experiments with doctors and hospitals willing to try new payment models. One of the attempts to do this was a program called Accountable Care Organizations (ACOs), which would let medical providers share in the savings if they reduced the overall health-care costs for their Medicare patients. Now more than 7.8 million of Medicare’s 55 million beneficiaries get their care through such arrangements, up from zero in 2011.

The Obama administration would like to speed this up. Medicare wants 30 percent of all payments to go through models like ACOs by the end of next year, and 50 percent by the end of 2018, up from about 20 percent now. Other incentives already in place, such as penalties for hospitals when patients get readmitted, nudge providers to improve care, even if they’re still getting paid in a traditional fee-for-service system. The government wants 90 percent of all Medicare payments to include such incentives by the end of 2018.

It still has a long way to go

It’s hard to say precisely how much of the total $2.9 trillion in health spending flows through fee-for-service payments, but a safe answer is: most of it. Even hospitals participating in Medicare’s new payment experiments often get paid the old way by commercial insurers, for example. Those contradictory incentives can make it hard for hospitals to fully make the changes they need to care for patients more efficiently. “Can you create a situation ultimately where you’re treating fewer people in the hospital and doing fewer higher-reimbursement treatments? That’s a real risk,” Moody’s health-care analyst Dan Steingart told me this month. “If your contracts only pay you on a pure fee-for-service basis, you’re basically shooting yourself in the foot.”

This is the first time Medicare officials have set clear targets for how much spending they want to flow through new payment systems. The Obama administration said the goals should incentivize more doctors and hospitals to join, and give them some certainty that the switch to new payment methods is real. The government also wants private-sector buyers of health care to make the shift. A council of executives from the insurance and medical industries, as well as big employers such as Boeing and Verizon, will try to expand alternative payments.

We don’t know how well it will work

Medicare is trying a few experiments, including ACOs and bundled payments (which try to put limits around how much hospitals can charge for common procedures like knee and hip replacements). While economists and medical providers largely agree that ending the fee-for-service program is essential to containing health-care costs, the evidence for the new models isn’t really in yet. Medicare officials said they have no results on bundled payments yet. The early years of the ACO program have shown some savings, but a majority of ACOs for which Medicare has data have not generated savings yet.


Teaching Case on ACA Health Care Tax Issues
From The Wall Street Journal Weekly Accounting Review on February 6, 2015

The ACA and Other Changes to Watch Out for This Tax Season
by: Tom Herman
Feb 02, 2015
Click here to view the full article on WSJ.com
 

TOPICS: Individual Taxation

SUMMARY: Before firing off a 2014 income tax return, taxpayers should take some time to master a few important, but easily overlooked, deductions, credits and other breaks-including a few that were revived at the end of last year. Even if a taxpayer considers him or herself a tax wizard who loves studying the Internal Revenue Code, it's increasingly easy to make costly bloopers. Also, taxpayers should watch out for a few new wrinkles in 2015, notably those stemming from the Affordable Care Act. The article offers some areas that deserve extra attention.

CLASSROOM APPLICATION: This article offers insight on some areas of individual taxation, especially areas that have experienced recent changes.

QUESTIONS: 
1. (Advanced) What are the tax issues involving health insurance for 2014 tax returns? Will the changes affect all taxpayers, some, or just a few? Why is health insurance a part of tax returns?

2. (Introductory) What is the income ceiling for the Social Security tax? How could this be a problem for people who have more than one job?

3. (Advanced) How is income taxed if capital losses exceed capital gains? How does that differ from when capital gains exceed capital losses? How are gains and losses from a personal residence different from other capital gains and losses?

4. (Advanced) What is the standard deduction? How many taxpayers elect to claim it? What is the other alternative? Why do the majority of the taxpayers choose the option they choose?

5. (Introductory) What taxpayers should choose to deduct sales taxes? What is the other option?

6. (Introductory) What is the simplified calculation for the home office deduction? Why did the IRS develop this calculation? What is the other option?
 

Reviewed By: Linda Christiansen, Indiana University Southeast

Before firing off your 2013 income tax return, take some time to master a few important, but easily overlooked, deductions, credits and other breaks—including a few that were revived at the end of last year.
"The ACA and Other Changes to Watch Out for This Tax Season," by Tom Herman, The Wall Street Journal, February 2, 2015 ---
http://www.wsj.com/articles/the-aca-and-other-changes-to-watch-out-for-this-tax-season-1422849612?mod=djem_jiewr_AC_domainid

The complexity and questions that arise from the nation’s ever-changing tax laws are as certain as taxes themselves. So we introduce a new column, written by Tom Herman, a former tax columnist for The Wall Street Journal, that will look at developments affecting taxpayers and individual investors. We welcome your thoughts and questions about tax issues, big and small. Send them to reports@wsj.com.

Early birds, be careful.

Before firing off your ... income tax return, take some time to master a few important, but easily overlooked, deductions, credits and other breaks—including a few that were revived at the end of last year.

Even if you consider yourself a tax wizard who loves studying the Internal Revenue Code, it’s increasingly easy to make costly bloopers. Also, watch out for a few new wrinkles this year, notably those stemming from the Affordable Care Act.

Here are some areas that deserve extra attention:

HEALTH INSURANCE Get ready for some new lines on this year’s forms because of the Affordable Care Act. For most, this should be fairly simple. “The majority of taxpayers—more than three out of four—will simply need to check a box to verify they have health-insurance coverage,” the IRS says. Others will face trickier issues. Some may be eligible to claim an exemption from the coverage requirement. But those who don’t have qualifying coverage or who don’t qualify for an exemption will need to make “an individual shared responsibility payment.” Others may qualify for a “premium tax credit.” See irs.gov/aca for details. For some “this will be very complicated,” warns Mark Luscombe, principal federal tax analyst for Wolters Kluwer Tax & Accounting U.S.

SOCIAL SECURITY TAX Some people who worked for two or more employers last year may have paid too much in Social Security tax. The maximum amount that should have been withheld by all your employers for 2014 was $7,254. (That’s 6.2% of $117,000, the maximum amount of wages subject to the Social Security tax.) If you had too much withheld, you typically can claim the excess as a credit. See IRS Publication 17 for details.

INVESTMENT LOSERS Did you lose money on stocks, bonds and other investments you sold last year? Use your capital losses to offset capital gains. But what if your losses exceeded your gains? You can deduct as much as $3,000 a year ($1,500 for married taxpayers filing separately) of net losses against your wages and other ordinary income. Carry over excess losses into future years. Warning: You can’t deduct a loss on the sale of your personal residence.

IRA CHARITABLE TRANSFERS Late last year, lawmakers revived a provision that allowed many people age 70½ or older to transfer as much as $100,000 directly from an IRA to charity, tax-free, during 2014. The transfer counted toward the taxpayer’s required minimum distribution. You’re supposed to report your “qualified charitable distribution” on your return even if it’s tax-free. Just make sure you don’t put it on the wrong line. For example, if you file Form 1040, report your “QCD” on Line 15a. Don’t include any of that distribution on the line for “taxable amount” (Line 15b). Instead, write “QCD” next to the line.

HIGHER STANDARD About two out of every three returns typically claim the standard deduction. For 2014, the basic standard deduction is $12,400 for those married and filing jointly, or $6,200 if single or married and filing separately. There are additional amounts for people who were 65 or older, or blind. Before taking the standard deduction, check to see if you might be better off itemizing.

SALES TAXES Late last year, Congress revived a law that gives taxpayers who itemize an important choice: They can deduct either state and local income taxes paid in 2014—or their state and local sales taxes. (But they can’t deduct both.) The sales-tax option offers welcome relief for people in states with no income tax, such as Texas and Florida. But taxpayers in other states may benefit from taking the sales-tax deduction, says Mr. Luscombe, including those who paid large amounts of sales tax on major purchases such as cars or boats or those who reside in states with high sales-tax rates.

HOME OFFICE Many people who work at home don’t bother deducting their home-office expenses because the rules can be fiendishly complex and because of fears it would increase their chances of getting audited. But if you qualify to deduct home-office expenses, you may benefit from a simplified calculation method allowed by the IRS. Multiply the square footage of the home used for your home office (but not more than 300 square feet) by an IRS-approved rate of $5 a square foot. Thus, the maximum deduction in this case would be $1,500.

Mr. Herman is a writer in New York City. He was formerly The Wall Street Journal’s Tax Report columnist.

IRS ACA Health Insurance Site --- http://irs.gov/aca


"Tax Preparers Brace To Give Bad Health Law News," by April Dembosky, KQED and Jeff Cohen, WNPR, WebMD News from Kaiser Health News, January 21, 2015 ---
http://www.webmd.com/health-insurance/20150121/tax-preparers-brace-to-be-bearers-of-bad-health-law-news

Are you thinking about tax day yet? Your friendly neighborhood tax preparer is. IRS Commissioner John Koskinen declared this tax season one of the most complicated ever, and tax preparers from coast to coast are trying to get ready for the first year that the Affordable Care Act will show up on your tax form.

Sue Ellen Smith manages an H&R Block office in San Francisco, and she is expecting things to get busy soon.

“This year taxes and health care intersect in a brand new way,” Smith says.

For most people, who get insurance through work, the change will be simple: checking a box on the tax form that says, “yes, I had health insurance all year.”

But it will be much more complex for an estimated 25 million to 30 million people who didn’t have health insurance or who bought subsidized coverage through the exchanges. To get ready, Smith and her team have been training for months, running through a range of hypothetical scenarios. One features “Ray” and “Vicky,” a fictional couple from an H&R Block flyer. Together they earn $65,000 a year, and neither has health insurance.

“The biggest misconception I hear people say is, ‘Oh the penalty’s only $95, that’s easy,’” says Smith, but the Rays and Vickys of the world are in for a surprise that will hit their refund. “In this situation, it’s almost $450.”

That’s because the penalty for being uninsured in 2014 is $95 or 1 percent of income, whichever is greater. Next year, it’s 2 percent. Smith says the smartest move for people to avoid those penalties is to sign up for insurance before Feb. 15, the end of the health law’s open enrollment period.

But a lot of people may not think about this until they file their taxes in April. For them, it will be too late to sign up for health insurance and too late to do anything about next year’s penalty too, says Mark Steber, chief tax officer for Jackson Hewitt Tax Services.


And Yet in New Hampshire and Other States Upwards of Half the Hospitals are Refusing to Serve Patients with ACA insurance?
Why?

Answer One of the main reasons is that hospitals serving ACA patients get stuck with having to serve deadbeats who are behind in paying their insurance premiums. For 60 days doctors and lawyers must serve ACA patients that are behind over 30 days in paying insurance premiums such that insurance companies no longer have to pay their medical bills.

In the past people who defaulted on premiums became uninsured people who were treated in special facilities such as county hospitals funded by taxpayers. Now people who default on premiums get a 90-day grace period where insurance companies pay their medical costs for 30 days and the doctors and hospitals have to pay for their medical care for 60 days.

There's a 90-day grace period in the ACA where people who default on paying premiums are still covered for the first 30-days by the insurance company and the next 60 days by the doctors and hospitals providing the care is absolutely absurd. The insurance companies will simply pass on these bad debt losses (which may be enormous for surgeries and hospital confinements) into higher premiums for the people who pay their medical insurance billings.


"Supreme Court Battle Brewing Over Medicaid Fees," by Phil Galewitz, WebMD, January 12, 2015 ---
http://www.webmd.com/health-insurance/20150112/supreme-court-battle-brewing-over-medicaid-fees

Rita Gorenflo’s 7-year-old son Nathaniel was in severe pain from a sinus infection.

But since the boy was covered by Medicaid, she couldn’t immediately find a specialist willing to see him. After days of calling, she was finally able to get Nathaniel an appointment nearly a week later near their South Florida home. That was in 2005.

Last month, ruling in a lawsuit brought by the state’s pediatricians and patient advocacy groups, a federal district judge in Miami determined Nathaniel’s wait was “unreasonable” and that Florida’s Medicaid program was failing him and nearly 2 million other children by not paying enough money to doctors and dentists to ensure the kids have adequate access to care.

The Florida case is the latest effort to get federal judges to force states to increase Medicaid provider payment rates for the state and federal program that covers about 70 million low-income Americans. In the past two decades, similar cases have been filed in numerous states, including California, Illinois, Massachusetts, Oklahoma, Texas and the District of Columbia– with many resulting in higher pay.

But while providers and patient advocates nationwide hailed the Florida decision, they are deeply worried about a U.S. Supreme Court case that they say could restrict their ability across the country to seek judicial relief from low Medicaid reimbursement rates.

The high court on Jan. 20 will hear a case from Idaho seeking to overturn a 2011 lower court order to increase payments to providers serving Medicaid enrollees with development disabilities. In the original case, five centers serving developmentally disabled adults and children argued that Idaho was unfairly keeping Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of providing care had risen.

Idaho officials argue only the state and federal government should be able to set provider fees in Medicaid and all other “private parties,” including patients and providers, should not be able to use the court system to gain higher rates. Twenty-seven states and the Obama administration are supporting Idaho’s appeal, along with the National Governors Association.


"Tax Preparers Brace To Give Bad Health Law News," by April Dembosky, KQED and Jeff Cohen, WNPR, WebMD News from Kaiser Health News, January 21, 2015 ---
http://www.webmd.com/health-insurance/20150121/tax-preparers-brace-to-be-bearers-of-bad-health-law-news

Are you thinking about tax day yet? Your friendly neighborhood tax preparer is. IRS Commissioner John Koskinen declared this tax season one of the most complicated ever, and tax preparers from coast to coast are trying to get ready for the first year that the Affordable Care Act will show up on your tax form.

Sue Ellen Smith manages an H&R Block office in San Francisco, and she is expecting things to get busy soon.

“This year taxes and health care intersect in a brand new way,” Smith says.

For most people, who get insurance through work, the change will be simple: checking a box on the tax form that says, “yes, I had health insurance all year.”

But it will be much more complex for an estimated 25 million to 30 million people who didn’t have health insurance or who bought subsidized coverage through the exchanges. To get ready, Smith and her team have been training for months, running through a range of hypothetical scenarios. One features “Ray” and “Vicky,” a fictional couple from an H&R Block flyer. Together they earn $65,000 a year, and neither has health insurance.

“The biggest misconception I hear people say is, ‘Oh the penalty’s only $95, that’s easy,’” says Smith, but the Rays and Vickys of the world are in for a surprise that will hit their refund. “In this situation, it’s almost $450.”

That’s because the penalty for being uninsured in 2014 is $95 or 1 percent of income, whichever is greater. Next year, it’s 2 percent. Smith says the smartest move for people to avoid those penalties is to sign up for insurance before Feb. 15, the end of the health law’s open enrollment period.

But a lot of people may not think about this until they file their taxes in April. For them, it will be too late to sign up for health insurance and too late to do anything about next year’s penalty too, says Mark Steber, chief tax officer for Jackson Hewitt Tax Services.

 


"What '60 Minutes' Didn't Say: Hospitals Will Charge You More Under Obamacare," by Avik Roy, Forbes, January 12, 2015 ---
http://www.forbes.com/sites/theapothecary/2015/01/12/what-60-minutes-didnt-tell-you-obamacare-will-drive-up-the-cost-of-hospital-care/

On Sunday evening, CBS’ 60 Minutes did a feature story on Steven Brill’s new book, America’s Bitter Pill, in which Brill complains that Obamacare didn’t do enough to tackle the exorbitantly high price of U.S. hospital care. “Obamacare does zero to change any of that,” says Brill. That’s not exactly right. What Brill—and CBS—don’t tell you—is that Obamacare is driving hospitals to charge you more than they already do.

The U.S. hospital industry is crony capitalism at its finest

Steven Brill, founder of The American Lawyer and Court TV took a starring role in the health care debate when he published the Time articleBitter Pill,” describing how hospitals charge extreme prices for ordinary care to the uninsured. For example, Sean Recchi, an uninsured lymphoma patient, went to MD Anderson Cancer Center, a world-renowned facility in Houston, to seek treatment. MD Anderson proceeded to charge him $283 for a $20 chest X-ray. They charged him more than $15,000 for blood tests costing a few hundred dollars. They charged him $13,702 for a dose of Rituxan, a lymphoma drug, for which the average U.S. hospital price is around $4,000. All told, Recchi’s course of treatment cost $83,900. Whatever he couldn’t pay was called “uncompensated care.”

MD Anderson is not struggling under the weight of bills unpaid by the uninsured. In 2010, MD Anderson recorded revenue of $2.05 billion and operating profits of $531 million. Brill recounted several other patients at other hospitals with similar stories.

This is a topic we’ve covered extensively at The Apothecary, and elsewhere: the U.S. hospital industry is the single largest example of crony capitalism in the history of civilization. In 2013, I wrote a piece for National Review calledAn Arm and a Legexplaining the problem.

To summarize: the average day spent in a U.S. hospital costs five times as much as it does in other industrialized countries. That’s not because U.S. hospitals use higher technology or better care. It’s because they charge more for the same technology and the same care. Because they can get away with it.

Obamacare subsidizes hospitals’ already-high prices

Thanks to federal intervention in the health care system—Medicare, Medicaid, and the employer tax exclusion—hospitals have been able to charge whatever they want for their services, knowing that the average consumer has no idea how much he’s paying, because he’s paying mostly through taxes and other indirect means.

In 2013, U.S. government entities—i.e., taxpayers—spent a half-trillion dollars subsidizing American hospitals. By 2021, thanks in part to Obamacare, that will grow to $800 billion a year. That’s more than twice what the military spends subsidizing the aerospace industry.

And here’s the thing. While Brill rightly criticizes Obamacare for not doing anything to bring down the cost of hospital care, he’s actually an ardent supporter of the law. And this is the fundamental problem with Brill’s thesis. Obamacare doesn’t merely not do anything to bring hospital costs down. It actively works to drive hospital costs upward, by doubling down on the incentives hospitals have to charge more to patients.

In every state, it’s the hospital industry that has been the principal lobbyist in support of Obamacare. Why? Because the law increases taxpayer subsidies of the hospital industry by around $400 billion per decade. In other words, it takes the currently high prices that U.S. hospitals charge and says “keep doing what you’re doing.”

If Obamacare had never passed, hospitals would have been under much more pressure to keep these costs down, because no one would be bailing them out if hospital care became increasingly unaffordable. The opposite, of course, has happened.

Obamacare encourages hospitals to increase their market power

The next thing Obamacare does is it encourages hospitals to merge, thereby giving hospitals even more market power to charge even higher prices. A study by Jamie Robinson of the University of California found that highly concentrated hospital markets–where one or two hospitals controlled most of the patient volume—hospitals charged an average of 41 percent more for common procedures than they did in more competitive markets.

Continued in article


The Health Care Market is Not a Market

"Video:  Inside ‘Bitter Pill’: Steven Brill Discusses His TIME Cover Story," Time Magazine, February 22, 2013 ---
http://healthland.time.com/2013/02/20/bitter-pill-inside-times-cover-story-on-medical-bills/

Simple lab work done during a few days in the hospital can cost more than a car. A trip to the emergency room for chest pains that turn out to be indigestion brings a bill that can exceed the price of a semester at college. When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?

Steven Brill spent seven months analyzing hundreds of bill from hospitals, doctors, and drug companies and medical equipment manufacturers to find out who is setting such high prices and pocketing the biggest profits. What he discovered, outlined in detail in the cover story of the new issue of TIME, will radically change the way you think about our medical institutions:

· Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer—Medicare—from even trying to negotiate the price of drugs.

· Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.

· Cancer treatment—at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson—has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.

· Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.

Brill concludes:

The health care market is not a market at all.
It’s a crapshoot. Everyone fares differently based on circumstances they can neither control nor predict. They may have no insurance. They may have insurance, but their employer chooses their insurance plan and it may have a payout limit or not cover a drug or treatment they need. They may or may not be old enough to be on Medicare or, given the different standards of the 50 states, be poor enough to be on Medicaid. If they’re not protected by Medicare or protected only partially by private insurance with high co-pays, they have little visibility into pricing, let alone control of it. They have little choice of hospitals or the services they are billed for, even if they somehow knew the prices before they got billed for the services. They have no idea what their bills mean, and those who maintain the chargemasters couldn’t explain them if they wanted to. How much of the bills they end up paying may depend on the generosity of the hospital or on whether they happen to get the help of a billing advocate. They have no choice of the drugs that they have to buy or the lab tests or CT scans that they have to get, and they would not know what to do if they did have a choice. They are powerless buyers in a sellers’ market where the only consistent fact is the profit of the sellers.

 

"Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

"Yes, Hospital Pricing Is Insane, But Why? Time magazine issues a 24,000-word memo on what we already knew," by Holman Jenkins Jr., The Wall Street Journal, March 1, 2013 ---
http://online.wsj.com/article/SB10001424127887323978104578334082993009730.html?mod=djemEditorialPage_h

Without diminishing the epic scope of Steven Brill's Time magazine piece about the U.S. health care system, he reiterates in lengthy detail perversities that are already well known, without offering a single useful insight on how it go that way, and even less on how to fix it.

Yet Mr. Brill, founder of CourtTV and American Lawyer magazine, author of books on terrorism and education, has written the longest piece in Time's history—24,000 words—so attention must be paid.

That health-care costs are inflated compared to what they would be in a reasonably transparent, competitive market (a point Mr. Brill never clearly makes) won't be a revelation. That hospitals allocate their costs to various items on their bills and price lists in ways that are opaque and arbitrary is not a new discovery either.

He finds it shocking that a hospital charging $1,791 a night won't throw in the generic Tylenol for free (instead charging $1.50 each). But this is to commit the reification fallacy of thinking there is some organic relationship between what a hospital charges for a particular item and what that item costs in the first place.

He dwells on the irrationality of hospitals charging their highest prices to their poorest customers, those without insurance. But he's also aware that these customers often pay little or nothing of what they are charged and hospitals reallocate the cost to the bills of other patients. He even notes that a hospital might collect as little as 18% of what it bills.

He vaguely gets that hospital price lists are memos for the file, to be drawn out and waved as a reference in negotiations with their real customers, the big health-care insurers, Medicaid, Medicare and other large payers.

The deals hammered out with these customers tend naturally to gravitate toward round numbers, leaving a hospital free to allocate its costs and profits to specific items however it wants. Mr. Brill may be offended that certain "non-profit" hospitals appear to be highly profitable. He probably wouldn't be happier, though, if they diverted their surplus revenues into even higher salaries and more gleamingly superfluous facilities.

"What is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?" Mr. Brill asks. But his question is rhetorical since he doesn't exhibit much urge to understand why the system behaves as it does, treating its nature as a given.

In fact, what he describes—big institutions dictating care and assigning prices in ways that make no sense to an outsider—is exactly what you get in a system that insulates consumers from the cost of their health care.

Your time might be better spent reading Duke University's Clark Havighurst in a brilliant 2002 article that describes the regulatory, legal and tax subsidies that deprive consumers of both the incentive and opportunity to demand value from medical providers. Americans end up with a "Hobson's choice: either coverage for 'Cadillac' care or no health coverage at all."

"The market failure most responsible for economic inefficiency in the health-care sector is not consumers' ignorance about the quality of care," Mr. Havighurst writes, "but rather their ignorance of the cost of care, which ensures that neither the choices they make in the marketplace nor the opinions they express in the political process reveal their true preferences."

You might turn next to an equally fabulous 2001 article by Berkeley economist James C. Robinson, who shows how the "pernicious" doctrine that health care is different—that consumers must shut up, do as they're told and be prepared to write a blank check—is used to "justify every inefficiency, idiosyncrasy, and interest-serving institution in the health care industry."

Hospitals, insurers and other institutions involved in health care may battle over available dollars, but they also share an interest in increasing the nation's resources being diverted into health care—which is exactly what happens when costs are hidden from those who pay them.

Continued in article

Jensen Comment
Over a year ago Erika's Medicare-Anthem summary of charges for the month included an $11,376 charge for out patient surgery that was mistakenly billed to her account. We called our doctor who did the procedure in the hospital. Our doctor responded not to bother her or the hospital --- since Medicare-Anthem paid the entire bill it would not matter.

This bothered us since the woman (I assume it was a woman) may not have been eligible for Medicare-Anthem. So I phoned Medicare. Medicare said not to bother them and advised us to contact the hospital where the procedure took place. Any corrections should be made by the hospital and the doctor.

So I called the hospital's accounting office. They asked that I send in a copy of the Medicare-Anthem report. I hand-delivered the report to the the hospital accounting office --- which is miles from the hospital.

Over the ensuing year we waited for a corrected Medicare-Anthem report. Nothing! So I did a follow up visit to the hospital's accounting office. The feedback was that since Medicare-Anthem paid the bill there was no need to waste time correcting this item.

I keep thinking that some woman not eligible for Medicare got a windfall gain here. Who cares if it was Medicare-Anthem that got screwed?

Erika and I changed to a doctor that we like better. But we cannot change hospitals.

Moral of the Story
If the third party insurer gets billed mistakenly or pays too much nobody cares, least of all the doctors and hospitals who got reimbursed.

Question
Who is telling a lie?

Steven Brill wrote a long cover story for Time Magazine, In that story he describes having his team examine eight very complicated hospital bills from different hospitals. In every case they found that the bills were laced with errors and overcharges in favor of the hospital and possible frauds.
Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

The following week Stamford Hospital CEO Brian G. Grissler replied as shown, in part, below. Steven Brill's reply to Grissler, Time Magazine, March 18, 2013, Page 2.

Brian G. Grissler
". . . Brill refused to share the patient's name or the complete bill, so we are unable to answer those questions . . . "

Steven Brill Responds
"Stamford Hospital was shown the bill and never disputed its authenticity. I made clear in the article the hospital settled for cutting its bill entirely in half."

Jensen Comment
There are four possibilities behind this dispute:

  1. Brian Grissler could be lying through his teeth.

     
  2. Brian Grissler may not have thoroughly investigated the ultimate resolution of this bill by his staff.

     
  3. Steven Brill could be lying through his teeth.

     
  4. Steven Brill and Brian Grissler may not be discussing the same bill (although Brill claims he only picked one bill to examine from Stamford Hospital).

My vote is that Answer 1 above is probably the correct answer, but we most likely will never know.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


And Yet in New Hampshire and Other States Upwards of Half the Hospitals are Refusing to Serve Patients with ACA insurance?
Why?

Answer
One of the main reasons is that hospitals serving ACA patients get stuck with having to serve deadbeats who are behind in paying their insurance premiums. For 60 days doctors and lawyers must serve ACA patients that are behind over 30 days in paying insurance premiums such that insurance companies no longer have to pay their medical bills.

In the past people who defaulted on premiums became uninsured people who were treated in special facilities such as county hospitals funded by taxpayers. Now people who default on premiums get a 90-day grace period where insurance companies pay their medical costs for 30 days and the doctors and hospitals have to pay for their medical care for 60 days.

There's a 90-day grace period in the ACA where people who default on paying premiums are still covered for the first 30-days by the insurance company and the next 60 days by the doctors and hospitals providing the care is absolutely absurd. The insurance companies will simply pass on these bad debt losses (which may be enormous for surgeries and hospital confinements) into higher premiums for the people who pay their medical insurance billings.


Say What?
Harvard Faculty Upset Over Obamacare's Impact

http://townhall.com/tipsheet/guybenson/2015/01/06/single-tear-harvard-faculty-upset-over-obamacare-impact-n1938881?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm&newsletterad=thpm1

"Harvard Ideas on Health Care Hit Home, Hard," by Robert Pearjan, The New York Times, January 5, 2015 ---
http://www.nytimes.com/2015/01/06/us/health-care-fixes-backed-by-harvards-experts-now-roil-its-faculty.html?_r=2

For years, Harvard’s experts on health economics and policy have advised presidents and Congress on how to provide health benefits to the nation at a reasonable cost. But those remedies will now be applied to the Harvard faculty, and the professors are in an uproar.

Members of the Faculty of Arts and Sciences, the heart of the 378-year-old university, voted overwhelmingly in November to oppose changes that would require them and thousands of other Harvard employees to pay more for health care. The university says the increases are in part a result of the Obama administration’s Affordable Care Act, which many Harvard professors championed. Continue reading the main story Related Coverage

Roberto Villacreses of Sunshine Life and Health Advisors with Darko Tomelic and Andrea Viteri recently at a Miami mall. Health Insurance Enrollment Strongest in Federal MarketplaceDEC. 30, 2014 Agents from Sunshine Life and Health Advisors helped customers sign up for health care in Miami this month. So Far, 6.4 Million Obtain Health Care Coverage for 2015 in Federal MarketplaceDEC. 23, 2014 Obama Administration to Investigate Insurers for Bias Against Costly ConditionsDEC. 22, 2014

The faculty vote came too late to stop the cost increases from taking effect this month, and the anger on campus remains focused on questions that are agitating many workplaces: How should the burden of health costs be shared by employers and employees? If employees have to bear more of the cost, will they skimp on medically necessary care, curtail the use of less valuable services, or both?

Harvard is a microcosm of what’s happening in health care in the country,” said David M. Cutler, a health economist at the university who was an adviser to President Obama’s 2008 campaign. But only up to a point: Professors at Harvard have until now generally avoided the higher expenses that other employers have been passing on to employees. That makes the outrage among the faculty remarkable, Mr. Cutler said, because “Harvard was and remains a very generous employer.”

In Harvard’s health care enrollment guide for 2015, the university said it “must respond to the national trend of rising health care costs, including some driven by health care reform,” in the form of the Affordable Care Act. The guide said that Harvard faced “added costs” because of provisions in the health care law that extend coverage for children up to age 26, offer free preventive services like mammograms and colonoscopies and, starting in 2018, add a tax on high-cost insurance, known as the Cadillac tax.

Richard F. Thomas, a Harvard professor of classics and one of the world’s leading authorities on Virgil, called the changes “deplorable, deeply regressive, a sign of the corporatization of the university.”

Mary D. Lewis, a professor who specializes in the history of modern France and has led opposition to the benefit changes, said they were tantamount to a pay cut. “Moreover,” she said, “this pay cut will be timed to come at precisely the moment when you are sick, stressed or facing the challenges of being a new parent.”

The university is adopting standard features of most employer-sponsored health plans: Employees will now pay deductibles and a share of the costs, known as coinsurance, for hospitalization, surgery and certain advanced diagnostic tests. The plan has an annual deductible of $250 per individual and $750 for a family. For a doctor’s office visit, the charge is $20. For most other services, patients will pay 10 percent of the cost until they reach the out-of-pocket limit of $1,500 for an individual and $4,500 for a family.

Previously, Harvard employees paid a portion of insurance premiums and had low out-of-pocket costs when they received care.

Michael E. Chernew, a health economist and the chairman of the university benefits committee, which recommended the new approach, acknowledged that “with these changes, employees will often pay more for care at the point of service.” In part, he said, “that is intended because patient cost-sharing is proven to reduce overall spending.”

The president of Harvard, Drew Gilpin Faust, acknowledged in a letter to the faculty that the changes in health benefits — though based on recommendations from some of the university’s own health policy experts — were “causing distress” and had “generated anxiety” on campus. But she said the changes were necessary because Harvard’s health benefit costs were growing faster than operating revenues or staff salaries and were threatening the budget for other priorities like teaching, research and student aid.

In response, Harvard professors, including mathematicians and microeconomists, have dissected the university’s data and question whether its health costs have been growing as fast as the university says. Some created spreadsheets and contended that the university’s arguments about the growth of employee health costs were misleading. In recent years, national health spending has been growing at an exceptionally slow rate.

In addition, some ideas that looked good to academia in theory are now causing consternation. In 2009, while Congress was considering the health care legislation, Dr. Alan M. Garber — then a Stanford professor and now the provost of Harvard — led a group of economists who sent an open letter to Mr. Obama endorsing cost-control features of the bill. They praised the Cadillac tax as a way to rein in health costs and premiums.

Dr. Garber, a physician and health economist, has been at the center of the current Harvard debate. He approved the changes in benefits, which were recommended by a committee that included university administrators and experts on health policy.

In an interview, Dr. Garber acknowledged that Harvard employees would face greater cost-sharing, but he defended the changes. “Cost-sharing, if done appropriately, can slow the growth of health spending,” he said. “We need to be prepared for the very real possibility that health expenditure growth will take off again.”

But Jerry R. Green, a professor of economics and a former provost who has been on the Harvard faculty for more than four decades, said the new out-of-pocket costs could lead people to defer medical care or diagnostic tests, causing more serious illnesses and costly complications in the future.

“It’s equivalent to taxing the sick,” Professor Green said. “I don’t think there’s any government in the world that would tax the sick.”

Meredith B. Rosenthal, a professor of health economics and policy at the Harvard School of Public Health, said she was puzzled by the outcry. “The changes in Harvard faculty benefits are parallel to changes that all Americans are seeing,” she said. “Indeed, they have come to our front door much later than to others.”

But in her view, there are drawbacks to the Harvard plan and others like it that require consumers to pay a share of health care costs at the time of service. “Consumer cost-sharing is a blunt instrument,” Professor Rosenthal said. “It will save money, but we have strong evidence that when faced with high out-of-pocket costs, consumers make choices that do not appear to be in their best interests in terms of health.”

Harvard’s new plan is far more generous than plans sold on public insurance exchanges under the Affordable Care Act. Harvard says its plan pays 91 percent of the cost of services for the covered population, while the most popular plans on the exchanges, known as silver plans, pay 70 percent, on average, reflecting their "actuarial value.”

"None of us who protested was motivated by our own bottom line so much as by the principle,” Ms. Lewis said, expressing concern about the impact of the changes on lower-paid employees.

In many states, consumers have complained about health plans that limit their choice of doctors and hospitals. Some Harvard employees have said they will gladly accept a narrower network of health care providers if it lowers their costs. But Harvard’s ability to create such networks is complicated by the fact that some of Boston’s best-known, most expensive hospitals are affiliated with Harvard Medical School. To create a network of high-value providers, Harvard would probably need to exclude some of its own teaching hospitals, or discourage their use.

“Harvard employees want access to everything,” said Dr. Barbara J. McNeil, the head of the health care policy department at Harvard Medical School and a member of the benefits committee. “They don’t want to be restricted in what institutions they can get care from.”

Although out-of-pocket costs over all for a typical Harvard employee are to increase in 2015, administrators said premiums would decline slightly. They noted that the university, which has an endowment valued at more than $36 billion, had an unusual program to provide protection against high out-of-pocket costs for employees earning $95,000 a year or less. Still, professors said the protections did not offset the new financial burdens that would fall on junior faculty and lower-paid staff members.

Continued in article

 

 

 




December 31, 2014

The 5 Most Common Health Insurance Exemptions -- and Who Qualifies ---
http://news.yahoo.com/5-most-common-health-insurance-exemptions-qualifies-180857442.html

Cadillac Tax --- http://en.wikipedia.org/wiki/Cadillac_insurance_plan
Unions used their political connections to exempt themselves from the whopping Cadillac tax on luxury health plans
---
http://nypost.com/2010/01/15/unions-will-dodge-os-health-tax/

 


"Vermont bails on single-payer health care," by Sarah Wheaton, Politico, December 17, 2014 ---
http://www.politico.com/story/2014/12/vermont-peter-shumlin-single-payer-health-care-113653.html

. . .

Gov. Shumlin had missed two earlier financing deadlines but finally released his proposal. But he immediately cast it as “detrimental to Vermonters.” The model called for businesses to take on a double-digit payroll tax, while individuals would face up to a 9.5 percent premium assessment. Big businesses, in particular, didn’t want to pay for Shumlin’s plan while maintaining their own employee health plans.

“These are simply not tax rates that I can responsibly support or urge the Legislature to pass,” the governor said. “In my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the state’s economy.”

And that was for a plan that would not be truly single payer. Large companies with self-insured plans regulated by ERISA would have been exempt. And Medicare also would have operated separately, unless the state got a waiver, which was a long shot.

Shumlin added that federal funds available for the transition were $150 million less than expected.

He also has a lot less political capital than before November. Shumlin, chairman of the Democratic Governors Association, still hasn’t even officially won his own reelection bid: The Legislature will settle the outcome of the November race in January because Shumlin failed to win more than 50 percent of the vote. He’s leading his Republican challenger by just a few thousand ballots.

And the substance of the plan isn’t its only politically problematic aspect. Gruber, now infamous for his blunt assessments of the Affordable Care Act and his remarks about “stupid” voters, was until recently a state consultant. Days after the election, video emerged of him dismissing criticism of Vermont’s plan in 2011 by asking, “Was this written by my adolescent children, by any chance?” State officials said they would cut off his contract.

Advocates of a single-payer plan said Shumlin should not be able to cast aside Act 48, the 2011 law that called for the creation of Green Mountain Care, without repealing it. A group planned to hold a rally in front of the statehouse on Thursday to protest his decision.

“The governor’s misguided decision was a completely unnecessary result of a failed policy calculation that he pursued without Democratic input,” the group Healthcare Is a Human Right Campaign said in a statement.

Jensen Comment
This is sad, because I was hoping that Vermont would lead the way for the other 49 states to adopt single-payer plans ---
http://faculty.trinity.edu/rjensen/Health.htm

One of Vermont's many problems with health care is that physicians are leaving the state due, in large measure, to Vermont's huge taxation of higher income professionals. This has already forced Vermont to use the medical doctors, clinics, and hospitals in bordering New Hampshire where there are no taxes on earned incomes and sales.

Vermont is also having a problem with loss of students in schools. Thus far efforts to close nearly-empty schools have failed. Purportedly there are some Vermont school districts that have more members on the school boards than children in the schools.


Question
Does anybody find it shocking that hospitals and other medical service providers overbill the third party insurance fraud pinata made up of Medicaid, Medicare, and medical insurance companies?

What is sad is when powerful politicians stand in the way of legal investigations for their big-donor friends.

"Probes Of Overbilling Run Into Political Pressure," by Christopher S. Stewart, The Wall Street Journal, December 12, 2014 ---
http://imarketreports.com/probes-of-overbilling-run-into-political-pressure.html

When investigators suspected that Houston’s Riverside General Hospital had filed Medicare claims for patients who weren’t treated, they moved to block all payments to the facility. Then politics intervened.

Rep. Sheila Jackson Lee, a Texas Democrat, contacted the federal official who oversees Medicare, Marilyn Tavenner, asking her to back down, according to documents reviewed by The Wall Street Journal. In a June 2012 letter to Ms. Tavenner, Rep. Jackson Lee said blocking payments had put the hospital at financial risk and “jeopardized” patients needing Medicare.

Weeks later, Ms. Tavenner, administrator of the Centers for Medicare and Medicaid Services, instructed deputies to restore most payments to the hospital even as the agency was cooperating in a criminal investigation of the facility, according to former investigators and documents. “These changes are at the direction of the Administrator and have the highest priority,” a Medicare official wrote to investigators.

About two months after that order, Riverside’s top executive was indicted in a $158 million fraud scheme. The hospital was barred from Medicare this May, and the CEO was convicted in October.

What happened at Riverside General Hospital shows how political pressure from medical providers and elected officials can collide with efforts to rein in waste and abuse in the nearly $600 billion, taxpayer-funded Medicare system. More than a dozen former investigators and CMS officials said in interviews that they faced questions from members of Congress about policy changes or punitive action affecting providers or individual doctors.

Ricky Sluder, a former senior investigator for a Medicare contractor who oversaw part of the Riverside investigation, said “it was extremely frustrating to stall an investigation to give some explanation to a lawmaker. It’s providers’ way of using political power.”

In an emailed statement, Medicare administrator Ms. Tavenner said the Riverside episode “reflected the tension between fraud prevention and access to care.” She said she wasn’t aware of the pending indictments and that her job required her to “balance two important policy goals” — saving taxpayer money and protecting Medicare’s beneficiaries.

A spokesman for Rep. Jackson Lee declined to comment.

Medicare has reported that during the 2013 fiscal year, waste, fraud and abuse accounted for an estimated $34.6 billion in improper payments to medical providers. CMS says it clawed back about $9 billion that year through audits and investigations.

Medicare hires contractors to enforce antifraud rules and fight improper billing. The contractors can suspend payments to doctors and hospitals and revoke billing privileges. They also can block some payments to review claims — called “prepayment review.”

Such actions can squeeze medical providers and even threaten to put them out of business. Medical providers sometimes seek help from elected officials. Politicians have a stake in such disputes: Health providers often provide jobs and valued services in their districts, and can be campaign contributors.

Continued in article

Question
What is the main difference between errors in hospital bills (in over 90% of the billings) and retail store scanned billings (in over 4% of the billings)?

Answer
Errors in hospital bills almost always favor the hospitals.
Retail store billing errors only favor the stores about half the time.

 

"The Accuracy of Scanned Prices, David Hardesty, Journal of Retailing, 2014 ---
http://www.sciencedirect.com/science/article/pii/S0022435914000244

4.08% of the prices picked up by retail-store scanners are wrong, about twice the error rate considered acceptable by the U.S. Federal Trade Commission, says a team led by David M. Hardesty of the University of Kentucky that studied more than 231,000 products scanned over 15 years in the state of Washington. Slightly less than half the errors were overcharges. An intriguing finding: Error rates are higher in affluent neighborhoods, suggesting that stores may be more careful about mistakes in areas where shoppers are more price-conscious, the researchers say.

Continued in article

The Health Care Market is Not a Market

"Video:  Inside ‘Bitter Pill’: Steven Brill Discusses His TIME Cover Story," Time Magazine, February 22, 2013 ---
http://healthland.time.com/2013/02/20/bitter-pill-inside-times-cover-story-on-medical-bills/

Simple lab work done during a few days in the hospital can cost more than a car. A trip to the emergency room for chest pains that turn out to be indigestion brings a bill that can exceed the price of a semester at college. When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?

Steven Brill spent seven months analyzing hundreds of bill from hospitals, doctors, and drug companies and medical equipment manufacturers to find out who is setting such high prices and pocketing the biggest profits. What he discovered, outlined in detail in the cover story of the new issue of TIME, will radically change the way you think about our medical institutions:

· Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer—Medicare—from even trying to negotiate the price of drugs.

· Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.

· Cancer treatment—at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson—has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.

· Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.

Brill concludes:

The health care market is not a market at all.
It’s a crapshoot. Everyone fares differently based on circumstances they can neither control nor predict. They may have no insurance. They may have insurance, but their employer chooses their insurance plan and it may have a payout limit or not cover a drug or treatment they need. They may or may not be old enough to be on Medicare or, given the different standards of the 50 states, be poor enough to be on Medicaid. If they’re not protected by Medicare or protected only partially by private insurance with high co-pays, they have little visibility into pricing, let alone control of it. They have little choice of hospitals or the services they are billed for, even if they somehow knew the prices before they got billed for the services. They have no idea what their bills mean, and those who maintain the chargemasters couldn’t explain them if they wanted to. How much of the bills they end up paying may depend on the generosity of the hospital or on whether they happen to get the help of a billing advocate. They have no choice of the drugs that they have to buy or the lab tests or CT scans that they have to get, and they would not know what to do if they did have a choice. They are powerless buyers in a sellers’ market where the only consistent fact is the profit of the sellers.

 

"Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

"Yes, Hospital Pricing Is Insane, But Why? Time magazine issues a 24,000-word memo on what we already knew," by Holman Jenkins Jr., The Wall Street Journal, March 1, 2013 ---
http://online.wsj.com/article/SB10001424127887323978104578334082993009730.html?mod=djemEditorialPage_h

Without diminishing the epic scope of Steven Brill's Time magazine piece about the U.S. health care system, he reiterates in lengthy detail perversities that are already well known, without offering a single useful insight on how it go that way, and even less on how to fix it.

Yet Mr. Brill, founder of CourtTV and American Lawyer magazine, author of books on terrorism and education, has written the longest piece in Time's history—24,000 words—so attention must be paid.

That health-care costs are inflated compared to what they would be in a reasonably transparent, competitive market (a point Mr. Brill never clearly makes) won't be a revelation. That hospitals allocate their costs to various items on their bills and price lists in ways that are opaque and arbitrary is not a new discovery either.

He finds it shocking that a hospital charging $1,791 a night won't throw in the generic Tylenol for free (instead charging $1.50 each). But this is to commit the reification fallacy of thinking there is some organic relationship between what a hospital charges for a particular item and what that item costs in the first place.

He dwells on the irrationality of hospitals charging their highest prices to their poorest customers, those without insurance. But he's also aware that these customers often pay little or nothing of what they are charged and hospitals reallocate the cost to the bills of other patients. He even notes that a hospital might collect as little as 18% of what it bills.

He vaguely gets that hospital price lists are memos for the file, to be drawn out and waved as a reference in negotiations with their real customers, the big health-care insurers, Medicaid, Medicare and other large payers.

The deals hammered out with these customers tend naturally to gravitate toward round numbers, leaving a hospital free to allocate its costs and profits to specific items however it wants. Mr. Brill may be offended that certain "non-profit" hospitals appear to be highly profitable. He probably wouldn't be happier, though, if they diverted their surplus revenues into even higher salaries and more gleamingly superfluous facilities.

"What is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?" Mr. Brill asks. But his question is rhetorical since he doesn't exhibit much urge to understand why the system behaves as it does, treating its nature as a given.

In fact, what he describes—big institutions dictating care and assigning prices in ways that make no sense to an outsider—is exactly what you get in a system that insulates consumers from the cost of their health care.

Your time might be better spent reading Duke University's Clark Havighurst in a brilliant 2002 article that describes the regulatory, legal and tax subsidies that deprive consumers of both the incentive and opportunity to demand value from medical providers. Americans end up with a "Hobson's choice: either coverage for 'Cadillac' care or no health coverage at all."

"The market failure most responsible for economic inefficiency in the health-care sector is not consumers' ignorance about the quality of care," Mr. Havighurst writes, "but rather their ignorance of the cost of care, which ensures that neither the choices they make in the marketplace nor the opinions they express in the political process reveal their true preferences."

You might turn next to an equally fabulous 2001 article by Berkeley economist James C. Robinson, who shows how the "pernicious" doctrine that health care is different—that consumers must shut up, do as they're told and be prepared to write a blank check—is used to "justify every inefficiency, idiosyncrasy, and interest-serving institution in the health care industry."

Hospitals, insurers and other institutions involved in health care may battle over available dollars, but they also share an interest in increasing the nation's resources being diverted into health care—which is exactly what happens when costs are hidden from those who pay them.

Continued in article

Jensen Comment
Over a year ago Erika's Medicare-Anthem summary of charges for the month included an $11,376 charge for out patient surgery that was mistakenly billed to her account. We called our doctor who did the procedure in the hospital. Our doctor responded not to bother her or the hospital --- since Medicare-Anthem paid the entire bill it would not matter.

This bothered us since the woman (I assume it was a woman) may not have been eligible for Medicare-Anthem. So I phoned Medicare. Medicare said not to bother them and advised us to contact the hospital where the procedure took place. Any corrections should be made by the hospital and the doctor.

So I called the hospital's accounting office. They asked that I send in a copy of the Medicare-Anthem report. I hand-delivered the report to the the hospital accounting office --- which is miles from the hospital.

Over the ensuing year we waited for a corrected Medicare-Anthem report. Nothing! So I did a follow up visit to the hospital's accounting office. The feedback was that since Medicare-Anthem paid the bill there was no need to waste time correcting this item.

I keep thinking that some woman not eligible for Medicare got a windfall gain here. Who cares if it was Medicare-Anthem that got screwed?

Erika and I changed to a doctor that we like better. But we cannot change hospitals.

Moral of the Story
If the third party insurer gets billed mistakenly or pays too much nobody cares, least of all the doctors and hospitals who got reimbursed.

Question
Who is telling a lie?

Steven Brill wrote a long cover story for Time Magazine, In that story he describes having his team examine eight very complicated hospital bills from different hospitals. In every case they found that the bills were laced with errors and overcharges in favor of the hospital and possible frauds.
Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

The following week Stamford Hospital CEO Brian G. Grissler replied as shown, in part, below. Steven Brill's reply to Grissler, Time Magazine, March 18, 2013, Page 2.

Brian G. Grissler
". . . Brill refused to share the patient's name or the complete bill, so we are unable to answer those questions . . . "

Steven Brill Responds
"Stamford Hospital was shown the bill and never disputed its authenticity. I made clear in the article the hospital settled for cutting its bill entirely in half."

Jensen Comment
There are four possibilities behind this dispute:

  1. Brian Grissler could be lying through his teeth.

     
  2. Brian Grissler may not have thoroughly investigated the ultimate resolution of this bill by his staff.

     
  3. Steven Brill could be lying through his teeth.

     
  4. Steven Brill and Brian Grissler may not be discussing the same bill (although Brill claims he only picked one bill to examine from Stamford Hospital).

My vote is that Answer 1 above is probably the correct answer, but we most likely will never know.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm

 


From the CFO Journal's Morning Ledger on December 9, 2014

Workers to bear burden of ACA cost increases ---
http://blogs.wsj.com/cfo/2014/12/08/workers-to-bear-burden-of-aca-cost-increases/?mod=djemCFO_h

Workers in the U.S. should expect health care to take a bigger bite out of their paychecks next year, CFO Journal’s Vipal Monga reports. According to Bank of America Merrill Lynch, finance chiefs at U.S. companies expect the Affordable Care Act to increase healthcare costs next year, and the majority expect to pass that along to their employees.

Jensen Comment
There were only supposed to be savings for workers under the ACA. What went wrong?

"ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---
http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

. . .

Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.

The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.

The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”

Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.

My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.

Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.

Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)

If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”

So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.

The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.

Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)

In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.

Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.

The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.

Continued in article

"Senate Bill Sets a Plan to Regulate Premiums," by Robert Pear, The New York Times, April 20, 2010 --- http://www.nytimes.com/2010/04/21/health/policy/21healt

. . .

Grace-Marie Turner, president of the Galen Institute, a research center that advocates free-market health policies, said the Democrats’ proposal was unlikely to succeed in lowering insurance costs.

“Capping premiums without recognizing the forces that are driving up costs would be like tightening the lid on a pressure cooker while the heat is being turned up,” Mrs. Turner said.

Mrs. Feinstein said her bill would close what she described as “an enormous loophole” in the new law. And she said health insurance should be regulated like a public utility.

“Water and power are essential for life,” Mrs. Feinstein said. “So they are heavily regulated, and rate increases must be approved. Health insurance is also vital for life. It too should be strictly regulated so that people can afford this basic need.”

The 6 Biggest Whoppers In Gruber's ObamaCare Comic Book ---
http://news.investors.com/ibd-editorials-obama-care/120114-728618-the-6-biggest-whoppers-in-gruber-obamacare-comic-book.htm

. . .

What the reviewers failed to mention is that the book is also chock-a-block with misinformation and outright falsehoods about the law Gruber helped construct — many of which Gruber himself exposed later on. Among the most glaring:

• Gruber claims that for individuals and small firms qualifying for a tax credit, "this bill will lower your health care costs." But Gruber would later go on to tell several states the opposite. One of them was Wisconsin, where he said fewer than 6% would see lower premiums, and 41% would get hit with hikes of 50% or more. Meanwhile, millions learned that Gruber's claim was a fantasy last year, when they confronted ObamaCare's sky-high premiums after seeing their existing plans canceled.

• Gruber declares that the law doesn't raise taxes on anyone "with incomes below $200,000 per year." Yet several of the dozens of tax hikes stuffed into the bill hit the middle class, or soon will. Americans for Tax Reform counted seven big ones.

• In the section on the Cadillac tax, which depicts Gruber tooling around in a Caddy, he claims this tax would apply "only to the top few percent of health insurance plans" and would hit more only if premiums climb faster than inflation.

But in videotaped comments, Gruber explains that the tax was purposely designed to start small and then eventually hit all employer plans, "essentially getting rid of the exclusion for employer-sponsored plans."

• Gruber emphatically declares that ObamaCare will cut the federal deficit by $1 trillion over its second decade because "the deficit-reducing effects of this legislation grow over time."

But all the Congressional Budget Office said was that a "rough outlook" for ObamaCare's second decade resulted in deficit cuts "in a broad range of around one-half percent of GDP." And that assumed the law was enacted exactly as written, and worked exactly as predicted, both of which have already failed to come true.

When the Government Accountability Office ran the numbers using more realistic scenarios, it found ObamaCare adding significantly to the long-term deficit. The CBO, meanwhile, has given up making even short-term forecasts of ObamaCare's impact on the deficit.

• Throughout the book, Gruber cites CBO projections of ObamaCare's effects on premiums and coverage, calling it "the best independent source for evaluating bills like the ACA." What he doesn't mention is that when the CBO developed its health care forecasting model in 2007, Gruber had a role in creating it. It even credits Gruber for his "helpful comments and feedback ... throughout the model's development."

And in a 2011 paper, Gruber himself said that his own health care model "mirrors the CBO approach to modeling health reform."

• Gruber says that if the law's many cost-control measures work as expected, "the ACA will end up solving our cost problem in the U.S." But earlier this year Gruber told the Washington Post that it was "misleading" to say ObamaCare will save money. "The law isn't designed to save money," he said. "It's designed to improve health, and that's going to cost money."


Read More At Investor's Business Daily:
http://news.investors.com/ibd-editorials-obama-care/120114-728618-the-6-biggest-whoppers-in-gruber-obamacare-comic-book.htm#ixzz3KllqGGBp

 

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


"Chuck Schumer: Passing Obamacare in 2010 Was a Mistake:  The Senate’s No. 3 Democrat says that his party misused its mandate," by Sarah Mimms, National Journal, November 25, 2014 ---
http://www.nationaljournal.com/congress/chuck-schumer-passing-obamacare-in-2010-was-a-mistake-20141125

Chuck Schumer upbraided his own party Tuesday for pushing the Affordable Care Act through Congress in 2010.

While Schumer emphasized during a speech at the National Press Club that he supports the law and that its policies "are and will continue to be positive changes," he argued that the Democrats acted wrongly in using their new mandate after the 2008 election to focus on the issue rather than the economy at the height of a terrible recession.

"After passing the stimulus, Democrats should have continued to propose middle-class-oriented programs and built on the partial success of the stimulus, but unfortunately Democrats blew the opportunity the American people gave them," Schumer said. "We took their mandate and put all of our focus on the wrong problem—health care reform."

The third-ranking Senate Democrat noted that just about 5 percent of registered voters in the United States lacked health insurance before the implementation of the law, arguing that to focus on a problem affecting such "a small percentage of the electoral made no political sense."

The larger problem, affecting most Americans, he said, was a poor economy resulting from the recession. "When Democrats focused on health care, the average middle-class person thought, 'The Democrats aren't paying enough attention to me,' " Schumer said.

Continued in article

"Sen. Chuck Schumer: Obamacare Focused 'On The Wrong Problem,' Ignores The Middle Class" by  Avik Roy, Forbes, November 26, 2014 ---
http://www.forbes.com/sites/theapothecary/2014/11/26/sen-chuck-schumer-obamacare-focused-on-the-wrong-problem-ignores-the-middle-class/

Despite the enduring unpopularity of Obamacare, Congressional Democrats have up to now stood by their health care law, allowing that “it’s not perfect” but that they are proud of their votes to pass it. That all changed on Tuesday, when the Senate’s third-highest-ranking Democrat—New York’s Chuck Schumer—declared that “we took [the public’s] mandate and put all our focus on the wrong problem—health care reform…When Democrats focused on health care, the average middle-class person thought, ‘The Democrats aren’t paying enough attention to me.’”

Sen. Schumer made his remarks at the National Press Club in Washington. “Democrats blew the opportunity the American people gave them…Now, the plight of uninsured Americans and the hardships caused by unfair insurance company practices certainly needed to be addressed,” Schumer maintained. “But it wasn’t the change we were hired to make. Americans were crying out for the end to the recession, for better wages and more jobs—not changes in health care.”

“This makes sense,” Schumer continued, “considering 85 percent of all Americans got their health care from either the government, Medicare, Medicaid, or their employer. And if health care costs were going up, it really did not affect them. The Affordable Care Act was aimed at the 36 million Americans who were not covered. It has been reported that only a third of the uninsured are even registered to vote…it made no political sense.”

The response from Obama Democrats was swift. Many, like Obama speechwriters Jon Lovett and Jon Favreau and NSC spokesman Tommy Vietor, took to Twitter. “Shorter Chuck Schumer,” said Vietor, “I wish Obama cared more about helping Democrats than sick people.”

"Schumer’s Con Job for the Middle Class," by Peter Morici, Townhall, December 2, 2014 ---
http://finance.townhall.com/columnists/petermorici/2014/12/02/schumers-con-job-for-the-middle-class-n1925988?utm_source=thdaily&utm_medium=email&utm_campaign=nl 

Senator Charles Schumer, in a recent speech, stated President Obama and Democratic majorities in Congress were elected in 2008 to get the economy working for middle class families. Consequently, assigning extraordinary priority to passing the Affordable Care Act was a mistake.

In 2008, most middle class families had private insurance they liked; their incomes had been falling for about a decade.

The ACA was really part of Democrats’ agenda to assist the working poor—raising the minimum wage, and expanding Medicaid, food stamps, the earned-income tax credit, and higher education grants—while cozying up to big business to finance Democratic campaigns.

Schumer wants Democrats to advocate big government programs to cure middle class woes, and portray Republicans as servants of big corporate interests. He still embraces the ACA as sound policy, even though it made health care more expensive for many middle class families and it enriches Democratic contributors among top executives and shareholders in the health care industries.

That’s not surprising—Schumer championed the 2010 Dodd-Frank banking reforms.

Those made compliance with new mortgage and business lending regulations so cumbersome that many regional banks sold out to bigger banks—and lots of decently-paying jobs in smaller city banks were lost. In turn, with more deposits to invest, the Wall Street banks keep finding new scams—like rigging foreign currency markets and speculating in commodities—to keep funding multi-million dollar bonuses for New York executives and big campaign contributions to Democrats in the Senate and House.

Cozying up to big business—while championing the poor and offering lip service to the middle class—is what Democrats have done best lately.

President Obama’s favorite fund raising venue is the home of Comcast’s CEO, and his Administration has rewarded cable providers with little effort to curb abusive rates, which rise faster than inflation.

Now, the Treasury Department has decided telecom companies may count the wires to homes as real estate and qualify for lower corporate taxes—that’s the kind of special treatment Obama charges are the primary focus of Republicans lawmakers.

. . .

Democrats have blocked petroleum exploration off the Atlantic, Pacific and Eastern Gulf Coasts, Keystone and other pipeline and infrastructure projects. These limit U.S. oil supplies, enrich big multinational oil companies, and keep OPEC and Russian oil producers in business. In turn, those deny Americans good paying jobs and finance terrorism.

The new GOP congress should try to reverse those abusive policies. But each step of the way, the Senator from Wall Street will appear on Sunday talk shows to paint Republicans as servants of big business.

Oh what a flimflam man—the Senator from Wall Street wants to now present himself as champion of the middle class.

Peter Morici is an economist and business professor at the University of Maryland, and a national columnist

 

Jensen Comment
So what's wrong with the ACA?
Firstly it expanded the piñata for fraud --- Medicaid. Half the people on Medicaid in Illinois were found not to be eligible for Medicaid.  It's bad in most other states that just are paying for audits while the Federal government is paying the tab.

Secondly it's a windfall for ACA insurance companies since the Federal government guarantees their profits and promises taxpayer money if they begin to fail. In capitalism, business firms are supposed to take on financial risks.

Thirdly, the affordable policies have 40%-60% co-pays that essentially prevents insured people from going to doctors, medical clinics, and hospitals unless they are really, really sick because of what it costs them up front. Insurance companies love that, because they are selling insurance that people don't use as much as they should be using that insurance.

Fourthly, insurance companies love the ACA because paying for medical services and medications for people behind on the payments of their ACA premiums are passed on to doctors and hospitals after 30 days. Is it any surprise that so many doctors and hospitals are refusing to accepted patients with ACA insurance?

And the list of complaints against the ACS goes on and on --- See below!

"ObamaCare Has Been A Boon To Insurers, Not Patients, Investors Business Daily, December 2, 2014 ---
http://news.investors.com/ibd-editorials-obama-care/120214-728765-new-reports-show-obamacare-a-boon-to-insurers-but-not-patients.htm

Health Costs: Imagine a health reform plan that gives a boost to big insurance companies while leaving patients less able to pay their medical bills. Think progressives would cheer about it? They will if it's called ObamaCare.

Once upon a time Democrats championed ObamaCare as "taking on" big insurance while protecting families from big medical bills. So how are those promises working out?

A Gallup survey released late last week found that 33% reported putting off medical treatments this year "because of the cost you would have to pay."

That's higher than any time since Gallup starting asking this question back in 2001, and three points higher than it was last year — before ObamaCare's insurance regulations went into effect.

What's more, the share who put off treatment for a serious condition because of cost hit 22% this year, up from 17% when President Obama took office.

Even more interesting, the poll found that having insurance apparently offered less financial protection. The share of those with insurance who said they couldn't afford at least one medical procedure jumped from 25% in 2013 to 34% in 2014.

Gallup suspects part of the reason is the fact that ObamaCare plans deployed narrow networks and steep deductibles, which kept premium costs down but exposed patients to big health bills.

At the other end of the spectrum, ObamaCare appears to be a windfall for Big Insurance. Over the first three years the law was in effect, the insurance market actually got more concentrated, according to a new Government Accountability Office report.

Between 2010 and 2013, for example, the number of states where the top three insurers controlled 80% of the individual insurance market or more went from 30 to 38. The GAO data go only through 2013, and so don't fully account for changes in the market thanks to the ObamaCare exchanges.

But it's not as though ObamaCare has so far made any meaningful impact. A Kaiser Family Foundation study looked at seven states and found that it was pretty much a wash this year — some were more competitive, some less, others didn't change.

And a GAO report released earlier this year found that the biggest insurers either held on to or increased their market share in 40 states under ObamaCare. It also found that small insurers became increasingly rare.

Yes, there are more insurance companies competing for business in the exchanges in ObamaCare's second open enrollment season. But so far, the overall impact of the law has been to direct billions of taxpayer subsidies to insurance companies for benefits that don't seem to be trickling down to patients.


Question
What is the main difference between errors in hospital bills (in over 90% of the billings) and retail store scanned billings (in over 4% of the billings)?

Answer
Errors in hospital bills almost always favor the hospitals.
Retail store billing errors only favor the stores about half the time.

 

"The Accuracy of Scanned Prices, David Hardesty, Journal of Retailing, 2014 ---
http://www.sciencedirect.com/science/article/pii/S0022435914000244

4.08% of the prices picked up by retail-store scanners are wrong, about twice the error rate considered acceptable by the U.S. Federal Trade Commission, says a team led by David M. Hardesty of the University of Kentucky that studied more than 231,000 products scanned over 15 years in the state of Washington. Slightly less than half the errors were overcharges. An intriguing finding: Error rates are higher in affluent neighborhoods, suggesting that stores may be more careful about mistakes in areas where shoppers are more price-conscious, the researchers say.

Continued in article

The Health Care Market is Not a Market

"Video:  Inside ‘Bitter Pill’: Steven Brill Discusses His TIME Cover Story," Time Magazine, February 22, 2013 ---
http://healthland.time.com/2013/02/20/bitter-pill-inside-times-cover-story-on-medical-bills/

Simple lab work done during a few days in the hospital can cost more than a car. A trip to the emergency room for chest pains that turn out to be indigestion brings a bill that can exceed the price of a semester at college. When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?

Steven Brill spent seven months analyzing hundreds of bill from hospitals, doctors, and drug companies and medical equipment manufacturers to find out who is setting such high prices and pocketing the biggest profits. What he discovered, outlined in detail in the cover story of the new issue of TIME, will radically change the way you think about our medical institutions:

· Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer—Medicare—from even trying to negotiate the price of drugs.

· Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.

· Cancer treatment—at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson—has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.

· Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.

Brill concludes:

The health care market is not a market at all.
It’s a crapshoot. Everyone fares differently based on circumstances they can neither control nor predict. They may have no insurance. They may have insurance, but their employer chooses their insurance plan and it may have a payout limit or not cover a drug or treatment they need. They may or may not be old enough to be on Medicare or, given the different standards of the 50 states, be poor enough to be on Medicaid. If they’re not protected by Medicare or protected only partially by private insurance with high co-pays, they have little visibility into pricing, let alone control of it. They have little choice of hospitals or the services they are billed for, even if they somehow knew the prices before they got billed for the services. They have no idea what their bills mean, and those who maintain the chargemasters couldn’t explain them if they wanted to. How much of the bills they end up paying may depend on the generosity of the hospital or on whether they happen to get the help of a billing advocate. They have no choice of the drugs that they have to buy or the lab tests or CT scans that they have to get, and they would not know what to do if they did have a choice. They are powerless buyers in a sellers’ market where the only consistent fact is the profit of the sellers.

 

"Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

"Yes, Hospital Pricing Is Insane, But Why? Time magazine issues a 24,000-word memo on what we already knew," by Holman Jenkins Jr., The Wall Street Journal, March 1, 2013 ---
http://online.wsj.com/article/SB10001424127887323978104578334082993009730.html?mod=djemEditorialPage_h

Without diminishing the epic scope of Steven Brill's Time magazine piece about the U.S. health care system, he reiterates in lengthy detail perversities that are already well known, without offering a single useful insight on how it go that way, and even less on how to fix it.

Yet Mr. Brill, founder of CourtTV and American Lawyer magazine, author of books on terrorism and education, has written the longest piece in Time's history—24,000 words—so attention must be paid.

That health-care costs are inflated compared to what they would be in a reasonably transparent, competitive market (a point Mr. Brill never clearly makes) won't be a revelation. That hospitals allocate their costs to various items on their bills and price lists in ways that are opaque and arbitrary is not a new discovery either.

He finds it shocking that a hospital charging $1,791 a night won't throw in the generic Tylenol for free (instead charging $1.50 each). But this is to commit the reification fallacy of thinking there is some organic relationship between what a hospital charges for a particular item and what that item costs in the first place.

He dwells on the irrationality of hospitals charging their highest prices to their poorest customers, those without insurance. But he's also aware that these customers often pay little or nothing of what they are charged and hospitals reallocate the cost to the bills of other patients. He even notes that a hospital might collect as little as 18% of what it bills.

He vaguely gets that hospital price lists are memos for the file, to be drawn out and waved as a reference in negotiations with their real customers, the big health-care insurers, Medicaid, Medicare and other large payers.

The deals hammered out with these customers tend naturally to gravitate toward round numbers, leaving a hospital free to allocate its costs and profits to specific items however it wants. Mr. Brill may be offended that certain "non-profit" hospitals appear to be highly profitable. He probably wouldn't be happier, though, if they diverted their surplus revenues into even higher salaries and more gleamingly superfluous facilities.

"What is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?" Mr. Brill asks. But his question is rhetorical since he doesn't exhibit much urge to understand why the system behaves as it does, treating its nature as a given.

In fact, what he describes—big institutions dictating care and assigning prices in ways that make no sense to an outsider—is exactly what you get in a system that insulates consumers from the cost of their health care.

Your time might be better spent reading Duke University's Clark Havighurst in a brilliant 2002 article that describes the regulatory, legal and tax subsidies that deprive consumers of both the incentive and opportunity to demand value from medical providers. Americans end up with a "Hobson's choice: either coverage for 'Cadillac' care or no health coverage at all."

"The market failure most responsible for economic inefficiency in the health-care sector is not consumers' ignorance about the quality of care," Mr. Havighurst writes, "but rather their ignorance of the cost of care, which ensures that neither the choices they make in the marketplace nor the opinions they express in the political process reveal their true preferences."

You might turn next to an equally fabulous 2001 article by Berkeley economist James C. Robinson, who shows how the "pernicious" doctrine that health care is different—that consumers must shut up, do as they're told and be prepared to write a blank check—is used to "justify every inefficiency, idiosyncrasy, and interest-serving institution in the health care industry."

Hospitals, insurers and other institutions involved in health care may battle over available dollars, but they also share an interest in increasing the nation's resources being diverted into health care—which is exactly what happens when costs are hidden from those who pay them.

Continued in article

Jensen Comment
Over a year ago Erika's Medicare-Anthem summary of charges for the month included an $11,376 charge for out patient surgery that was mistakenly billed to her account. We called our doctor who did the procedure in the hospital. Our doctor responded not to bother her or the hospital --- since Medicare-Anthem paid the entire bill it would not matter.

This bothered us since the woman (I assume it was a woman) may not have been eligible for Medicare-Anthem. So I phoned Medicare. Medicare said not to bother them and advised us to contact the hospital where the procedure took place. Any corrections should be made by the hospital and the doctor.

So I called the hospital's accounting office. They asked that I send in a copy of the Medicare-Anthem report. I hand-delivered the report to the the hospital accounting office --- which is miles from the hospital.

Over the ensuing year we waited for a corrected Medicare-Anthem report. Nothing! So I did a follow up visit to the hospital's accounting office. The feedback was that since Medicare-Anthem paid the bill there was no need to waste time correcting this item.

I keep thinking that some woman not eligible for Medicare got a windfall gain here. Who cares if it was Medicare-Anthem that got screwed?

Erika and I changed to a doctor that we like better. But we cannot change hospitals.

Moral of the Story
If the third party insurer gets billed mistakenly or pays too much nobody cares, least of all the doctors and hospitals who got reimbursed.

Question
Who is telling a lie?

Steven Brill wrote a long cover story for Time Magazine, In that story he describes having his team examine eight very complicated hospital bills from different hospitals. In every case they found that the bills were laced with errors and overcharges in favor of the hospital and possible frauds.
Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---
http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

The following week Stamford Hospital CEO Brian G. Grissler replied as shown, in part, below. Steven Brill's reply to Grissler, Time Magazine, March 18, 2013, Page 2.

Brian G. Grissler
". . . Brill refused to share the patient's name or the complete bill, so we are unable to answer those questions . . . "

Steven Brill Responds
"Stamford Hospital was shown the bill and never disputed its authenticity. I made clear in the article the hospital settled for cutting its bill entirely in half."

Jensen Comment
There are four possibilities behind this dispute:

  1. Brian Grissler could be lying through his teeth.

     
  2. Brian Grissler may not have thoroughly investigated the ultimate resolution of this bill by his staff.

     
  3. Steven Brill could be lying through his teeth.

     
  4. Steven Brill and Brian Grissler may not be discussing the same bill (although Brill claims he only picked one bill to examine from Stamford Hospital).

My vote is that Answer 1 above is probably the correct answer, but we most likely will never know.


"Medical Costs Drive Record High Number of Americans to Delay Treatment," by Sarah Jean Seman, Townhall, November 29, 2014 ---
http://townhall.com/tipsheet/sarahjeanseman/2014/11/29/medical-costs-drive-record-high-number-of-americans-to-delay-treatment-n1925200?utm_source=thdaily&utm_medium=email&utm_campaign=nl&newsletterad=

One in three Americans has delayed seeking medical treatment due to its high cost, according to a recent Gallup poll. This marks the highest percentage ever recorded in the 14-year history of the survey question.

Despite President Obama's dream of providing affordable health care coverage for all, fewer and fewer Americans are able to get the coverage they need. 

“Last year, many hoped that the opening of the government healthcare exchanges and the resulting increase in the number of Americans with health insurance would enable more people to seek medical treatment. But, despite a drop in the uninsured rate, a slightly higher percentage of Americans than in previous years report having put off medical treatment, suggesting that the Affordable Care Act has not immediately affected this measure.”

Even Upper-class Americans (those making more than $75K) were deterred by health care costs. Between 2013 and this year, there was an 11 percent increase in treatment delay among wealthier Americans.

What's more, the costs are not merely discouraging people from running to the Doctor for every little sneeze and cough. The survey found that Americans are becoming increasingly more likely (22 percent) to put off treatment for a "very" or "somewhat serious" condition or illness. Twice the number recorded (11 percent) for non-serious conditions.

Even as time continues to reveal Obamacare's negative impact on Americans, the Obama Administration continues to relentless promote its product as being what's best for the American people.


"The Real Cost of “High-Priced” Drugs," by Michael Rosenblatt, Harvard Business Review Blog, November 17, 2014 --- Click Here
https://hbr.org/2014/11/the-real-cost-of-high-priced-drugs?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

Jensen Comment
This still does not explain why the USA has to pay so much more for medications than other nations pay for the exact same products, which is why so many of my neighbors make a run for Canada to re-fill their prescriptions.

This still does not explain why the big pharmaceutical companies lobbied our whores in Washington DC to ban negotiating lower prices for Medicare D prescriptions.


Flackcheck Patterns of Deception ---
http://www.flackcheck.org/patterns-of-deception/affordable-care-act/?gclid=CMWP97rJhsICFWxk7AodCA8AqQ


"Audit reveals half of people enrolled in Illinois Medicaid program not eligible," by Craig Cheatham, KMOV Television, November 4, 2013 ---
http://www.kmov.com/news/just-posted/Audit-reveals-half-of-people-enrolled-in-IL-Medicaid-program-not-eligible-230586321.html?utm_content=buffer824ba&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer

"Medicaid Spending Has Exploded, And It Will Keep Rising Faster Than Expected

"Medicaid Spending Has Exploded, And It Will Keep Rising Faster Than Expected," by John R. Graham, Daily Caller, November 12. 2014 ---
http://dailycaller.com/2014/11/12/medicaid-spending-has-exploded-and-it-will-keep-rising-faster-than-expected/

According to the Centers for Medicare & Medicaid Services (CMS), spending on Medicaid, the jointly funded state-federal welfare program that provides health benefits to low-income people, increased 6.7 percent in 2013 to $449.5 billion. And it will keep growing at a fast rate.

In 2014, total Medicaid spending is projected to grow 12.8 percent because Obamacare has added about 8 million dependents. A large minority of states have chosen to increase residents’ eligibility for Medicaid by expanding coverage to adults making up to 138 percent of the federal poverty level.

Unfortunately, more states are likely to expand this welfare program. This is expected to result in a massive increase in the number of Medicaid dependents: From 73 million in 2013 to 93 million in 2024. Medicaid spending is expected to grow by 6.7 percent in 2015, and 8.6 percent in 2016. For 2016 to 2023, spending growth is projected to be 6.8 percent per year on average.

This comprises a massive increase in welfare dependency and burden on taxpayers. Further, official estimates often low-ball actual experience. This is because it is hard to grapple with how clever states are at leveraging federal dollars.

The Office of the Inspector General of the U.S. Department of Health & Human Services has just released a report that summarizes a decade of research on how states game the system to increase spending beyond that which the federal government anticipated.

The incentive lies in Medicaid’s perverse financing merry-go-round. In a rich state like California, for example, the federal government (pre-Obamacare) spent 50 cents on the dollar for adult dependents. So, if California spent 50 cents, it automatically drew 50 cents from the U.S. Treasury. And most states had a bigger multiplier. Which state politician can resist a deal like that?

Continued in article


Jonathan Gruber --- http://en.wikipedia.org/wiki/Jonathan_Gruber_%28economist%29#Controversies

. . .

In January 2010, after news emerged that Gruber was under a $297,000 contract with the Department of Health and Human Services, while at the same time promoting the Obama administration's health care reform policies, some conservative commentators suggested a conflict of interest.[17][18][19] While he did disclose his HHS connections in an article for the New England Journal of Medicine, his oversight in doing this earlier was defended by Paul Krugman in The New York Times.[20]

One heavily-scrutinized part of the ACA reads that subsidies should be given to healthcare recipients who are enrolled "through an Exchange established by the State". Some have read this to mean that subsidies can be given only in states that have chosen to create their own healthcare exchanges, and do not use the federal exchange, while the Obama administration says that the wording applies to all states. This dispute is currently part of an ongoing series of lawsuits referred to collectively as King v. Burwell. In July 2014, two separate recordings of Gruber, both from January 2012, surfaced in which he seemed to contradict the administration's position.[5] In one, Gruber states, in response to an audience question, that "if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits",[21] while in the other he says, "if your governor doesn't set up an exchange, you're losing hundreds of millions of dollars of tax credits to be delivered to your citizens."[22] When these recordings emerged, Gruber called these statements mistaken, describing them as "just a speak-o — you know, like a typo".[21]

In November 2014, a series of four videos emerged of Gruber speaking at different events, from 2010 to 2013, about ways he felt the ACA was misleadingly crafted and marketed to get the bill passed; in several of these videos he specifically refers to American voters as ill-informed and "stupid." In the first, most widely-publicized video taken at a panel discussion about the ACA at the University of Pennsylvania in October 2013, Gruber said the bill was deliberately written "in a tortured way" to disguise the fact that it creates a system by which "healthy people pay in and sick people get money." He said this obfuscation was needed due to "the stupidity of the American voter" in ensuring the bill's passage. Gruber said the bill's inherent "lack of transparency is a huge political advantage" in selling it.[23] The comments caused significant controversy.[24][25][26][27][28] In two subsequent videos, Gruber was shown talking about the decision (which he attributed to John Kerry) to have the bill tax insurance companies instead of patients, which he called fundamentally the same thing economically but more palatable politically. In one video, he stated that "the American people are too stupid to understand the difference" between the two approaches, while in the other he said that the switch worked due to "the lack of economic understanding of the American voter."[29] In another video, taken in 2010, Gruber expressed doubts that the ACA would significantly reduce health care costs, though he noted that lowering costs played a major part in the way the bill was promoted.[30]

"Academic Built Case for Mandate in Health Care Law," by Catherine Rampell, The New York Times, March 28, 2012 ---
http://www.nytimes.com/2012/03/29/business/jonathan-gruber-health-cares-mr-mandate.html?pagewanted=all&_r=1&

After Massachusetts, California came calling. So did Connecticut, Delaware, Kansas, Minnesota, Oregon, Wisconsin and Wyoming.

They all wanted Jonathan Gruber, a numbers wizard at M.I.T., to help them figure out how to fix their health care systems, just as he had helped Mitt Romney overhaul health insurance when he was the Massachusetts governor.

Then came the call in 2008 from President-elect Obama’s transition team, the one that officially turned this stay-at-home economics professor into Mr. Mandate.

Mr. Gruber has spent decades modeling the intricacies of the health care ecosystem, which involves making predictions about how new laws will play out based on past experience and economic theory. It is his research that convinced the Obama administration that health care reform could not work without requiring everyone to buy insurance.

And it is his work that explains why President Obama has so much riding on the three days of United States Supreme Court hearings, which ended Wednesday, about the constitutionality of the mandate. Questioning by the court’s conservative justices has suggested deep skepticism about the mandate, setting off waves of worry among its backers — Mr. Gruber included.

“As soon as I started reading the dispatches my stomach started churning,” Mr. Gruber said of the arguments on Tuesday, while taking a break from quizzing his son for a biology test. “Losing the mandate means continuing with our unfair individual insurance markets in a world where employer-based insurance is rapidly disappearing.”

Mr. Gruber, 46, hates traveling without his wife and three children, so he is tracking the case from his home in Lexington, Mass. There he crunches numbers and advises other states on health care, in between headbanging at Van Halen concerts with his 15-year-old son and cuddling with the family’s eight parrots. (His wife, Andrea, volunteers at a bird rescue center.)

If the court rules against the mandate, Mr. Gruber says he believes the number of newly insured Americans could fall to eight million from the projected 32 million. He insists that without a mandate, the law will result in a terrible spiral: only relatively sick Americans will choose to get insurance, leading premium prices to rise and causing the healthier of even those sick people to drop their insurance, sending prices higher and higher.

Some other economists quibble, though, with Mr. Gruber’s pessimistic assessment.

“My general thought about the mandate is if insurance is affordable and accessible, most people will buy it anyway,” said David Cutler, an economist at Harvard and longtime collaborator of Mr. Gruber’s.

Others, like Paul Starr, a Princeton sociologist, say they believe Mr. Gruber’s work does not account for how hard it will be to enforce the mandate.

“There is this groupthink about how important the mandate is,” Mr. Starr says. “Most people don’t understand or won’t acknowledge how weak the enforcement mechanism is.”

Mr. Starr said he thought Mr. Gruber in particular was overstating the effectiveness of the mandate because “it’s his baby.”

 That said, it is difficult for too many other experts to categorically refute Mr. Gruber’s work, since he has nearly cornered the market on the technical science behind these sorts of predictions. Other models exist — built by nonprofits like the RAND Corporation or private consultancies like the Lewin Groupbut they all use Mr. Gruber’s work as a benchmark, according to Jean Abraham, a health economist at the University of Minnesota and former senior economist in both the Obama and George W. Bush administrations.

“He’s brought a level of science to an issue that would otherwise be just opinion,” Mr. Cutler says. “He’s really the only person who has been doing all this careful modeling for so long. He’s the only person you can go to for that kind of thing, which is why the White House reached out to him in the first place.”

Mr. Obama had made health care reform a cornerstone of his campaign, and wanted to announce a credible proposal quickly after taking office. But members of the Obama administration’s transition team said they had inherited an executive branch that had vastly underinvested in modeling research on health care, especially compared to the technical modeling that had been done in areas like tax policy.

“Creating a good model from scratch would have taken months, maybe years,” said Lawrence H. Summers, who was the director of President Obama’s National Economic Council and had advised Mr. Gruber on his dissertation when they were at Harvard.

Mr. Gruber had already spent years researching government mandates, starting with his 1991 dissertation about how mandated employer benefits cut into workers’ wages.

He also did similar analyses, on a broader range of public policies for the Treasury Department in the Clinton administration from 1997-98. He was recruited by Mr. Summers, who was then deputy secretary of Treasury.

Then in 2001, after returning to M.I.T., Mr. Gruber received an e-mail from Amy Lischko, who was then an assistant commissioner in the Massachusetts healthy policy department under then-Gov. Jane M. Swift, a Republican.

She was familiar with his work, and contracted him to model some potential ways that Massachusetts could expand health insurance coverage.

“He certainly wasn’t as well known then as he is now in the health care arena,” said Ms. Lischko, now a professor at Tufts University School of Medicine. “We couldn’t exactly kick the tires on these kinds of models back then, but we knew he had done work on simulations before.”

Mr. Gruber calls himself a “card-carrying Democrat.” He and his wife host a “great quadrennial Democratic victory party” whether or not the Democratic candidate wins, he said. But given his reputation and relatively rare expertise, he still ended up working for two Republican governors in Massachusetts.

When Mr. Romney succeeded Ms. Swift in 2003, he proposed using an individual mandate to help the state achieve universal health care coverage. Mr. Gruber was again brought in to analyze the idea, which he had not formally modeled before.

“Romney saw it as a traditional Republican moral issue of personal responsibility, getting rid of the free riders in the system, not as much of an economic issue,” Mr. Gruber said. “Not only were the Republicans for it, the liberals hated it. People forget that.”

Mr. Obama had vehemently opposed an individual mandate before his election in 2008.

After the Massachusetts plan passed in 2006, Arnold Schwarzenegger, then the Republican governor of California, invited Mr. Gruber to Sacramento to help model a similar proposal.

“That was awesome,” Mr. Gruber says, his eyes widening at the memory. “I got to see the sword from Conan the Barbarian.”

The California proposal fell apart, but soon Mr. Gruber had a little cottage industry helping states model potential health system changes. He also serves on the Massachusetts board that oversees the state’s new health care exchanges.

Along with these credentials, Mr. Gruber’s position as an adviser to the influential Congressional Budget Office also left him perfectly positioned to advise the White House on health reform.

“The most important arbiter of everything was the C.B.O.,” said Neera Tanden, who was a senior adviser for health reform at the Department of Health and Human Services.

The C.B.O.’s assessment of a bill’s efficacy and costs strongly influences political debate, but the office does not publicly reveal how it calculates those numbers.

“We knew the numbers he gave us would be close to where the C.B.O. was likely to come out,” Ms. Tanden said. She was right.

After Mr. Gruber helped the administration put together the basic principles of the proposal, the White House lent him to Capitol Hill to help Congressional staff members draft the specifics of the legislation.

This assignment primarily involved asking his graduate student researchers to tweak his model’s software code. It was also almost entirely conducted from his home office, while his children were at school and then after they had gone to bed.

“If I wanted to be in Washington, I’d have taken a job in Washington,” he said. “I wanted to be around for my family.”

Even though he was brought in by the White House, Congressional staff members from both parties trusted him because he was seen as an econometric wonk, not a political agent. But soon his very involvement with the bill caused questions about his objectivity to be raised in the news media.

During and after the bill’s slog through Congress, he frequently spoke with reporters and wrote opinion pieces supporting the Affordable Care Act but did not always mention his role in helping to devise it.

He says he regrets not being more upfront about his involvement with the administration. But he does not apologize for publicly advocating the legislation, and continuing to do so — including through a comic book he wrote to explain the law.

Yes, I want the public to be informed by an objective expert,” he says. “But the thing is, I know more about this law than any other economist.”

The unintentional Obamacare Wrecking Ball Professor from MIT
MIT economist Jonathan Gruber is one of the foremost architects of Obamacare, having bragged that he "knows more about this law" than anyone else in his field. He's also emerged as an unintentional one-man wrecking ball against Obamacare, making public statements that have undermined the Obama administration's legal and political defenses of the president's signature domestic legacy.
http://www.townhallmail.com/zlzjrctbjjwkrbjbkbrptkgllfkllbftddpcqrwdbwmdms_wzvdnjvgdsn.html

"Watch Obamacare Architect Jonathan Gruber Explain Why "Lack of Transparency" Was Key to Passing the Health Care Law," by Peter Suderman, Reason Magazine, November 10, 2014 ---
http://reason.com/blog/2014/11/10/watch-obamacare-architect-jonathan-grube

. . .

It's even harder to believe now that he has admitted that he thinks it's fine to mislead people if doing so bolsters the policy goals he favors. It's really quite telling, about the law and also about Gruber. Gruber may believe that American voters are stupid, but he was the one who was dumb enough to say all this on camera.

Jensen Comment
Condoning the misleading of the public for political purposes by a scientist borders on fabrication of data and may be in violation of his university's (MIT) academic integrity policy.

Similar issues arose in the allegations against Phil Jones regarding integrity of his climate temperature recordings ---
http://en.wikipedia.org/wiki/Climatic_Research_Unit_email_controversy
Professor Jones stepped aside temporarily but was reinstated. Nevertheless these and similar allegations badly damaged the public's confidence in climate change data.

Jon Krosnick, professor of communication, political science and psychology at Stanford University, said scientists were overreacting. Referring to his own poll results of the American public, he said "It's another funny instance of scientists ignoring science." Krosnick found that "Very few professions enjoy the level of confidence from the public that scientists do, and those numbers haven't changed much in a decade. We don't see a lot of evidence that the general public in the United States is picking up on the (University of East Anglia) emails. It's too inside baseball."[139]

The Christian Science Monitor, in an article titled "Climate scientists exonerated in 'climategate' but public trust damaged," stated, "While public opinion had steadily moved away from belief in man-made global warming before the leaked CRU emails, that trend has only accelerated."[140] Paul Krugman, columnist for the New York Times, argued that this, along with all other incidents which called into question the scientific consensus on climate change, was "a fraud concocted by opponents of climate action, then bought into by many in the news media."[141] But UK journalist Fred Pearce called the slow response of climate scientists "a case study in how not to respond to a crisis" and "a public relations disaster".[142]

A. A. Leiserowitz, Director of the Yale University Project on Climate Change, and colleagues found in 2010 that:

Climategate had a significant effect on public beliefs in global warming and trust in scientists. The loss of trust in scientists, however, was primarily among individuals with a strongly individualistic worldview or politically conservative ideology. Nonetheless, Americans overall continue to trust scientists more than other sources of information about global warming.

In late 2011, Steven F. Hayward wrote that "Climategate did for the global warming controversy what the Pentagon Papers did for the Vietnam war 40 years ago: It changed the narrative decisively."[143] An editorial in Nature said that many in the media "were led by the nose, by those with a clear agenda, to a sizzling scandal that steadily defused as the true facts and context were made clear."

Jensen Comment
Professor Gruber's confession will similarly affect the public opinion of the way Obamacare was foisted on the public. This is not a proud moment in science or the life of a scientist and his university.


From the CFO Journal's Morning Ledger on November 6, 2014

Health insurers woo consumers in crowded market
http://online.wsj.com/articles/health-insurance-deadline-prompts-marketing-blitz-to-drum-up-business-1415202655?mod=djemCFO_h
Health insurers are unleashing a blizzard of ads, letters, live events and other efforts to reach consumers, as the industry ramps up for the reopening of the health law’s marketplaces on Nov. 15. Meanwhile, small-business owners test-driving the federal government’s new online health-insurance exchange report a mixed experience with the site ahead of its planned opening in 10 days.

Jensen Comment
Health insurance is currently a very good business for companies, because bad debts from people who do not pay contracted premiums are passed on to the doctors and hospitals after 30 days. In any case Obamacare promises guaranteed profits for insurance companies at taxpayer expense if necessary. This is not capitalism since one of the tenants of capitalism is that businesses take risks risks of losses and failure.

It's the doctors and hospitals that take the financial risks. In New Hampshire nearly half the hospitals refuse to admit patients with ACA insurance except in dire emergencies. Many doctors are turning patients away unless they have something other than ACA medical insurance.

Another good thing for insurers is that the deductibles have become so huge (40% to 60%) that insured people put off getting medical care until absolutely necessary --- thereby greatly reducing the number of claims to be processed and paid.

My point is that just to say that more people now have ACA health insurance is not saying a whole lot about the quality of health care that this insurance is buying. There will probably be gridlock for years in Washington DC for any attempts to bring quality health care to all citizens of the USA. I favor national health insurance, although national health insurance plans in most non-OPEC nations like Sweden, Denmark, and the UK are doing badly these days. I consider Canada to be an OPEC nation. Germany is doing better because it allows people to take on supplemental health insurance using their own savings.

The USA is now an one of the world's largest oil producers, but gridlock politics have all but destroyed possibilities for great health care for all citizens. It's one of the best nations for health care for people who can afford to pay for the services, including those lucky enough to be on Medicaid or Medicare.


Some national health plans economize by not funding medical and pharmaceutical research in anticipation that other nations will make the new discoveries. These and others also economize with delays in service, such as waiting what seems like forever for a new hip in Canada, Sweden, or Denmark. But there are some that have taken on new services (such as dialysis for the elderly) that are not adequately funded.

"Britain's Health System Is 'At Breaking Point' Over A $48 Billion Funding Black Hole," by Tomas Hirst, Business Insider, October 6, 2014 ---
http://www.businessinsider.com/nhs-is-at-breaking-point-over-a-30-billion-funding-black-hole-2014-10
Also see http://www.businessinsider.com/nhs-is-at-breaking-point-over-a-30-billion-funding-black-hole-2014-10#ixzz3FMwz0jBP

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


ACA Health Insurance Mandate for Employers in 2015 Causes New Obstacles and Challenges

From the CFO Journal's Morning Ledger on October 15, 2014

With the health law’s insurance mandate for employers set to kick in next year, companies are trying to avoid the law’s penalties while holding down costs, using strategies like enrolling employees in Medicaid, the WSJ reports. The law’s penalties, which can amount to about $2,000 per employee, take effect next year for firms that employ at least 100 people.

Insurance brokers and benefits administrators are pitching companies on strategies to keep a lid on expenses that exploit wrinkles in the law. The Medicaid option is drawing particular interest from companies with low-wage workers, brokers say.

Locals 8 Restaurant Group LLC, with about 1,000 workers, already offers health coverage, and next year plans to reduce some employees’ premiums so as to avoid running afoul of the law’s standard for affordability. It will also help eligible employees enroll in Medicaid, using a contractor called BeneStream Inc. Such maneuvers could fuel controversy as costs are shifted to taxpayers, but BeneStream said its business is growing rapidly.


From the CFO Journal's Morning Ledger on October 31, 2014

Small firms (under 50 employees) drop health plans ---
http://online.wsj.com/articles/small-firms-drop-health-plans-1414628013?mod=djemCFO_h
Small companies are starting to turn away from offering health plans, with many viewing the health law’s marketplace as an inviting and affordable option. Wellpoint Inc. said 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. Other insurers have flagged a similar trend.

Modestly larger firms are moving more employees to part-time in order to drop coverage. Larger firms have a much more difficult time avoiding high penalties for dropping health plans.

From the CPA Newsletter on May 27, 2014

IRS sets high penalties for (large) companies that send employees to ACA health exchanges
According to an Internal Revenue Service ruling, employers that move employees to health insurance exchanges by reimbursing them for their premiums do not satisfy the requirements of the Affordable Care Act. Companies that send workers to the exchanges face a tax penalty of $100 a day, or $36,500 a year, per employee. The New York Times (tiered subscription model) (5/

Eventually, large employers may opt to pay the fine for not providing health insurance and leave their workers to get coverage in the exchanges. Doing so might even save them money.
"Obamacare Increases Large Employers' Health Costs," by Sally Pipes, Forbes, May 19, 2014 ---
http://www.forbes.com/sites/sallypipes/2014/05/19/obamacare-increases-large-employers-health-costs/

Employer-provided health insurance may not be long for this world. According to a new report from S&P Capital IQ, 90 percent of American workers who receive health insurance from large companies will instead get coverage through Obamacare’s exchanges by 2020.

For that, patients — many of whom no doubt like the insurance they currently have — can blame Obamacare. The law’s many mandates, fees, and taxes will increase health costs for large employers to the point that providing health benefits at work is financially unsustainable.

Consider some of Obamacare’s most burdensome new levies. For instance, one fee on group plan sponsors is intended to fund the Patient Centered Outcomes Research Institute (PCORI), a government-sponsored organization charged with investigating the relative effectiveness of various medical treatments. Medicare may consider the Institute’s research in the determining what sorts of therapies it will cover.

Set aside the fact that the government — as paymaster for half of the health care delivered in this country — will have a significant incentive to twist the findings of such research so that older, cheaper therapies seem just as effective as more expensive, cutting-edge ones.

Making matters worse, the federal government is forcing private firms to underwrite its dirty work. For plan years ending after September 30, 2013, and before October 1, 2014, employer sponsors must pay the feds a PCORI fee of $2 per covered life. And for plan years between October 1, 2014, and October 1, 2019, they’ll have to pay an amount adjusted for national health inflation.

Large employers also have to pay a Temporary Reinsurance Fee to help “stabilize” premiums in the individual insurance market. In an American Health Policy Institute (AHPI) survey of businesses with more than 10,000 employees, one company estimated that this fee could cost it $15.3 million from 2014 to 2016.

Then there’s the 40 percent excise tax on expensive insurance plans — those with premiums greater than $10,200 for individuals and $27,500 for families — which goes into effect in 2018. One company in the same survey said that this tax could cost it $378 million over five years.

Large employers like these cover 59 percent of private-sector workers, according to the Employee Benefit Research Institute. So many firms will likely face the same tax-motivated cost increases as these two.

Obamacare doesn’t just tax employers directly. Its many coverage mandates also raise the cost of benefits indirectly.

Effective 2015, the law’s employer mandate requires employers with 100 or more full-time employees to provide health insurance to full-timers or pay a fine. In 2016, those with 50 to 99 employees will have to follow suit. The law originally intended for both groups to comply with the mandate in 2014.

Obamacare also orders plans to cover adult children on their parents’ policies until they’re 26 years of age. This “slacker mandate” has already raised employer health insurance costs by 1 to 3 percent. One firm told AHPI that the mandate could cost it almost $69 million over ten years.

Obamacare also requires employer-sponsored health plans to cover 100 percent of preventive care services, such as immunizations, contraceptive care, and depression screening. One large employer reported that full coverage of contraceptive care on its own could cost $25.6 million over ten years.

It’s no wonder that large employers expect their health bills to escalate in the years to come. The AHPI survey revealed that Obamacare could increase their health costs by 4.3 percent in 2016, 5.1 percent in 2018, and 8.4 percent in 2023.

Those percentages equate to real dollars. Over the next ten years, Obamacare could cost large employers $151 billion to $186 billion. That’s about $163 million to $200 million in additional cost per employer — or $4,800 to $5,900 per employee — solely attributable to the health reform law.

Employers will likely pass along these costs to their workers. According to a recent Mercer survey, 80 percent of employers are considering raising deductibles — or have already done so.

Eventually, large employers may opt to pay the fine for not providing health insurance and leave their workers to get coverage in the exchanges. Doing so might even save them money.

The care for an employee with hemophilia, for example, can cost a company $300,000. That could end up being a lot more expensive than the $2,000 per-employee fine for not offering insurance.

Firms could also continue furnishing insurance to most of their workers — but nudge their costliest ones onto the exchanges by making the company insurance plan unattractive to them. A company could shrink its network of doctors, raise co-payments, or even offer a chronically ill employee a raise to opt out of the employer plan.

In so doing, the company would save money. The employee would be able to secure better coverage through the exchange. And if a raise covered the cost of the exchange policy, both parties would benefit.

Others in the exchange pool — and the taxpayers subsidizing them — won’t be so lucky. Exchange enrollees are already sicker than their counterparts outside the government insurance portals. Indeed, the exchange pool fills prescriptions for the sorts of specialty drugs associated with chronic disease at a rate that’s 47 percent higher than for folks outside the exchanges.

Adding even more high-cost individuals to the exchanges could cause insurers to hike premiums. And higher premiums require greater taxpayer subsidies. Already, the Congressional Budget Office projects that the federal government will spend $1.03 trillion on exchange subsidies and related spending from 2015 to 2024.

If employers dump their sickest employees into the exchanges, that number could go spiral even further upward.

Continued in article


Penalty for Opting Out of the Affordable Care Act Is Large ($12,240) and Growing ---
http://taxprof.typepad.com/taxprof_blog/2014/09/penalty-for-opting-out-of-affordable-care-act-.html


"Underinsured ACA enrollees strain community health centers," by Virgil Dickson, Modern Healtcare, September 25, 2014 ---
http://www.modernhealthcare.com/article/20140925/NEWS/309259947/underinsured-aca-enrollees-strain-community-health-centers 

Obamacare enrollees are straining the finances of community health centers around the country, some health center leaders say.

The issue is that many lower-income patients with insurance coverage through the federal and state exchanges bought bronze-tier plans with lower premiums but high deductibles, coinsurance and copayments and no federal cost-sharing subsidies. When these patients face high out-of-pocket costs for care that falls below the deductible, they can't afford it.

So the centers are subsidizing that care by offering them means-tested sliding-scale fees. When the centers, which are not allowed to turn away patients for inability to pay, try to get the insurers to pay, the claims are usually denied, and the centers have
to write it off as uncompensated care..

“People bought what they could afford and healthcare centers are in effect subsidizing these policies,” said José Camacho, executive director of the Texas Association of Community Health Centers.

There had been uncertainty about whether community health centers, which receive federal funding and serve 22 million Americans at 9,000 sites around the country, were allowed to offer sliding-scale fees to patients with private insurance plans. On Monday,
HHS released a guidance clarifying that the centers can offer these reduced fees to patients with incomes under 200% of the federal poverty level.

Of the 7.3 million people who purchased and paid for coverage on the federal and states exchanges for 2014, about 20% selected bronze-tier plans, which feature deductibles as high as $5,500 a person. Those plans lack a key affordability feature of silver plans, which generally have higher premiums. Under the Patient Protection and Affordable Care Act, people with incomes of up to 250% of the federal poverty level who buy silver plans
qualify for cost-sharing subsidies that reduce their out-of-pocket costs for care. Purchasers of bronze plans do not qualify for those subsidies.

While all health plans that comply with Obamacare standards must cover a range of primary-care and preventive services on a first-dollar basis, deductibles and coinsurance apply when patients are diagnosed and treated for sickness, injuries or chronic illness.

“With the Affordable Care Act, while the number of uninsured may be dropping, there's a new challenge in that there is now a huge cadre of underinsured people,” said Sara Rosenbaum, chair of the health policy department at George Washington University.

Continued in article


"US Census Data: Uninsured Rate…Increased in 2014?," by Guy Benson, Townhall, September 22, 2014 ---
http://townhall.com/tipsheet/guybenson/2014/09/22/us-census-bureau-number-of-uninsured-americansincreased-in-2014-n1894992?utm_source=thdaily&utm_medium=email&utm_campaign=nl

Wait, what? We've expressed a healthy skepticism of the administration's "official" enrollment numbers, and for good reason -- but even I must admit to being a bit flummoxed by the United States Census Bureau's new findings that America's uninsured population increased in 2014 over 2013.  That data, via Phil Kerpen:

Continued in article

 

"The Myth of ObamaCare's Affordability:  The law's perverse incentives will have the nation working fewer hours, and working those hours less productively," by Casey B. Mulligan, The Wall Street Journal, September 8, 2014 ---
http://online.wsj.com/articles/casey-b-mulligan-the-myth-of-obamacares-affordability-1410218437?tesla=y&mod=djemMER_h&mg=reno64-wsj

Whether the Affordable Care Act lives up to its name depends on how, or whether, you consider its consequences for the wider economy.

Millions of people pay a significant portion of their income for health insurance so they and their families can get good health care when they need it. The magnitude of their sacrifices demonstrates the importance that people ascribe to health care.

The Affordable Care Act attempts to help low- and middle-income families avoid some of the tough sacrifices that would be necessary to purchase health insurance without assistance. But no program can change the fundamental reality that society itself has to make sacrifices in order to deliver health care to more people. Workers and therefore production have to be taken away from other industries to beef up health care, or the workforce itself has to get bigger, or somehow people have to work more productively.

Although the ACA helps specific populations by giving them a bigger slice of the economic pie, the law diminishes the pie itself. It reduces the amount that Americans work, and it makes their work less productive. This slows growth in both personal income and gross domestic product.

In further expanding the frontiers of redistribution, the ACA reduces the benefits of employment for both employers and employees. Employers that don't provide health insurance are either subject to large penalties based on the number and types of employees that they have, or are threatened with enormous penalties when they get the opportunity to expand their business. About a quarter of the nation's employees, more than 35 million men and women, currently work for employers that don't offer health insurance. These tend to be small and midsize businesses with employees who already make less than the average American worker. The result of penalizing businesses for hiring and expanding is going to be less hiring and expanding.

Another sixth of the nation's employees—almost 25 million people—are in a full-time position that makes them ineligible for the law's new and generous assistance with health-insurance premiums and cost sharing. They are ineligible for subsidies simply because they are working full time and thereby eligible for their employers' coverage. Because the only ways for them to get the new assistance is to move to part-time status, find an employer that doesn't offer coverage, or stop working, we can expect millions of workers to make one or more of those adjustments.

Most people wouldn't give up working merely to qualify for a few thousand dollars in assistance. But it is a mistake to assume that nobody is affected by subsidies, because there are people who aren't particularly happy with working, planning to leave their job anyway, or otherwise on the fence between working and not working. A new subsidy is enough to push them over the edge or to get them to stop working sooner than they would have otherwise.

The law has effects that extend well beyond the employment rate and the average length of the workweek. People, businesses and entire sectors will jockey to reduce their new tax burdens or enhance their subsidies. Their adjustments to the new incentives will make our economy less productive and stifle wage growth, even among workers who have no direct contact with the law's penalties and subsidies.

The "29er" phenomenon is a good example of how the law harms productivity. Because ACA's "employer mandate" requires firms with 50 or more full-time workers to offer health plans to employees who work more than 30 hours a week, many employers and employees have adopted 29-hour work schedules. This is not the most productive way to arrange the workplace, but it allows employers to avoid the mandate and its penalties and helps the employees qualify for individual assistance.

All of this, and much more, exacerbates the societal problem that the economy cannot expand its health sector without giving up something else of value. A complex law like the ACA has a few provisions that encourage work, such as counting unemployment income against eligibility for health assistance. But the bulk of the law overwhelms them. The ACA as a whole will have the nation working fewer hours, and working those hours less productively.

I estimate that the ACA's long-term impact will include about 3% less weekly employment, 3% fewer aggregate work hours, 2% less GDP and 2% less labor income. These effects will be visible and obvious by 2017, if not before. The employment and hours estimates are based on the combined amount of the law's new taxes and disincentives and on historical research on the aggregate effects of each dollar of taxation. The GDP and income estimates reflect lower amounts of labor as well as the law's effects on the productivity of each hour of labor.

By the end of this decade, nearly 20 million additional Americans will have health insurance as a consequence of the law. But the ultimate economywide cost of their enrollments will be at least double what it would have been if these people had enrolled without government carrots and sticks; that is, if they had decided it was worth spending their own money on health insurance. In effect, people who aren't receiving assistance through the ACA are paying twice for the law: once as the total economic pie gets smaller and again as they receive a smaller piece.

The Affordable Care Act is weakening the economy. And for the large number of families and individuals who continue to pay for their own health care, health care is now less affordable.

Mr. Mulligan is a professor of economics at the University of Chicago and the author of the new e-book "Side Effects: The Economic Consequences of the Health Reform" (JMJ Economics, 2014).

"Unemployed by ObamaCare:  Three new Fed surveys highlight damage to the labor market," The Wall Street Journal, August 21, 2014 ---
http://online.wsj.com/articles/unemployed-by-obamacare-1408664211?tesla=y&mod=djemMER_h&mg=reno64-wsj

"The Full-Time Scandal of Part-Time America Fewer than half of U.S. adults are working full time. Why? Slow growth and the perverse incentives of ObamaCare," by Mortimer Zuckerman, The Wall Street Journal,  July 13, 2014 ---
http://online.wsj.com/articles/mortimer-zuckerman-the-full-time-scandal-of-part-time-america-1405291652?tesla=y&mod=djemMER_h&mg=reno64-wsj

There has been a distinctive odor of hype lately about the national jobs report for June. Most people will have the impression that the 288,000 jobs created last month were full-time. Not so.

The Obama administration and much of the media trumpeting the figure overlooked that the government numbers didn't distinguish between new part-time and full-time jobs. Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics. What has increased are part-time jobs. They soared by about 800,000 to more than 28 million. Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security.

On July 2 President Obama boasted that the jobs report "showed the sixth straight month of job growth" in the private economy. "Make no mistake," he said. "We are headed in the right direction." What he failed to mention is that only 47.7% of adults in the U.S. are working full time. Yes, the percentage of unemployed has fallen, but that's worth barely a Bronx cheer. It reflects the bleak fact that 2.4 million Americans have become discouraged and dropped out of the workforce. You might as well say that the unemployment rate would be zero if everyone quit looking for work.

Last month involuntary part-timers swelled to 7.5 million, compared with 4.4 million in 2007. Way too many adults now depend on the low-wage, part-time jobs that teenagers would normally fill. Federal Reserve Chair Janet Yellen had it right in March when she said: "The existence of such a large pool of partly unemployed workers is a sign that labor conditions are worse than indicated by the unemployment rate."

There are a number of reasons for our predicament, most importantly a historically low growth rate for an economic "recovery." Gross domestic product growth in 2013 was a feeble 1.9%, and it fell at a seasonally adjusted annual rate of 2.9% in the first quarter of 2014.

But there is one clear political contribution to the dismal jobs trend. Many employers cut workers' hours to avoid the Affordable Care Act's mandate to provide health insurance to anyone working 30 hours a week or more. The unintended consequence of President Obama's "signature legislation"? Fewer full-time workers. In many cases two people are working the same number of hours that one had previously worked.

Since mid-2007 the U.S. population has grown by 17.2 million, according to the Census Bureau, but we have 374,000 fewer jobs since a November 2007 peak and are 10 million jobs shy of where we should be. It is particularly upsetting that our current high unemployment is concentrated in the oldest and youngest workers. Older workers have been phased out as new technologies improve productivity, and young adults who lack skills are struggling to find entry-level jobs with advancement opportunities. In the process, they are losing critical time to develop workplace habits, contacts and new skills.

Most Americans wouldn't call this an economic recovery. Yes, we're not technically in a recession as the recovery began in mid-2009, but high-wage industries have lost a million positions since 2007. Low-paying jobs are gaining and now account for 44% of all employment growth since employment hit bottom in February 2010, with by far the most growth—3.8 million jobs—in low-wage industries. The number of long-term unemployed remains at historically high levels, standing at more than three million in June. The proportion of Americans in the labor force is at a 36-year low, 62.8%, down from 66% in 2008.

Part-time jobs are no longer the domain of the young. Many are taken by adults in their prime working years—25 to 54 years of age—and many are single men and women without high-school diplomas. Why is this happening? It can't all be attributed to the unforeseen consequences of the Affordable Care Act. The longer workers have been out of a job, the more likely they are to take a part-time job to make ends meet.

The result: Faith in the American dream is eroding fast. The feeling is that the rules aren't fair and the system has been rigged in favor of business and against the average person. The share of financial compensation and outputs going to labor has dropped to less than 60% today from about 65% before 1980.

Why haven't increases in labor productivity translated into higher household income in private employment? In part because of very low rates of capital spending on new plant and equipment over the past five years. In the 1960s, only one in 20 American men between the ages of 25 and 54 was not working. According to former Treasury Secretary Larry Summers, in 10 years that number will be one in seven.

The lack of breadwinners working full time is a burgeoning disaster. There are 48 million people in the U.S. in low-wage jobs. Those workers won't be able to spend what is necessary in an economy that is mostly based on consumer spending, and this will put further pressure on growth. What we have is a very high unemployment rate, a slow recovery and across-the-board wage stagnation (except for the top few percent). According to the Bureau of Labor Statistics, almost 91 million people over age 16 aren't working, a record high. When Barack Obama became president, that figure was nearly 10 million lower.

The great American job machine is spluttering. We are going through the weakest post-recession recovery the U.S. has ever experienced, with growth half of what it was after four previous recessions. And that's despite the most expansive monetary policy in history and the largest fiscal stimulus since World War II.

Continued in article


California's Proposition 45:  Will ObamaCare price fixing work in California?

"California's ObamaCare Fight," by Allysia Finley, The Wall Street Journal, September 15, 2014 ---
http://online.wsj.com/articles/political-diary-californias-obamacare-fight-1410807906?tesla=y&mod=djemMER_h&mg=reno64-wsj

One of the most expensive and contentious initiative campaigns in California this year pits progressive Democrats against the state's ObamaCare exchange. The progressives want to give the state insurance commissioner veto power over health-insurance rates while the exchange backers want to prevent ObamaCare from imploding.

State Insurance Commissioner Dave Jones decided to go to voters after unsuccessfully lobbying the legislature to give him authority to reject health insurance rate hikes. Backing him are progressive groups and San Francisco billionaire Tom Steyer, who say consumers need more protection from money-grubbing health-insurance companies.

Assisting insurers in their fight against the initiative, Proposition 45, are regulators for the state exchange Covered California. "It's going to end up hurting Californians, hurting consumers, increasing costs," declared Democratic exchange board member Susan Kennedy at a meeting last month. "And it will damage health-care reform, perhaps permanently, perhaps fatally, in California and I think perhaps nationally."

"I don't think this is the right law at the right time," added Diana Dooley, who is Gov. Jerry Brown's secretary of health and human services. "I feel very mother-bearish on protecting the investment we have made in implementing the Affordable Care Act."

They're afraid Prop. 45 will induce insurers to narrow their provider networks to minimize rate increases. The larger danger is that some insurers might drop out of the exchange if they can't raise rates enough to cover their costs. This would erode choice and quality of health insurance, and the collateral damage might incite a public backlash. So to ensure ObamaCare's promise of lower health costs, progressives may wind up sabotaging the country's best-run state exchange.

Note that the ObamaCare benefit mandates are mainly to blame for driving up individual health premiums by as much as 88% this year. While campaigning for Prop. 45, Mr. Jones has flogged the rate spikes and accused insurers of curtailing their rate increases this year in order to undercut the initiative.

The anti-Prop. 45 campaign is just gearing up—it has spent $1.7 million of its $36.7 million war chest—but it seems that all the kvetching has raised public skepticism of the initiative. A Field Poll last week showed 41% of voters favoring the initiative, down from 69% in early July. A third of voters remain undecided, which is twice as many as two months ago. Ballot measures typically need to be polling above 50% to stand a chance of passing.

Jensen Comment
Voters should look to the empty supermarkets in Venezuela before going to the polls in California to vote for price fixing.

Voters should also remember that hospitals, medical clinics, and doctors are not obligated to serve patients having ACA-exchange insurance. In New Hampshire nearly half the hospitals in the state refuse to honor ACA-exchange medical insurance. This is partly due to reimbursement rates as well as having to cover up to 60 days of free medical care for deadbeats who are bad debts in terms of ACA insurance premiums.

Price controls ala Proposition 45 in California may result greatly reduced quantity and quality of medical care for patients insured by California's ACA-exchanges.

One state to watch in this regard is Vermont.
Vermont is in the midst of trying to start up a state-funded insurance plan that will force all private sector medical insurance companies out of the current Vermont ACA exchanges. This is probably the closest movement toward a Canadian-styled public sector health insurance plan. In Canada the province taxpayers fund healthcare insurance, and coverage varies somewhat between provinces.

One problem in Vermont is that a state with only 500,000 people (counting babies) cannot figure out how to raise $1 billion in capital needed to get the state-exchange plan started. I do hope that Vermont will figure out a way in this regard. Another problem is that much of Vermont's taxpayer dollars for state-funded medical care will go out of state since Vermont is so dependent on specialist services from the bigger medical service providers in surrounding states such as the Hitchcock-Dartmouth Medical Center and the large medical centers in Boston.

Update
 

"Vermont bails on single-payer health care," by Sarah Wheaton, Politico, December 17, 2014 ---
http://www.politico.com/story/2014/12/vermont-peter-shumlin-single-payer-health-care-113653.html

. . .

Gov. Shumlin had missed two earlier financing deadlines but finally released his proposal. But he immediately cast it as “detrimental to Vermonters.” The model called for businesses to take on a double-digit payroll tax, while individuals would face up to a 9.5 percent premium assessment. Big businesses, in particular, didn’t want to pay for Shumlin’s plan while maintaining their own employee health plans.

“These are simply not tax rates that I can responsibly support or urge the Legislature to pass,” the governor said. “In my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the state’s economy.”

And that was for a plan that would not be truly single payer. Large companies with self-insured plans regulated by ERISA would have been exempt. And Medicare also would have operated separately, unless the state got a waiver, which was a long shot.

Shumlin added that federal funds available for the transition were $150 million less than expected.

He also has a lot less political capital than before November. Shumlin, chairman of the Democratic Governors Association, still hasn’t even officially won his own reelection bid: The Legislature will settle the outcome of the November race in January because Shumlin failed to win more than 50 percent of the vote. He’s leading his Republican challenger by just a few thousand ballots.

And the substance of the plan isn’t its only politically problematic aspect. Gruber, now infamous for his blunt assessments of the Affordable Care Act and his remarks about “stupid” voters, was until recently a state consultant. Days after the election, video emerged of him dismissing criticism of Vermont’s plan in 2011 by asking, “Was this written by my adolescent children, by any chance?” State officials said they would cut off his contract.

Advocates of a single-payer plan said Shumlin should not be able to cast aside Act 48, the 2011 law that called for the creation of Green Mountain Care, without repealing it. A group planned to hold a rally in front of the statehouse on Thursday to protest his decision.

“The governor’s misguided decision was a completely unnecessary result of a failed policy calculation that he pursued without Democratic input,” the group Healthcare Is a Human Right Campaign said in a statement.

Jensen Comment
This is sad, because I was hoping that Vermont would lead the way for the other 49 states to adopt single-payer plans ---
http://faculty.trinity.edu/rjensen/Health.htm

One of Vermont's many problems with health care is that physicians are leaving the state due, in large measure, to Vermont's huge taxation of higher income professionals. This has already forced Vermont to use the medical doctors, clinics, and hospitals in bordering New Hampshire where there are no taxes on earned incomes and sales.

Vermont is also having a problem with loss of students in schools. Thus far efforts to close nearly-empty schools have failed. Purportedly there are some Vermont school districts that have more members on the school boards than children in the schools.


"Doctors Get Stuck with Bills for Deadbeat Obamacare Patients," by J.D. Tuccille, Reason Magazine, September 16, 2014 ---
http://reason.com/blog/2014/09/16/doctors-get-stuck-with-bills-for-deadbea

Last year I wrote that Obamacare could leave doctors holding the bag for claims for patients who don't pay their insurance premiums. That's because the law includes a three-month grace period during which health insurers must continue to cover patients who sign up, but don't pay the price of their insurance. If the patients eventually make good, there's no problem. But if patients don't pay the owed premiums, the insurance company has to cover the cost of claims filed during the first month. Providers are stuck with the tab for any claims filed during months two and three.

The piece I wrote last July was theoretical. The notification letter I'm holding in my hand, addressed to my wife's pediatric practice, is reality. And reality costs, in this case, over $600. That's the outstanding balance owed the practice by a patient insured by BlueCross BlueShield of Arizona. It's a balance that my wife might have to eat, or else try to collect herself.

Here's the letter, from which my wife redacted all identifying information before showing it to me.

Dear Practitioner:

Under the Patient Protection and Affordable Care Act (PPACA), if an individual purchases health insurance through the Individual Marketplace and receives a subsidy to assist with premiums, there is a three month grace period in which the individual can make premium payments. During this period, insurance companies may not disenroll members, issuers must notify providers as soon as practicable when an enrollee enters the grace period and, during the second and third months of the grace period, they are required to notify providers that claims incurred in the second and third months may deny if the premium is not paid.

The member referenced above purchased health insurance through the Marketplace and currently receives a subsidy to assist with premiums. This letter is a courtesy notification to make you aware that this member and any covered dependents are currently in the 3rd month of their grace period.

What this means to you

  • This claim was incurred during the second or third month of the member's grace period and was pended. All individual claims under this contract are also in the second or third month of their grace period.
  • Any additional claims incurred during the second and third month of the grace period may be pended until the full premium due is paid by the member.
  • If the premium is paid in full by the end of the grace period, and pended claims will be processed in accordance with the terms of the contract.
  • If premium is not paid in full by the end of the grace period, any claims incurred in the second and third months may be denied. If claims incurred in the second and third month are denied due to non-payment of premium, you may seek reimbursement directly from the member.

The American Medical Association (AMA) has more information about the grace period here, though the letter above covers the high points. Given the potentially high costs providers can face when the insurance coverage they process for patient care turns out to be more of a conditional suggestion than a firm guarantee, the AMA also offers physicians guidance, and urges them to enter into financial agreements with patients who receive subsidized care. The idea is to get them to promise to pay their own bills if they stiff the insurance company.

Of course, those patients promised to pay their insurance companies, too.

"Doctors Get Stuck with Bills for Deadbeat Obamacare Patients," by J.D. Tuccille, Reason Magazine, September 16, 2014 ---
http://reason.com/blog/2014/09/16/doctors-get-stuck-with-bills-for-deadbea

Last year I wrote that Obamacare could leave doctors holding the bag for claims for patients who don't pay their insurance premiums. That's because the law includes a three-month grace period during which health insurers must continue to cover patients who sign up, but don't pay the price of their insurance. If the patients eventually make good, there's no problem. But if patients don't pay the owed premiums, the insurance company has to cover the cost of claims filed during the first month. Providers are stuck with the tab for any claims filed during months two and three.

The piece I wrote last July was theoretical. The notification letter I'm holding in my hand, addressed to my wife's pediatric practice, is reality. And reality costs, in this case, over $600. That's the outstanding balance owed the practice by a patient insured by BlueCross BlueShield of Arizona. It's a balance that my wife might have to eat, or else try to collect herself.

Here's the letter, from which my wife redacted all identifying information before showing it to me.

Dear Practitioner:

Under the Patient Protection and Affordable Care Act (PPACA), if an individual purchases health insurance through the Individual Marketplace and receives a subsidy to assist with premiums, there is a three month grace period in which the individual can make premium payments. During this period, insurance companies may not disenroll members, issuers must notify providers as soon as practicable when an enrollee enters the grace period and, during the second and third months of the grace period, they are required to notify providers that claims incurred in the second and third months may deny if the premium is not paid.

The member referenced above purchased health insurance through the Marketplace and currently receives a subsidy to assist with premiums. This letter is a courtesy notification to make you aware that this member and any covered dependents are currently in the 3rd month of their grace period.

What this means to you

  • This claim was incurred during the second or third month of the member's grace period and was pended. All individual claims under this contract are also in the second or third month of their grace period.
  • Any additional claims incurred during the second and third month of the grace period may be pended until the full premium due is paid by the member.
  • If the premium is paid in full by the end of the grace period, and pended claims will be processed in accordance with the terms of the contract.
  • If premium is not paid in full by the end of the grace period, any claims incurred in the second and third months may be denied. If claims incurred in the second and third month are denied due to non-payment of premium, you may seek reimbursement directly from the member.

The American Medical Association (AMA) has more information about the grace period here, though the letter above covers the high points. Given the potentially high costs providers can face when the insurance coverage they process for patient care turns out to be more of a conditional suggestion than a firm guarantee, the AMA also offers physicians guidance, and urges them to enter into financial agreements with patients who receive subsidized care. The idea is to get them to promise to pay their own bills if they stiff the insurance company.

Of course, those patients promised to pay their insurance companies, too.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


There's No Accounting for the Pricing Differences of Health Care Services
Why does an upper back MRI scan cost three times as much in one reputable Boston-area hospital as in a nearby reputable hospital?

"Price Tags On Health Care? Only In Massachusetts," by Martha Bebinger, WBUI, October 8, 2014 ---
http://www.webmd.com/health-insurance/ma/20141008/price-tags-on-health-care-only-in-massachusetts

Without much fanfare, Massachusetts launched a new era of health care shopping last week.

Anyone with private health insurance in the state can now go to his or her health insurer’s website and find the price of everything from an office visit to an MRI to a Cesarean section. For the first time, health care prices are public.

It’s a seismic event. Ten years ago, I filed Freedom of Information Act requests to get cost information in Massachusetts—nothing. Occasionally over the years, I’d receive manila envelopes with no return address, or secure .zip files with pricing spreadsheets from one hospital or another.

Then two years ago, Massachusetts passed a law that pushed health insurers and hospitals to start making this once-vigorously guarded information more public. Now as of Oct. 1, Massachusetts is the first state to require that insurers offer real-time prices by provider in consumer-friendly formats.

“This is a very big deal,” said Undersecretary for Consumer Affairs and Business Regulation Barbara Anthony. “Let the light shine in on health care prices.”

There are caveats.

1.) Prices are not standard, they vary from one insurer and provider to the next. I shopped for a bone density test. The low price was $16 at Tufts Health Plan, $87 on the Harvard-Pilgrim Health Care site and $190 at Blue Cross Blue Shield of Massachusetts. Why? Insurers negotiate their own rates with physicians and hospitals, and these vary too. Some of the prices include all charges related to your test, others don’t (see No. 2).

2.) Posted prices may or may not include all charges, for example the cost of reading a test or a facility fee. Each insurer is defining “price” as it sees fit. Read the fine print.

3.) Prices seem to change frequently. The first time I shopped for a bone density test at Blue Cross, the low price was $120. Five days later it had gone up to $190.

4.) There is no standard list of priced tests and procedures. I found the price of an MRI for the upper back through Harvard Pilgrim’s Now iKnow tool. That test is “not found” through the Blue Cross “Find a Doc” tool.

5.) Information about the quality of care is weak. Most of what you’ll see are patient satisfaction scores. There is little hard data about where you’ll get better care. This is not necessarily the insurer’s fault, because the data simply doesn’t exist for many tests.

6.) There are very few prices for inpatient care, such as a surgery or an illness that would keep you in the hospital overnight. Most of the prices you’ll find are for outpatient care.

These tools are not perfect, but they are unlike anything else in the country. While a few states are moving toward more health care price transparency, none have gone as far as Massachusetts to make the information accessible to consumers. Tufts Health Plan Director of Commercial Product Strategy Athelstan Bellerand said the new tools "are a major step in the right direction.” Bellerand added: “They will help patients become more informed consumers of health care.”

Patients can finally have a sense of how much a test or procedure will cost in advance. They can see that some doctors and hospitals are a lot more expensive than others. For me, a bone density test would cost $190 at Harvard Vanguard and $445 at Brigham and Women’s Hospital.

The most frequent early users of the newly disclosed data are probably providers. Anthony says some of the more expensive physicians and hospitals react with, “I don’t want to be the highest priced provider on your website. I thought I was lower than my competitors.”

Anthony is hoping that will generate more competition and drive down prices.

“I’m just talking about sensible rational pricing, which health prices are anything but,” she added.

Take, for example, the cost of an upper back MRI.

“The range here is $614 to $1,800, so three times,” said Sue Amsel, searching “Now I Know,” the tool she manages at Harvard Pilgrim. “That to me is a very big range.” 

In this case, the most expensive MRI is at Boston Children’s Hospital and the lowest cost option is at New England Baptist, with no apparent difference in quality. 

“It’s not just for choosing. It’s primarily for getting you the information, about whatever you’re having done, so you can plan for it,” she said.

Most of us don’t have to plan for anything except our co-pay. But about 15 percent of commercial insurance plans have high deductible plans, in which patients pay the full cost of an office visit or test up to the amount of their deductible, and that number is growing.

Continued in article

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


"GAO: Where did ObamaCare’s $3.7B go?" by Sarah Ferris, The Hill, September 22, 2014 ----
http://thehill.com/policy/healthcare/218628-gao-where-did-obamacares-37b-go

The Obama administration has spent at least $3.7 billion to build and promote online marketplaces under the Affordable Care Act, but it can’t prove exactly where it all went, according to an audit released Monday.

Federal investigators said the Centers for Medicare and Medicaid Services (CMS) does not properly track certain data that public officials need in order to determine whether the healthcare law is working.

The government tracks its healthcare spending in an outdated records system that cannot easily respond to data requests such as salaries or public relations contracts in certain departments. Instead, officials rely on manually prepared spreadsheets that can take months to produce. 

Out of that data, “we were not able to determine the reliability of most of the information,” according to the report by the independent Government Accountability Office (GAO). 

CMS's processes are inconsistent with certain federal accounting and internal control standards,” the report states. To improve the system, the GAO recommends that CMS staff create new procedures to provide more timely and reliable information to the public. “Particularly for programs subject to a significant degree of public and congressional scrutiny,” the GAO reports. 

The report marks the third time in two weeks that a federal audit has criticized the rollout of ObamaCare.

The auditors pointed to one particularly troublesome area within CMS — its Center for Consumer Information & Insurance Oversight, which works largely with state governments. 

That agency could not verify its total costs of staff salaries, travel, polling or total advertising spent on ObamaCare. 

The investigation was requested by Rep. Dave Camp (R-Mich.), the outgoing chair of the House Ways and Means Committee. Camp released a statement criticizing the administration's financial tracking.

“After promising transparency and then ignoring repeated requests from Congress, we now find out that the administration is not even keeping track of how many taxpayer dollars are going out the door,” he said. “Worse yet, the administration won’t even account for how much it spent on public relations campaigns promoting their unpopular law.” 

The Department of Health and Human Services (HHS), which oversees the other agencies, defended its financial tracking system, which it described as “up-to-date.” 

The department argued it relies on an ad-hoc process only when responding to non-routine data requests, such as those from the GAO or Congress. 

HHS has endured heavy scrutiny from lawmakers, particularly over the last year. Members of Congress and their staff have sent hundreds of inquiries to HHS since the launch of ObamaCare. As a result, department officials have testified at more than 50 hearings and supplied 140,000 pages of documents.


"Big (60%) Minnesota insurer leaves Obamacare site," by Dan Mangan (CNBC), Yahoo Finance, September 16, 2014 ---
http://finance.yahoo.com/news/big-minnesota-insurer-leaves-obamacare-185046511.html

The "Blue Ox" of Minnesota Obamacare is calling it quits.

PreferredOne, the insurer that sold nearly 60 percent of all private health plans on Minnesota's Obamacare exchange, on Tuesday said it would leave that marketplace. PreferredOne's plans were the lowest-cost options on that exchange, known as MNSure.

PreferredOne cited the costs of doing business on MNSure as the reason for its surprising decision, saying that selling plans is "not administratively and financially sustainable going forward," according to KSTP.com, the website of that Minnesota TV News network.

"Our MNsure individual product membership is only a small percentage of the entire PreferredOne enrollment but is taking a significant amount of our resources to support administratively," a company statement obtained by KSTP said. "We feel continuing on MNsure was not sustainable and believe this is an important step to best serve all PreferredOne members."
 

The insurer's surprising move came just two months before the start of open enrollment in Obamacare plans for 2015 and a month before insurers are expected to release their plan rates for next year.

Read More CEO prescription for health care

PreferredOne's decision is likely to have significant effect not only on its current Obamacare enrollees, but also on people who will be shopping for plans for next year on the exchange, which is now left with just four insurers. The remaining players on the exchange are Blue Cross and Blue Shield, Health Partners, Medica and UCare.

PreferredOne's relatively low-priced plans on MNSure for the 2014 enrollment season were a big reason why 59 percent of the 47,902 people who bought health coverage on the exchange by mid-April selected the insurer.

Those customers now face the prospects of higher rates if they want to remain in those same plans next year, as is their option, while existing customers of other insurers and new customers in the market will have fewer price options from which to choose.

In a statement released Tuesday, MNSure noted that "all consumers currently enrolled through Preferred One will have continued coverage through their existing plan for the rest of 2014."

And the statement said that under state law, customers have the right to renew their current coverage for 2015, but "this mandate does not require it to be offered at the same price."

Read More 115K could lose Obamacare coverage

In a joint statement, MNsure's CEO, Scott Leitz, and Preferred One CEO Marcus Merz said, "Today Preferred One made the decision to not offer health plans through the health insurance exchange in 2015. Simply put, both organizations understand that MNsure is still an evolving partnership. This decision impacts 2015 enrollment."

"Consumers still have at least four, well-known, Minnesota-based carriers who are committed to providing important health coverage to Minnesotans through MNsure, including people who qualify for tax credits and public programs," the CEOs said.

Read More How to save on health care in retirement

"MNsure and Preferred One will work closely to minimize impact to current enrollees in a Preferred One Plan through MNsure."

PreferredOne is owned jointly by three medical providers in the Minneapolis-St. Paul area. The insurer is Minnesota's fifth largest by revenue, and will continue selling health plans outside of the Obamacare exchange.

-By CNBC's Dan Mangan.

Jensen Comment
I don't think the ACA is sustainable until state or federal government insurance exchanges replace those of the private sector. Keep tuned into Vermont where a serious effort is underway to opt out of private sector medical insurance for ACA exchanges.


Jensen Comment
What stands in the way of cutting health care cost in the USA relative to other nations. My answer to this is:

  • Lawyers who have found a gold mine in malpractice insurance (often fraudulent) lawsuits. Physicians and hospitals pay ten or more times as much in the USA for malpractice insurance than health providers in other nations. In part this is why the USA has 80?% more lawyers than other nations.
     
  • Relatives of terminally ill patients who refuse to sign off on dying patients as long as third-party providers (e.g., Medicare and Medicaid) pay all the enormous expenses of keeping dying people alive in hospitals.|
    The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/
    All other nations are more sensible about costs and benefits of temporarily extending life at massive costs.
     
  • Medical care providers who fear making mistakes (for whatever reason) and over prescribe diagnostic and treatment tests and medications. The USA also spends much more than other nations on keeping premature babies alive.
     

The article below focuses on the medical care providers.

"What Really Stands in the Way of Cutting Health Care Costs?" Knowledge@Wharton, July 31, 2014 ---
http://knowledge.wharton.upenn.edu/article/really-stands-way-cutting-health-care-costs/

"A Medicare scam that just kept rolling: The government has paid billions to buy power wheelchairs. It has no idea how many of the claims are bogus," The Washington Post, August 16, 2014 ---
http://www.washingtonpost.com/sf/national/2014/08/16/a-medicare-scam-that-just-kept-rolling/

LOS ANGELES — In the little office where they ran the scam, a cellphone would ring on Sonia Bonilla’s desk. That was the sound of good news: Somebody had found them a patient.

When Bonilla answered the phone, one of the scam’s professional “patient recruiters” would read off the personal data of a senior citizen. Name. DOB. Medicare ID number. Bonilla would hang up and call Medicare, the enormous federal health-insurance program for those over 65.

BREAKING POINTS:

WHERE GOVERNMENT FALLS APART

Fourth in a series examining the failures at the heart of troubled federal systems.

She asked a single question: Had the government ever bought this patient a power wheelchair?

No? Then the scam was off and running.

“If they did not have one, they would be taken to the doctor, so the doctor could prescribe a chair for them,” Bonilla recalled. On a log sheet, Bonilla would make a note that the recruiter was owed an $800 finder’s fee. “They were paid for each chair.”

This summer, in a Los Angeles courtroom, Bonilla described the workings of a peculiar fraud scheme that — starting in the mid-1990s — became one of the great success stories in American crime.

The sucker in this scheme was the U.S. government. That wasn’t the peculiar part.

The tool of the crime was the motorized wheelchair.

The wheelchair scam was designed to exploit blind spots in Medicare, which often pays insurance claims without checking them first. Criminals disguised themselves as medical-supply companies. They ginned up bogus bills, saying they’d provided expensive wheelchairs to Medicare patients — who, in reality, didn’t need wheelchairs at all. Then the scammers asked Medicare to pay them back, so they could pocket the huge markup that the government paid on each chair.

A lot of the time, Medicare was fooled. The government paid.

Since 1999, Medicare has spent $8.2 billion to procure power wheelchairs and “scooters” for 2.7 million people. Today, the government cannot even guess at how much of that money was paid out to scammers.

Now, the golden age of the wheelchair scam is probably over.

But, while it lasted, the scam illuminated a critical failure point in the federal bureaucracy: Medicare’s weak defenses against fraud. The government knew how the wheelchair scheme worked in 1998. But it wasn’t until 15 years later that officials finally did enough to significantly curb the practice.

“If you play it right, you can make a lot of money quickly, stealing from Medicare,” said James Quiggle, of the nonprofit Coalition Against Insurance Fraud, recounting the lesson of the past decade and a half. “You can walk into the United States, with limited English skills, no knowledge of medicine, and — if you hook up with the right people, that know how to play the system like a Stradivarius — you can become an overnight millionaire.” Video: How to scam Medicare in 4 easy steps

‘I said I didn’t need it’

In the courtroom in Los Angeles, 42-year-old Olufunke Fadojutimi was on trial. Prosecutors alleged she’d run a wheelchair-scam operation out of an office-park suite in suburban Carson, Calif.

As these scams go, this one was medium-sized. It billed Medicare for about 1,000 power wheelchairs.

“I said I didn’t need it,” witness Heriberto Cortez, 73, testified on the stand. Cortez was recalling the day when a stranger — allegedly one of Fadojutimi’s patient recruiters — came to his house and offered him a wheelchair. He said no. She didn’t listen.

“She insisted,” Cortez said. “She said that they were giving the chairs away.”

Later in the trial, 71-year-old Rodolfo Fernandez testified that a woman showed up at his house in Los Angeles. The woman asked if he was on Medicare. He was.

The next day, she came back with a van. Other seniors were already inside.

“They took us to a clinic. They did an exam on us,” Fernandez recalled, translated speaking through a Spanish interpreter.

Authorities said the doctor at this clinic was in on the scam, too. He was paid to find the same problems, every time. The patient was too weak to use a cane. Or a walker. Or even a non-motorized wheelchair. Only a motorized wheelchair would do. Instead of making lame men walk, the doctor’s job was to make walking men lame — at least on paper. A surge in power wheelchairs and scooters paid for by Medicare

Since 1999, Medicare has spent $8.2 billion to procure power wheelchairs and scooters for 2.7 million people. Today, the federal government does not know how much of that money was actually paid to scammers.

Source: U.S. Centers for Medicare and Medicaid Services

In his testimony, Fernandez noted that the clinic was in a second-floor walk-up.

“I had to climb the stairs,” Fernandez said, in order for the doctor to proclaim him unfit to climb stairs.

After seeing the doctor, prosecutors said, both Cortez and Fernandez got power wheelchairs from Fadojutimi’s company. The company then sent Medicare the bills. Medicare paid.

Today, Cortez’s wheelchair sits in his garage, still wrapped in plastic from the factory. Fernandez’s wheelchair is occupied by an enormous stuffed animal wearing a Los Angeles Lakers hat.

“I put my little teddy bear on top of it,” Fernandez said, as jurors smiled at a photo of the bear in the chair. An overwhelmed system

Fraud in Medicare has been a top concern in Washington for decades, in part because the program’s mistakes are so expensive. In fiscal 2013, for instance, Medicare paid out almost $50 billion in “improper payments.” These were bills that, upon further reflection, contained mistakes and should not have been paid.

No one knows how much of that money was actually lost to fraud, and how much of it was caused by innocent errors.

The power-wheelchair scam provided a painful and expensive example of why Medicare fraud works so often. The fault lay partly with Congress, which designed this system to be fast and generous. And it lay partly with Medicare bureaucrats — who were slow to recognize the threat and use the powers they had to stop it. As a result, scammers took advantage of a system that was overwhelmed by its own claims and lacked the manpower and money to check most of those claims before it paid.

The scheme first appeared in the mid-1990s in Miami — a city whose mix of elderly people and professional scammers has always made it the DARPA of Medicare fraud, where bad ideas begin.

“The patients would be walking,” said one former Justice Department official, recalling investigations from that time. “And they’d have the wheelchair, a $2,500 wheelchair, sitting in the corner with stacks of [stuff] on it. And [investigators] would say, ‘Why do you have this?’ And they would say, ‘They told me I could have this, so I took it.’ ”

Fraudsters, they were learning, had invented a new twist on an old trick: the Medicare equipment scam.

The original equipment scam had sprung up in the 1970s, at a time when Medicare was young and criminals were still learning how to steal its money. Doctors, for example, could bill Medicare for exams they didn’t do. Hospitals could bill for tests that patients didn’t need.

The equipment scam was the poor man’s way in, an entry-level fraud that didn’t require a medical degree or a hospital.

Instead, the crooks only had to set up a “medical equipment” company and get access to the Medicare system. Then, they needed to learn a simple scheme, in which the fraudster would run the normal order of medical decision-making in reverse.

A legitimate medical-supply company, of course, must wait for a patient to see a doctor, then come looking for somebody to fill a prescription. But a fraudster starts with a prescription he wants to fill.

Then he goes looking for a patient and a doctor to foist it on.

By the 1990s, fraudsters had already perfected parts of this equipment scam. To find the patients, for instance, they had learned to use professional recruiters, called “marketers” or “cappers.”

These recruiters induced seniors to hand over their Medicare ID numbers. Sometimes, they just paid the patients a bribe. Other times, they talked them into giving the number up free. The government is offering free wheelchairs, but only for a limited time. If you don’t act now . . .

Most fraudsters had also learned to buy off a doctor or two, paying a set price for each bogus prescription. But some had also perfected a cheaper method.

They corrupted dead doctors instead.

“The Russian mob up in Brooklyn has been doing this for years. . . . They scour the obits. They find out when Doctor Morris has died. They immediately write to Medicare and they say, ‘Hi, I’m Doctor Morris, and I’m changing my address,' ” said Lewis Morris, a former top official at the Department of Health and Human Services’ office of the inspector general.

If it works, the dead doctor’s mail is delivered to the live crook. Including paperwork with the doctor’s Medicare ID number. “So the new Doctor Morris, Sammy Scumbag, starts writing scrip in the name of Doctor Morris,” Morris said. Recent reforms have lessened this problem.

The payoff of this whole scheme came when a scammer sent Medicare a bill. The bill would say that the bought-off doctor had prescribed some piece of equipment to the bought-off (or hoodwinked) patient.

The fraudster would say that he had supplied that thing. Now, he wanted Medicare to pay its share — usually, 80 percent of the price tag.

But what was the best kind of equipment to use?

Continued in article

Bob Jensen's Fraud Updates --- http://faculty.trinity.edu/rjensen/FraudUpdates.htm

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


We're old enough to remember when advocates for the Affordable Care Act promised that it would "bend the cost curve" and reduce expensive hospital visits, particularly at emergency rooms. So far, the opposite is occurring.
James Freeman, "There Goes Another ObamaCare Argument," WSJ, August 6, 2014 ---
http://online.wsj.com/articles/there-goes-another-obamacare-argument-1407242712?tesla=y&mod=djemMER_h&mg=reno64-wsj

"A Simple Theory for Why School and Health Costs Are So Much Higher in the U.S.," by Andrew O’Connell, Harvard Business Review Blog, April 7, 2014 ---
http://blogs.hbr.org/2014/04/a-simple-theory-for-why-school-and-health-costs-are-so-much-higher-in-the-u-s/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29&cm_ite=DailyAlert-040814+%281%29&cm_lm=sp%3Arjensen%40trinity.edu&cm_ven=Spop-Email 

Jensen Comment
One reason higher education costs more in the USA is that more attempts are made to bring college education to everybody with nearby physical campuses such as community colleges and online degree programs from major universities. In Europe and most other parts of the world higher education is available only to a much smaller portion of the population. In Germany, for example, less than 25% of young graduates are admitted to college and opportunities for adult college education are much more limited than in the USA. Those other nations, however, often offer greater opportunities for learning a trade that does not require a college education.

There are many reasons health care costs more in the USA. One reason is that the USA is the world leader in medical and medication research. Another reason is that the USA imposes a costly private sector insurance intermediary where other nations offer insurance from a more efficient public sector.

Still another reason is that malpractice lawsuits are a legal punitive damages lottery in most parts of the USA such that hospitals and physicians must pay ten or more times as much for malpractice insurance relative to nations like Canada that restrict malpractice to actual damages only, leaving out the lottery for lawyers.

Still another reason is that the USA keeps extremely premature babies alive that other nations throw away. Even more expense if what Medicare spends on keeping people hopelessly and artificially alive, dying people that other nations let slip away without all the very costly artificial life extensions.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

National Bureau of Economic Research: Bulletin on Aging and Health --- http://www.nber.org/aginghealth/

Leading ACA Act Blogs ---
http://www.zanebenefits.com/blog/15-best-health-reform-blogs

 

 


"Obamacare by the Numbers A state-by-state analysis of failed health care exchanges," by Peter Suderman, Reason Magazine, August/September 2014 ---
http://reason.com/archives/2014/07/01/obamacare-by-the-numbers


"The ObamaCare-IRS Nexus:  The supposedly independent agency harassed the administration's political opponents and saved its health-care law," by Kimberly Strassel, The Wall Street Journal, July 24, 2014 ---
http://online.wsj.com/articles/kim-strassel-the-obamacare-irs-nexus-1406244677?tesla=y&mod=djemMER_h&mg=reno64-wsj

One of the big questions out of the IRS targeting scandal is this: How can an agency that engaged in such political misconduct be trusted to implement ObamaCare? This week's Halbig v. Burwell ruling reminded us of the answer. It can't.

The D.C. Circuit Court of Appeals ruled in Halbig that the administration had illegally provided ObamaCare subsidies in 36 insurance exchanges run by the federal government. Yet it wasn't the "administration" as a whole that issued the lawless subsidy gift. It was the administration acting through its new, favorite enforcer: the IRS.

And it was entirely political. Democrats needed those subsidies. The party had assumed that dangling subsidies before the states would induce them to set up exchanges. When dozens instead refused, the White House was faced with the prospect that citizens in 36 states—two-thirds of the country—would be exposed to the full cost of ObamaCare's overpriced insurance. The backlash would have been horrific, potentially forcing Democrats to reopen the law, or even costing President Obama re-election.

The White House viewed it as imperative, therefore, that IRS bureaucrats ignore the law's text and come up with a politically helpful rule. The evidence shows that career officials at the IRS did indeed do as Treasury Department and Health and Human Services Department officials told them. This, despite the fact that the IRS is supposed to be insulated from political meddling.

We know this thanks to a largely overlooked joint investigation and February report by the House Oversight and Ways and Means committees into the history of the IRS subsidy rule. We know that in the late summer of 2010, after ObamaCare was signed into law, the IRS assembled a working group—made up of career IRS and Treasury employees—to develop regulations around ObamaCare subsidies. And we know that this working group initially decided to follow the text of the law. An early draft of its rule about subsidies explained that they were for "Exchanges established by the State."

Yet in March 2011, Emily McMahon, the acting assistant secretary for tax policy at the Treasury Department (a political hire), saw a news article that noted a growing legal focus on the meaning of that text. She forwarded it to the working group, which in turn decided to elevate the issue—according to Congress's report—to "senior IRS and Treasury officials." The office of the IRS chief counsel—one of two positions appointed by the president—drafted a memo telling the group that it should read the text to mean that everyone, in every exchange, got subsidies. At some point between March 10 and March 15, 2011, the reference to "Exchanges established by the State" disappeared from the draft rule.

Emails viewed by congressional investigators nonetheless showed that Treasury and the IRS remained worried they were breaking the law. An email exchange between Treasury employees in the spring of 2011 expressed concern that they had no statutory authority to deem a federally run exchange the equivalent of a state-run exchange.

Yet rather than engage in a basic legal analysis—a core duty of an agency charged with tax laws—the IRS instead set about obtaining cover for its predetermined political goal. A March 27, 2011, email has IRS employees asking HHS political hires to cover the tax agency's backside by issuing its own rule deeming HHS-run exchanges to be state-run exchanges. HHS did so in July 2011. One month later the IRS rushed out its own rule—providing subsidies for all.

That proposed rule was criticized by dozens of scholars and congressional members, all telling the IRS it had a big legal problem. Yet again, the IRS did no legal analysis. It instead brought in a former aide to Democratic Rep. Lloyd Doggett, whose job appeared to be to gin up an after-the-fact defense of the IRS's actions. The agency formalized its rule in May 2012.

To summarize: The IRS (famed for nitpicking and prosecuting the tax law), chose to authorize hundreds of billions of illegal subsidies without having performed a smidgen of legal due diligence, and did so at the direction of political taskmasters. The agency's actions provided aid and comfort to elected Democrats, even as it disenfranchised millions of Americans who voted in their states to reject state-run exchanges. And Treasury knows how ugly this looks, which is why it initially stonewalled Congress in its investigation—at first refusing to give documents to investigators, and redacting large portions of the information.

Administration officials will continue to use the IRS to try to improve its political fortunes. The subsidy shenanigans are merely one example. Add Democrats' hijacking of the agency to target and silence political opponents. What you begin to see are the makings of a Washington agency—a body with the power to harass, to collect, to fine, to imprison—working on behalf of one political party. Richard Nixon, eat your heart out.


"Obamacare: The Story So Far A linktastic round-up of Reason's coverage of the president's health care law," by Peter Suderman, Reason Magazine, July 1, 2014---
http://reason.com/archives/2014/07/01/obamacare-story-so-far

Reason has been covering the march toward health care reform for so long, we remember when the Affordable Care Act was just a glimmer in President Barack Obama’s eye. As the package of health care laws that would eventually become known as Obamacare stumbled through debate, passage, and early implementation, our crack team of writers and reporters was there, chronicling the twists, turns, and dramatic reversals. And now, in honor of our special Obamacare issue, we have stitched together that coverage into a single handy, linktastic narrative. Enjoy!

 

The Pre-Debate:

Barack Obama campaigned on the promise of health care reform, and the moment he was elected president the push for a major overhaul began. But how to reform the system? In December 2008, Ronald Bailey took a look at "Tom Daschle’s Plan for Health Care Rationing"—an unsparing assessment of the proposals of the president’s initial nominee to run the Department of Health and Human Services (HHS). Daschle’s big idea, a Federal Health Board, was supposed to produce health care savings by making comparative effectiveness determinations about different medical procedures. But Bailey concluded that the Fed Board "would be able to cut costs only by limiting access to care."

What might work better? In March 2009, Bailey argued that free markets can provide health security through "health status insurance"—basically, a form of life-long insurance against catastrophic changes in an individual’s current health level. "Creating and selling separate health-status insurance policies would mean that medical insurance companies would no longer have an incentive to offload sick people," he wrote. "Instead, because those with pre-existing conditions would have the funds to pay higher premiums, insurers would compete for their business."

The Debate, Part 1:

Before long, the push for health care reform was consuming Washington. President Obama, now settled into the Oval Office, was making it an early top priority, and congressional staffers were beavering away on options to expand coverage, often citing the health systems of European countries as models.

Continued in article

 


Huge Medicaid Fraud:  The Biggest Drain on State Budgets in Medicaid
The Biggest Drain in the Federal Budget is Medicaid, Medicare, and Social Security
"The Medicaid Black Hole That Costs Taxpayers Billions," by John Tozzi, Bloomberg Businessweek, June 23, 2014 ---
http://www.businessweek.com/articles/2014-06-23/the-medicaid-black-hole-that-costs-taxpayers-billions?campaign_id=DN062314

Here’s some cheerful news: States and the federal government are doing little to stop a costly form of Medicaid fraud, according to a government report released last week.

Medicaid, the federal-state health insurance program for poor Americans, now covers more than half its members through what’s known as Medicaid managed care. States pay private companies a fixed rate to insure Medicaid patients. It has become more popular in recent years than the traditional “fee for service” arrangement, in which Medicaid programs reimburse doctors and hospitals directly for each service they provide.

Despite the growth of managed care in recent decades, officials responsible for policing Medicaid “did not closely examine Medicaid managed-care payments, but instead primarily focused their program integrity efforts on [fee-for-service] claims,” according to the Government Accountability Office, the investigative arm of Congress. The managed-care programs made up about 27 percent of federal spending on Medicaid, according to the GAO. The nonpartisan investigators interviewed authorities in California, Florida, Maryland, New Jersey, New York, Ohio, and Texas over the past 12 months.

Funded jointly by the federal government and the states, Medicaid provided health insurance to about 72 million low-income Americans at a cost of $431 billion last year, according to the report. By the Medicaid agency’s own reckoning, $14.4 billion of federal spending on Medicaid constituted “improper payments,” which include both overpayments and underpayments. That’s 5.8 percent of what the federal government spends on the program. The $14 billion figure doesn’t tally what states lose to bad payments.

The fraud risk for managed care is twofold. Doctors or other health-care providers could be bilking the managed-care companies, which pass on those fraudulent costs to the government. Or the managed-care companies themselves could be perpetrating schemes that cost taxpayers money and harm patients.

What does this look like in practice? New York Times reporter Nina Bernstein wrote a Dickensian report last month detailing the competition among managed-care companies in New York to find the most profitable Medicaid clients:

“Many frail people with greater needs were dropped, and providers jockeying for business bought, sold or steered cases according to the new system’s calculus: the more enrollees, and the less spent on services, the more money the companies can keep.

“Adult home residents, like those caught in the hotel, had long been victimized under the old fee-for-service Medicaid system, in which providers were paid for services rendered. Now, under managed care, they find themselves prey to new versions of old tactics, including intimidation to accept services they do not need.

“’They came like vultures—”Sign here, sign here!”—with their doughnuts and cookies,” recalled Robert Rosenberg, 61, who has a spinal disorder and Crohn’s disease, and, at 4 feet 4 inches tall, had waded through hip-high water to escape the flood at Belle Harbor Manor in Queens. ‘They coerced people. They told residents they would lose their Medicaid if they didn’t sign.’”

Even well-meaning managed-care companies may not have an incentive to stop fraud by medical providers, the GAO says. “If [managed-care organizations] are making payments that are too high, or have some waste, fraud, and abuse, sometimes those payments then get put into the calculation for next year’s rates,” says Carolyn Yocom, director of health care at the GAO and author of the report.

The Department of Health and Human Services, in a five-page written response to the GAO included with the report, says the agency periodically assesses states’ managed-care programs, promotes best practices, and offers training for state leaders. The agency’s “comprehensive reviews have identified findings and vulnerabilities related to managed care program integrity,” according to the response. The agency also noted that managed-care audits can be more complex than policing traditional Medicaid payments, so “states can benefit from more direct support.” A spokeswoman for the department declined provide additional comment.

Part of the problem is that Medicaid in general “has not traditionally been very transparent, nor has it been very easy to see where the money goes,” the GAO’s Yocom says. Managed-care arrangements are even more difficult to monitor. “The visibility of what happens is once-removed, because of the managed-care entity itself.”

Craziest of all, states aren’t required to audit the payments they make to managed-care companies, or the payments those companies make to medical providers. The GAO, in its drily ascerbic way, recommends they start.

Continued in article

Jensen Comment
An even bigger fraud arises when Medicaid coverage granted to people who are really not eligible for Medicaid.

"Audit reveals half of people enrolled in Illinois Medicaid program not eligible," by Craig Cheatham, KMOV Television, November 4, 2013 ---
http://www.kmov.com/news/just-posted/Audit-reveals-half-of-people-enrolled-in-IL-Medicaid-program-not-eligible-230586321.html?utm_content=buffer824ba&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer

The early findings of an ongoing review of the Illinois Medicaid program revealed that half the people enrolled weren’t even eligible.

The state insisted it’s not that bad but Medicaid is on the federal government’s own list of programs at high risk of waste and abuse.

Now, a review of the Illinois Medicaid program confirms massive waste and fraud.

A review was ordered more than a year ago-- because of concerns about waste and abuse. So far, the state says reviewers have examined roughly 712-thousand people enrolled in Medicaid, and found that 357-thousand, or about half of them shouldn't have received benefits. After further review, the state decided that the percentage of people who didn't qualify was actually about one out of four.

"It says that we've had a system that is dysfunctional. Once people got on the rolls, there wasn't the will or the means to get them off,” said Senator Bill Haines of Alton.

A state spokesman insists that the percentage of unqualified recipients will continue to drop dramatically as the review continues because the beginning of the process focused on the people that were most likely to be unqualified for those benefits. But regardless of how it ends, critics say it's proof that Illinois has done a poor job of protecting tax payers money.

“Illinois one of the most miss-managed states in country-- lists of reasons-- findings shouldn't surprise anyone,” said Ted Dabrowski.

Dabrowski, a Vice-President of The Illinois Policy Institute think tank, spoke with News 4 via SKYPE. He said the Medicaid review found two out of three people recipients either got the wrong benefits, or didn't deserve any at all.

We added so many people to medicaid rolls so quickly, we've lost control of who belongs there,” said Dabrowski.

Continued in article


"Doctors Think Emergency Room Visits Are Going To Explode Under Obamacare, by Brett LoGiurato, Business Insider, May 22, 2014 ---
 http://www.businessinsider.com/obamacare-emergency-room-visits-study-2014-5#ixzz32TW12uwS

One of the major selling points of the Affordable Care Act was its theoretical potential to reduce costly emergency room visits, given the law's access to coverage. 

But a new survey shows that so far under the healthcare law, more people are going to the emergency room. The survey, conducted by the American College of Emergency Physicians, found that since Jan. 1 — the day coverage went into effect for millions of Americans — 46% of emergency physicians have experienced jumps in patients. Half that percentage reported a decrease, and 27% of physicians said the influx has stayed about the same.

And even though it was one of the points President Barack Obama and Democrats used to sell the law ahead of its passage, doctors said they've been expecting this all along.

"We told you this was going to happen. We don't mind that it has. But we'd sure appreciate some support," Howard Mell, a spokesman for the ACEP and an emergency care physician, told Business Insider on Wednesday. 

Emergency physicians only expect it to get worse over the next few years. Eighty-six percent of emergency physicians expect there to be a slight or "great" increase in the amount of visits to their departments over the next three years. Moreover, 77% of these doctors think their facilities are not prepared for the expected influx of patients.

Emergency care physicians also expect payments for ER visits to sharply reduce. They think access to emergency care will improve overall, but that doesn't mean quality care will follow — a plurality of emergency physicians expect the ACA to have a negative effect on quality and patient safety. 

Part of the increase can be expected. Emergency room use is a covered benefit, and when people get insurance, the use of those benefits would be expected to increase somewhat.

But here's the problem: Though the healthcare law has helped get more people insured, it doesn't guarantee care. ACEP says there is an overall shortage of primary care doctors.

 

Many of the millions who qualified for coverage under the expansion of the federal Medicaid program could also be out of luck, since many primary care doctors do not accept Medicaid patients. Because Medicaid coverage pays so little, it is the main problem, whereas more than 8 million people signed up for private insurance through exchanges established by the law.

The Obama administration said the study comes too soon to draw any long-term conclusions. 

"This survey, looking at only the first three months of coverage, cannot speak to the long-term effects of expanded coverage, which will be shaped by our continuing efforts to help people use their new primary care and preventive care benefits and to invest in innovative approaches aimed at improving our nation’s system of primary care," a Department of Health and Human Services told Business Insider in a statement.

Still, according to the Association of American Medical Colleges, there will be a shortage of about 30,000 too few primary care physicians to keep up with patient demand next year. And the problem is expected to grow — over the next decade, according to the study, primary care physicians will rise by only 7%.

Combined with the fact the American population is getting older — a 36% increase in the American population over 65 — ACEP is warning the U.S. is on something of a "collision course."

"Emergency visits will increase in large part because more people will have health insurance and therefore will be seeking medical care," said Alex Rosenau, the president of ACEP. 

"But America has severe primary care physician shortages, and many physicians do not accept Medicaid patients, because Medicaid pays so low. When people can't get appointments with physicians, they will seek care in emergency departments.  In addition, the population is aging, and older people are more likely to have chronic medical conditions that require emergency care."

A classic example of where the problem continues to manifest is with a patient who has asthma but waits until an emergency to seek coverage. As Mell explains, a primary care doctor should be able to solve the health problem in its infancy — for example, prescribing an inhaler to an asthma-inflicted patient. Instead, the patient will wait until they have an asthma attack. That means $50-$100 worth of medicine becomes thousands of dollars in emergency care.

Some health-policy experts think much of the increase can be mitigated by educating patients about their healthcare options. Many people who just gained insurance for the first time are simply used to routinely going to the emergency room for their healthcare needs.

"Part of the need in this new environment is to teach people who have not had insurance at all or very often in the past how best to use it and the best ways to access care," said Linda Blumberg, a senior fellow at the Urban Institute. "That is, they need help to understand the importance of identifying and using a usual source of care outside of the ER for non emergent situations."

Continued in article


From the CFO Journal's Morning Ledger on May 27, 2014

Health-law costs snarl union contract talks
Labor talks nationwide are becoming more challenging as unions and employers butt heads over who should pick up the tab for new costs associated with the Affordable Care Act
, the WSJ reports. Coverage for dependent children up to age 26 is already an issue, but future costs, like a tax on premium health plans that starts in 2018, are also coming up. Labor experts say the law doesn’t take into account that health benefits have been negotiated over decades, and that rewriting plans to meet end requirements can affect wages and other labor terms.

Jensen Comment
Many firms like Walgreen have already dropped employee health insurance plans.

On a separate matter, the Obama Administration recently ruled that salary increases to replace employer-funded  medical insurance contributions with ACA private exchange plans will not be tax deductible.  This complicates payroll and tax accounting for business firms.  Of course this will not matter to government agencies and other non-profit organizations since they do not seek tax deductions..

From the CFO Journal's Morning Ledger on October 31, 2014

Small firms drop health plans ---
http://online.wsj.com/articles/small-firms-drop-health-plans-1414628013?mod=djemCFO_h
Small companies are starting to turn away from offering health plans, with many viewing the health law’s marketplace as an inviting and affordable option. Wellpoint Inc. said 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. Other insurers have flagged a similar trend.

From the CPA Newsletter on May 27, 2014

IRS sets high penalties for companies that send employees to ACA health exchanges
According to an Internal Revenue Service ruling, employers that move employees to health insurance exchanges by reimbursing them for their premiums do not satisfy the requirements of the Affordable Care Act. Companies that send workers to the exchanges face a tax penalty of $100 a day, or $36,500 a year, per employee. The New York Times (tiered subscription model) (5/

"I.R.S. Bars Employers From Dumping Workers Into Health Exchanges," by Robert Pear, The New York Times, May 25, 2014 ---
http://www.nytimes.com/2014/05/26/us/irs-bars-employers-from-dumping-workers-into-health-exchanges.html?_r=0 

Many employers had thought they could shift health costs to the government by sending their employees to a health insurance exchange with a tax-free contribution of cash to help pay premiums, but the Obama administration has squelched the idea in a new ruling. Such arrangements do not satisfy the health care law, the administration said, and employers may be subject to a tax penalty of $100 a day — or $36,500 a year — for each employee who goes into the individual marketplace.

The ruling this month, by the Internal Revenue Service, blocks any wholesale move by employers to dump employees into the exchanges.

Under a central provision of the health care law, larger employers are required to offer health coverage to full-time workers, or else the employers may be subject to penalties. Many employers — some that now offer coverage and some that do not — had concluded that it would be cheaper to provide each employee with a lump sum of money to buy insurance on an exchange, instead of providing coverage directly.

But the Obama administration raised objections, contained in an authoritative question-and-answer document released by the Internal Revenue Service, in consultation with other agencies.

Continued in article

IRS Ruling Prohibits Employers from Dumping Workers into Exchange May 27, 2014

The Obama administration is out with a new rule (May 2014) that prohibits large groups from giving tax-free contributions to employees in an attempt steer them into the Exchange. According to the new rule, employers caught “dumping” employees into the Exchange could face fines up to $100 a day ($36,500 per year) for each employee who goes into the individual marketplace. [Jensen Comment:  I don't think these fines are tax deductible by the employer, and the amounts paid to employees for health exchanges are taxable to those employees because of this May 2014 ruling by the IRS]

The Affordable Care Act requires large employers to either offer affordable group coverage or pay a fine. The deadline to do this varies according to the size of the large group. This requirement is called the Employer-Shared Responsibility provision (or the “employer mandate” or “pay-or-play”).

For more information on the new ruling, head to the IRS website.

Eventually, large employers may opt to pay the fine for not providing health insurance and leave their workers to get coverage in the exchanges. Doing so might even save them money.
"Obamacare Increases Large Employers' Health Costs," by Sally Pipes, Forbes, May 19, 2014 ---
http://www.forbes.com/sites/sallypipes/2014/05/19/obamacare-increases-large-employers-health-costs/

Employer-provided health insurance may not be long for this world. According to a new report from S&P Capital IQ, 90 percent of American workers who receive health insurance from large companies will instead get coverage through Obamacare’s exchanges by 2020.

For that, patients — many of whom no doubt like the insurance they currently have — can blame Obamacare. The law’s many mandates, fees, and taxes will increase health costs for large employers to the point that providing health benefits at work is financially unsustainable.

Consider some of Obamacare’s most burdensome new levies. For instance, one fee on group plan sponsors is intended to fund the Patient Centered Outcomes Research Institute (PCORI), a government-sponsored organization charged with investigating the relative effectiveness of various medical treatments. Medicare may consider the Institute’s research in the determining what sorts of therapies it will cover.

Set aside the fact that the government — as paymaster for half of the health care delivered in this country — will have a significant incentive to twist the findings of such research so that older, cheaper therapies seem just as effective as more expensive, cutting-edge ones.

Making matters worse, the federal government is forcing private firms to underwrite its dirty work. For plan years ending after September 30, 2013, and before October 1, 2014, employer sponsors must pay the feds a PCORI fee of $2 per covered life. And for plan years between October 1, 2014, and October 1, 2019, they’ll have to pay an amount adjusted for national health inflation.

Large employers also have to pay a Temporary Reinsurance Fee to help “stabilize” premiums in the individual insurance market. In an American Health Policy Institute (AHPI) survey of businesses with more than 10,000 employees, one company estimated that this fee could cost it $15.3 million from 2014 to 2016.

Then there’s the 40 percent excise tax on expensive insurance plans — those with premiums greater than $10,200 for individuals and $27,500 for families — which goes into effect in 2018. One company in the same survey said that this tax could cost it $378 million over five years.

Large employers like these cover 59 percent of private-sector workers, according to the Employee Benefit Research Institute. So many firms will likely face the same tax-motivated cost increases as these two.

Obamacare doesn’t just tax employers directly. Its many coverage mandates also raise the cost of benefits indirectly.

Effective 2015, the law’s employer mandate requires employers with 100 or more full-time employees to provide health insurance to full-timers or pay a fine. In 2016, those with 50 to 99 employees will have to follow suit. The law originally intended for both groups to comply with the mandate in 2014.

Obamacare also orders plans to cover adult children on their parents’ policies until they’re 26 years of age. This “slacker mandate” has already raised employer health insurance costs by 1 to 3 percent. One firm told AHPI that the mandate could cost it almost $69 million over ten years.

Obamacare also requires employer-sponsored health plans to cover 100 percent of preventive care services, such as immunizations, contraceptive care, and depression screening. One large employer reported that full coverage of contraceptive care on its own could cost $25.6 million over ten years.

It’s no wonder that large employers expect their health bills to escalate in the years to come. The AHPI survey revealed that Obamacare could increase their health costs by 4.3 percent in 2016, 5.1 percent in 2018, and 8.4 percent in 2023.

Those percentages equate to real dollars. Over the next ten years, Obamacare could cost large employers $151 billion to $186 billion. That’s about $163 million to $200 million in additional cost per employer — or $4,800 to $5,900 per employee — solely attributable to the health reform law.

Employers will likely pass along these costs to their workers. According to a recent Mercer survey, 80 percent of employers are considering raising deductibles — or have already done so.

Eventually, large employers may opt to pay the fine for not providing health insurance and leave their workers to get coverage in the exchanges. Doing so might even save them money.

The care for an employee with hemophilia, for example, can cost a company $300,000. That could end up being a lot more expensive than the $2,000 per-employee fine for not offering insurance.

Firms could also continue furnishing insurance to most of their workers — but nudge their costliest ones onto the exchanges by making the company insurance plan unattractive to them. A company could shrink its network of doctors, raise co-payments, or even offer a chronically ill employee a raise to opt out of the employer plan.

In so doing, the company would save money. The employee would be able to secure better coverage through the exchange. And if a raise covered the cost of the exchange policy, both parties would benefit.

Others in the exchange pool — and the taxpayers subsidizing them — won’t be so lucky. Exchange enrollees are already sicker than their counterparts outside the government insurance portals. Indeed, the exchange pool fills prescriptions for the sorts of specialty drugs associated with chronic disease at a rate that’s 47 percent higher than for folks outside the exchanges.

Adding even more high-cost individuals to the exchanges could cause insurers to hike premiums. And higher premiums require greater taxpayer subsidies. Already, the Congressional Budget Office projects that the federal government will spend $1.03 trillion on exchange subsidies and related spending from 2015 to 2024.

If employers dump their sickest employees into the exchanges, that number could go spiral even further upward.

Continued in article

"Best of the Web Today: No 'Dumping' Obama acts to protect workers from ObamaCare," by James Toronto, The Wall Street Journal,

Two months ago Ezekiel Emaunel, one of the designers of ObamaCare, predicted that one long-term effect of the so-called Patient Protection and Affordable Care Act would be the near-abolition of employer-provided health insurance. On balance, he argued, the law's incentives would induce employers to drop their plans and instead increase cash compensation so that employers could buy plans on the ObamaCare exchanges.

This column was skeptical. Our argument was that the horrors of the exchanges would give workers newfound appreciation for their employer plans, increasing the pressure on both companies and politicians to preserve the existing system. To judge by this story in the New York Times, we were right:

Many employers had thought they could shift health costs to the government by sending their employees to a health insurance exchange with a tax-free contribution of cash to help pay premiums, but the Obama administration has squelched the idea in a new ruling. Such arrangements do not satisfy the health care law, the administration said, and employers may be subject to a tax penalty of $100 a day--or $36,500 a year--for each employee who goes into the individual marketplace.

The ruling this month, by the Internal Revenue Service, blocks any wholesale move by employers to dump employees into the exchanges.

The key word here is tax-free: Employers can give raises in lieu of medical insurance, but the former, unlike the latter, are taxable income. "The I.R.S. is going out of its way to keep employers in the group insurance market and to reduce the incentives for them to drop coverage," Richard Lindquist, president of a benefits software company, tells the Times.

The word that got our attention, though, is dump. It appears in the headline, too: "I.R.S. Bars Employers From Dumping Workers Into Health Exchanges." If the New York Times were our only source of news, we'd be very confused right now. (Well, OK, we'd be very confused almost always.) For months the Times has been touting the quality of ObamaCare policies, scoffing at those who liked their previous plans and were victimized by President Obama's fraudulent promise that they could keep them.

Now all of a sudden the exchanges are a garbage dump? Or is it that the exchanges are a pristine wilderness into which workers are the garbage being dumped?

 


"Why Freakonomics Freaks Me Out," by Mark Buchanan, Bloomberg View, June 6, 2014 ---
http://www.bloombergview.com/articles/2014-06-05/why-freakonomics-freaks-me-out

The law of supply and demand offers a useful insight: Typically, if you reduce the price of something, people will buy more of it. Unfortunately, some economists can’t help but take the idea too far.

"Freakonomics" authors Steven Levitt and Stephen Dubner tell a story in their new book, "Think Like a Freak," about meeting David Cameron before he became the U.K. prime minister. They tried to make him see the folly of the taxpayer-funded National Health Service, through which people get treatments free of charge. They explained that the market for medical services is just like any other market, and it can't work right unless patients have to pay.
 

As Levitt, a professor of economics at the University of Chicago, summed it up: “It doesn’t take a whole lot of smarts or a whole lot of blind faith in markets to recognize that when you don’t charge people for things (including health care), they will consume too much of it.”

Maybe Cameron lacks smarts, because he abruptly ended the meeting. Far more likely, he's intelligent enough to know a juvenile ideological argument when he sees one, even if it's made by someone who ought to know better. Economists have understood for years that medical services aren't simple “goods” such as apples or automobiles, and that free markets for such things don't work very well.

The trouble is an imbalance of knowledge. Most of us don't know enough about medicine to diagnose our own problems. That gnawing pain in your gut might be nothing, or it might be a sign of something more serious. If it persists, you'll need medical experts, aided by technology, to identify the problem, just as you would need an expert mechanic to discover what's wrong with a car that won't start or a refrigerator that won’t cool.

Experts know more than you do, so you're at their mercy when purchasing their services. You can only hope the doctor will prescribe the right tests and treatment. Did you really need that $3,000 magnetic resonance imaging scan? What about those super-expensive pills, allegedly to protect your stomach lining? Even after you recover, you still won't be sure what part of the treatment was really necessary.

Consumers cannot possibly buy something intelligently if they don't know what they want or need, and they can't properly judge whether what they bought was worth it. Hence, suchcredence goodsaren't subject to typical market forces. Reaching the right amount of consumption at the right price requires lots of extra things such as better knowledge on the part of consumers (which is often impossible), ways to verify the quality of treatments (often difficult or impossible), or ways to hold experts liable for mistreatment (either impossible or impractical).

Levitt's and Dubner's vision has other flaws. Price may well deter people from seeking treatments that we actually want to encourage. What if, for example, we let vaccine manufacturers sell their products in an open market, rather than requiring parents to vaccinate their children against diseases such as polio or measles? Many would certainly choose not to pay $200 for a series of shots. The market would find its equilibrium, guaranteeing sporadic epidemics of easily preventable diseases.

No wonder many people are deeply suspicious of economists. We hear way too much cheerleading for the notion that markets can solve all our problems and way too little about the complexities we face in trying to supply things such as credence goods to the people who need them -- which is all of us. Too bad, because this is economics at its best.

The myth of easy solutions through free markets is endlessly appealing. It makes the complicated seem simple and avoids facing up to real trade-offs. This may be freaky thinking, but not in a good way.


"Health-care fraud in America:  That’s where the money is How to hand over $272 billion a year to criminals," The Economist, May 31, 2014 ---
http://www.economist.com/node/21603026?fsrc=nlw|hig|29-05-2014|536d497184958af23b817074|NA

MEDICAL science is hazy about many things, but doctors agree that if a patient is losing pints of blood all over the carpet, it is a good idea to stanch his wounds. The same is true of a health-care system. If crooks are bleeding it of vast quantities of cash, it is time to tighten the safeguards.

In America the scale of medical embezzlement is extraordinary. According to Donald Berwick, the ex-boss of Medicare and Medicaid (the public health schemes for the old and poor), America lost between $82 billion and $272 billion in 2011 to medical fraud and abuse (see article). The higher figure is 10% of medical spending and a whopping 1.7% of GDP—as if robbers had made off with the entire output of Tennessee or nearly twice the budget of Britain’s National Health Service (NHS).

Crooks love American health care for two reasons. First, as Willie Sutton said of banks, it’s where the money is—no other country spends nearly as much on pills and procedures. Second, unlike a bank, it is barely guarded.

Some scams are simple. Patients claim benefits to which they are not entitled; suppliers charge Medicaid for non-existent services. One doctor was recently accused of fraudulently billing for 1,000 powered wheelchairs, for example. Fancier schemes involve syndicates of health workers and patients. Scammers scour nursing homes for old people willing, for a few hundred dollars, to let pharmacists supply their pills but bill Medicare for much costlier ones. Criminal gangs are switching from cocaine to prescription drugs—the rewards are as juicy, but with less risk of being shot or arrested. One clinic in New York allegedly wrote bogus prescriptions for more than 5m painkillers, which were then sold on the street for $30-90 each. Identity thieves have realised that medical records are more valuable than credit-card numbers. Steal a credit card and the victim quickly notices; photocopy a Medicare card and you can bill Uncle Sam for ages, undetected.

It is hard to make such a vast system secure: Medicare’s contractors process 4.5m claims a day. But pointless complexity makes it even harder. Does Medicare really need 140,000 billing codes, as it will have next year, including ten for injuries that take place in mobile homes and nine for attacks by turtles? A toxic mix of incompetence and political gridlock has made matters worse. Medicare does not check new suppliers for links to firms that have previously been caught embezzling (though a new bill aims to fix this). Fraud experts have long begged the government to remove Social Security numbers from Medicare cards to deter identity thieves—to no avail.

Start by closing the safe door

One piece of the solution is obvious: crack down on the criminals. Obamacare, for all its flaws, includes some useful measures. Suppliers are better screened. And when Medicaid blackballs a dodgy provider, it now shares that information with Medicare—which previously it did not. For every dollar spent on probing health-care fraud, taxpayers recover eight. So the sleuths’ budgets should be boosted, not squeezed, as now.

But the broader point is that American health care needs to be simplified. Whatever its defects, Britain’s single-payer National Health Service is much simpler, much cheaper and relatively difficult to defraud. Doctors are paid to keep people well, not for every extra thing they do, so they don’t make more money by recommending unnecessary tests and operations—let alone billing for non-existent ones.

Too socialist for America? Then simplify what is left, scale back the health tax-perks for the rich and give people health accounts so they watch the dollars that are spent on their treatment. After all, Dr Berwick’s study found that administrative complexity and unnecessary treatment waste even more health dollars than fraud does. Perhaps that is the real crime.

 

Bob Jensen's Fraud Updates ---
http://faculty.trinity.edu/rjensen/FraudUpdates.htm


"ACA more despised than ever, while Nevada faces 90,000 cancellations and price hikes," by Robert Laurie, Canada Free Press, May 6, 2014 ---
http://canadafreepress.com/index.php/article/62899

Democrats have long been promising that, once people get signed up, they’re going to love ObamaCare. Candidates are going to run on its merits, and the law is going to be a big positive for Dems during the 2014 midterms. Those who were still against it were a small, dwindling minority. As soon as the signup date passed, and the target numbers were (allegedly) reached, negative perception was supposed to fade away.

Uh-oh.

According to a new Washington Post piece entitledObamaCare hits new low,” that’s simply not happening.  In fact, a new Pew poll shows the law is more despised than ever.

A new poll shows the public’s opposition to ObamaCare has never been higher.

  The Pew Research Center poll shows disapproval of the law hitting a new high of 55 percent. It comes on the heels of several polls last week that showed the law had very little—if any—bump after sign-ups on the health-care exchanges exceeded goals.

Continued in articl

 


How to Mislead With Statistics
Many of Obamacare's 'Eight Million Enrollments' are Duplicates ---
https://mail.google.com/mail/u/1/#inbox/145d8223a9b75dc9


What the administration does not reveal is what proportion of those younger enrollees are being subsidized and, therefore, are not keepign costs down

"Obama Administration Says 28% of Health-Law Enrollees Are 18 to 34 Years Old Supporters Say Large Numbers of Young People Needed to Keep Costs Down," by Louise Radnofsky And Anna Wilde Mathew, The Wall Street Journal, May 1, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702303948104579535941871360828?mod=djemCFO_h&mg=reno64-wsj

 WASHINGTON—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.

One big insurer, Florida Blue, had projected an average age for enrollees in the late 30s, but instead is seeing a figure in the low 40s. The difference is "significant," said Senior Vice President Jon Urbanek. It would "tend to drive a higher rate increase" for next year, he said. But the impact is likely to be blunted by provisions in the law designed to compensate insurers that end up with higher-than-anticipated medical claims.

Federal officials said Thursday they were comfortable with the balance of risk in the new insurance markets in their first year of operation.

"We believe, based on the data that we've seen and the independent data that is out there, that premiums will be stable and that the risk pool is sufficiently large and varied to support that kind of pricing," said Michael Hash, a top official overseeing the health law's implementation at the Department of Health and Human Services. He added that he believed that to be the case "in every state."

The 28% proportion falls short of the 40% share that young adults represented in the potential target population for the exchange plans, according to an analysis by the Kaiser Family Foundation. But for the insurance industry, the key is how the demographics of the sign-ups stack up against assumptions they made when they set their rates.

The health law bars insurers from charging riskier consumers more, and as a result, the health plans have said they need a large number of younger people and men to sign up to balance out the likely higher medical claims incurred by older people and women. Insurers view women as costlier to cover because of pregnancy and other female health needs.

The administration said previously that through Feb. 28, 25% of enrollees had been 18 to 34 years old.

The federally run exchanges serving 36 states had allowed most people until April 15 to sign up for coverage for the year. Some of the 14 state-run exchanges set deadlines for a few days later, and in a small number of those states, people were able to sign up through April 30 or after.

Continued in article

Jensen Comment
A table in this article reveals a high variance among states in terms of younger enrollees. In states that allow large numbers of new signups there are many who are signing up for free Medicaid rather than the ACA exchanges. It's a better deal to be on Medicaid than to be on the plans of parents or on ACA exchange plans.

Many doctors and hospitals that refuse ACA exchange plans will accept Medicaid patients.


"The ObamaCare 8% The WSJ/NBC poll asks Americans if they think the health law is working," by James Freeman, The Wall Street Journal, April 29, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702303678404579533362696579096?mod=djemMER_h&mg=reno64-wsj

A new survey from the Journal and NBC News shows that the President's signature health care law remains deeply unpopular.

Yesterday we noted the ABC/Washington Post poll showing Mr. Obama with the lowest marks of his presidency, just two weeks after he claimed success in rolling out insurance policies under the Affordable Care Act. "This thing is working," President Obama said of the law on April 17.

Now the latest edition of the WSJ/NBC poll suggests just how few Americans agree with that statement. A mere 8% of respondents in the new survey say that the Affordable Care Act "is working well the way it is."

There are differences of opinion on how to respond to the mess Washington has created, but few Americans think it's time to shut down the debate over the health law. A full 49% say that the law should either be scrapped entirely or given "a major overhaul," while 40% say the law needs "minor modifications to improve it."

Perhaps the White House can take comfort in the fact that the Journal/NBC survey shows modest improvements in support for the President and his signature health law, compared to recent editions of this poll. But both remain underwater. Mr. Obama's 44% approval rating lags his 50% disapproval rating. And while 36% of respondents say the health law is a good idea, 46% say it's a bad idea. Congressional Democrats up for re-election this fall may be especially troubled by these results given that 43% of survey respondents voted for Barack Obama in 2012, versus 34% who voted for Mitt Romney. In the actual 2012 race, Mr. Obama bested Mr. Romney by four percentage points.

In the survey, 54% of respondents disapprove of Mr. Obama's handling of the economy, compared to just 42% who approve. And by more than two to one, Americans say the country is headed on the "wrong track" versus the "right direction."

A little more than six months before Americans go to the polls, Mr. Obama and his signature health law remain liabilities for his party.


Some of the mean and politically-motivated predictions about the Affordable Care Act that we could have done without ---
http://www.newrepublic.com/article/117229/obamacare-doom-predictions-quotes-conservatives-and-critics

Jensen Comment
I still think that the Affordable Care Act is a politically-crafted abomination that proves once again that compromise solutions can be terrible solutions due to absurd compromises. The ACA should should be administered by the government, leaving out the private sector insurance companies much like Medicare is administered. Only I would insist on better fraud controls that drag down Medicare.

Private sector insurance companies should be involved only in providing supplemental plans. In this respect I favor the German plan where there is basic public sector insurance coverage for everybody plus optional supplemental plans. Here's how the German system works:
Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance

Jensen Comment
I'm just not willing to accept the ACA as a success no matter how many people sign up for the only show in town right now. It has become a political "show" where politicians are avoiding the main failures of the ACA.

A huge problem is that millions of employer-subsidized plans are being dropped in favor of inferior high-deductible plans having much more limited access to doctors and hospitals. Here in New Hampshire nearly half the hospitals and far too many physicians are refusing to accept ACA covered patients.

Rationing of health care in one form or another is probably inevitable given that it is so costly and virtually every nation has a shortage of physicians and other health care workers and facilities. In the USA we've unfairly rationed and still do ration health care on the basis of income. For example, the somewhat poor people not eligible for Medicaid often can now only afford the high deductable Silver or Bronz ACA plans that have 30% or 40% deductibles that highly discourage seeking medical treatment --- a type of rationing based on income.

With such high deductibles people who cannot afford their share of the doctor and hospital bills will put off medical diagnosis and treatment until their ailments become critical. The is ACA rationing on the basis of income and economic choice such as getting a new car or a new knee.

Having said this, the USA will probably have to live with the ACA as written until it is significantly improved by Congress or the courtsw. Here are a few of my major concerns where improvements are drastically needed.

  • The high-deductible plans having 30% or higher deductibles are terrible. Too many people having these plans will put off paying for medical treatments and medications because ACA-covered people simply cannot or will not pay the high deductibles. People in the USA will literally become sicker and sicker, suffer more, and die sooner.
     
  • There's a 90-day grace period in the ACA where people who default on paying premiums are still covered for the first 30-days by the insurance company and the next 60 days by the doctors and hospitals providing the care is absolutely absurd. The insurance companies will simply pass on these bad debt losses (which may be enormous for surgeries and hospital confinements) into higher premiums for the people who pay their medical insurance billings.

    An enormous number of doctors and hospitals are so afraid of having to provide free care to ACA deadbeats that they are refusing to participate in the ACA medical care networks. For example, in New Hampshire where I live about half the hospitals and many physicians in the state are refusing to care for ACA patients except in dire emergencies where patients cannot be shipped by ambulance to other hospitals.
     
  • Something drastic must be done to reduce the number of remaining uninsured and the number of formerly insured people who tried the ACA for a while and got tired of having to pay for lousy, high deductible health insurance policies. They take their chances as uninsured people who cannot be turned down by emergency rooms (much like the system before the ACA was passed).
     
    • One partial solution is to provide more and more incentives for large and small businesses and other employers to provide medical insurance coverage of employees.

       
    •  Another partial solution is to net health insurance premiums out of unemployment and disability benefits and welfare payments for people who do not qualify for Medicaid.

       
    • Another partial solution is to have the IRS garnish wages of people who are not up to date on paying health insurance premiums and/or cheat on their claims for subsidies on those premiums.

There are no easy answers here. I hope President Hillary Clinton reignites her preferred option of taking the private sector insurance companies out of universal health coverage in a government administered plan that takes us closer and closer to the German system for health care insurance.

I vote for the German system that operates a lot like Medicare for all ages of citizens but with better fraud controls. I used to lean toward the Canadian system, but it's elective medical procedure delays for new hips, knees, and shoulders forces too many Canadians to pay cash for such procedures in the USA. when they grow weary of waiting out Canadian health plan approval.

What bothers me the most are the blatant lies our leaders broadcast to voters just to get a health care bill passed. I would be much less critical if they had flat out been honest about what they really intend for this legislation to cost. One example of a political lie is that Cadillac insurance plans will be taxed. The unions didn't object very loudly because they know full well that by 2018 when the tax is supposed to commence, Congress will have repealed all or most of the Cadillac tax.  The same is true with many other provisions of the legislation that can be altered at taxpayer expense. Also our leaders promised that nearly a half trillion dollars will be saved by reducing third party payments to physicians. Dumb! Dumb! Dumb!


Disgrace: Phoenix VA Dumps Sick Veterans Into 'Secret Waiting Lists,' Some Die of Negligence ---
http://townhall.com/tipsheet/guybenson/2014/04/24/disgrace-at-the-va-n1828852?utm_source=thdaily&utm_medium=email&utm_campaign=nl

Prepare to be enraged by this exclusive investigative report from CNN. As Allahpundit notes, the media has been documenting the VA's egregiously poor treatment of our veterans for some time, blowing the whistle on horrific conditions and scandalously long wait times for care. But the new revelations introduce an additional, more sinister, element into the equation: Lethal, ass-covering corruption. An absolute disgrace:

Continued in article

 


Obama Gives Health Plans Added Two-Year Reprieve Plans That Don't Meet ACA Rules Could Stay in Place Through 2016 ---
http://online.wsj.com/news/articles/SB10001424052702303369904579421541748450598?mod=djemalertNEWS


How Physicians and Hospitals Can Try to Collect Bad Debts During Two Months When Medical Care is Mandated snf Insurance Companies Refuse to Pay for Deadbeat  Patient Care

The American Medical Association is protesting an Obamacare provision it argues will leave doctors with the bill for up to two months of unpaid care (out of the so-called 90-day "grace period" of unpaid premiums)
 

One of the Main Reasons Your Doctor and/or Hospital May be Refusing to Participate in the ACA:  Being Forced to Serve Deadbeats at No Pay
In New Hampshire, many of the doctors and 10 or 26 hospitals are refusing to be part of any ACA network of Medical service providers

"American Medical Association: Obamacare sticks doctors with unpaid bills,"  Daily Caller, March 19, 2014 ---
http://dailycaller.com/2014/03/19/american-medical-association-obamacare-sticks-doctors-with-unpaid-bills/

The American Medical Association is protesting an Obamacare provision it argues will leave doctors with the bill for up to two months of unpaid care.

The provision requires insurers to allow patients with federally-subsidized health insurance plans a 90-day grace period to pay their premiums before canceling the coverage. Insurers are on the hook for the first 30 days of care, if the customer never pays up, but doctors will be stuck without payment for any services between 30 and 90 days, until the coverage is canceled.

The American Medical Association was a strong supporter of Obamacare.

“If a patient is being treated for a serious illness, that requires ongoing care,” Dr. Ardis Dee Hoven, president of the AMA, said in a press release Wednesday. “The physician is having to assume the financial risk for this. That’s the bottom line.”

The AMA released new resources Wednesday for its member physicians, offering “step-by-step help for minimizing risk,” while admitting that the Obamacare rule “could pose a significant financial risk for medical practices.”

The doctors’ association spent $22 million lobbying for Obamacare to pass in 2010, the most of any health care organization, and has kept up their spending in the years since while the law’s final regulations have been tinkered with.

The rule’s damaging effect on doctors — especially those with private practices — exemplifies the split between the AMA’s lobbying ambitions and the outlook of the average doctors that do the work.

After Obamacare’s passage, just 13 percent of American physicians agreed with the AMA’s support of the law, according to a survey from physician recruitment firm Jackson & Coker. Surveys have repeatedly found that doctors don’t believe the law will let them help patients and make a living.


Read more: http://dailycaller.com/2014/03/19/american-medical-association-obamacare-sticks-doctors-with-unpaid-bills/#ixzz2wXTlkQDp
 

The new AMA resources for physicians include . . . ---
http://www.ama-assn.org/ama/pub/news/news/2014/2014-03-19-ama-issues-grace-period-guide-to-assist-physicians.page

 

Jensen Comment
What I wonder is what happens to the deadbeat who plays the following game:  Pay the premium once every four months, then get one month of free coverage from the insurance company and two months of free coverage from all health care providers on the network.

However, if you have no assets to make lawsuits worthwhile just get free medical care in emergency rooms just like in years before the ACA.  That way you avoid having to pay a premium once every four months.


Question
Why are many corporations going to drop their health care coverage of employees over the next several years?

"Ezekiel's Prophecy If he's right, ObamaCare's biggest disruptions are yet to come," by James Taranto, The Wall Street Journal, March 27, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702304418404579465480916914144?mod=djemBestOfTheWeb_h&mg=reno64-wsj

Ezekiel Emanual, Rahm's elder brother, is a physician who helped design ObamaCare and has been one of its most intense champions. So you may be surprised to learn that in his new book, "Reinventing American Health Care," he predicts that tens of millions more Americans will lose their medical plans in the coming decade.

In its "You're the Boss" small-business blog, the New York Times quotes his prediction that by 2025, "fewer than 20 percent of workers in the private sector will receive traditional employer-sponsored health insurance." As of March 2013 such benefits were available to 85% of full-time private-sector workers, according to the Bureau of Labor Statistics. If Emanuel is right--and especially if, as he implies, ObamaCare was designed to produce such an outcome--the president's repeated pledge that "if you like your plan, you can keep your plan" was a far more widespread fraud than has yet been realized.

In the next two to three years, Emanuel predicts, "a few big, blue-chip companies will announce their intention to stop providing health insurance. Instead, they will raise salaries substantially or offer large, defined contributions to their workers. Then the floodgates will open." Small businesses will be even more eager to drop coverage.

The main reason Emanuel expects this result is the so-called Cadillac tax, which takes effect in 2018 and has nothing to do with the bailout of General Motors. Rather, it is a levy on what the Times calls "especially generous health plans."

Yet one cannot say ObamaCare was designed with the clear purpose of discouraging employer coverage. It leaves in place the tax exemption for such plans, which Emanuel understatedly acknowledges, in the Times's words, "is a big obstacle to this vision." It also imposes a fine on companies with more than 50 employees that don't insure enough of them. Although the fine for not insuring a worker is considerably less than the cost of insuring one, it's still an incentive to continue coverage.

Continued in article

Jensen
Many of these doomsday forecasts for the ACA are based upon the assumption that the 2010 ACA legislation won't be changed much. However, a Republican majority in the Senate could lead to some major revisions in the ACA, including repeal of the Cadillac Tax and repeal of the way physicians and hospitals must treat deadbeats for free if they renege on keeping their insurance premiums payments up to date.

I don't anticipate total repeal of the the ACA, but there are many disasters in need of legislative repair no matter what the outcomes of the 2014 and 2016 elections.

The Cadillac Tax: A Game Changer for U.S. Health Care:  Can you explain this tax to your students?
Do you understand the Cadillac Tax provision of the Affordable Healthcare Act that will have a monumental 2018 impact on healthcare coverage of employees who are now covered by employer plans --- plans now costing the government over $250 billion per year? But not for long!

Do you understand the Cadillac Tax provision?
Me neither. As Nancy Pelosi said years ago, Congress passed the ACA before anybody in the USA had a chance to study all the surprises in this the enormous bill.

If you're covered presently on your employer's plan you should most certainly learn about the Cadillac Tax provision that kicks in in 2018.

"The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/

Jensen Comment
Non-profit organizations, especially labor unions, for whom Cadillac plans are especially popular will be allowed to keep their plans without penalty since tax deductions are not of concern to them.

Having preferred networks of doctors and hospitals is not unheard of in national health care plans. Germany, for example, has both public health insurance plus premium coverage with private insurance. Cuba notoriously has bourgeoisie plans for members of the Communist Party and the wealthy versus  proletariat plans for the poor people.

If you Congressional representative brags about signing up for Obamacare ask if he or she has a Cadillac Obamacare plan that lets them choose their own doctors and hospitals.

 

Hi Jim,

What keeps employer coverage popular is the tax break for each employee by not making employer contributions to medical plans taxable on a W-2 form. I hate to see the Cadillac tax ruin all this and more!
 
What I see is wrong with losing employer medical coverage is the adverse societal impact (an externality) of taking medical insurance choices away from employers and giving it to each and every cowboy/cowgirl --- this  leads to bad decisions for healthcare in the USA. 


When I was on the insurance committee of my university we tried to make responsible choices keeping in mind the needs of the highest users of medical services among families of colleagues. This led to recommendations for a group policy with relatively low deductibles.
 

When making individual choices most cowboys will opt for the lowest-cost high-deductible options such as 40% deductible Bronz Plans or 30% deductible Silver Plans. The only people choosing the 20%-deductible  Gold Plans will be those with known expensive family preconditions such as heavy diabetes and mental health afflictions and AIDS.


The government is now considering dirt-cheap 50% deductibles which will be very popular among the cowboys who even sign up for any medical insurance.
 

At the moment most of the people signing up for individual ACA exchanges are choosing the lower-cost high deductible plans because these people are relatively poor and their government subsidized premiums for the most crappy plans are relatively cheap.

Sadly, studies show that crappy high deductible coverage leads to delays in seeking health care diagnosis and treatment except in emergencies. These studies show that the cowboys will put off going to the doctor more than the cowgirls. The cowboys favor other options for their spending money --- much of which goes for courting cowgirls, more expensive guns, and " faster horses, younger women, older whiskey, and more money".
 
When corporations start dropping their relatively better coverage having 10% deductibles,  the employee cowboys will be given even more salary to choose their own individual ACA exchange plans. They will be enough increase in salary to consider gold low deductible plans. For cowboys? Yeah Right!

The thing about most cowboys is that they think they will never get sick or fall off their horses or get saddled with a sick kid.
They will choose the highest deductible crap plans and use their added salary money for for cruises, more expensive condos, ski trips, Las Vegas junkets, newer trucks, and whatever modern cowboys like better than health care insurance that they think they don't really need at all..

 

Faster Horses by Tom T. Hall ---
https://www.youtube.com/results?search_query=faster+horses+tom+t+hall&sm=1 
Lyrics

He was an old-time cowboy, don't you understand
His eyes were sharp as razor blades his face was leather tan
His toes were pointed inward from a-hangin' on a horse
He was an old philosopher, of course


He was so thin I swear you could have used him for a whip
He had to drink a beer to keep his britches on his hips
I knew I had to ask him about the mysteries of life
He spit between his boots and he replied
"It's faster horses, younger women,
Older whiskey, and more money
"


He smiled and all his teeth were covered with tobacco stains
He said, "It don't do men no good to pray for peace and rain.
Peace and rain is just a way to say prosperity,
And buffalo chips is all it means to me."


I told him I was a poet, I was lookin' for the truth
I do not care for horses, whiskey,
Women or the loot I said I was a writer,
My soul was all on fire
He looked at me an' he said, "You are a liar."


"
It's faster horses, younger women,
Older whiskey, and more money
"
Well, I was disillusioned, if I say the least
I grabbed him by the collar and I jerked him to his feet
There was something cold and shiny layin' by my head
So I started to believe the things he said
Well, my poet days are over and I'm back to being me
As I enjoy the peace and comfort of reality
If my boy ever asks me what it is that
I have learned I think that I will readily affirm
"It's faster horses, younger women,
Older whiskey, and more money"
"It's faster horses, younger women,
Older whiskey, and more money
.

It ain't no damn expensive ACA medical  insurance plan
that mostly subsidizes sick folks
and fat-cat insurance companies
.

The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/

"The Individual Mandate Goes Poof:  The latest delays show that the supposed centerpiece of ObamaCare won't cause the uninsured to buy coverage," by Abby McCloskey And Tom Miller, The Wall Street Journal, March 26, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702303802104579451103019884322?mod=djemMER_h&mg=reno64-wsj

One by one, the myths of the Affordable Care Act have been revealed. When the curtain on open enrollment falls on March 31, the last remaining big myth of ObamaCare will be fully exposed: The individual mandate has failed.

After a last-ditch effort with President Obama himself encouraging "young invincibles" to sign up before the deadline, the administration is scrambling to boost enrollment. On Tuesday, the White House announced that people who applied for coverage on the federal health-insurance exchange will have until mid-April to finish the paperwork.

The mandate was supposed to be the administration's magical elixir for the assorted shortcomings of the Affordable Care Act. Disappointing early enrollment numbers? More people will sign up eventually to avoid mandate penalties. Potential premium spikes for government-approved coverage that must ignore cost differences in the age- and health-related risks of enrollees? Forcing young and healthy individuals to buy coverage will spread out the costs.

But the individual mandate was never strong enough to force millions of Americans to buy insurance they did not want or could not afford. Last week, the Obama administration estimated that five million Americans had signed up thus far for insurance on the exchanges, falling short of original projections by the administration and the Congressional Budget Office that there would be seven million first-year enrollees. Yet even the five million figure needs to be discounted by at least another 20% to account for people who fail to pay for their first month's premium, according to insurers' estimates of early enrollees.

The individual mandate had the least effect on those it was supposed to encourage to gain coverage—the uninsured. McKinsey & Co. surveys found that a little over one-quarter of people signing up for coverage last month were previously uninsured. Goldman Sachs GS +0.35% analysts estimate that about one million uninsured Americans will sign up for the ObamaCare exchanges before open enrollment ends. For perspective, that's about 2% of the 48 million uninsured.

A larger share of the exchange enrollees is likely coming from people whose previous coverage was canceled (due to other ObamaCare rules) or those who found a somewhat better deal for exchange coverage (due to much more generous low-income subsidies). More recent increases in insurance coverage are appearing in health plans outside of the exchanges.

The mandate penalties are too small and limited to be very persuasive. Many uninsured individuals are exempted from them. Either their incomes are lower than the federal income tax filing threshold (roughly $10,150 for a single individual), the minimum essential coverage that ObamaCare requires would be "unaffordable" under the law (costing them more than 8% of their household income), or they fall within a growing list of other exemptions from the mandate.

Even when the CBO was more optimistic about the individual mandate's effects (in April 2010), it expected about two-thirds of the 21 million nonelderly persons still uninsured in 2016 to be exempt from the mandate or its penalties.

Those not exempt face modest fines compared with the out-of-pocket cost of paying premiums for ObamaCare-required insurance. For example, the maximum penalties for a single adult remaining uninsured throughout all of 2014 would amount to the higher of $95 or 1% of household income above the federal income tax filing threshold. This is a fraction of the cost of health insurance for potential enrollees in government exchanges.

The threat behind the penalties is even less believable. The Affordable Care Act explicitly prohibits the Internal Revenue Service from using its most powerful enforcement tools like criminal penalties and levying property—such as wage garnishment.

If the IRS manages to discover someone without required coverage for all or part of a year, it can do little more than collect the penalty by taking it out of any other income tax refunds owed to an uninsured taxpayer. That risk can be limited or avoided by reducing the amounts withheld from one's regular paycheck for income taxes.

For the mandate to have teeth, the size of the penalty would need to be greatly increased, exemptions would need to decrease, and enforcement would need to be stronger. Good luck with convincing congressional Democrats facing midterm elections to commit political suicide.

Even then, a tougher mandate still might not work. The CBO concedes that there is "little empirical evidence concerning individual people's responsiveness to health insurance mandates." In other countries with much higher penalties, such as Switzerland or the Netherlands, health-insurance mandates have had little success in changing the behavior of the uninsured and largely reinforced existing levels of coverage. This was the finding in a November 2007 Health Affairs study by former Obama Health and Human Services official Sherry Glied and two co-authors. They also found mixed results from mandates for auto insurance.

The March 31 deadline to gain coverage in government exchanges will come and go with a whimper, not a bang. Enrollment numbers may rally a bit, but likely still will remain low. Any net gains in coverage will be due primarily to ObamaCare's generous exchange subsidies for lower-income Americans, plus automatic enrollment of income-eligible Medicaid beneficiaries.

The ineffectiveness of the individual mandate is trumped only by its unpopularity. Two-thirds of Americans support getting rid of the individual mandate completely, according to a recent ABC News poll. This month, the House of Representatives voted again to delay enforcement of the individual mandate for a year, with support from 27 Democratic defectors.

The Obama administration already has been forced to delay, drop or revise a host of other requirements in the law, such as the employer mandate, minimum benefits standards, and nondiscrimination rules. Until now, the White House has refused to delay or repeal the unpopular individual mandate because it was supposed to hide the full "on-budget" costs of ObamaCare. Its architects hoped that the mandate could force millions of Americans to pay for the law's expensive coverage and cross subsidies through higher premiums instead of higher taxes. But they always lacked sufficient political support to try to make the mandate powerful enough to accomplish this.

Expect the mandate to turn into even more of a "suggestion" before votes are cast in this November's congressional elections. With the mandate illusion off the table, the Affordable Care Act can no longer hide what it truly is: another unfunded liability for taxpayers


Irony Alert: Union Report Charges ObamaCare with Worsening Inequality---
http://cdn.ralstonreports.com/sites/default/files/ObamaCaretoAFL_FINAL.pdf

The promise of Obamacare was the right one and the hope for extending healthcare coverage to the un-and under-insured a step in the right direction. Yet the unintended consequences will hit the average, hard-working American where it hurts: in the wallet. Currently a national dialogue is emerging by all political parties on the issue of income inequality. That is a debate worth having. The White House and Congressional Democrats are “resetting” the domestic agenda following the negative fallout from the rollout of the ACA. They plan to shift focus from health care to bread and butter issues of income inequality that have eroded the American paycheck for decad

Ironically, the Administration’s own signature healthcare victory poses one of the most immediate challenges to redressing inequality. Yes, the Affordable Care Act will help many more Americans gain some health insurance coverage, a significant step forward for equality. At the same time, without smart fixes, the ACA threatens the middle class with higher premiums, loss of hours, and a shift to part-time work and less comprehensive coverage.

• Transferring A Trillion Dollars in Wealth: Most of the ACA’s $965 billion in subsidies will go directly to commercial insurance companies, one of the largest transfers of public wealth to private hands ever. Since the ACA passed, the average stock price of the big for-profit health insurers doubled, their top executives were paid more than a half billion dollars in cash and stock options, and in the past 2 years, the top 10 insurers have spent $25 billion on mergers and acquisitions.

• Strangling Fair Competition: Before reform, different types of health plans were regulated under different bodies of law. The Obama Administration has blocked many non-profit health funds from competing for the law’s proposed trillion dollars in subsidies by refusing to set fair regulations for different types of plans. The unbalanced playing field will give employers of people covered by these plans powerful incentives to drop coverage.

• Moving to Part Time Work: The Administration’s experts say employers won’t follow the incentives and drop coverage. But they also told the nation that employers would not cut workers’ hours to get below the 30-hour per week threshold for “full time” work, even as 388 employers announced hours cuts since early 2012.

• Cutting People’s Pay: If employers follow the incentives in the law, they will push families onto the exchanges to buy coverage. This will force low-wage service industry employees to spend $2.00, $3.00 or even $5.00 an hour of their pay to buy similar coverage

Making Inequality Worse A Trillion Dollar Wealth Transfer The Congressional Budget Office projects that the federal government will spend at least $965 billion in subsidies to make coverage purchased through the new online marketplaces affordable.

Nearly all of that money will go directly to health insurance companies, one of the largest transfers of wealth from public to private hands in history. This is the heart of the ACA — subsidies to persuade health insurers to make their products affordable to new customers. Even before subsidy checks, the ACA is benefiting for-profit health insurers. The average share prices of the top 5 for- profits — Wellpoint, United, Aetna, Cigna, Humana — have more than doubled since the March 23, 2010 passage of the ACA. At a time of record stock prices, the Big 5’s aggregate share prices have increased almost twice as fast as the Standard and Poor’s 500 index of blue chip stocks. 2 For-Profit Health Insurance Stocks Since Obamacare $965 Billion: Projected insurance subsidies under Obamacare, 10 years $25

Continued in article

Jensen Comment
The report fails to mention that insurance companies will be bearing very little of the bad debts of insured people receiving medical care. These losses are mostly going to be passed on to the physicians, hospitals, and other providers of health care. The bad debts that are covered by insurance companies will be passed on to the public by way of higher premiums.

President Obama prefers that private insurance companies to be third parties in the ACA Act. Like the Clintons he prefers that the ACA be funded and managed by the Federal Government much like Medicare is managed by the Government.  However, in his zeal to get the ACA passed he agreed to an ACA monster that brings the private insurers into the ACA --- a disaster in the making where private insurance companies walk off with guaranteed profits.


Jensen Comment
Many people who are eligible legally or illegally for these new ACA tax credits don't know about them yet and probably won't understand them after they read this section of the ACA code. Chances are that your current tax adviser, like me, does not have clue about these credits that soon will be the law of the land.

"Are ObamaCare's Tax Credits Harmless? The Little Understood Dark Side Of The Subsidies," by Josh Archambault, Forbes, March 17, 2014 ---
http://www.forbes.com/sites/theapothecary/2014/03/17/are-obamacares-tax-credits-harmless-the-little-understood-dark-side-of-the-subsidies/

T-minus 14 days until open enrollment closes for ObamaCare. It is crunch time for thousands as they decide if they want to enroll, and ultimately how much of a tax credit to accept in order to determine their first premium payment amount. Much attention has been lavished on the “positives” of the ACA’s tax credits (also called premium subsidies). White House press releases often highlight the impact of the credits while chiding others for not including them when discussing the new higher premiums under the law. Yet, the new reality of ObamaCare’s tax credits has left finance reporters to pen articles warning readers to “take care” when considering a tax credit and providing strategies for how best to “protect yourself.” So what do finance reporters know that the White House doesn’t?

By accepting a tax credit, low-income or lower-middle class families face significant tax ramifications and potential financial risk. Congress has changed the rules twice on consumers for the credits, making the income cliffs steeper, and fully equipping the IRS to claw back overpaid subsidies (unlike the individual mandate penalty).

The flip side of the tax credits is almost unknown to the general public.

Who Exactly Gets The Tax Credits?

The ACA’s tax credits are given directly to the insurance companies, and are calculated on a sliding scale, based on family size, and in theory, to those making between 138% and 400% of the federal poverty level (FPL) in states that have expanded Medicaid eligibility. In states that have not expanded Medicaid, the tax credits are available to those making between 100% and 138% FPL.

However, individuals can claim them by estimating that they will make over 100% FPL even if they end up making 90% FPL in these states, effectively closing the coverage gap we have heard Medicaid expansion supporters and the media complain so loudly about. However, the tax credits are unavailable to those with an “affordable” offer of employer-based insurance, or for those on other forms of government-approved coverage like standard Old Medicaid or Medicare.

Yet, soon to be published research by my colleague Jonathan Ingram will show that the tax credits phase out quickly for those in the exchange, and are therefore unavailable for many young people (18-34) in numerous states making far less than 400% FPL, based on the complex formula used to calculate the subsidies, and the price of the plans available on the exchange. This fact is only making the Administration’s job of convincing young people to sign up even harder.

The credits can only be used in a government-sanctioned ObamaCare exchange. In other words, individuals purchasing private insurance on their own must decide if they want to keep their current insurance plan without a subsidy or drop their coverage to take the tax credit. Since so many states rejected the President’s call to renew policies for those facing cancellations, and the recent extension of that policy, millions of Americans are facing this exact decision of joining an exchange or buying elsewhere by March 31st.

All citizens that take the credit must file a tax return to receive the credits regardless of their income. Failure to do so will result in them being prohibited from seeking a credit in the future. Married couples must file a joint return.

How You Take The Credit Could Determine Exposure

The initial tax credit calculation will be based on an applicant’s income tax return from the previous year, or a best estimate of what it will be next year. The credit can be taken in advance at the beginning of the year. However, individuals who enroll in the ObamaCare exchange will run the risk of having to pay back a significant portion of the tax credit if their life circumstances change (more on this below).

The credit can also be taken on the following year’s return in the form of a refund. However, individuals who make this decision will be responsible for coming up with the full cost of the ObamaCare exchange insurance at the beginning of the year. Individuals and families do have the option of taking a partial credit.

Congress Has Changed ObamaCare’s Tax Credit Rules Twice

Republicans have by and large ignored the tax credit issue unless talking about the budget implications. Perhaps the silence is due to the fact that Congress has voted to change ObamaCare twice to increase the financial risk that families could face when they take the credit.

Since the enactment of ACA, these limits have been amended twice: first under the Medicare and Medicaid Extenders Act of 2010 (P.L. 111-309), and then under the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011 (P.L. 112-9). Congress changed the payback protection to vanish at the 400% poverty level and increased the payback amounts at 200% and 300% FPL from what they had been before.

The result will be surprise bills from the IRS in the mail come tax time 2015, in the order of a couple hundred dollars all the way up to full value of any subsidy received if a family crosses the 400% FPL threshold. (This could be $10,000-$12,000 for a family of four, as an example.) Just a few dollars of extra income could result in thousands of back taxes to be paid.

Life Change Should Be Reported To The Exchange, Requiring A New Application

Our lives are constantly in flux. Lower and middle-class families rarely find themselves in static work and life environments, but that is exactly what ObamaCare assumes. Even the most common and mundane life changes could significantly impact an individual’s financial situation if he or she decides to take the tax credit. So ObamaCare recommends that individuals report these changes immediately.

Continued in article

Jensen Comment
This suggests to me a possible tax student assignment that might help the IRS. Assign students in a tax course (probably teams of students) the creative task of thinking up how identity thieves filing false tax returns for the refunds can add to those refunds by filing for ACA tax credits. Of course the ID thieves don't have to worry about subsequent penalties since the IRS does not have a clue about who the thieves are that are filing false income tax returns for the refunds.

Better yet expand this to assigning students to write scenarios on all (or at least many)  ways that ID thieves can pad their fake tax returns in general to maximize illegal tax refunds.


A long-delayed correction of a lie
"You Might Lose Your Doctor Under Obamacare," WebMd, March 14, 2014 ---
http://hotair.com/archives/2014/03/14/great-news-80-of-employers-have-or-may-raise-deductibles-thanks-to-obamacare/

Voters in November might be ready to show Democrats what they think about removing choice and hiking costs, as well as their arrogance in determining that a few politicians in Washington know better about their choices than they do. Unfortunately, Barack Obama doesn’t appear to have figured out this problem. In an interview with WebMD, Obama finally acknowledged that, contra his promise, people might not be able to keep the doctors they liked, but that they probably shouldn’t have liked those doctors in the first place.

Jensen Comment
Why won't he still admit the truth. Many of those doctors that "they liked" tend to be so good that they get more than enough business without working for medical clinics and

Here in New Hampshire 10 of the 26 hospitals and many of the best physicians in the state refuse to go on network. One of the main reasons is that patients in default on their health exchange premiums must be treated for 90 days with physicians and hospitals bearing the treatment costs for the last 60 of those 90 days. God forbid that the fat-cat insurance companies or the Federal government take the risks of paying for the free care during those 60-days.


It's important to know that the article below was published by The New York Times and not The Wall Street Journal

The Many Taxes of the Affordable Health Care Act are Badly Hurting Employment Opportunities

"The Affordable Care Act’s Multiple Taxes." by Casey B. Mulligan, The New York Times, February 26, 2014 --- Click Here
http://economix.blogs.nytimes.com/2014/02/26/the-affordable-care-acts-multiple-taxes/?_php=true&_type=blogs&_php=true&_type=blogs&_php=true&_type=blogs&_r=2

The Affordable Care Act contains at least two economically distinct taxes on labor market activity. Even the experts on the law have failed to recognize all of them.

The Affordable Care Act tries to make health insurance affordable by offering means-tested subsidies and tax credits to households so they can make their payments for monthly health insurance premiums and out-of-pocket health expenses like deductibles and copayments for medical services.

This assistance is means-tested because higher-income households get less assistance than lower-income households. As a household’s income rises, it has to pay more for the same coverage. As a matter of economics, it wouldn’t have been much different if the law had given assistance to all households and then paid for it with a new income tax that was capped once household income hits 400 percent of the federal poverty line.

Naturally, income taxes discourage people from doing the things that create income. This is not to say that everyone responds to every tax, just that the average result of an additional income tax is less income.

Economists have long understood and publicized the implicit income taxes that come with attempts to make health care affordable. As my fellow Economix blogger Uwe Reinhardt put it 20 years ago (in an article with Alan B. Krueger) about one specific subsidy plan, health insurance premium assistance “would present millions of low-income American families with total marginal tax rates in excess of 75 percent.” Professor Reinhardt also noted recently that the marginal tax rate implicit in any particular health insurance proposal depends very much on the features of that plan.

The Congressional Budget Office also highlighted this issue as the Affordable Care Act was going through Congress. Daniel P. Kessler, a Stanford professor, also discussed it in a commentary in 2011.

Under the Affordable Care Act, only a small minority of workers is expected to get subsidized coverage. So economists concluded that aggregate labor market effects of the new law would be minimal.

I would agree if the implicit income tax were the only new tax on labor market activity in the new law. But there’s more: The Affordable Care Act also contains a new implicit tax on employment that affects far more people than its implicit income tax does.

Income taxes and employment taxes are not the same, because the income tax is based on income and the employment tax is based on employment. Two households with the same family structure (in number and age of family members) and annual income who live in the same county will not necessarily get the same assistance from the Affordable Care Act. The household that is employed more months of the year is likely to get less assistance (and maybe no assistance) from the new law, because the law requires that, during the months that they are employed, full-time workers get health coverage from their employer before they turn to the new health insurance marketplaces for federal government subsidies.

To put it another way, even if the health insurance subsidies in the Affordable Care Act had been a specific dollar amount that was not phased out with household income, the law would still act as a tax on employment because most workers could not get the assistance during the months they were at work.

This new implicit employment tax will apply to tens of millions of workers who are offered health insurance on their job and to millions of non-employed persons who are considering a position that offers coverage.

(The new employment tax also changes the types of jobs that are created and accepted by workers, but this effect does not prevent the law from reducing employment, as Trevor Gallen and I explain).

As far as I know, before this month the only place that one could read about the Affordable Care Act’s new employment tax was in this paper by David Gamage, in posts I have written for this blog, in my 2012 book or in a 2013 paper. Even though the consequences of the law have been debated at least as far back as 2009, the law’s advocates have yet to acknowledge the new implicit employment tax, let alone estimate the number of people who will face it.

But in a recent paper, the Congressional Budget Office has joined me in explaining that it’s not just the implicit income tax that will contract the labor market. As the paper puts it, “The loss of subsidies upon returning to a job with health insurance is an implicit tax on working,” adding that the effect of the new tax is “similar to the effect of unemployment benefits” (see Page 120).

Once we consider that the new law has an employer penalty, too, the labor market will be receiving three blows from the new law: the implicit employment tax, the employer penalty and the implicit income tax. Regardless of how few economists acknowledge the new employment tax, it should be no surprise when the labor market cannot grow under such conditions.


"Public Sector Cuts Part-Time:  Shifts to Bypass Insurance Law," by Robert Pear, The New York Times, February 20, 2014 ---
http://www.nytimes.com/2014/02/21/us/public-sector-cuts-part-time-shifts-to-duck-insurance-law.html?_r=0

Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.

The cuts to public sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health care law, who claim that it is creating a drain on the economy.

President Obama has twice delayed enforcement of the health care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average. But many public employers have already adopted policies, laws or regulations to make sure workers stay under that threshold.

Even after the administration said this month that it would ease coverage requirements for larger employers, public employers generally said they were keeping the restrictions on work hours because their obligation to provide health insurance, starting in 2015, would be based on hours worked by employees this year. Among those whose hours have been restricted in recent months are police dispatchers, prison guards, substitute teachers, bus drivers, athletic coaches, school custodians, cafeteria workers and part-time professors.

Continued in article

Jensen Comment
Sadly these part-time jobs are at the lower end of wage earners.


"Public Sector Cuts Part-Time Shifts to Bypass Insurance Law," by Robert Pear, The New York Times, February 20, 2014 ---
http://www.nytimes.com/2014/02/21/us/public-sector-cuts-part-time-shifts-to-duck-insurance-law.html?_r=0

Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.

The cuts to public sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health care law, who claim that it is creating a drain on the economy.

President Obama has twice delayed enforcement of the health care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average. But many public employers have already adopted policies, laws or regulations to make sure workers stay under that threshold.

Even after the administration said this month that it would ease coverage requirements for larger employers, public employers generally said they were keeping the restrictions on work hours because their obligation to provide health insurance, starting in 2015, would be based on hours worked by employees this year. Among those whose hours have been restricted in recent months are police dispatchers, prison guards, substitute teachers, bus drivers, athletic coaches, school custodians, cafeteria workers and part-time professors.

Continued in article

Jensen Comment
Sadly these part-time jobs are at the lower end of wage earners.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm

 

Jensen Comment
Ironically, what may save medical insurance exchanges is that their policies are so lousy that people, especially those with subsidized premiums, will resist taking advantage of their coverage unless they become severely ill. Forget preventative medicine. Forget mental health treatment. The problem is that 20%-40% deductibles and high co-pays are just too expensive. Many people just will not make a choice to go to a medical center relative to other obligations on their limited budgets --- like housing and heroin and beer and trips to Disneyworld.

Also there's a problem of convenience.
People in New Hampshire that were served by 26 hospitals are reduced to only 16 hospitals participating in the health exchange (there's only one in New Hampshire). This means more time and trouble and costs for same-day surgeries, therapy, consultations with onsite surgeons, etc. For example, a patient possibly needing a bone density scan may have to pay 40% of the hospital's charge, travel 70 miles to a participating hospital, drive in the wintry dark, and possibly stay in a hotel the night before or the night afterwards. These costs and inconveniences add up to a point where people will put off health care unless very serious problems are encountered.

And the millions of people insured under employer plans may see their deductibles and co-payments increase next year.

In New Hampshire and elsewhere there's serious doubt about having a sufficient number of specialists like psychiatrists and dermatologists participating in the ACA. The dream of having better mental health coverage may be just that --- only a dream. Only half of the psychiatrists in the USA previously participated in any insurance coverage in the USA. The ACA fees are so limited it almost certain that the supply of psychiatrists will fall way short of the ACA and other demands.

Perhaps this is why the Governor of Vermont devoted his entire 2014 State of Vermont address to the problems of heroin addiction and expense of treatment. Vermont's generous welfare system attracts a lot of addicts to Vermont.

Another problem for Vermont is that it's high taxes are driving many more physicians and other medical service providers out of the state than attracting them to the state. Yesterday nurse that drew my blood for my annual physical said she had just moved from Vermont. My primary care physician and my eyelid surgery physician recently moved to New Hampshire from Vermont.


Question
Should colleges wanting to avoid having to provide health insurance to adjunct teachers rush to cap their total work hours to less than 30 hours per week in order to avoid the requirements of the Affordable Health Care Act more commonly known as Obamacare? There is considerable ambiguity about how many hours adjuncts "work" outside of class for course preparation and for helping students outside of class (e.g., via email).

"Caps Untouched," by Colleen Flaherty, Inside Higher Ed,  February 25, 2014 ---
http://www.insidehighered.com/news/2014/02/25/some-colleges-consider-changes-adjunct-caps-wake-irs-guidance

When the Internal Revenue Service offered guidance earlier this month on how college and universities should count adjuncts’ hours in relations to the Affordable Care Act, the agency raised at least as many questions as it answered.

Chief among them was whether the guidance would make any real difference in the lives of adjuncts. Would colleges and universities stop capping adjuncts’ workloads to prevent them from qualifying as eligible for benefits under the law? Would institutions that already had done so rethink their caps? And would administrators even follow the guidance, which offers a “safe harbor” formula of 2.25 hours worked for each classroom contact hour, but still allows them to count total hours worked based on a decidedly ambiguous “reasonable” standard?

. . .

Starting about 18 months ago, colleges moved in droves to cap their adjuncts’ course loads ahead of the health care law’s so-called “employer mandate” taking effect. Large employers under the law must offer full-time employees – those who work 30 hours or more per week – health care benefits or face fines, so institutions all over the country moved to lower their course load caps for adjuncts or create them where they hadn’t existed before.

College associations warned institutions that they may be acting too soon, without explicit guidance from the federal government about how to count adjuncts’ total hours worked per week to determine if they were benefits-eligible under the law. Since adjuncts work outside of class to prepare for contact time with students, they said, it was unclear how to count adjuncts’ hours. Different adjuncts groups, college associations and unions proposed various formulas, but there was nothing concrete.

Many of the institutions were working off a kind of “worst case scenario” scenario formula, from the perspective of wanting to provide as few adjuncts health care as possible. Under that formula, which was supported by the American Federation of Teachers and some adjunct groups, one hour of contact time equaled two hours of outside preparation time, for a total of three hours. So Community College of Allegheny County, followed by many other institutions, announced a 10-credit-per-semester cap. It replaced a previous 12-credit cap, essentially meaning that most adjuncts could now teach three courses (nine credits) instead of four per semester in the fall and summer, for 27 hours per week total.

Allegheny did not respond to a request for comment on whether it would rethink its policy in light of the IRS guidance. Various institutions also are staying mum. A spokesman for the College of DuPage, which last year created some full-time positions for adjuncts while capping other adjuncts’ workload at 27 credits per, said the guidance wouldn’t change anything, and showed that the college’s policy is “appropriate within the clarified guidelines.”

The Virginia Community College system, however, is reviewing a course load cap it instituted last year for all adjuncts: 10 credits each in the fall and spring and 7 in the summer, a spokesman said. That cap resulted in sections being taken away from or limited for about 25 percent of the system’s some 7,000 adjuncts at 23 campuses, and could change based on a pending review of the IRS guidance and the Virginia “Manpower Control Program.” The state policy limits adjunct faculty at public institutions to 29 hours per week. Still, at least one college within the system has announced that new course loads of 12 credits and contact hourseach for the fall and spring, and 8 in the summer, soon will be adopted, based on the relatively “relaxed” IRS guidance, The Washington Post reported. The college system spokesman said that announcement was premature.

Josh Ulman, chief government relations officer for the College and University Professional Association for Human Resources, said he expected more and more colleges to follow the IRS model, to be in compliance should the guidelines change going forward.

Randi Weingarten, president of the American Federation of Teachers, said in email that whether or not colleges would follow the guidelines was "simple." Employers that "embrace the sprit of the [law] -- which is rooted in the idea that everyone deserves access to high-quality and affordable healthcare -- will work with us to make it happen. Those who oppose the law or put cutting costs above high-quality education probably won't."

Indiana's Ivy Tech Community College, a large community college system, won’t change the ACA-related course load caps it instituted regardless of the guidance, President Tom Snyder said. Under the new caps, adjuncts can work 12 credit hours per semester, or about 27 hours total based on the IRS formula. Snyder, who recently offered  Congressional testimony on what he saw as the disproportionate impact of the new health care law on community colleges, given their high rates of employment of adjunct faculty, said he would continue to lobby for the possible exemption of colleges from the law. Snyder said the law "penalizes" adjunct faculty who want to teach more hours but must adhere to new course load caps, and the "school misses out on a skilled adjunct." And providing health care to all adjuncts teaching beyond the new caps would be prohibitively expensive, at the cost of $10 million annually, he said. To do that, Ivy Tech would have to downgrade health care plans for everyone else.

No college has yet announced it will offer more adjuncts health insurance as a result of the guidance. That didn’t come as a surprise to adjunct advocates, who often cite health insurance and other benefits as a kind of “last nut” to be cracked in organizing and other advocacy efforts that in many places already have led to better pay and job security, for example.

Because many institutions still recognize adjuncts as working only during contact classroom hours, Kezar said the guidelines “certainly should make more adjuncts qualify.” But, she said, “Institutions that are dead-set against providing them [with health insurance] will find ways around it."

Baime noted that the guidelines offer flexibility to colleges to offer "robust employment" of adjuncts without necessarily providing health insurance. Weingarten said that adjuncts who don't get insurance through their institutions are counting on expanded opportunities for coverage elsewhere in the law.

Ulman said that at the very least, the IRS guidance will make it clearer who might qualify for benefits so that institutions and employees can have more “honest discussions” about coverage.

Maria Maisto, president of the New Faculty Majority, said there was more work to be done to make sure that those kinds of honest discussions were happening on campuses. And given the lack of obvious enforcement mechanism in the guidance, she said, it’s up to adjuncts to demand it.

Despite the tumult of the past 18 months for adjuncts, advocates have said there’s a silver lining, to which the new IRS guidance adds: It’s brought the contingent academic labor issue out of the sector and into the broader policy debate.

Rhoades said the guidance is “official recognition that adjunct faculty work outside the class, as part of contributing to a quality education for the students, and that will create additional pressure on institutions to not just acknowledge that, but to actually remunerate these faculty for that work.”

Kezar agreed, saying, “the legislation and guidance have been really instrumental in bringing adjuncts’ plight to light." She noted Democratic Rep. George Miller’s recent report on adjunct labor issues, which was sparked by Maisto’s November testimony to the House Committee on Education and the Workforce. “He learned all that through the [Affordable Care Act] discussions.”

Ultimately, she said, the debate’s greatest impact “may not be on health care but on drawing attention to the slew of problems related to this work force model that has been grown beyond capacity to serve higher education well.”


"(More) Clarity on Adjunct Hours (including healthcare insurance guidance)," by Doug Lederman, Inside Higher Ed, February 11, 2014 ---
http://www.insidehighered.com/news/2014/02/11/irs-guidance-health-care-law-clarifies-formula-counting-adjunct-hours 

The Obama administration on Monday released its long-awaited final guidance on how colleges should calculate the hours of adjunct instructors and student workers for purposes of the new federal mandate that employers provide health insurance to those who work more than 30 hours a week.

The upshot of the complicated regulation from the Treasury Department and the Internal Revenue Service:

·        On adjuncts, colleges will be considered on solid ground if they credit instructors for 1 ¼ hours of preparation time for each hour they spend in the classroom, and instructors should be credited for any time they spend in office hours or other required meeting time.

·        On student workers, the IRS opted to exclude work-study employment from any count of work hours, but the administration declined to provide an exemption for student workers over all. As a result, colleges and universities will be required to provide health insurance to teaching and research assistants who work more than 30 hours a week.

Adjunct Hours

The issues of how to count the hours of part-time instructors and student workers have consumed college officials and faculty groups for much of the last 18 months, ever since it became clear that the Affordable Care Act definition of a full-time employee as working 30 hours or more a week was leading some colleges to limit the hours of adjunct faculty members, so they fell short of the 30-hour mark.

All that the government said in its initial January 2013 guidance about the employer mandate under the health care law was that colleges needed to use "reasonable" methods to count adjuncts' hours.

In federal testimony and at conferences, college administrators and faculty advocates have debated the appropriate definition of "reasonable," with a focus on calculating the time that instructors spend on their jobs beyond their actual hours in the classroom. The American Council on Education, higher education's umbrella association and main lobbying group, proposed a ratio of one hour of outside time for each classroom hour, while many faculty advocates have pushed for a ratio of 2:1 or more.

In its new regulation, published as part of a complex 227-page final rule in today's Federal Register, the government said that it would be too complex to count actual hours, and it rejected proposals to treat instructors as full time only if they were assigned course loads equivalent or close to those of full-time instructors at their institutions.

The administration continued to say that given the "wide variation of work patterns, duties, and circumstances" at different colleges, institutions should continue to have a good deal of flexibility in defining what counts as "reasonable."

But in the "interest of predictability and ease of administration in crediting hours of service for purposes" of the health care law, the agencies said, the regulation establishes as "one (but not the only)" reasonable definition a count of 2.25 hours of work for each classroom hour taught. "[I]n addition to crediting an hour of service for each hour teaching in the classroom, this method would credit an additional 1 ¼ hours service" for "related tasks such as class preparation and grading of examinations or papers."

Separately, instructors should also be credited with an hour of service for each additional hour they spend outside of the classroom on duties they are "required to perform (such as required office hours or required attendance at faculty meetings," the regulation states.

The guidance states that the ratio -- which would essentially serve as a "safe harbor" under which institutions can qualify under the law -- "may be relied upon at least through the end of 2015."

By choosing a ratio of 1 ¼ hours of additional service for each classroom hour, the government comes slightly higher than the 1:1 ratio that the higher education associations sought, and quite a bit lower than the ratio of 2:1 or higher promoted by many faculty advocates.

David S. Baime, vice president for government relations and research at the American Association of Community Colleges, praised administration officials for paying "very close attention to the institutional and financial realities that our colleges are facing." He said community colleges appreciated both the continued flexibility and the setting of a safe harbor under which, in the association's initial analysis, "the vast majority of our adjunct faculty, under currernt teaching loads, would not be qualifying" for health insurance, Baime said.

Maria Maisto, president and executive director of New Faculty Majority, said she, too, appreciated that the administration had left lots of room for flexibility, which she hoped would "force a lot of really interesting conversations" on campuses. "I think most people would agree that it is reasonable for employers to actually talk to and involve employees in thinking about how those workers can, and do, perform their work most effectively, and not to simply mandate from above how that work is understood and performed," she added.

Maisto said she was also pleased that the administration appeared to have set the floor for a "reasonable" ratio above the lower 1:1 ratio that the college associations were suggesting.

She envisioned a good deal of confusion on the provision granting an hour of time for all required non-teaching activities, however, noting that her own contract at Cuyahoga Community College requires her to participate in professional development and to respond to students' questions and requests on an "as-needed basis." "How does this regulation account for requirements like that?" she wondered.

Student Workers

The adjunct issue has received most of the higher education-related attention about the employer mandate, but the final regulations have significant implications for campuses that employ significant numbers of undergraduate and graduate students, too.

Higher education groups had urged the administration to exempt student workers altogether from the employer mandate, given that many of them would be covered under the health care law's policies governing student health plans and coverage for those up to age 26 on their parents' policies. The groups also requested an exemption for students involved in work study programs.

The updated guidance grants the latter exemption for hours of work study, given, it states, that "the federal work study program, as a federally subsidized financial aid program, is distinct from traditional employment in that its primary purpose is to advance education."

But all other student work for an educational organization must be counted as hours of service for purposes of the health care mandate, Treasury and IRS said.

Steven Bloom, director of federal relations at the American Council on Education, said higher ed groups thought it made sense to exempt graduate student workers, given that their work as teaching assistants and lab workers is generally treated as part of their education under the Fair Labor Standards Act. He said the new guidance is likely to force institutions that employ graduate students as TAs or research assistants -- and don't currently offer them health insurance as part of their graduate student packages -- to start counting their hours.

The guidance also includes a potentially confounding approach to students who work as interns. The new regulation exempts work conducted by interns as hours of service under the health care employer mandate -- but only "to the extent that the student does not receive, and is not entitled to, payment in connection with those hours."

Continued in article

Also see
http://info.ballardspahr.com/rs/vm.ashx?ct=24F7661FD7E00AEDC1D180A5D22E941DDDBE7BB3D38714DD4CF371647BF8D90DDD78034

Jensen Question
How should a university account for a doctoral student who happens to teach 33 hours one semester and works less than 30 hours in all other semesters of the doctoral program? Is the university required to provide health coverage for zero, one, or more years while the student is a full time student in the doctoral program? I assume the university must provide health insurance for one year, but I'm no authority on this issue.

There also is a huge difference in hours of work required for teaching. A doctoral student who only teaches recitation sections under a professor who provides the lecture sections, writes the syllabus, writes the examinations, and essentially owns a course versus a doctoral student who owns only section of governmental accounting with no supervision from a senior instructor.

When I was Chair of the Accounting Department at Florida State University, the wife (Debbie) of one of our doctoral students (Chuck Mulford) had total control of the lectures and 33 recitation sections of basic accounting each semester where most of the recitation "instructors" were accounting doctoral students. Debbie had her CPA license and a masters degree, but she was not a doctoral student. She was very good at this job. The recitation instructors had almost no preparation time and did not design or grade the examinations. They did not own all 33 sections like Debbie owned all 33 sections. It would be a bit unfair to give the recitation instructors as much pay for preparation as the selected doctoral students who taught more advanced courses and essentially owned those courses in terms of classroom preparation and examinations.

Bob Jensen's personal finance helpers are at
http://faculty.trinity.edu/rjensen/Bookbob1.htm#InvestmentHelpers


ACA advocates promised that more people would be insured but nothing was said about only being half insured.

The lousy 30%-40% high deductible medical insurance plans such as the Silver and Bronze Plans my get lousier with a proposed Copper Plan. This should possibly be called the Yugo Plan that will pay half of qualified medical insurance claims..

"Health-Law Backers Push Skimpier 'Copper' Insurance Policies:  The White House Said it Was Weighing the Proposal," by Louise Radnofsky, The Wall Street Journal, February 13, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702303874504579373342002006318?mod=djemCFO_h

Some backers of the 2010 health-care law are pushing to create a new kind of insurance coverage that the measure essentially had ruled out: policies offering lower premiums but significantly higher out-of-pocket costs than those now available.

The plans, dubbed "copper" because they would offer a lower level of coverage than the "gold," "silver" and "bronze" options on the government-run health-care exchanges, would be a departure from the minimum level of coverage that is one of the Affordable Care Act's core principles.

Many plans that offered less coverage were canceled when the health-care law was rolled out because they didn't meet its new requirements. Republicans accused President Barack Obama of backtracking on his promise that the law would allow people to keep their preferred health plans. In the face of an uproar, the Obama administration asked insurers to reinstate some of the millions of canceled policies for one year.

Now, some insurers and a pair of Senate Democrats are trying to change the law permanently so that individuals and small businesses can buy so-called copper plans. The plans likely would have lower premiums, but purchasers would pay more of their ordinary health costs upfront. Greater coverage would kick in for serious, unforeseen health episodes that would require, for example, a hospital stay.

Sens. Mark Begich of Alaska and Mark Warner of Virginia, both Democrats facing close re-election races this year, are sponsoring legislation that would allow people to buy copper plans on the exchanges. Moreover, insurance-industry officials have been talking up the idea with federal officials, though it is unclear whether the administration could make the change through regulations.

The White House said it was weighing the proposal. "The president remains open to all ideas that would genuinely improve the Affordable Care Act and appreciates the careful thought Mr. Begich has given to his legislation," an administration official said.

Copper plans would cover, on average, 50% of medical costs, and while consumers' out-of-pocket expenses would still be capped, that limit likely would be higher than the $6,350 maximum for individuals and $12,700 for families currently set by the law.

People who selected the plan would be allowed tax credits toward the cost of premiums, as they already get for bronze plans, which cover 60% of costs; silver plans, which cover 70%; and gold plans, which cover 80%.

Continued in article

Jensen Comment
We were promised that more people would be insured but nothing was said about only being half insured.


Teaching Case
From The Wall Street Journal Accounting Weekly Review on February 21, 2014

Health Law Already Has Impact on Bottom Lines
by: Noelle Knox
Feb 25, 2014
Click here to view the full article on WSJ.com
 

TOPICS: Earning Announcements, Earnings Forecasts, Financial Statements

SUMMARY: "More than 80 public companies told investors the new health-care rules were, or could be, a financial boost or drag on their quarterly earnings, though they were often uncertain of the magnitude, according to a Wall Street Journal search of earnings-call transcripts for the most recent quarter provided by FactSet... The Congressional Budget Office's most recent estimate of the ACA's budgetary impact is $1.36 trillion between 2014 and 2023...In general, media and advertising companies and staffing and outsourcing firms are clocking gains. Insurance providers are investing heavily now in technology and staffing-and taking a hit to earnings-in anticipation of future gains. And many large employers across industries are spending more on insurance benefits for full-time employees or on training for new, part-time employees...."

CLASSROOM APPLICATION: The article may be used in a financial reporting class to understand the use of financial statement data to investigate impact on specific companies and industries of the new Affordable Care Act (ACA or ObamaCare). The article provides a good comparison of this micro-economic analysis to macro-economic estimates from the Congressional Budget Office (CBO).

QUESTIONS: 
1. (Introductory) How did the Wall Street Journal prepare its analysis for this article?

2. (Advanced) In what two ways are large employers expecting cost increases from the impact of the Affordable Care Act (ACA or ObamaCare)? Which financial statement expense category or categories do you think will show these increases?

3. (Introductory) What types of industries expect increases in revenues from the impact of the Affordable Care Act (ACA or ObamaCare)?

4. (Advanced) To what financial reporting periods do these cost and revenue impacts relate? Why are these impacts being discussed in 2013 earnings call transcripts?
 

Reviewed By: Judy Beckman, University of Rhode Island

"Health Law Already Has Impact on Bottom Lines," by Noelle Knox, The Wall Street Journal, February 25, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702304834704579403072411467200?mod=djem_jiewr_AC_domainid&mg=reno64-wsj

The Affordable Care Act's impact on the bottom line is starting to ripple across corporate America.

More than 80 public companies told investors the new health-care rules were, or could be, a financial boost or drag on their quarterly earnings, though they were often uncertain of the magnitude, according to a Wall Street Journal search of earnings-call transcripts for the most recent quarter provided by FactSet.

The Congressional Budget Office's most recent estimate of the ACA's budgetary impact is $1.36 trillion between 2014 and 2023. The financial effects on businesses are evolving as changes are made to the legislation, including a decision this month to again delay when many smaller companies will face a fine if they fail to offer health insurance.

But some trends are emerging.

In general, media and advertising companies and staffing and outsourcing firms are clocking gains. Insurance providers are investing heavily now in technology and staffing—and taking a hit to earnings—in anticipation of future gains.

And many large employers across industries are spending more on insurance benefits for full-time employees or on training for new, part-time employees who won't necessarily be entitled to company-sponsored coverage.

Several advertising and communications companies, including Emmis Communications Corp. EMMS +2.83% and LIN Media LIN +2.57% LLC, said they will register increases in spending on advertising and outreach campaigns to encourage enrollment through the new state and federal insurance exchanges.

Emmis is forecasting a 12% to 15% increase in health-care advertising this year, and up to 20% of that is expected to come from ACA-related advertising from insurers, hospitals and state-government agencies, Patrick Walsh, chief financial officer at Emmis, said in an interview.

The Indianapolis-based company's two biggest markets are New York and California, both states that have rolled out health exchanges. Mr. Walsh said Emmis's biggest radio stations are the hip-hop-music Power 106 and Hot 97, which target young, urban minorities. "Our audience is an attractive target for the exchanges," he noted.

Oscar Insurance Corp., for example, ran radio ads on Emmis's New York City Hot 97 radio station in conjunction with a Twitter and Facebook campaign to attract customers.

"Right now, the ACA-related spending is showing up in two places, as political advertising or as health-care advertising. But I foresee it becoming a completely new category as the space develops," said Edward Atorino, a media analyst at Benchmark Co. "The bigger markets have national TV covering them, but for the smaller ones, there is a real need to get the information about exchanges out there by telling people about the locations and phone numbers."

At the same time, employment-benefit and IT companies, such as Virtusa Corp. VRTU +4.74% and Automatic Data Processing Inc. ADP +1.85% say they are seeing more business as they help clients comply with the ACA's demands.

Virtusa, an IT consulting and outsourcing company based in Westborough, Mass., said that increased spending from health-care clients helped boost its fiscal-third-quarter operating profit 14% from the previous quarter.

Insurers and health-care providers are streamlining their IT infrastructures and revamping websites to provide more data to customers, said Ranjan Kalia, the company's CFO, adding, "We believe that this is a market driver."

However, he said Virtusa has also had to spend more to bring its own benefit plans for employees into compliance with ACA demands. He estimated Virtusa could spend "a few hundred thousand dollars" more on health care for its 900 U.S. employees when it renews its plans this summer.

Dozens of other large employers also warned investors that the cost of complying with the ACA will be sizable. United Parcel Service Inc., UPS +1.28% Pantry Inc. PTRY +4.13% and J&J Snack Foods Corp. JJSF +1.65% are among the companies that detailed the likely financial hit for broadening benefits coverage.

Pantry, which operates Kangaroo Express convenience stores, said the company hired 800 part-time employees late last year and spent an additional $700,000 on training. The new employees won't be eligible for company-sponsored health-care benefits.

Nevertheless, Pantry will spend up to $8 million more a year on health-insurance costs related to the ACA for its 6,600 full-time employees, said CFO B. Clyde Preslar.

J&J Snack Foods, maker of Super Pretzels and Icee frozen drinks, cautioned shareholders it will spend an additional $600,000, or $0.02 a share, this year on health-insurance coverage for its 3,300 employees.

But repeated changes in the law have made CFO Dennis Moore cautious about the financial impact. "The law keeps changing. That's another unknown. Who knows how many times it's going to change?"

Last week, Wal-Mart Stores Inc. WMT +1.62% said health-care expenses were a "headwind" last year and will continue to be this year. The company said "higher than anticipated" enrollment in its health-insurance program put "pressure on our benefits expense."

Widespread technical problems late last year with the health law's new online marketplaces helped push down enrollment for health-insurance companies offering plans on the government-backed websites, including Cigna Corp. CI +1.34% and WellPoint Inc. WLP +1.83%

In addition, the risk profile of the new enrollees has been skewing toward somewhat older, potentially higher-cost people, which could be a concern for the health plans' future earnings. Indeed, Cigna, Humana Inc. and Aetna Inc. AET +1.65% have all said that they expect to lose money this year on their public-exchange business.

WellPoint said the ACA would have a $100 million "unfavorable impact" on its earnings this year.

Continued in article


My objection to the ACA at the beginning of 2014 is that the health care insurance plans with or without subsidies are awful. The 30%-40% deductibles are too high coupled with the co-payments are more than most insured people can afford.  They will simply avoid going to doctors for preventative care, for diagnoses, and for treatments unless they feel their lives are threatened enough to possibly wipe out their savings for expensive treatments.

Now the Congressional Budget Office is admitting that its own estimates before the ACA was passed was way off base in terms of estimations of job losses and economic impacts.

Even liberals writing for liberal magazines knew the Congressional Budget Office (CBO) optimism for cost and revenue predictions were not credible before the ACA was passed. The CBO's political bias is responsible for much of the mess the USA now finds itself in terms of health coverage.

Fuzzy CBO Accounting Tricks
"ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---
http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.

EXPRESS:

The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.

The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.

The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.

Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.

Continued in article

 

For starters, $1 trillion of extra debt-financed spending would cause the government to pay about $300 billion of extra interest in the next decade. Moreover, the CBO's method of estimating the cost of such a program doesn't recognize the incentives it creates for households and firms to change their behavior. The House health-care bill gives a large subsidy to millions of families with incomes up to three times the poverty level (i.e., up to $66,000 now for a family of four) if they buy their insurance through one of the newly created "insurance exchanges," but not if they get their insurance from their employer. The CBO's cost estimate understates the number who would receive the subsidy because it ignores the incentive for many firms to drop employer-provided coverage. It also ignores the strong incentive that individuals would have to reduce reportable cash incomes to qualify for higher subsidy rates. The total cost of ObamaCare over the next decade likely would be closer to $2 trillion than to $1 trillion.
Martin Feldstein, "ObamaCare's Crippling Deficits The higher taxes, debt payments and interest rates needed to pay for health reform mean lower living standard," The Wall Street Journal, September 7, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574393110640864526.html?mod=djemEditorialPage

 

 

 

The Budget and Economic Outlook: 2014 to 2024 ---
Congressional Budget Office
February 4, 2014

Jensen Comment
Especially note Page 127 regarding the Affordable Care Act impact on employment in the USA.

The Affordable Care Act will also reduce the number of fulltime workers by more than 2 million in coming years, congressional budget analysts said in the most detailed analysis of the law’s impact on jobs. The CBO said the law’s impact on jobs would be mostly felt starting after 2016. The agency previously estimated that the economy would have 800,000 fewer jobs as a result of the law. The impact is likely to be most felt, the CBO said, among low-wage workers. The agency said that most of the effect would come from Americans deciding not to seek work as a result of the ACA’s impact on the economy. Some workers may forgo employment, while others may reduce hours, for a equivalent of at least 2 million fulltime workers dropping out of the labor force.

Jensen Comment
Although before the ACA was passed President Obama and and House Majority Leader Nancy Pelosi erroneously promised that the ACA would create millions of new jobs. Now that this does not appear to be the case in 2014. President Obama and his allies MSNBC and  the New York Times try to put a positive spin on this by saying this will allow many people to drop out of the work force by retiring early (before becoming eligible for Medicare). But what they fail to mention is that the loss of 800,000 jobs because of the ACA is hardly a good thing for people needing work. Many of these jobs will be lost when smaller businesses with 50-100 employees scale back the workforce to 50 or less so as not to have to pay the stiff penalty for not providing health insurance to employees. How can you put a favorable spin on this.

Of course most of this document is devoted to good news and bad news items apart from the ACA.

The federal budget deficit has fallen sharply during the past few years, and it is on a path to decline further this year and next year. CBO estimates that under current law, the deficit will total $514 billion in fiscal year 2014, compared with $1.4 trillion in 2009. At that level, this year’s deficit would equal 3.0 percent of the nation’s economic output, or gross domestic product (GDP)—close to the average percentage of GDP seen during the past 40 years.

As it does regularly, CBO has prepared baseline projections of what federal spending, revenues, and deficits would look like over the next 10 years if current laws governing federal taxes and spending generally remained unchanged. Under that assumption, the deficit is projected to decrease again in 2015—to $478 billion, or 2.6 percent of GDP. After that, however, deficits are projected to start rising—both in dollar terms and relative to the size of the economy—because revenues are expected to grow at roughly the same pace as GDP whereas spending is expected to grow more rapidly than GDP. In CBO’s baseline, spending is boosted by the aging of the population, the expansion of federal subsidies for health insurance, rising health care costs per beneficiary, and mounting interest costs on federal debt. By contrast, all federal spending apart from outlays for Social Security, major health care programs, and net interest payments is projected to drop to its lowest percentage of GDP since 1940 (the earliest year for which comparable data have been reported).

The large budget deficits recorded in recent years have substantially increased federal debt, and the amount of debt relative to the size of the economy is now very high by historical standards. CBO estimates that federal debt held by the public will equal 74 percent of GDP at the end of this year and 79 percent in 2024 (the end of the current 10-year projection period). Such large and growing federal debt could have serious negative consequences, including restraining economic growth in the long term, giving policymakers less flexibility to respond to unexpected challenges, and eventually increasing the risk of a fiscal crisis (in which investors would demand high interest rates to buy the government’s debt).

After a frustratingly slow recovery from the severe recession of 2007 to 2009, the economy will grow at a solid pace in 2014 and for the next few years, CBO projects. Real GDP (output adjusted to remove the effects of inflation) is expected to increase by roughly 3 percent between the fourth quarter of 2013 and the fourth quarter of 2014—the largest rise in nearly a decade. Similar annual growth rates are projected through 2017. Nevertheless, CBO estimates that the economy will continue to have considerable unused labor and capital resources (or “slack”) for the next few years. Although the unemployment rate is expected to decline, CBO projects that it will remain above 6.0 percent until late 2016. Moreover, the rate of participation in the labor force—which has been pushed down by the unusually large number of people who have decided not to look for work because of a lack of job opportunities—is projected to move only slowly back toward what it would be without the cyclical weakness in the economy.

Beyond 2017, CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades. That projected slowdown mainly reflects long-term trends—particularly, slower growth in the labor force because of the aging of the population. Inflation, as measured by the change in the price index for personal consumption expenditures (PCE), will remain at or below 2.0 percent throughout the next decade, CBO anticipates. Interest rates on Treasury securities, which have been exceptionally low since the recession, are projected to increase in the next few years as the economy strengthens and to end up at levels that are close to their historical averages (adjusted for inflation).

Deficits Are Projected to Decline Through 2015 but Rise Thereafter, Further Boosting Federal Debt

Assuming no legislative action that would significantly affect revenues or spending, CBO projects that the federal budget deficit will fall from 4.1 percent of GDP last year to 2.6 percent in 2015—and then rise again, equaling about 4 percent of GDP between 2022 and 2024. That pattern of lower deficits initially and higher deficits for the rest of the coming decade would cause federal debt to follow a similar path. Relative to the nation’s output, debt held by the public is projected to decline slightly between 2014 and 2017, to 72 percent of GDP, but then to rise in later years, reaching 79 percent of GDP at the end of 2024. By comparison, as recently as the end of 2007, such debt equaled 35 percent of GDP (see the figure below).

Continued in article

Note that declines in deficits are still increases in debt as long as they remain spending "deficits.". This is not as bad for a government controlling the money printing presses as it is for entities (citizens, towns, counties, state, and businesses) that cannot print money to avoid bankruptcy.
Bob Jensen's threads on the sad state of governmental accounting and the $100 trillion of debt that is off balance sheet ---
http://faculty.trinity.edu/rjensen/Entitlements.htm

Meanwhile pray for heavy rains and snow in the Southwest, especially Nevada and Colorado. Years of drought could destroy any lingering optimism in this CBO budget forecast.

Please don't shoot the messenger!


"Calculating the health care individual mandate penalty," by Debra M. Johnson, Journal of Accountancy, January 2014 ---
http://www.journalofaccountancy.com/Issues/2014/Jan/20138935.htm

"Minimum essential coverage and shared-responsibility penalty rules provide transitional relief for individuals," by Sally P. Schreiber, Journal of Accountancy, January 24,  2014 ---
http://www.journalofaccountancy.com/News/20149497.htm


The liberal Slate magazine's positive review of the GOP modification plan for the Affordable Health Care Act
"The End of the Beginning on Obamacare Repeal," by Matthew Yglesias, Slate, January 27, 2014 ---
http://www.slate.com/blogs/moneybox/2014/01/27/gop_health_replacement_plan_the_beginning_of_a_surrender.html

Sens. Tom Coburn, Richard Burr, and Orrin Hatch rolled out an Obamacare replacement plan today that I think offers us a good window into how the health care debate is evolving on Capitol Hill. I recommend Philip Klein's rundown in the Washington Examiner for a clear description of the details, but the view from 50,000 feet is basically that this is the Republican Party stepping away from the idea that it's going to repeal the Affordable Care Act.
Of course, in its official operations the way the bill works is to first repeal Obamacare and then replace it with a new law that happens to retain some of Obamacare's most popular features. For example, "insurers would be barred from imposing lifetime limits on medical claims and required to allow individuals to remain on their parents’ policies until the age of 26." And rather than eliminate the Affordable Care Act's restrictions on insurers charging older people higher premiums than younger people, the senators would simply make the restrictions a bit less strict. And while Coburn/Burr/Hatch don't want to altogether ban insurers from refusing to cover people with pre-existing conditions, they "would require insurers to offer coverage to anybody who has applied as long as they have maintained continuous coverage, regardless of whether they are switching health plans or shifting from employer-based health care to the individual market."

 

In other words, rather than scrapping the main pillars of the Affordable Care Act entirely, they would partially roll them back.
Conversely, while conservative wonks have traditionally favored a big bang approach to eliminating the massive tax subsidies that keep employer-provided insurance together, "in consideration of the backlash against the way that Obamacare has disrupted people’s insurance coverage, the new GOP proposal would maintain the employer health insurance bias."

 

Last but by no means least "[i]nstead of expanding Medicaid, as Obamacare does, the Coburn-Burr-Hatch proposal would reform it to give more flexibility to states and allow Medicaid beneficiaries the option of using their tax credit to purchase private coverage."

 

I don't think the plan as written is fully sound from a structural viewpoint. In particular, the continuous coverage rule is the kind of thing that's easy to write down as a single sentence in a column but difficult to turn into a clear piece of legislation. Turning that into a workable regulation, especially in a world where which insurance plans are available changes from time to time and place to place, would be a whole giant process and you'd have to evaluate a specific proposal. But the key thing about this is that it doesn't envision radically remaking the health care system along free market lines. Relatively to the status quo that existed in 2009, it would constitute modestly remaking the health care system along liberal lines. Most of all, as a political document it reflects an appreciation of the overwhelming political power of the status quo. You can't kick those 25-year-olds off their parents' insurance plan. You can't deny the currently insured the peace-of-mind that comes from knowing that getting sick won't make them uninsurable. You can't change tax policy in a way that's too disruptive. And this plan isn't going to pass in 2014. It's not going to pass in 2015. And it's not going to pass in 2016. By 2017, Medicaid expansion and subsidized exchange plans will be the new status quo. Are the Coburns, Burrs, and Hatches of 2017 really going to be willing to blow that up?

CPA's who advise clients about personal finances and health care insurance should be aware of the following:

The ACA made it possible for some wealthy people to sign up for Medicaid's free medical services, nursing homes, and free medication
"Will You Owe Debt After Death? The Medicaid Surprise," by Morgan Brittany, Townhall, January 27, 2014 ---
http://finance.townhall.com/columnists/morganbrittany/2014/01/27/will-you-owe-debt-after-death--the-medicaid-surprise-n1785111

This was not in the fine print of the Affordable Care Act (that no one read), and there was nothing in it that changed the existing law from 1993. The ACA however, did expand the number of people who are eligible for Medicaid, so now there are more people from the ages of 55 to 65 whose estates could be on the hook for Medicaid expenses after the beneficiary dies.

This sounds like a cash grab to me. Many states have not changed the law to limit the amount of expenses the government can claim are owed for Medicaid, but Oregon and Washington have issued emergency rule changes. In Washington it now says that the state can only recover the cost of nursing home care for the 55-65 age groups.Oregon followed this path as well.However there are 23 other states that have expanded Medicare under Obamacare and they have not changed their estate recovery policies. This could end up with the deceased person’s heirs losing homes, property and other assets.

The 1993 law stated that spouses and children under 21 of the deceased person were exempt from estate recovery, but the rules can vary by state. However, with rule changes running rampant under this administration, there is no guarantee of anything anymore. Laws and rules can be changed on a whim and the public will never even be aware of it.

Just to give you an example of the amount of money that the states could potentially confiscate, in 2004, California collected $44.6 million through estate recovery and MediCal officials say that they expect 1 to 2 million more enrollees by 2015. That could add up to a lot of money. Minnesota collected $25 million in 2004 and is keeping its recovery program in place with no alterations.

Dr. Jane Orient of The Association of American Physicians and Surgeons says; “I think that people are maybe in for a shock when they find out that their heirs are going to be paying for their care, because they got into a system under false pretenses”. Just one more thing that no one told us about Obamacare and the mainstream media is not mentioning even now.

Continued in article

The ACA made it possible in some states for even millionaires to get Medicaid's free medical care, nursing care, and medications.
"Will You Owe Debt After Death? The Medicaid Surprise," by Morgan Brittany, Townhall, January 27, 2014 ---
http://finance.townhall.com/columnists/morganbrittany/2014/01/27/will-you-owe-debt-after-death--the-medicaid-surprise-n1785111 

This was not in the fine print of the Affordable Care Act (that no one read), and there was nothing in it that changed the existing law from 1993. The ACA however, did expand the number of people who are eligible for Medicaid, so now there are more people from the ages of 55 to 65 whose estates could be on the hook for Medicaid expenses after the beneficiary dies.

This sounds like a cash grab to me. Many states have not changed the law to limit the amount of expenses the government can claim are owed for Medicaid, but Oregon and Washington have issued emergency rule changes.In Washington it now says that the state can only recover the cost of nursing home care for the 55-65 age groups.Oregon followed this path as well.However there are 23 other states that have expanded Medicare under Obamacare and they have not changed their estate recovery policies. This could end up with the deceased person’s heirs losing homes, property and other assets.

The 1993 law stated that spouses and children under 21 of the deceased person were exempt from estate recovery, but the rules can vary by state. However, with rule changes running rampant under this administration, there is no guarantee of anything anymore. Laws and rules can be changed on a whim and the public will never even be aware of it.

Just to give you an example of the amount of money that the states could potentially confiscate, in 2004, California collected $44.6 million through estate recovery and MediCal officials say that they expect 1 to 2 million more enrollees by 2015. That could add up to a lot of money. Minnesota collected $25 million in 2004 and is keeping its recovery program in place with no alterations.

Dr. Jane Orient of The Association of American Physicians and Surgeons says; “I think that people are maybe in for a shock when they find out that their heirs are going to be paying for their care, because they got into a system under false pretenses”. Just one more thing that no one told us about Obamacare and the mainstream media is not mentioning even now.

Continued in article


"Covered California clients have trouble finding doctors," by Victoria Colliver, San Francisco Chronicle, January 23, 2014 ---
http://www.sfgate.com/health/article/Covered-California-clients-have-trouble-finding-5169944.php

Think signing up for health insurance through Covered California is hard? Some consumers say the real battle starts when it comes to finding a doctor or hospital that will take a plan purchased through the state-run health exchange.

Sue Kearney of Oakland thought she did her homework. She found the policy she thought was right for her - one from Anthem Blue Cross - and checked the plan's directory of doctors and hospitals to make sure she could get the specialist she wanted. Assured of that, she signed up for the plan in October.

But right before a doctor appointment this month, Kearney learned the physician's medical group will not accept any of Covered California plans.

Kearney, 63, who has a chronic digestive problem that hasn't responded to treatment, ended up paying $200 for the appointment, despite her newly minted coverage. "It's confusing and demoralizing," she said.

Most of the problems with the new health system have focused on online application glitches, long wait times to get help and delays in getting insurance cards and first-month premium bills to new enrollees.

'A lot of confusion'

But now that coverage has started, some people are finding it tough to determine whether their doctor or hospital will accept their coverage. Consumers say the insurer's directory of doctors and hospitals is inaccurate or out of date. In some cases, the doctors don't even know what to tell their patients.

"There's a lot of confusion. The physicians don't know if they're actually participating" in the exchange's networks, said Donald Waters, executive director of the Alameda-Contra Costa Medical Association, which represents 3,100 doctors in the East Bay.

The problem is not limited to California. A study released last month by the consulting group McKinsey found that many plans sold through the federal health law are using "narrow" or "ultra narrow" networks - physician and hospital lists that are limited to lower costs.

In more than two-thirds of all exchange networks analyzed by McKinsey, at least 30 percent of the largest 20 local hospitals were excluded. Insurers say the move to limit the number of doctors and hospitals on a network was necessary to keep the costs of premiums low.

In California, plans offered by Blue Shield through Covered California included just 60 percent of the doctors that participate in the insurer's group plans and just 75 percent of the hospitals. On top of that, Blue Shield is reimbursing doctors and hospitals in Covered California policies up to 30 percent less than those not in the exchange, spokesman Stephen Shivinsky said.

Limited networks

Sy Neilson, spokesman for Sutter Health, one of Northern California's largest health chains, said not all of its hospitals or doctors are participating in Covered California plans. But the hospitals and doctors that are participating are involved in limited networks, he said.

Anthem officials did not respond to requests for comment.

For his part, Peter Lee, Covered California's executive director, acknowledged that consumers may be getting misinformation from the state agency or insurer about whether their providers are participating. But, he said, the exchange is prepared to help those consumers get new plans that more suitably meet their needs.

"If our directory or the directory of the health plan is wrong and a consumer wants to change plans, we'll work with them to make sure they can do so," Lee said in a news call this week.

As for Kearney, she spent much of the past week trying to find a gastroenterologist and a lab to complete the tests ordered by the specialist she paid for. She said Alameda Health System's Highland Hospital - the county hospital - was the only center in her area that would take her, and not until March.

Kearney had even opted for more comprehensive coverage including a PPO, or preferred provider organization plan. "I chose a PPO so I could have had choice," she said. "The thing is, now I have nothing to choose from."

For Alison Berndt of Livermore, making sure her physicians were in her new plan's network is especially important because she was diagnosed with breast cancer in July.

Berndt, 61, selected a more expensive Covered California plan to ensure her five doctors, particularly her plastic surgeon, were in the network because she has yet to go through the reconstructive surgery.

Cutting medications

After she signed up, she called one of the doctors she thought was included on her Anthem policy and received conflicting information from the office staff about whether that was true. She spent a lot of time on the phone and eventually learned she was given misinformation and they were, indeed, accepting her coverage.

Berndt still hasn't been able to sort out a problem getting her drugs covered and has been forced to cut her blood pressure and cholesterol medication in half.

"Every step of the way has been crazy," she said.


With health law, less-easy access in N.H.:  Lone insurer in plan reduces roster of hospitals to keep premiums low," by Tracy Jan, Boston Globe, January 20, 2014 ---
http://www.bostonglobe.com/news/nation/2014/01/20/narrow-hospital-networks-new-hampshire-spark-outrage-political-attacks/j2ufuNSf9J2sdEQBpgIVqL/story.html

When Nancy Petro needs routine tests to make sure her thyroid cancer and high blood pressure have not returned, the retired gas station attendant and general store clerk must now drive an hour over mountainous roads to seek care, even though there is a hospital just minutes from her home in rural northern New Hampshire.

Petro, 62, had been uninsured until January, when she obtained coverage through President Obama's groundbreaking health law. The benefit, just $26 a month, came with a downside, however.

To keep premiums affordable, Anthem Blue Cross and Blue Shield of New Hampshire, the only insurer in the state offering coverage in the new insurance marketplace, radically reduced the hospitals in its network. Petro's local provider did not make the cut. . . .

Of the state's 26 hospitals, 10 are excluded from Anthem's network. Not on the list: Petro's former provider, Upper Connecticut Valley Hospital, where the uninsured receive free or discounted care. The 16-bed facility, located 15 miles from the Canadian border, serves New Hampshire's largest geographic area and its neediest patient population.

 


"District court says premium tax credits are available in federal health care exchanges," by Sally P. Schreiber, Journal of Accountancy, January 16, 2014 ---
http://www.journalofaccountancy.com/News/20149450.htm

In a decision that aids the implementation of a key provision of 2010’s health care reform legislation, the federal district court for the District of Columbia held that the Sec. 36B premium tax credit is available to taxpayers who purchase health insurance through the 34 state health care exchanges that are run by the federal government (Halbig v. Sebelius, No. 13-0623 (PLF) (D.D.C. 1/16/14)).

In May 2012, the IRS issued final regulations interpreting the Patient Protection and Affordable Care Act, P.L. 111-148, as allowing the IRS to grant tax credits to eligible individuals who purchase health insurance on either a state-run or a federally run health care exchange (Regs. Sec. 1.36B-1(k)). The plaintiffs in the case sued to have this regulation struck down, arguing that the IRS’s interpretation was contrary to the plain language of Sec. 36B(b)(2)(A), which provides a credit to eligible individuals who purchase health insurance through “an Exchange established by the State.” They asserted that the regulation therefore exceeded the IRS’s statutory authority and violated the Administrative Procedure Act.

The court applied an analysis from Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), by asking first whether the statute was ambiguous. After looking at the text of the statute, the statutory structure, and the legislative purpose, the court concluded that Sec. 36B(b)(2)(A) is not ambiguous and that Congress clearly intended to make premium tax credits available on all exchanges, whether or not established by a state. As a result, the court held that Regs. Sec. 1.36B-1(k) is a valid interpretation of the law. 

Continued in article

Jensen Comment
Note that these are tax credits that dollar-for-dollar reduce the amount of tax owed before the credit is applied. I assume that this can add to tax credits to where the credits exceed the tax owed, thereby becoming a negative income tax where a taxpayer receives a refund in excess of the tax owed before the credit.

I don't think such credits are available for qualified health insurance purchased outside the exchanges, but I could be wrong on this. For example, President Obama declared it possible for some people to stay on their own individual plans. I think they may not be eligible for the tax credits. But I could be wrong on this.

 


Slightly over 75% of the ACA signups prior to mid*January are over 35 years of age, raising huge concerns about those  prospects18-34 years of age that are vital to funding the ACA. A third of the signups are age 55-64 which adds even more worry that the ACA will operate deeply in the red. At age 65 most people become eligible for Medicare which is funded differently based upon contributions of workers and employers over the years of their working life.

The Administration revealed 79% of the 2.2 million received premium subsidies (not counting Medicaid)  to be paid by taxpayers ---
http://www.businessweek.com/articles/2014-01-13/whos-buying-obamacare-in-three-charts

Most of the people who bought coverage on the exchanges this fall got subsidies to help them afford the premiums. That’s in contrast to the first month of the program, when less than one-third of buyers were subsidized. People earning up to four times the poverty rate—as much as $96,000 a year for a family of four—can get help buying coverage.

Also about 40% of those signed up have not actually paid their first premiums,  some of whom will not pay once they (especially students) learn that they are eligible for Medicaid free coverage. An even larger percentage may default of premiums down the road and still be covered for three months under the ACA provision of carrying defaulters for 90 days with insurance companies paying for their medical care for 30 days and doctors and hospitals paying for their care for an additional 60 days. This could become a game of paying the premium for one month and then getting four months of coverage followed by paying another premium for one month followed by four months of coverage and on and on and on. Paying three monthly premiums may get you 12 months of coverage.

Four million people have additionally signed up for the Medicaid totally free medical services and medicines intended for additional people supposedly who are poor but can have substantial assets, including some millionaires who are long on assets like houses, land, and stocks but short on cash income. I'm totally amazed that millions more students did not immediately sign up for Medicaid since in most instances Medicaid is a better deal than staying on policies of parents where there are copayments and deductibles.

The bottom line is that its probably too soon to tell how good or how bad the sign up process is going for the Affordable Health Care Act.
Millions more will soon be signing up for private plans without taxpayer subsidies, private plans with taxpayer subsidies, and totally subsidized Medicaid plans.

To date about 70% of the 2.2 million people signing up for private plans chose the Silver Plan that has a whopping 30% deductible.

"Older Pool of Health Care Enrollees Stirs Fears on Costs," by Michael D. Shear and Robert Pearson, The New York Times, January 13, 2014 ---
 http://www.nytimes.com/2014/01/14/us/health-care-plans-attracting-more-older-less-healthy-people.html?hp&_r=0

"Health Sign-Ups Skew Older, Raising Fears Over Costs Release of Data Shows Challenge in Persuading Young People to Enroll," by Louise Radnofsky and Christopher Weaver, The Wall Street Journal, January 13, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702304049704579318930612496594?mod=djemCFO_h

Also see
http://www.cbsnews.com/news/obamacare-sign-ups-among-young-adults-off-to-slow-start/

Also see
http://www.cbsnews.com/news/gop-suspicious-of-obamacare-enrollment-figures/


$4,878 Room and Board Charge for One Night in the Hospital:  Those meals must've been fantastic
"This $55,000 Bill Is The Perfect Example Of Our Broken Hospital System," by Lauren F. Friedman, Business Insider, December 30, 2013 ---
http://www.businessinsider.com/redditors-appendectomy-cost-5502931-2013-12
See a copy of the bill itself (note how the charge for aspirin is now hidden)

Jensen Comment
Cost Accounting Student Assignment:  Backflush the line items on this bill to identify possible components and justify the charges
Hint:  Don't forget hospital bad debts and executive salaries and subtle kickbacks to doctors.
For example, it's common for physicians in the Emergency Room to recommend at least one night at $10,000 in ICU when a $4,878 room for one night would probably suffice. This recently happened to my wife.

Bob Jensen's health care messaging updates --- http://faculty.trinity.edu/rjensen/Health.htm


Questions
Was President Obama correct in promising that the ACA insurance would transfer Medicaid patients from ER rooms to ACA networked physicians?

How does the ACA expansion of Medicaid greatly increase the moral hazard of new Medicare patients?

One of the naive promises made by President Obama was that uninsured people previously seeking free care in Emergency Rooms (ER) would relieve the ER rooms for all the new Medicaid patients who could now have access to network physicians with their new free medical care and medication insurance policies. This was naive because he should have known that previous Medicaid patients preferred ER rooms even when they had  freeMedicaid insurance. He should have known that when Oregon expanded the number of people on Medicaid that demand for ER services increased by 40%.

People receiving free medical care and medications are inclined to favor ER services even when they can have care from network physicians. Reasons are complicated especially when walk-in medical clinics are available. One reason is that walk-in clinics serving Medicaid patients are not usually as close by as hospitals with ER services. The physicians in the ER facilities are likely to not only be MDs, they are sometimes better MDs that the staff of walk-in medical clinics who often hire newly graduated MDs still in residency or physicians assistants. In other words, if you want the best physicians the odds are usually better for ER rooms than networked ACA physicians and walk-in clinics.

When walk-in clinics are not convenient, getting an appointment with a networked physician may take weeks or even months. Top physicians are available 24/7 for emergency patients and non-emergency Medicaid patients. Insured patients not on Medicaid may be discouraged by co-pays of expensive ER services. But Medicaid patients never have to worry about co-payments.

Last night CBS News reported that ER use expanded by 40% due to new Medicaid patients.

 

"Medicaid Expansion Boosted Emergency Room Visits In Oregon," by Julie Royner, NPR, January 3, 2014 ---
http://www.wbur.org/npr/259128081/medicaid-expansion-boosted-emergency-room-visits-in-oregon

Giving poor people health insurance, the belief was, would decrease their dependence on hospital emergency rooms by providing them access to more appropriate, lower-cost primary care.

But a study published in the journal Science on Thursday finds that's not the case. When you give people Medicaid, it seems they use both more primary care and more emergency room services.

"Medicaid coverage increases emergency department use, both overall and for a broad range of types of visits, conditions, and subpopulations," says Amy Finkelstein, an economics professor at MIT and one of the authors of the study. "Including visits for conditions that may be most readily treatable in primary care settings."

In other words, people are going to the emergency department for things that aren't emergencies. This is exactly what policymakers hoped to avoid by giving people health insurance – including the huge increase in Medicaid coverage coming as part of the Affordable Care Act.

And the increase in ER use found in the study was significant – "about 40 percent," Finkelstein said.

This would be a good place to point out this is not just any study. It is the third major paper from something called the Oregon Health Insurance Experiment, which Finkelstein heads along with Katherine Baicker from the Harvard School of Public Health.

The experiment was a rare opportunity to create a randomized controlled experiment – the gold standard of scientific research. It came about almost by accident, thanks to Oregon's decision in 2008 to expand its Medicaid program via a lottery.

The result, said Finkelstein, was that the groups of people with or without insurance were identical, "except for the fact that some have insurance and some don't. You've literally randomized the allocation of insurance coverage."

And that gave researchers the ability to compare the effects of having health insurance — in this case, Medicaid.

The first paper from the research team, published in 2011, was mostly positive. It found that people who got Medicaid coverage were more likely to use health services in general, less likely to suffer from depression, and less likely to suffer financial problems related to medical bills than those who remained uninsured.

The results in the second paper, published last spring, were more equivocal. Researchers found no measurable health benefits in the Medicaid group for several chronic conditions, including hypertension, high cholesterol and diabetes.

It's not clear that the emergency room results will translate nationwide: The study only lasted 18 months and the study population is both more while and more urban than the rest of the nation.

But that's not stopping critics of Medicaid expansion.

"When you make ER care free to people, they consume more of it. They consume 40 percent more of it," says Michael Cannon, head of health policy for the libertarian Cato Institute. "Even as they're consuming more preventive care. And so one of the main arguments for how Obamacare was going to reduce health care costs is just flat out false."

Cannon says the study will likely further hurt President Obama's credibility for vowing that expanding Medicaid would help get people out of emergency rooms. But what's likely to bother the administration even more, he says, is what it may do to the half of the states that have yet to adopt the Medicaid expansion.

"This study is going to make it less likely that the 25 states that decided not to expand Medicaid are going to change their minds and decide to expand Medicaid," Cannon predicts.

But this study doesn't come as much of a surprise to those people who actually run Medicaid programs around the country.

"This is not something that is unexpected and not something that we're not prepared for," says Kathleen Nolan. She's director of state policy and programs for the National Association of Medicaid Directors.

Continued in article

Jensen Comment
The majority of new Medicaid patients will be poor, although it is possible for millionaires to now qualify for Medicaid with devious financial planning such as low income students having million dollar trust funds. The poor patients have incentives to game the ER services for prescription pain medicine. With one network physician or clinic, there will be records as to when prescriptions can be renewed. Given the Administration's track record for implementing databases, I strongly doubt that a Medicaid patient intent upon selling prescription pain killers can be prevented by traveling around to different hospital ER service for prescriptions that would not be granted if the ER physician was aware of the last time a Medicaid patient received such a prescription in another hospital and another and another.

I'm not certain how well pharmacies share prescription data or even if privacy laws even allow CVC and Walgreen and Wal-mart to even share a person's prescription data without receiving permission from the patient.

The moral hazard is greater with poor people in need of selling their pills like they sell food stamps.

Can prescription data be shared between different corporations without patient consent?

And then there's the problem of granting Medicaid to people who do not qualify for Medicaid. For example, an audit in Illinois revealed that have the people on Medicaid did not qualify for Medicaid. This appears to be yet another entitlement going crazy at taxpayer expense.

Bob Jensen's health care messaging updates --- http://faculty.trinity.edu/rjensen/Health.htm


Over 3,000 Cuban doctors defected from Venezuela in 2013:  Most Cuban doctors defecting to the US over the last 12 months came from Venezuela, ---
http://www.eluniversal.com/nacional-y-politica/131228/over-3000-cuban-doctors-defected-from-venezuela-in-2013

Over the last 12 months some 3,000 Cubans, mostly doctors, have arrived in the United States after deserting one of the Venezuelan government's social programs they staff. This accounts for a 60% increase as compared with 2012.

In 2012 there were about 5,000 refugee Cuban doctors and nurses in the United States coming from all over the world. Through December 1, 2013 this figure had surged to 8,000, 98% of them came from Venezuela.

These are estimates by Dr. Julio Cesar Alfonso, head of the South Florida group Solidarity Without Borders Inc. (SWB), which helps Cuban medical professionals who try to desert the medical programs Havana sells worldwide as "exports of services."

Venezuela hosts the largest contingent of Cuban medical professionals under the cooperation agreement signed by Caracas and Havana in 2003.

By 2012, 44,804 Cubans staffed the seven social programs starting in 2003, according to the last official data released.

"In 2012 we had 5,000 refugee medical professionals in the United States under federal assistance, but that figure has surged so far in 2013 reaching 8,000 doctors, 98% of whom defected from Venezuela because of continuously worsening conditions in that country," Alfonso says.

"Most Cubans who have defected complain about low salaries, late payment, increased workload in the Barrio Adentro neighborhood clinics and CDIs (Comprehensive Diagnostic Centers) across Venezuela, which to some critics amounts to modern-day slavery," Alfonso says.

"Cuban doctors only get USD 300 a month, but the Venezuelan government pays the Castro regime around USD 6,000 per doctor, so individual doctors are paid less than 10% of what Cuba collects," Alfonso says.

Since 2006, Cuban doctors and some other health workers who are serving their government overseas are allowed to request a United States visa under the Cuban Medical Professional Parole (CMPP) Program.

After requesting assistance from the US Embassy in Caracas, most doctors defect to the United States via Colombia, but Brazil is also being used as an alternative transit route to freedom.

Cuban medical professionals are required to produce numerous patient records for the purposes of drafting reports, many of which contain patient data that have been tampered with.

"This is done so that Cuba can show positive reports to the Venezuelan government," Alfonso says.

Jensen Comment
Cuba and Venezuela have done more than nearly all other nations have done more to eliminate income inequality than other nations. Contrary to the lies you hear from Michael Moore, their efforts do not appear to be healthy. Soon the U.S. and parts of Europe may be getting an influx of very skilled French physicians.

Warning:  The numbers in this article need to be validated, but this should not be too difficult to do since the U.S. government has records most of these types of defections as opposed to records on people wading across the Rio Grande. There will also be records on defectors seeking certifications to practice, many of which will probably be in Florida among the many Cuban defectors already located in and around Miami.

 

 


December 31, 2013

The good news, if you want to call it that, is that roughly 1.6 million Americans have enrolled in ObamaCare so far. The not-so-good news is that 1.46 million of them actually signed up for Medicaid . . . New York spent more than $15 billion on Medicaid last year, roughly 30% of all state expenditures. The Kaiser Foundation projects that over the next 10 years, New York taxpayers will shell out some $433 billion for the program. But none of these projections foresaw that so many of ObamaCare’s enrollees would be Medicaid eligible. To be sure, the health-care law’s designers saw the expansion of Medicaid as an important feature of their plan to expand coverage for the uninsured. Still, they expected most of those enrolling in ObamaCare to qualify for private (albeit subsidized) insurance.
Michael D. Tanner, NY Post, December 7, 2013 ---
http://nypost.com/2013/12/07/the-medicaid-time-bomb/
Medicaid --- http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-State.html

Jensen Comment
It's hard to find Medicaid's share of state budgets because the amounts are usually buried in other line items. As best I can tell thus far the Medicaid share of state budgets is approximately a third before the new Obamacare enrollees in Medicaid are factored into the budgets. Medicaid is a great idea, but would be a better idea if more was spent to enforce the rules regarding who qualifies. For example, Russian diplomats received over $5 million in Medicaid benefits by lying about their incomes. A recent audit in Illinois reveals that half the people on Medicaid are not eligible to be on Medicaid. What proportion of the millions of new Medicaid recipients do you think will really qualify for free medical care if the Medicaid rules were enforced?

President Obama hopes to add another 5 million people who are above the poverty line to Medicaid in 2014. 

NYT:  Update on December 11, 2013
Health Exchange Enrollment Improves, But Still Short of Target
http://www.nytimes.com/interactive/2013/10/04/us/opening-week-of-health-exchanges.html?_r=0
What the data does not reveal is the percentage of those signing up for private (non Medicaid and CHIP) plans that are not subsidized. The entire success of the Obamacare plan rests on the number of people who enroll in private plans without premium subsidies and the cooperation of hospitals and doctors with the exchanges that write those policies. To date, 70% of the doctors and many of the best hospitals in California are refusing to sign on because it is feared that Obamacare will be transferring too many losses (bad debts) for unpaid premiums and unpaid deductibles onto the medical service providers.


"More Bad News for ObamaCare," by Allysia Finlay, The Wall Street Journal, December 24, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304020704579278472445817540?mod=djemEditorialPage_h

Many Democrats who voted in favor of ObamaCare figured that voters would warm up to the law once its vaunted benefits and insurance subsidies kicked in. To adapt Nancy Pelosi, Congress had to pass the law for the public to love what's in it. Their hope hasn't panned out.

Opposition to ObamaCare hit a record high this week in a CNN poll, with 62% of respondents saying they oppose the law compared to 35% who favor it. Disapproval registered at 54% in December 2010, a month after Democrats were routed in the midterm elections, and 59% when the law passed in March 2010.

Democrats hoped that letting kids to stay on their parents' insurance until age 26, guaranteed coverage of pre-existing conditions, free preventative care, mandated minimum benefits and a ban on lifetime and annual limits would boost support for the law. Ditto subsidies for consumers earning up to 400% of the poverty line.

But instead, these putative benefits have driven up premiums and deductibles, which in many cases aren't offset by the federal insurance subsidies. Many insurers as a result have restricted provider networks to keep costs down. Worse, the law's mandates have forced insurers to cancel millions of policies altogether and restricted consumers' choice. While the exchange glitches may be due to haphazard planning, these problems are fundamental to the law.

The Obama administration has tried to provide political cover to vulnerable Senate Democrats up for re-election next year—Alaska's Mark Begich, Louisiana's Mary Landrieu and Arkansas' Mark Pryor, among others—with administrative patches like allowing insurers to renew cancelled policies through next year. But the White House fixes haven't improved support for the law. Instead, they underscore that Democrats really didn't know what was in the law when they passed it and didn't much care. And that may help explain why the public has continued to sour on ObamaCare.


Hi Norma,

Due in heavy part that Obamacare is passing both its deductible nonpayment bad debts and its premium non-payment bad debts (two of the three months of a three-month nonpayment grace period), many hospitals like the Andersen Cancer Center and many doctors (70% in California) are refusing to serve patients insured by the exchanges. The TV networks and major newspapers seem to conspire to not report this.
 

You may not be able to choose your doctor or hospital unless you pay cash or go on a high premium Cadillac plan that, in 2015, will cease to be tax deductible by you or your employer..
 
After his gun control initiatives failed in Congress, President Obama unilaterally added very expensive mental health coverage to Obamacare without mentioning that most psychiatrists will refuse to serve patients having any type of insurance..  Psychiatrists are already in short supply in the USA. Nearly half already only serve cash-paying patients and currently won't bill any insurance companies, including Medicare or Medicaid. I think even more will reject the the exchanges.
 
I have a relative who needs psychiatric medications daily. Even though her husband is on a good state university medical insurance plan for coverage of most of her medical needs, she's dependent upon the only (overworked) psychiatrist in the area. That psychiatrist does not accept insurance.
 
Why are there so few psychiatrists?
One reason is that psychiatry is the most dangerous medical specialty. Exhibit A is the recent mass murderer James Holmes in Aurora, Colorado who was booted off campus for threatening his psychiatrist. Personally I think another reason is that doctors do not like going into a specialty having such a low proportion of cure rates and having to be on call 24/7 (usually to prevent suicides).
 
Something will have to be done to prevent passing bad bad debts onto hospitals and doctors.
Now that the GOP has given up on deficit reduction (Sen. Ryan lied by excluding interest on the debt in his budget), perhaps  legislation to Federal coverage of bad debts on to the Federal government along with assurances that doctors can bill at their full rates they charge cash paying patients. The blow to the deficit will be devastating since patients have little incentive to pay their deductibles if the government will pay those deductibles.
 
What we now have is two political parties so desperate to win elections that both are now promising nearly-free medical coverage that will explode the deficit and provide false promises about the quality of medical care in short supply to meet exploding demand.
Medical care will be almost free as long as the government fails to seriously prevent frauds in Medicaid. Medicare phony disability coverage,  and Obamacare subsidies --- all three of which are now frauds out of control due to failed government enforcement
 

U.S. prosecutors have charged 49 current and former Russian diplomats and their family members with participating in a scheme to get health benefits intended for the poor by lying about their income . . . Meanwhile, according to the charges, the family members had their housing costs paid for by the Russian government and spent "tens of thousands of dollars" on vacations, jewelry and luxury goods from stores like Swarovski and Jimmy Choo.
http://www.reuters.com/article/2013/12/05/usa-russia-healthfraud-idUSL2N0JK1AV20131205

The Scam Succeeded
All Russian Diplomats Charged in US Medicaid Fraud Case Have Returned Home
---
http://en.ria.ru/crime/20131225/185920522/All-Russian-Diplomats-Charged-in-US-Fraud-Case-Have-Returned.html
Neither the Russian government nor any of the fraudsters will repay a penny of the fraud.


"Obamacare: Silence of the Insurers," by Jonah Goldberg, Townhall, December 18, 2013 ---
http://townhall.com/columnists/jonahgoldberg/2013/12/18/obamacare-silence-of-the-insurers-n1764535?utm_source=thdaily&utm_medium=email&utm_campaign=nl

When will the insurers revolt?

It's a question that's popping up more and more. On the surface, the question answers itself. We're talking about pinstriped insurance company executives, not Hells Angels. One doesn't want to paint with too broad a brush, but if you were going to guess which vocations lend themselves least to revolutionary zeal, actuaries rank slightly behind embalmers.

Still, it's hard not to wonder how much more these people are willing to take. Even an obedient dog will bite if you kick it enough. Since Obamacare's passage, the administration has constantly moved the goalposts on the industry. For instance, when the small-business mandate proved problematic in an election year, the administration delayed it, putting its partisan political needs ahead of its own policy and the needs of the industry.

But the insurers kept their eyes on the prize: huge guaranteed profits stemming from the diktat of the health insurance mandate. When asked how he silenced opponents in the health industry during his successful effort to socialize medicine, Aneurin Bevan, creator of the British National Health Service, responded, "I stuffed their mouths with gold."

Hence, the insurers were ready on Oct. 1. They rejiggered their industry. They sent out millions of cancellation letters to customers whose plans no longer qualified under the new standards set by the Affordable Care Act. They told their customers to go to the exchanges to get their new plans.

But because President Obama promised Americans "if you like your health care plan, you can keep it," (PolitiFact's "Lie of the Year"), those cancellations became a political problem of Obama's own making.

In response, the president blamed it on the insurance companies or "bad apple" insurers. White House spokesman Jay Carney insisted that it was the insurance companies that unilaterally decided not to grandfather existing plans. (The Washington Post's "Fact Checker" columnist, Glenn Kessler, gave this claim "Three Pinocchios.")

Then, just last week, Health and Human Services Secretary Kathleen Sebelius announced that she was "urging" insurers to ignore both their contracts and the law and simply cover people on the honor system -- as if they were enrolled and paid up. She also wants doctors and hospitals to take patients, regardless of whether they are in a patients' insurance network or even if the patient is properly insured at all. Just go ahead and extend the deadline for paying, she urged insurers; we'll work out the paperwork later.

Of course, urging isn't forcing. But as Avik Roy of Forbes notes, the difference is subtle. Also last week, HHS also announced last week that it will consider compliance with its suggestions when determining which plans to allow on the exchanges next year. A request from HHS is like being asked a "favor" by the Godfather; compliance is less than voluntary.

The irony, as Christopher DeMuth recently noted in the Weekly Standard, is that if the architects of Obamacare had their way, the insurers would have been in even worse shape today. The original plan was for a "public option" that would have, over time, undercut the private insurance market to the point where single-payer seemed like the only rational way to go. If it weren't for then-Sen. Joe Lieberman's insistence that the provision be scrapped, DeMuth writes, "Obamacare's troubles would today be leading smoothly to the expansion of direct federal health insurance to pick up millions of canceled policies and undercut rate increases on terms no private firm could match."

In other words, the insurers knew the administration never had their best interests at heart but got in bed with it anyway.

Continued in article

Jensen Comment
Until recently the enthusiasm of medical insurance companies was understandable since the the losses for deductible portions of contracts were passed on mostly to patients themselves and possibly their doctors. Most medical service bad debts of for default of premium payments were passed on to hospitals and doctors.

Also the big and prosperous insurance companies were allowed to opt out of participating in the more risky health insurance exchanges. Most did opt out such that the government had to make loans for new exchange companies to to become insurers for individuals not covered by their employers. These exchanges are poorly capitalized, and many will probably have to be bailed out by the government if and when they encounter insolvency.

To get more heavily capitalized insurance companies to participate would require higher premium rates and more protection against bad debt losses. But this in turn would raise premiums dramatically and be counter to the whole purpose of Obamacare ---  to get more people insured and using more preventative care options. High premiums and low deductibles could destroy Obamacare by making more rather than fewer people insured.

The silence of the media on astute health care providers is more problematic.
Many of the biggest and best hospitals like the Andersen Cancer Center will not serve patients covered by the exchanges. Over 70% of California's physicians will not serve patients covered by the exchanges (except in the case where emergency treatment is called for).

Has any media source complained that with proper investment planning very wealthy people, especially college students on trust funds, may get free Medicaid medical care and medications.

Jensen Question
I asked the following question on the Turbo Tax Forum Regarding Obamacare Questions:
Question
I'm told that only income, not wealth, will be the deciding factor on eligibility for Medicaid beginning in 2014.
If I'm a full time student having zero income and $10 million trust fund of stock paying no dividends, will I be eligible for Medicaid?

A Turbo Tax expert says that wealth may still be a criterion in the states that rejected the Medicaid expansion. Having valuable assets is no longer a criterion in those states that yielded to Whitehouse pressure and temporary funding to expand Medicaid roles.

I am honestly confused by the assertion that your wealth after 2014 will not affect your eligibility for Medicaid. In does not seem right that students on trust funds should be getting free medical care and medications.

 

"Obama's Mental Health Solution Falls Flat," by Nicole Bailey, Townhall, December 2, 2013 ---
http://townhall.com/tipsheet/nicolebailey/2013/12/12/obamas-mental-health-solution-falls-flat-n1761910?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm

. . .

The Obama administration has expanded mental health care coverage, but the latest research shows that psychiatrists often do not accept insurance at all. When only 43% of psychiatrists accept Medicaid, it is difficult to see how expanded coverage will help mental health patients.

Psychiatrists accept medical insurance less frequently than other specialists across the board, according to the study published in JAMA Psychiatry by researchers from three separate medical schools:
 

  • 55.3% of psychiatrists accepted medical insurance in general, compared to 88.7% of other physicians
  • 54.8% of psychiatrists accepted Medicare, compared to 86.1% of other physicians
  • 43.1% of psychiatrists accepted Medicaid, compared to 73.0% of other physicians

The mainline media seems to avoid the greatest concerns of Obamacare --- concerns about making hospitals and doctors absorb most of the costs of medical care during the 90-day premium default grace period and the cost of serving patients who afterwards renege on paying the deductible portions that they agreed to pay to get lower premium plans.

The USA now has a dual health care program --- the highest quality health care in the world for the wealthy on Cadillac medical insurance plans and inferior quality health care in the chaos of Obamacare that will force soaring inflation in health care provider pricings. Your local Congressional representative is signing up for a Cadillac plan paid for by taxpayers.

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


"70% of California doctors are boycotting California's Obamacare exchanges," Washington Examiner, December 7, 2013 ---
http://www.examiner.com/article/70-of-california-doctors-are-boycotting-california-s-obamacare-exchanges
Note there are still unanswered questions about the accuracy of this number. Most notably, however, is that most exchange will be accepted only by networks of hospitals and physicians who participate in the network. You may not choose your own off-network doctor and hospital unless you buy one of the premium Cadillac plans. President Obama failed to make this clear when he repeated over and over that "You can choose your own doctor."

An estimated seven out of every 10 physicians in deep-blue California are rebelling against the state's Obamacare health insurance exchange and won't participate, the head of the state's largest medical association said.

“It doesn't surprise me that there's a high rate of nonparticipation,” said Dr. Richard Thorp, president of the California Medical Association.

horp has been a primary care doctor for 38 years in a small town 90 miles north of Sacramento. The CMA represents 38,000 of the roughly 104,000 doctors in California.

“We need some recognition that we’re doing a service to the community. But we can’t do it for free. And we can’t do it at a loss. No other business would do that,” he said.

California offers one of the lowest government reimbursement rates in the country -- 30 percent lower than federal Medicare payments. And reimbursement rates for some procedures are even lower.

In other states, Medicare pays doctors $76 for return-office visits. But in California, Medi-Cal's reimbursement is $24, according to Dr. Theodore M. Mazer, a San Diego ear, nose and throat doctor.

In other states, doctors receive between $500 to $700 to perform a tonsillectomy. In California, they get $160, Mazer added.

Only in September did insurance companies disclose that their rates would be pegged to California’s Medicaid plan, called Medi-Cal. That's driven many doctors to just say no.

They're also pointing out that Covered California's website lists many doctors as participants when they aren't.

“Some physicians have been put in the network and they were included basically without their permission,” Lisa Folberg said. She is a CMA’s vice president of medical and regulatory Policy.

“They may be listed as actually participating, but not of their own volition,” said Donald Waters, executive director of the Alameda-Contra Costa Medical Association.

Waters' group represents 3,100 doctors in the East Bay area that includes Oakland, with an estimated 200,000 uninsured individuals.

“This is a dirty little secret that is not really talked about as they promote Covered California,” Waters said. He called the exchange's doctors list a “shell game” because “the vast majority” of his doctors are not participating.

Independent insurance brokers who work with both insurance companies and doctor networks estimate that about 70 percent of California's 104,000 licensed doctors are boycotting the exchange.

Continued in article

Jensen Comment
Five guesses as to what will happen to insurance premiums when millions of people at last are signed up for insurance from the exchanges?

Hint
The answer is not one thing.

  • First will be the raising of premiums to cover added payments to doctors.

     
  • Second will be the raising of premiums to cover the bad debts of hospitals and doctors for the high deductibles and higher premiums that millions of newly insured people will be unable to pay when they are seriously ill.

     
  • Third will be the long delays to make appointments with doctors who are participating in the exchange programs.  Experience with Romneycare in in Massachusetts found that appointment delays went up an average of six weeks.

     
  • Fourth will be the toughing out of individuals who will not seek medical care because of the cost of the deductibles.

     
  • Fifty will be the increased lines in emergency rooms for people to ill or injured to wait a month or two to see a doctor.

"ObamaCare's Troubles Are Only Beginning:  Be prepared for eligibility, payment and information protection debacles—and longer waits for care," by Michael J. Boskin, The Journal of Accountancy, December 15, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304403804579260603531505102?mod=djemEditorialPage_h

The White House is claiming that the Healthcare.gov website is mostly fixed, that the millions of Americans whose health plans were canceled thanks to government rules may be able to keep them for another year, and that in any event these people will get better plans through ObamaCare exchanges. Whatever the truth of these assertions, those who expect better days ahead for the Affordable Care Act are in for a rude awakening. The shocks—economic and political—will get much worse next year and beyond. Here's why:

The "sticker shock" that many buyers of new, ACA-compliant health plans have experienced—with premiums 30% higher, or more, than their previous coverage—has only begun. The costs borne by individuals will be even more obvious next year as more people start having to pay higher deductibles and copays.

If, as many predict, too few healthy young people sign up for insurance that is overpriced in order to subsidize older, sicker people, the insurance market will unravel in a "death spiral" of ever-higher premiums and fewer signups. The government, through taxpayer-funded "risk corridors," is on the hook for billions of dollars of potential insurance-company losses. This will be about as politically popular as bank bailouts.

The "I can't keep my doctor" shock will also hit more and more people in coming months. To keep prices to consumers as low as possible—given cost pressures generated by the government's rules, controls and coverage mandates—insurance companies in many cases are offering plans that have very restrictive networks, with lower-cost providers that exclude some of the best physicians and hospitals.

Next year, millions must choose among unfamiliar physicians and hospitals, or paying more for preferred providers who are not part of their insurance network. Some health outcomes will deteriorate from a less familiar doctor-patient relationship.

More IT failures are likely. People looking for health plans on ObamaCare exchanges may be able to fill out their applications with more ease. But the far more complex back-office side of the website—where the information in their application is checked against government databases to determine the premium subsidies and prices they will be charged, and where the applications are forwarded to insurance companies—is still under construction. Be prepared for eligibility, coverage gap, billing, claims, insurer payment and patient information-protection debacles.

The next shock will come when the scores of millions outside the individual market—people who are covered by employers, in union plans, or on Medicare and Medicaid—experience the downsides of ObamaCare. There will be longer waits for hospital visits, doctors' appointments and specialist treatment, as more people crowd fewer providers.

Those with means can respond to the government-driven waiting lines by making side payments to providers or seeking care through doctors who do not participate in insurance plans. But this will be difficult for most people.

Next, the Congressional Budget Office's estimated 25% expansion of Medicaid under ObamaCare will exert pressure on state Medicaid spending (although the pressure will be delayed for a few years by federal subsidies). This pressure on state budgets means less money on education and transportation, and higher state taxes.

The "Cadillac tax" on health plans to help pay for ObamaCare starts four years from this Jan. 1. It will fall heavily on unions whose plans are expensive due to generous health benefits.

In the nearer term, a political iceberg looms next year. Insurance companies usually submit proposed pricing to regulators in the summer, and the open enrollment period begins in the fall for plans starting Jan. 1. Businesses of all sizes that currently provide health care will have to offer ObamaCare's expensive, mandated benefits, or drop their plans and—except the smallest firms—pay a fine. Tens of millions of Americans with employer-provided health plans risk paying more for less, and losing their policies and doctors to more restrictive networks. The administration is desperately trying to delay employer-plan problems beyond the 2014 election to avoid this shock.

Meanwhile, ObamaCare will lead to more part-time workers in some industries, as hours are cut back to conform to arbitrary definitions in the law of what constitutes full-time employment. Many small businesses will be cautious about hiring more than 50 full-time employees, which would subject them to the law's employer insurance mandate.

On the supply side, medicine will become a far less attractive career for talented young people. More doctors will restrict practice or retire early rather than accept lower incomes and work conditions they did not anticipate. Already, many practices are closed to Medicaid recipients, some also to Medicare. The pace of innovation in drugs, medical devices and delivery is expected to slow significantly, as higher taxes and even rationing set in.

The repeated assertions by the law's supporters that nobody but the rich would be worse off was based on a beyond-implausible claim that one could expand by millions the number of people with health insurance, lower health-care costs without rationing, and improve quality. The reality is that any squeezing of insurance-company profits, or reduction in uncompensated emergency-room care amounts to a tiny fraction of the trillions of dollars extracted from those people overpaying for insurance, or redistributed from taxpayers.

The Affordable Care Act's disastrous debut sent the president's approval ratings into a tailspin and congressional Democrats in competitive districts fleeing for cover. If the law's continuing unpopularity enables Republicans to regain the Senate in 2014, the president will be forced to veto repeated attempts to repeal the law or to negotiate major changes.


I never new about ACA consumer add-on taxes until now
"As Obamacare Deadline Looms, Insurance Companies Pile On The Taxes," CBS News, December 26, 2013 ---
http://newyork.cbslocal.com/2013/12/26/as-obamacare-deadline-looms-insurance-companies-pile-on-the-taxes/

. . .

And there’s more: most insurance companies don’t tell you about the taxes they add to their premiums. The numbers will vary, but one subscriber said their tax amount is $23.14 a month, or nearly $278 annually.

Other add-ons include:

* A 2 percent premium tax on every health plan.

* A user fee of 3.5 percent to sell through the online marketplace.

* A $2-per-policy fee.

Nonetheless, supporters of the Affordable Care Act claim the neediest will get the best coverage.

“People who make a little more will pay more; people who make a little less will pay less,” Arevalo said.

Critics say most insurers don’t specifically post taxes on invoices, and some question how, in the case Brennan showed earlier, Alabama Blue Cross-Blue Shield was able to be so specific.

Watch the video

 


"Obama's Mental Health Solution Falls Flat," by Nicole Bailey, Townhall, December 2, 2013 ---
http://townhall.com/tipsheet/nicolebailey/2013/12/12/obamas-mental-health-solution-falls-flat-n1761910?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm

. . .

The Obama administration has expanded mental health care coverage, but the latest research shows that psychiatrists often do not accept insurance at all. When only 43% of psychiatrists accept Medicaid, it is difficult to see how expanded coverage will help mental health patients.

Psychiatrists accept medical insurance less frequently than other specialists across the board, according to the study published in JAMA Psychiatry by researchers from three separate medical schools:

  • 55.3% of psychiatrists accepted medical insurance in general, compared to 88.7% of other physicians
  • 54.8% of psychiatrists accepted Medicare, compared to 86.1% of other physicians
  • 43.1% of psychiatrists accepted Medicaid, compared to 73.0% of other physicians

Continued in article

 


Jensen Comment
Until now the media has has avoided mentioning the really big worries about Obamacare in an effort to present a rosy picture to encourage millions of people to sign up. What goes unmentioned, until the December 8, 2013 article in the WSJ quoted below, is that hospital bad debts with greatly increase due to people patients being unable to pay their deductibles.

December 6, 2013 message from Bob Jensen

Hi Eliot,

When there's no Obamacare there will be a USA National Health Plan that bypasses medical insurance companies. It's possible that we will still have such companies offering private insurance beyond what the USA National Plan covers. This "dual coverage" is how the German health insurance system now works. According to various sources in Germany at the moment (mostly Erika's relatives), the time and a6ttention and service varies in ways that that you might find objectionable. The best doctors give more attention and faster service to German patients with private insurance. For example, waiting for new knees can take much longer without private insurance.

Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance 

Our present USA Medicare system works on a dual basis. Erika and I pay nearly $200 per month (each) for supplemental p private Medicare insurance that eliminates the Medicare deductibles (co-insurance) and does such things as pay for the added cost of private hospital rooms. Of course Medicare costs us hundreds more each month such that the supposedly "free" Medicare costs us each nearly $400 per month. Erika pays all our bills such that I don't know the exact amounts. She allows me to carry one check if I promise not to use it.

Thus far I've fortunately paid much more into the Medicare system since my 2006 retirement than I've withdrawn. Erika sadly has withdrawn over $1 million from the system.

We've gone beyond the point of no return for Obamacare, although I think the Obamacare is so complicated and unjust that it will evolve into a national health care plan perhaps something like that in Germany. The Canada system is not a very good model, because it varies between provinces and has long delays for elective procedures such as new knees and hips. Canada has a dual system where the poor wait and the rich come to the USA for faster service.

Personally I think the evolution of Obamacare into a USA National Health Plan will be inevitable.

Obamacare is a disaster in terms of the size of the deductibles for plans that are affordable. Obamacare is a disaster in terms of the cheating that will become commonplace for the subsidies. Obamacare will be a disaster for insurance companies and health providers who will have to absorb enormous losses such as bad debt losses. Obamacare is a disaster in that we probably won't even note a significant difference in the crowds lining up in emergency rooms seeking free diagnostics, treatments, and drugs.

There will be frustrating years of turmoil in the USA health system until a USA National Health Plan finally evolves.

Respectfully,
Bob Jensen


I might note that the premium subsidies paid my Uncle Sam are a new thing and will probably become a larger scam than anything we've known in healthcare fraud prior to 2014. But let's ignore the new scam in town and the IRS refusal to enforce the subsidy rules.

Of course the hospitals and physicians will send in the debt collection agencies. But the millions of plans that were wiped out of the system in 2013 had much lower deductibles and often higher premiums. The premiums beginning in 2014 are cheaper in many instances because the deductible amounts were greatly increased such as the new Bronz plans where insurance companies only pay 60%.

Nobody seems to be talking about it, but when those big hospital bills hit the fan the people opting for the lowest premiums (and high deductibles) are the people least able to pay the deductibles for huge medical bills.

Yes I do think the problem of bad debts for huge deductibles will be a bigger, and bigger problem beginning in 2014 because the options for plans with enormous deductibles have been increased so greatly beginning in 2014.

What was a huge bad debt problem for hospitals and physicians in 2013 will become a monster bad debt problem after 2013. The problem is not so much with the premium amounts as it is the deductible amounts.

But don't look for the media to even whisper the future bad debt monster for medical providers.

Respectfully,
Bob Jensen


Hi Zafar,
 
A major portion of the medical cost for the "uninsured" currently  gets passed on to taxpayers since people that have no insurance are passed on to hospitals that are subsidized by taxpayers to cover the uninsured such as in San Antonio where most uninsured patients are passed on to the huge Bexar County Hospital that is heavily funded by county property taxes. The Bexar County Hospital portion of my property tax bill exceeded $1,000 per year when I lived in San Antonio.
 
Of course since that $1,000 gave me about a $400 tax break on my Federal income tax return, the Federal Government was in essence paying for 40% of my share of paying for the uninsured served at the Bexar County Hospital.
 
The bad debt  losses that currently hit hospitals not subsidized by property taxpayers are for "insured" patients who do not have sufficient coverage to pay entire billings beyond what their insurance will pay. The new exchange insurance plans with enormous deductibles such as the Bronz plans that only pay 60% will greatly increase the losses to hospitals for "insured" patients who cannot pay their 40% share of the hospital and physician billings..
 
My point is that a huge portion of medical care costs that are now paid by property  taxpayers for "uninsured" patients will no longer be paid by taxpayers because those patients are now "insured" with low premium, high-deductible plans where many of  those patients cannot afford the deductibles for hospital bills. Taxpayers in San Antonio with high property taxes may cheer the savings that must in the future  be choked on by the hospitals that are not property tax funded. 
 
In other words, somebody pays for hospital patients' bad debts. The "uninsured" are now heavily subsidized by county and city property taxpayers. Giving the uninsured insurance with low premiums and high deductibles is really a transfer payment from property taxpayers to whomever will pay for the added bad debts of defaulted deductibles.

I don't think this system is sustainable until there is USA National Health Program.
 
Respectfully,
Bob Jensen

 

The American Hospital Association, which represents for-profit and nonprofit hospitals and other health-care providers, concurred that the higher deductibles "will likely lead to an increase in hospital bad debt," said Ashley Thompson, its deputy director for policy.

"High Deductibles Fuel New Worries of Health-Law Sticker Shock Some Lower-Cost Plans Carry Steep Deductibles, Posing Financial Challenge," by By Leslie Scism and Timothy W. Martin, The Wall Street Journal, December 8, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303330204579246211560398876?mod=ITP_pageone_0

. . .

The health law makes tax credits available to help cover insurance premiums for people with annual income up to four times the poverty level, or $45,960 for an individual. In addition, "cost-sharing" subsidies to help pay deductibles are available to people who earn up to 2.5 times the poverty level, or about $28,725 for an individual, in the exchange's silver policies.

As enrollment picks up on HealthCare.gov, many people with modest incomes are encountering a troubling element: deductibles so steep they may not be able to afford the portion of medical expenses that insurance doesn't cover. Christopher Weaver discusses. Photo: Getty Images.

But those limits will leave hundreds of thousands or more people with a difficult trade-off: They can pay significantly higher premiums for the exchange's silver, gold and platinum policies, which have lower deductibles, or gamble they won't need much health care and choose a cheaper bronze plan. Moreover, the cost-sharing subsidies for deductibles don't apply to the bronze policies.

That means some sick or injured people may avoid treatment so they don't rack up high bills their insurance won't cover, according to consumer activists, insurance brokers and public-policy analysts—subverting one of the health law's goals, which is to ensure more people receive needed health care. Hospitals, meantime, are bracing for a rise in unpaid bills from bronze-plan policyholders, said industry officials and public-policy analysts.

Because all health plans now are required to provide certain minimum benefits, "consumers may be tempted to shop on premium alone, not realizing that the out-of-pocket costs can have a dramatic effect upon the annual costs of health care," said Kevin Coleman, head of research and data at HealthPocket.

Mr. Coleman said he expects the high deductibles will "produce some reduction in medical-service use" for enrollees who don't qualify for subsidies.

. . .

The American Hospital Association, which represents for-profit and nonprofit hospitals and other health-care providers, concurred that the higher deductibles "will likely lead to an increase in hospital bad debt," said Ashley Thompson, its deputy director for policy.

It isn't known how many bronze policies have been bought so far because the exchanges aren't releasing that level of detail, HealthPocket's Mr. Coleman said.

December 6, 2013 message from Bob Jensen

Hi Eliot,

When there's no Obamacare there will be a USA National Health Plan that bypasses medical insurance companies. It's possible that we will still have such companies offering private insurance beyond what the USA National Plan covers. This "dual coverage" is how the German health insurance system now works. According to various sources in Germany at the moment (mostly Erika's relatives), the time and a6ttention and service varies in ways that that you might find objectionable. The best doctors give more attention and faster service to German patients with private insurance. For example, waiting for new knees can take much longer without private insurance.

Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance 

Our present USA Medicare system works on a dual basis. Erika and I pay nearly $200 per month (each) for supplemental p private Medicare insurance that eliminates the Medicare deductibles (co-insurance) and does such things as pay for the added cost of private hospital rooms. Of course Medicare costs us hundreds more each month such that the supposedly "free" Medicare costs us each nearly $400 per month. Erika pays all our bills such that I don't know the exact amounts. She allows me to carry one check if I promise not to use it.

Thus far I've fortunately paid much more into the Medicare system since my 2006 retirement than I've withdrawn. Erika sadly has withdrawn over $1 million from the system.

We've gone beyond the point of no return for Obamacare, although I think the Obamacare is so complicated and unjust that it will evolve into a national health care plan perhaps something like that in Germany. The Canada system is not a very good model, because it varies between provinces and has long delays for elective procedures such as new knees and hips. Canada has a dual system where the poor wait and the rich come to the USA for faster service.

Personally I think the evolution of Obamacare into a USA National Health Plan will be inevitable.

Obamacare is a disaster in terms of the size of the deductibles for plans that are affordable. Obamacare is a disaster in terms of the cheating that will become commonplace for the subsidies. Obamacare will be a disaster for insurance companies and health providers who will have to absorb enormous losses such as bad debt losses. Obamacare is a disaster in that we probably won't even note a significant difference in the crowds lining up in emergency rooms seeking free diagnostics, treatments, and drugs.

There will be frustrating years of turmoil in the USA health system until a USA National Health Plan finally evolves.

Respectfully,
Bob Jensen


I might note that the premium subsidies paid my Uncle Sam are a new thing and will probably become a larger scam than anything we've known in healthcare fraud prior to 2014. But let's ignore the new scam in town and the IRS refusal to enforce the subsidy rules.

Of course the hospitals and physicians will send in the debt collection agencies. But the millions of plans that were wiped out of the system in 2013 had much lower deductibles and often higher premiums. The premiums beginning in 2014 are cheaper in many instances because the deductible amounts were greatly increased such as the new Bronz plans where insurance companies only pay 60%.

Nobody seems to be talking about it, but when those big hospital bills hit the fan the people opting for the lowest premiums (and high deductibles) are the people least able to pay the deductibles for huge medical bills.

Yes I do think the problem of bad debts for huge deductibles will be a bigger, and bigger problem beginning in 2014 because the options for plans with enormous deductibles have been increased so greatly beginning in 2014.

What was a huge bad debt problem for hospitals and physicians in 2013 will become a monster bad debt problem after 2013. The problem is not so much with the premium amounts as it is the deductible amounts.

But don't look for the media to even whisper the future bad debt monster for medical providers.

Respectfully,
Bob Jensen


Jensen Comment
Until now the media has has avoided mentioning the really big worries about Obamacare in an effort to present a rosy picture to encourage millups upon millions of people to sign up. What goes unmentioned, until today's article in the WSJ quoted below, is that hospital bad debts with greatly increase due to people patients being unable to pay their deductibles.

December 6, 2013 message from Bob Jensen

Hi Zafar,
 
A major portion of the medical cost for the "uninsured" currently  gets passed on to taxpayers since people that have no insurance are passed on to hospitals that are subsidized by taxpayers to cover the uninsured such as in San Antonio where most uninsured patients are passed on to the huge Bexar County Hospital that is heavily funded by county property taxes. The Bexar County Hospital portion of my property tax bill exceeded $1,000 per year when I lived in San Antonio.
 
Of course since that $1,000 gave me about a $400 tax break on my Federal income tax return, the Federal Government was in essence paying for 40% of my share of paying for the uninsured served at the Bexar County Hospital.
 
The bad debt  losses that currently hit hospitals not subsidized by property taxpayers are for "insured" patients who do not have sufficient coverage to pay entire billings beyond what their insurance will pay. The new exchange insurance plans with enormous deductibles such as the Bronz plans that only pay 60% will greatly increase the losses to hospitals for "insured" patients who cannot pay their 40% share of the hospital and physician billings..
 
My point is that a huge portion of medical care costs that are now paid by property  taxpayers for "uninsured" patients will no longer be paid by taxpayers because those patients are now "insured" with low premium, high-deductible plans where many of  those patients cannot afford the deductibles for hospital bills. Taxpayers in San Antonio with high property taxes may cheer the savings that must in the future  be choked on by the hospitals that are not property tax funded. 
 
In other words, somebody pays for hospital patients' bad debts. The "uninsured" are now heavily subsidized by county and city property taxpayers. Giving the uninsured insurance with low premiums and high deductibles is really a transfer payment from property taxpayers to whomever will pay for the added bad debts of defaulted deductibles.

I don't think this system is sustainable until there is USA National Health Program.
 
Respectfully,
Bob Jensen

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


Question
What happens if Obamacare insured individuals or companies go into default on premiums while the insureds keep piling on the medical bills on the pretense that they are still insured?

"Obamacare's Perilous Protection Plan for Debtors," by Michelle Malkin, Townhall, December 6, 2013 --- Click Here
http://townhall.com/columnists/michellemalkin/2013/12/06/obamacares-perilous-protection-plan-for-debtors-n1758399?utm_source=thdaily&utm_medium=email&utm_campaign=nl

 


Obamacare:  Limits Placed Upon Choosing Your Own Doctor and Hospital

Jensen Comment
The media along with President Obama led us to believe that medical insurance plans were going to vary only be the amount of the deductibles and age of the applicant. We are now learning more about differences in medical networks of hospitals and doctors. The President kept insisting that we could keep our present doctors. Technically that was not a lie, but what was left unsaid is that to literally keep your favored doctors and hospitals you may have to opt for the more expensive Cadillac plans having "broader network coverage "of physicians and selective hospitals that opted out of serving the lower-priced limited network plans.

Dr. Ezekiel Emanuel --- http://en.wikipedia.org/wiki/Ezekiel_Emanuel

"ObamaCare in Translation Ezekial Emanuel explains what the President really meant about your doctor," The Wall Street Journal, December 8, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304014504579246552456954872?mod=djemEditorialPage_h

. . .

Mr. Wallace: "It's a simple yes or no question. Didn't he say if you like your doctor, you can keep your doctor?"

Dr. Emanuel: "Yes. But look, if you want to pay more for an insurance company that covers your doctor, you can do that. This is a matter of choice. We know in all sorts of places you pay more for certain—for a wider range of choices or wider range of benefits. The issue isn't the selective networks. People keep saying, 'Oh, the problem is you're going to have a selective network.'"

Mr. Wallace: "Well, if you lose your doctor or lose your hospital—"

Dr. Emanuel: "Let me just say something. People are going to have a choice as to whether they want to pay a certain amount for a selective network or pay more for a broader network."

Mr. Wallace: "Which means your premiums would probably go up."

Dr. Emanuel: "They get that choice. That's a choice you've always made."

It's nice to hear a central planner embrace choice, except this needs translating too. The truth is that you may be able to pay more to keep your doctor, but only after you choose one of ObamaCare's preferred plans that already costs you more than your old plan that ObamaCare forced you to give up.

Jensen Comment
What Dr. Emanuel failed to mention is that the "broader expensive network" plans are Cadillac plans for which employers lose their tax deductions.

The Cadillac Tax: A Game Changer for U.S. Health Care:  Can you explain this tax to your students?
Do you understand the Cadillac Tax provision of the Affordable Healthcare Act that will have a monumental 2018 impact on healthcare coverage of employees who are now covered by employer plans --- plans now costing the government over $250 billion per year? But not for long!

Do you understand the Cadillac Tax provision?
Me neither. As Nancy Pelosi said years ago, Congress passed the ACA before anybody in the USA had a chance to study all the surprises in this the enormous bill.

If you're covered presently on your employer's plan you should most certainly learn about the Cadillac Tax provision that kicks in in 2018.

"The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/

Jensen Comment
Non-profit organizations, especially labor unions, for whom Cadillac plans are especially popular will be allowed to keep their plans without penalty since tax deductions are not of concern to them.

Having preferred networks of doctors and hospitals is not unheard of in national health care plans. Germany, for example, has both public health insurance plus premium coverage with private insurance. Cuba notoriously has bourgeoisie plans for members of the Communist Party and the wealthy versus  proletariat plans for the poor people.

If you Congressional representative brags about signing up for Obamacare ask if he or she has a Cadillac Obamacare plan that lets them choose their own doctors and hospitals.

 


Question
What happens if Obamacare insured individuals or companies go into default on premiums while the insureds keep piling on the medical bills on the pretense that they are still insured?

"Obamacare's Perilous Protection Plan for Debtors," by Michelle Malkin, Townhall, December 6, 2013 --- Click Here
http://townhall.com/columnists/michellemalkin/2013/12/06/obamacares-perilous-protection-plan-for-debtors-n1758399?utm_source=thdaily&utm_medium=email&utm_campaign=nl

I heard about the latest problem this week from an eye doctor friend who received a letter from a Colorado-based insurer informing her that she's essentially on the hook for Obamacare's payment grace period for debtors. The optometrist is bracing for a flood of similar letters from other insurers. Like countless other independent providers, she's extremely concerned about the potential liability, uncertainty and fraud the rule imposes on her business.

Here's the raw deal: The Affordable Care Act created a 90-day grace period before insurers can drop patients who fall behind on premiums. So, delinquents who obtain tax-subsidized health insurance through an Obamacare health insurance exchange have three months to settle up their bills prior to their policy being canceled. As written, the law puts insurers on the hook for the grace period.

But the bureaucrats at the Centers for Medicare and Medicaid Services decided to issue a rule in March making insurers responsible only for paying claims during the first 30 days of the debtors' grace period. Who's on the hook for the other two months? Well, customers are entrusted to foot the bills for additional services. But if they blow off the payments, it's up to physicians and hospitals to collect.

In real-world practice, this means providers will be eating untold costs. Several large hospital associations raised red flags over the issue this summer. In August, the Missouri Hospital Association noted that the regulatory shift "unduly burdens physicians, hospitals and other health care providers" by making them directly collect payments from patients, which "puts them at an unfair and significant risk for providing uncompensated care to patients."

Emillie J DiChristina of Practicefirst Medical Management Solutions spelled out the financial risks for clients on the company's blog: "This leaves providers in a potentially bad place as they have a high potential for accruing bad debt on services provided between 31 and 90 days of the allowed grace period." Can you spell f-r-a-u-d? People could "go on and off" insurance plans, Tampa Bay health care lawyer Bruce Lamb told me, and game the system by bailing on payments and exploiting Obamacare protections against denial of coverage.

Or as MHA officials put it: "We also are very concerned that some disreputable individuals will learn they can manipulate the system and win a full year's insurance coverage on only nine months of premiums. Knowing they are entitled to three months of grace period coverage, dishonest persons could stop paying premiums on the ninth month, enjoy free coverage during the 90-day grace period, have their coverage terminated, and then re-enter the exchange market where the Affordable Care Act's guaranteed issue mandate would prohibit another plan from denying them coverage."

Think such nefarious behavior won't occur? Then you haven't been paying attention to the data manipulators and con artists in the Obamacare navigator program. As I reported earlier this year, the seedy nonprofit Seedco secured multimillion-dollar navigator contracts in Georgia, Maryland, Tennessee and New York to recruit Obamacare recipients into the government-run exchanges -- despite settling a civil fraud lawsuit for faking at least 1,400 of 6,500 job placements under a $22.2 million federally funded contract with New York City a year ago.

Additionally, investigative journalist James O'Keefe and his Project Veritas team have caught Obamacare navigators on tape advising health insurance exchange customers to under-report their income and lie about their health status in order to cheat the system.

CMS has made no effort to repeal its cost-shifting rule or to do anything to address the concerns of providers who will be left holding the bag. As one hospital rep told me: "It's potentially catastrophic." Private practices are already being hit hard with slashed reimbursements, the electronic medical records mandate, ICD-10 medical diagnostic code changes, and increasing federal intrusions on how they provide care. In yet another entry on the laundry list of Obamacare's unintended consequences, this regulation will hurt patients by dissuading doctors from participating in exchange plans.

Continued in article

Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


The Cadillac Tax: A Game Changer for U.S. Health Care:  Can you explain this tax to your students?
Do you understand the Cadillac Tax provision of the Affordable Healthcare Act that will have a monumental 2018 impact on healthcare coverage of employees who are now covered by employer plans --- plans now costing the government over $250 billion per year? But not for long!

Do you understand the Cadillac Tax provision?
Me neither. As Nancy Pelosi said years ago, Congress passed the ACA before anybody in the USA had a chance to study all the surprises in this the enormous bill.

If you're covered presently on your employer's plan you should most certainly learn about the Cadillac Tax provision that kicks in in 2018.

"The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/



Case Studies in Primary Health Care ---
http://ocw.jhsph.edu/index.cfm/go/viewCourse/course/casestudiesinphc/coursePage/index/coursePage/index/


"Illinois's Fake Pension Fix:  The most dysfunctional state government lives down to its reputation," The Wall Street Journal, December 2, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303670804579233901035185122?mod=djemEditorialPage_h

Democrats in Illinois have dug a $100 billion pension hole, and now they want Republicans to rescue them by voting for a plan that would merely delay the fiscal reckoning while helping to re-elect Governor Pat Quinn. The cuckolded GOP seems happy to oblige on this quarter-baked reform.

Legislative leaders plan to vote Tuesday on a bill that Mr. Quinn hails as a great achievement. But the plan merely tinkers around the edges to save a fanciful $155 billion over 30 years, shaves the state's unfunded liability by at most 20%, and does nothing for Chicago's $20 billion pension hole.

Most of the putative savings would come from trimming benefits for younger workers. The retirement age for current workers would increase on a graduated scale by four months for 45-year-olds to five years for those 30 and under. Teachers now in their 20s would have to wait until the ripe, old age of 60 to retire, but they'd still draw pensions worth 75% of their final salary.

Salaries for calculating pensions would also be capped at $109,971, which would increase over time with inflation. Yet Democrats cracked this ceiling by grandfathering in pensions for workers whose salaries currently top or will exceed the cap due to raises in collective-bargaining agreements.

Democrats are also offering defined-contribution plans as a sop to Republicans who are desperate to dress up this turkey of a deal. These plans would only be available to 5% of workers hired before 2011. Why only 5%? Because if too many workers opt out of the traditional pension, there might not be enough new workers to fund the overpromises Democrats have made to current pensioners.

At private companies, such 401(k)-style plans are private property that workers keep if they move to a new job. But the Illinois version gives the state control over the new defined-contribution plans and lets the legislature raid the individual accounts at anytime. That's a scam, not a reform.

Even under the most optimistic forecasts, these nips and tucks would only slim the state's pension liability down to $80 billion—which is where it was after Governor Quinn signed de minimis fixes in spring 2010 to get him past that year's election.

Safely elected in January 2011, Democrats then raised the state's 3% flat income tax rate to 5% and its corporate rate from 7.3% to 9.5%, the fourth highest in the country. All $7 billion a year in new revenues have gone to pension payments, which will leave a huge new hole in the budget when the supposedly temporary tax hikes are phased out in 2015.

The truth is that Democrats will never let the tax increases expire, and state Senate President John Cullerton all but admitted as much in October. Mr. Quinn won't rule out another tax hike, which means round two is a certainty in 2015 if he wins re-election next year. The difference is that this time Democrats will kill the flat income tax and impose a progressive rate scheme that will make future tax hikes politically easier.

It's a sign of their desperation that the state's business lobbies are supporting the reform as the best they can hope for. Others want special tax breaks to offset the 2011 tax hike. Archer Daniels Midland ADM +1.49% (Decatur) and Office Max (Naperville) have threatened to move their corporate headquarters if the state doesn't guarantee $75 million in tax breaks. But Mr. Quinn has refused to approve more gifts for the legislature's corporate cronies until lawmakers pass something on pensions.

Democrats hold comfortable majorities in the legislature and don't need GOP votes. Yet they are demanding Republican support so they won't be the only targets of union wrath. Mr. Quinn watered down the reforms to reduce opposition from the teachers and other government unions, but the unions are still promising to go to court to block the changes if they pass.

GOP leaders who are rounding up votes must be feeling especially charitable this holiday season because they're making an in-kind contribution to Mr. Quinn, who will claim a bipartisan victory as he runs for re-election. While GOP gubernatorial candidate Bruce Rauner has denounced the pension legislation as window-dressing, his Republican primary challengers aren't as savvy. State Senator Bill Brady, who lost to Mr. Quinn in 2010, is supporting the bill while treasurer Dan Rutherford says it is too hard on unions. Such me-too thinking is why the Illinois GOP has become a useless minority.

Continued in article

"Audit reveals half of people enrolled in Illinois Medicaid program not eligible," by Craig Cheatham, KMOV Television, November 4, 2013 ---
http://www.kmov.com/news/just-posted/Audit-reveals-half-of-people-enrolled-in-IL-Medicaid-program-not-eligible-230586321.html?utm_content=buffer824ba&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer

The early findings of an ongoing review of the Illinois Medicaid program revealed that half the people enrolled weren’t even eligible.

The state insisted it’s not that bad but Medicaid is on the federal government’s own list of programs at high risk of waste and abuse.

Now, a review of the Illinois Medicaid program confirms massive waste and fraud.

A review was ordered more than a year ago-- because of concerns about waste and abuse. So far, the state says reviewers have examined roughly 712-thousand people enrolled in Medicaid, and found that 357-thousand, or about half of them shouldn't have received benefits. After further review, the state decided that the percentage of people who didn't qualify was actually about one out of four.

"It says that we've had a system that is dysfunctional. Once people got on the rolls, there wasn't the will or the means to get them off,” said Senator Bill Haines of Alton.

A state spokesman insists that the percentage of unqualified recipients will continue to drop dramatically as the review continues because the beginning of the process focused on the people that were most likely to be unqualified for those benefits. But regardless of how it ends, critics say it's proof that Illinois has done a poor job of protecting tax payers money.

“Illinois one of the most miss-managed states in country-- lists of reasons-- findings shouldn't surprise anyone,” said Ted Dabrowski.

Dabrowski, a Vice-President of The Illinois Policy Institute think tank, spoke with News 4 via SKYPE. He said the Medicaid review found two out of three people recipients either got the wrong benefits, or didn't deserve any at all.

We added so many people to medicaid rolls so quickly, we've lost control of who belongs there,” said Dabrowski.

Continued in article

 

 


From the CFO Journal's Morning Ledger on November 25, 2013

Corporate health-care plans may get hit by a wave of new participants
Many companies are betting that the insurance requirement in the Affordable Care Act will bring people into their plans who have previously opted out,
the WSJ’s Theo Francis reports. Towers Watson figures that about half of the usual opt-outs will sign up for next year—meaning an enrollment increase of about 7% or 8%, and a corresponding increase in costs of about 5%. In response, companies are raising workers’ premium contributions, steering them toward high-deductible plans and charging them more to cover family members.

Employers have been pushing more of the cost of providing health insurance on to their workers for years, Francis notes. Some are making employees pick up a bigger share of the premiums for coverage of family members. Employees this year are responsible for an average 18% of the cost of individual coverage, but 29% of the cost of family coverage, according to a survey by the Kaiser Family Foundation and the Health Research & Educational Trust. Gannett, for example, has replaced the two plans for families it used to offer its workers with a single high-deductible plan that requires employees to pay the first $3,000 of medical costs each year. Ryder has taken a similar path, replacing one of its two insurance options with a high-deductible plan. And it’s encouraging employees to choose the new option in part by raising the cost of more-traditional coverage.

Haverty Furniture, which has stores in 17 Southern and Midwestern states, expects health-care costs to rise by about $2 million, or 20%, next year. It expects the bulk of that to come from enrollment increases, so it’s raising premiums, deductibles and copayments in response, CFO Dennis Fink said. “We do think our per capita cost is going up, but the bigger piece is just people who’ve chosen not to have coverage.”


"Companies Prepare to Pass More Health Costs to Workers Firms Brace for Influx of Participants in Insurance Plans Who Had Earlier Opted Out," by Theo Francis, The Wall Street Journal, November 24, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304607104579212351200702342?mod=djemCFO_h

Companies are bracing for an influx of participants in their insurance plans due to the health-care overhaul, adding to pressure to shift more of the cost of coverage to employees.

Many employers are betting that the Affordable Care Act's requirement that all Americans have health insurance starting in 2014 will bring more people into their plans who have previously opted out. That, along with other rising expenses, is prompting companies to raise workers' premium contributions, steer them toward high-deductible plans and charge them more to cover family members.

The changes as companies roll out their health plans for 2014 aren't solely the result of the ACA. Employers have been pushing more of the cost of providing health insurance on to their workers for years, and firms that aren't booking much sales growth due to the sluggish economy are under heavy pressure to keep expenses down.

Some are dealing with rising expenses by making employees pick up a bigger share of the premiums for coverage of family members. Employees this year are responsible for an average 18% of the cost of individual coverage, but 29% of the cost of family coverage, according to a survey of employee health plans by the Kaiser Family Foundation and the Health Research & Educational Trust.

"We have seen employers do more cost-shifting, if you will, for an employee to pay a higher portion of the cost of dependent and spouse coverage," said Tracy Watts, U.S. health-care reform leader at Mercer, a benefits consulting unit of Marsh & McLennan MMC -0.27% Cos.

Between 15% and 20% of eligible workers nationwide tend to skip insurance, benefits consultants say.

Towers Watson TW -1.25% & Co., a benefits consulting firm, figures that about half of the usual opt-outs will sign up for next year—meaning an enrollment increase of about 7% or 8%, and a corresponding increase in costs of about 5%.

Haverty Furniture, HVT -2.76% an Atlanta-based retail furniture chain with stores in 17 Southern and Midwestern states, expects health-care costs to rise by about $2 million, or 20%, next year.

The company expects the bulk of that to come from enrollment increases, and it is raising premiums, deductibles and copayments in response, Chief Financial Officer Dennis Fink said.

"We do think our per-capita cost is going up, but the bigger piece is just people who've chosen not to have coverage," he said.

A quirk of the Affordable Care Act could make it more appealing for companies to raise rates for family coverage than for individuals, said Vivian Ho, a Rice University health-care economist.

Starting in 2015, companies employing 50 or more people must offer affordable health-care coverage to anyone working 30 hours a week or more.

But affordability is measured using the cost of individual coverage, capping the cost at 9.5% of income, Ms. Ho said.

Raising family rates could help companies recoup costs without running afoul of that limit, she said. Starting now, instead of next year, would allow a more gradual change.

U.S. Department of Health and Human Services spokeswoman Joanne Peters said that the health-reform law is keeping a lid on health-care costs overall, and makes it easier for employers to offer coverage. "Since the Affordable Care Act became law, health-care costs have been slowing and premiums are increasing by the lowest rates in years," she said.

Gannett Co. GCI +0.11% , which owns more than 80 newspapers and 23 television stations, expects one factor in its increased health costs to be the addition of more employees to its insurance plans due to the ACA rules, according to a person familiar with the company's projections.

To address an overall increase in costs, Gannett has replaced the two plans for families it used to offer its workers with a single high-deductible plan that requires employees to pay the first $3,000 of medical costs each year, according to workers at the Indianapolis Star, one of the company's papers. For those with individual coverage, who make up a little over half of Gannett's insurance pool, the figure is $1,500.

The company also scrapped a sliding scale that let lower-income workers pay lower premiums. For some employees, the result was a 60% jump in monthly premiums for family coverage, to $575 from about $360.

Gannett said more than half of its employees will see premiums fall by 12%.

United Parcel Service Inc. UPS -0.16% made headlines in August when it said that it would bar spouses from its nonunion health plan if they could get coverage at their own jobs. The company said it expected to see an increase in its health-care costs in part from adding employees to its plan who currently opt out.

About 6% of employers ban coverage for spouses who can get it elsewhere, and another 6% impose an explicit surcharge for covering a spouse, according to Mercer. American Electric Power Co. AEP -0.02% , for example, began imposing a $50 monthly surcharge this year to cover spouses with access to insurance at their own workplace. AEP said 92% of its employees usually sign up for coverage, so it doesn't expect a surge of new enrollment.

In another shift this year, companies have become increasingly aggressive about steering employees toward plans in which they pay more of the initial costs for their care in exchange for lower premiums.

Trucking and logistics company Ryder System Inc. R +0.42% has replaced one of its two insurance options with one such high-deductible plan. Ryder is encouraging employees to choose the new option in part by raising the cost of more traditional coverage.

These changes are expected to keep Ryder's total premium cost lower even as it keeps the share of employee premiums that it pays steady at about 70%, executives said. They accompany earlier decisions to close Ryder's plan to spouses who can get insurance elsewhere.

Continued in article

 

 


Three very smart coders who say the HealthCare.gov site was designed wrong from get go.
What users first want is a listing of exchange alternatives before feeding in any personal data.
 

"S.F. programmers build alternative to HealthCare.gov," CBS News, November 8, 2013 ---
http://www.cbsnews.com/8301-18563_162-57611592/s.f-programmers-build-alternative-to-healthcare.gov/

(CBS News) On Friday, President Obama had this to say about problems with the Obamcare website during a speech in New Orleans: "I promise you, nobody's been more frustrated. I wanted to go in and fix it myself, but I don't write code."

 But plenty of programmers do write code. And three of them have created their own website that addresses some of the most annoying problems with HealthCare.gov.

 In a San Francisco office shared with other tech start-ups, three 20-year-olds saw HealthCare.gov as a challenge.

With a few late nights, Ning Liang, George Kalogeropoulos and Michael Wasser built "thehealthsherpa.com," a two-week-old website that solves one of the biggest problems with the government's site.

They got it completely backwards in terms of what people want up front," said Liang. He added: "They want prices and benefits, so that they could make the decision."

Liang showed CBS News how it worked. "You come to our website and you put in your zip code -- in this case a California zip code. You hit 'find plans,' and you immediately see the exchange plans that are available for that zip code."

They have plenty of experience working at places like Twitter and Microsoft before setting out to build their own Internet companies. But this project is a public service.

"There was no thought of, 'How do we make money this time?'" said Wasser. "It was like, 'This is a problem that we know we can solve in a really short period of time. So let's just do it.'"

Using information buried in the government's own website built by high-priced government contractors, they found a simpler way to present it to users.

"That's the great thing about having such a small team," said Kalogeropoulos. "You sit around a table and say, 'Okay, how does this work?' There's no coordination meetings, there's no planning sessions. It's like, 'Well, let's read the document and let's implement this.'"

And the features keep on coming. CBS News looked at the team's website Thursday and pointed out that the tax subsidy wasn't in there, which is supposed to be one of the most complicated parts of the HealthCare.gov site. But as Liang explained: "Yes, we added this last night...the subsidy calculation is fairly complicated, but it wasn't too bad."

You can't actually enroll on the HealthSherpa site, but they do provide contact information for companies offering the plans. Users who find a plan they like can go directly to the insurance companies without ever using HealthCare.gov.

 Health Sherpa --- http://www.thehealthsherpa.com/
This site is unbelievably easy. It does discuss subsidy options. But it is not so great regarding discussion of the real sticking point of these plans ---
the deductibles that will probably be the main reason many individuals will go uninsured --- if they can't afford the deductibles.

I advise reading the top line to apply for "Updates" via email.

I also have questions regarding deductibles.

Plan Type

Select the metal levels you prefer.

I cannot find zip codes that offer Platinum or Catastrophic options. Where are these available?
Or is this merely a defect in the database to date?

Also it seems that only HMOs are available in most zip codes that I explored.
This can be a problem for people who want to choose their doctors or even choose getting an MD-certified doctor.

I am having considerable luck finding Obamacare answers on the Turbo Tax Forum for Obamacare. You should first search the Q&A for your question and answer. If it is not there you can ask a question for free provided you register (no obligation). .
--- Click Here
https://ttlc.intuit.com/health-care?cid=ppc_gg_nb_stan_dk_us-_hv-healthcare-Obamacare&srid=sr3_73548907_go&adid=healthcare&skw=how%20to%20apply%20for%20obamacare&kw={searchQuery}&ven=gg&&_sr_adpos=1t1&&_sr_usid=ppc_gg_nb_stan_dk_us-_hv-healthcare-Obamacare
 

Income is somewhat well defined.
The Turbo Tax Forum provided the following link ---
http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf 

Is tax exempt income also exempt in terms of applying for subsidies?
No it is not exempt  according to a link provided in the Turbo Tax Forum Answer ---
http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf


How are highly variable capital gains and losses factored into the calculation?
They must be included in the income calculation, although these can sometimes be timed in or out temporarily (such as wait for next year to sell at a gain and this year at a loss) or use a deferral strategy such as rolling capital gains on a residence put into another (newer to you) residence. Gains on long-term deferrals such as pension plans are exempt.

Is income to be estimated income for last year, this year, or next year, or some type of average?
Unclear, but I think your last filed tax return is the desired choice. Some ethical adjustments are recommended by me such as when you became employed this year it is unethical to claim a future subsidy on a very outdated tax return.

The High Cost of Dying
The undisputed most expensive coverage in Medicare is the cost of dying where dependents of a dying parent will keep that parent in intensive care (at $10,000 or more per day) as long as Medicare picks up the full tab. CBS Sixty Minutes even did a module on this "scandal" where hospitals salivate over keeping a Medicare patient in ICU for a very, very long time.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/
This is one huge cost difference between most national health care plans and the USA plans beginning in 2014. The USA plans will bear the enormous "cost of dying." But this is mitigated for non-Medicare and non-Medicaid insurance coverage if that coverage carries a relatively high deductible. Dependents may let Grandma slip away if her estate must pay $4,000 of the $10,000 per day it takes to keep her on life extending machines. In this respect Obamacare differs from Medicare and Medicaid.

This is a link forwarded to me from the Turbo Tax Forum ---
http://www.hhs.gov/healthcare/facts/timeline/timeline-text.html

Regulating Annual Limits on Insurance Coverage. Under the law, insurance companies’ use of annual dollar limits on the amount of insurance coverage a patient may receive will be restricted for new plans in the individual market and all group plans. In 2014, the use of annual dollar limits on essential benefits like hospital stays will be banned for new plans in the individual market and all group plans.

 

There should be a Website hot button to a Glossary on  Health Sherpa. No such luck! Maybe someday.

Obamacare database of questions and answers from TurboTax --- Click Here
https://ttlc.intuit.com/health-care?cid=ppc_gg_nb_stan_dk_us-_hv-healthcare-Obamacare&srid=sr3_73548907_go&adid=healthcare&skw=how%20to%20apply%20for%20obamacare&kw={searchQuery}&ven=gg&&_sr_adpos=1t1&&_sr_usid=ppc_gg_nb_stan_dk_us-_hv-healthcare-Obamacare
You do not have to be a TurboTax user to use this free site. The answers are from tax experts as well.

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Health Care Reform Act 2010

 

Health Sherpa --- http://www.thehealthsherpa.com/
This site is unbelievably easy. It does discuss subsidy options. But it is not so great regarding discussion of the real sticking point of these plans ---
the deductibles that will probably be the main reason many individuals will go uninsured --- if they can't afford the deductibles.


A Bait and Switch Question

  • This is a serious question that I hope will not be taken as political.

    Has President Obama just played a bait and switch game on the Obamacare health exchanges?

    The exchanges posted their deals for individuals at their own Websites and various other Websites, including Healhcare.gov. Then belatedly President Obama announced changes to required mental health coverage that could increase the cost of that particular coverage ten fold.
    "Mental Health Coverage Expanded to Most Insurance Plans," by Alex Wayne, Bloomberg Businessweek, November 8, 2013 ---
    http://www.bloomberg.com/news/2013-11-08/u-s-said-to-announce-new-rule-for-mental-health-coverage.html

    Will the exchanges be required to honor their original deals or will they be allowed in retrospect to increase the premiums for the mental health component in those deals now being signed by individuals?

    A second question concerns the years it will take to generate enough psychiatrists to meet the spike in demand ignited by this executive order, but that's another matter entirely.

    I'm not arguing against having this extended coverage. Personally a young member of my family will benefit enormously the rest of her life from this executive order for extended coverage. Her daily medications cost a fortune.

    Another question concerns the extent to which executive orders can be expanded. For example, can the President suddenly declare that all colleges and universities receiving Federal assistance be required to provide free tuition, room, and board to all students whose parents earn less than $50,000 per year?

    Because his mental healthcare executive order will create enormous shortages of psychiatrists can the President declare that medical schools will be free to students majoring in psychiatry --- without having to get Congressional approval of added funding for this purpose?

    In other words what are the limits to "executive orders" for lame duck presidents?

    It seems to me that we are facing an enormous constitutional question concerning balance of powers.


    And by the way, this favor harms all other taxpayers. The IRS assesses the reinsurance tax in annual tranches; it must collect $12 billion in 2014, $8 billion in 2015 and $5 billion 2016. So the smaller pool of ordinary people without a union card will pay a larger individual share of the same overall amount.
    "ObamaCare's Union Favor:  The White House may let Big Labor dodge a reinsurance," The Wall Street Journal, November 18, 2013 ---
    http://online.wsj.com/news/articles/SB10001424052702303309504579182061106839366?mod=djemEditorialPage_h

    The Affordable Care Act's greatest hits keep coming, and one that hasn't received enough attention is a looming favor for President Obama's friends in Big Labor. Millions of Americans are losing their plans and paying more for health care, and doctors are being forced out of insurance networks, but a lucky few may soon get relief.

    Earlier this month the Administration suggested that it may grant a waiver for some insurance plans from a tax that is supposed to capitalize a reinsurance fund for ObamaCare. The $25 billion cost of the fund, which is designed to pay out to the insurers on the exchanges if their costs are higher than expected, is socialized over every U.S. citizen with a private health plan. For 2014, the fee per head is $63.

    The unions hate this reinsurance transfer because it takes from their members in the form of higher premiums and gives to people on the exchanges. But then most consumers are hurt in the same way, and the unions have little ground for complaint given that ObamaCare would not have passed in 2010 without the fervent support of the AFL-CIO, the Teamsters and the rest.

    The unions ought to consider this tax a civic obligation in solidarity with the (uninsured) working folk they claim to support. Instead, they've spent most of the last year demanding that the White House give them subsidies and carve-outs unavailable to anyone else.

    But don't expect ObamaCare favors unless you helped to re-elect the President. In an aside in a Federal Register document filed this month, the Administration previewed its forthcoming regulation: "We also intend to propose in future rulemaking to exempt certain self-insured, self-administered plans from the requirement to make reinsurance contributions for the 2015 and 2016 benefit years."

    Allow us to translate. "Self-insured" means that a business pays for the medical expenses of its workers directly and hires an insurer as a third-party administrator to process claims, manage care and the like. Most unions as well as big corporations use this arrangement.

    But the kicker here is "self-administered." That term refers to self-insured plans that don't contract with the Aetnas and Blue Shields of the world and instead act as their own in-house benefits manager.

    Almost no business in the real world still follows this old-fashioned practice as both medicine and medical billing have become more complex. The major exception is a certain type of collectively bargained insurance trust known as Taft-Hartley plans. Such insurance covers about 20 million union members, and four out of five Taft-Hartley trusts are self-administered.

    There's no conceivable rationale—other than politics—for releasing union-only plans from a tax that is defined as universal in the Affordable Care Act statute. Like so many other ObamaCare waivers, this labor dispensation will probably turn out to be illegal.

    And by the way, this favor harms all other taxpayers. The IRS assesses the reinsurance tax in annual tranches; it must collect $12 billion in 2014, $8 billion in 2015 and $5 billion 2016. So the smaller pool of ordinary people without a union card will pay a larger individual share of the same overall amount.

    Count all of this as one more illustration of the way that ObamaCare has put politicians in control of health care. Some people get taxed but others don't, some people get subsidies but others don't, and some have to pay more so Mr. Obama can deliver favors to his political constituents.

    As you might imagine, The New York Times does not even mention this pending labor union exemption when it explains the Affordable Care Act Re-insurance Fund:
    "A Closer Look at the Reinsurance Fee," by Robert Pear,
    The New York Times, October 15, 2013 ---
    http://www.nytimes.com/news/affordable-care-act/2013/10/15/a-closer-look-at-the-reinsurance-fee/?_r=0

    The reinsurance tax is one of several measures intended to stabilize premiums in the individual insurance market as major provisions of the health care law take effect in January. The fees, to be charged from 2014 to 2016, will provide money to insurers that incur high claims for consumers in the individual insurance market, both inside and outside the new exchanges, or marketplaces. Insurers are apprehensive that some of their new customers, having been uninsured for years, will have costly existing conditions.

    The fees are to be paid by insurers in the individual, small group and large group markets, as well as by employers that serve as their own insurers.

    A delay in the implementation of the tax is popular with both employers and labor unions, many of which provide health coverage to members, because it would put off significant new costs.

    The government set the fee for 2014 at $63 per covered life, or $5.25 a month. Insurers and some self-insured employers may have to pay not only for subscribers and employees, but also for spouses and children who are covered.

    The total amount of fees to be collected over three years is $25 billion. Of that amount, $20 billion will go to the reinsurance program and $5 billion to the Treasury.

    “The primary purpose of the reinsurance program is to stabilize premiums in the individual market from 2014 through 2016,” the Obama administration said when it proposed the rules in December 2012. “The reinsurance program is designed to protect against issuers’ potential perceived need to raise premiums due to the implementation of the 2014 market reform rules, specifically guaranteed availability.’’

    The tax, the administration said, should alleviate the concerns of insurance companies about the risk of “high-cost claims from newly insured individuals.’’

    Jensen Comment
    Political favors are like that on both sides of the aisle. This one is just a bit more blatant without a justifiable reason.

    It will be interesting to watch Big Ed  try to squirm around this one. Even though he's employed by MSNBC, Ed Shultz draws hundreds of thousands in promotion fees from labor unions. At the same time he's an effective champion for the common man who will be footing the bill for this gift to labor unions. My guess is that, like The New York Times, he will not even mention this pending labor union exemption on the Ed Show.

    “U.S. labor unions paid MSNBC ‘Ed Show’ host Ed Schultz  roughly $200,000 in 2011, and roughly $337,000 in 2005-2012, according to Department of Labor documents.”

    Also see
    http://www.politico.com/story/2013/10/obamacare-reinsurance-fee-spending-deal-98328.html


    Teaching Case on Cost Accounting in a Medical Revolution and Those 500% Mark Ups
    From The Wall Street Journal Accounting Weekly Review on November 21, 2013

    What Care Costs. Really.
    by: Melinda Beck
    Nov 18, 2013
    Click here to view the full article on WSJ.com
     

    TOPICS: Cost Management, Cost-Basis Reporting, Health Care, Managerial Accounting

    SUMMARY: Brent C. James is "...Chief Quality Officer for Intermountain Healthcare, a...network of 22 hospitals and 185 clinics in Utah and Idaho. Dr. James has been using electronic records to improve care and cut costs since the 1980s." In this interview-format article, he discusses the medical field push to a cost-based system, away from a current system of charging for services performed regardless of necessity of the procedure. The article gives classic examples of establishing standard costs for materials and labor such as management engineers "who go around and stopwatch how much time it takes a technician to set up a lab test. They measure how much glassware and reagent the test consumes to process...."

    CLASSROOM APPLICATION: The article may be used in a management accounting class to introduce standard costs, particularly the process of establishing standard costs.

    QUESTIONS: 
    1. (Introductory) Who is Brent C. James? What "medical revolution" may he be starting?

    2. (Advanced) Define the term "standard cost." What measurement techniques are described I the article to establish standard costs for hospital products and services?

    3. (Introductory) What does Dr. James say is the reason has it taken until now for hospitals to establish cost management systems?

    4. (Advanced) What is "transparency"? How has Dr. James's hospital network's management pledged to provide transparency?

    5. (Advanced) Are patients at Dr. James's hospital network going to seeing the cost data his team is compiling? Explain your answer.
     

    Reviewed By: Judy Beckman, University of Rhode Island

    "What Care Costs. Really," by Melinda Beck, The Wall Street Journal, November 18, 2013 ---
    http://online.wsj.com/news/articles/SB10001424052702304561004579135434122969634?mod=djem_jiewr_AC_domainid

    Brent C. James may be starting another medical revolution.

    As chief quality officer for Intermountain Healthcare, a Salt Lake City-based network of 22 hospitals and 185 clinics in Utah and Idaho, Dr. James has been using electronic records to improve care and cut costs since the 1980s.

    His data-driven clinical-management systems have been emulated around the world. He estimates that they save at least $250 million and 1,000 lives a year at Intermountain alone.

    Now, Intermountain is building an ambitious new data system that will also be able to track the actual cost of every procedure and piece of equipment used in its hospitals and clinics, a function that is standard in many industries but not in health care.

    Dr. James shared his vision and the challenges ahead with The Wall Street Journal. Cost Clarity

    WSJ: You've described your new data system as a "cost master," in contrast to the "charge master" that many hospitals use to set prices. What's the difference?

    DR. JAMES: In a charge master, what you're seeing is the old phenomenon called "mark it up to mark it down." Hospitals will make an initial estimate of what something costs, and then they'll mark it up—sometimes 400% to 500%. Insurance brokers measure success in the size of the discount they get. That's how you end up with $17 pieces of gauze. It loses all connection to reality.

    In a cost-master system, you have empirical, fact-based costs. We have eight management engineers, for example, who go around and stopwatch how much time it takes a technician to set up a lab test. They measure how much glassware and reagent the test consumes to process, and how much time it takes on the analyzing machine. The engineers load all that information into the cost master and they get the true cost of running that lab test. They do similar cost measurements on every item contained in our cost master.

    We figure we have about 5,000 clinical terms and upward of 25,000 total items in our cost master. Once I get those costs, I can manage them the way I would if I were building an automobile or a washing machine.

    These are not new systems. They've been around for a long time in other industries. All we're doing is shifting them over to health care. Truth is, Intermountain has run this sort of activity-based costing since 1983. It just wasn't integrated into clinical documentation through an electronic medical record [EMR]. With a link to the EMR, maybe we'll be able to move health care out of the dark ages.

     

    WSJ: How will knowing what everything costs change the way you deliver care?

    DR. JAMES: If you know the true cost of providing care, you can ask yourself whether doing one thing is really more important than doing something else.

    Our mission statement is: the best medical result at the lowest necessary cost. We think there is enough waste in health care that we can dramatically improve our costs. But to do that, I've got to be able to measure and manage those costs.

    A Money Loser?

    WSJ: In fee-for-service medicine, hospitals lose money when they cut costs and unnecessary care. How do you get around that?

    DR. JAMES: That's why Intermountain made the decision several years ago to shift our business, over time, to capitated care.

    In the past, the way to make money was to do more. Figure out how to do more surgeries, even if they're unnecessary. Add that famous physician to try to attract more patients. It creates a medical arms race. Imagine instead that I get a per-member, per-month payment for a population of patients. I no longer have a strong financial incentive for doing more. If I find a way to save money by taking out waste, all the savings come back to me and my patients. At the same time, I make measures of quality outcomes transparent. That way patients can know they are getting good care, and know what it will cost them.

     

    WSJ: What impact do you expect this to have on the health-care industry?

    DR. JAMES: The whole health-care world is shifting to having the care provider take over the financial risk. In that world, your survival depends on being able to manage your costs. We happened, by luck and circumstance, to get going on it early on. Suddenly this is becoming a race, with some very capable groups entering the fray—but it's a race toward excellence.

    Total Transparency

    WSJ: Will patients be able to see your actual costs?

    DR. JAMES: We made a commitment from senior management that we will be completely transparent.

    We have already started to post prices for things that many patients buy directly, such as lab tests and imaging exams [such as X-rays]. We will soon add things like routine office visits and simple procedures, like screening colonoscopy. Later we will add major treatments like delivering a newborn, or surgery to implant an artificial knee joint.

    While we will post prices on our website, probably the most effective sharing of cost information will happen through our insurance partners' websites. We believe that patients will mostly want to know what their own out-of-pocket costs will be, given that they've already paid for their health insurance. That's true even if your "insurance plan" is the care delivery group.

    Finally, remember that some care delivery is impossible to price as a package deal in advance. For example, treatment of major automobile trauma is so unique that it's impossible to predetermine a standard price.

     

    WSJ: How much will the new system cost?

    DR. JAMES: Several hundred million dollars. But I could pay for it in one year, if I can use it to get significantly more waste out.

    Continued in article


    The President made one sorry excuse that riles my feathers.
    Yesterday he made the claim that "government is incapable of creating high quality Websites." That just has not been true over the past two decades. The Federal government created some of the finest Websites in the world. Exhibit A is the IRS Website. Exhibit B is the OLAP implementation of FedScope over 15 years ago ---
    http://www.fedscope.opm.gov/index.asp

    OLAP --- http://faculty.trinity.edu/rjensen/XBRLandOLAP.htm#OLAPextended

     

    "A Health Care Fix," NYT Editorial Board, The New York Times, November 15, 2013 ---
    http://www.nytimes.com/2013/11/15/opinion/a-health-care-fix.html?hp&rref=opinion&_r=0

    . . .

    The White House had no estimates on how many consumers whose policies were canceled might want reinstatement as opposed to buying something better, often with the help of subsidies. It is also unclear how the temporary fix might affect the overall goal of upgrading the benefits covered and keeping premiums affordable.

    If a relatively small population of people get extensions, as some experts think likely, the effect on premiums in the overall health insurance market may be minimal. Even so, this disturbing reversal is caused by the incompetence of the administration in ushering in reforms that millions have been waiting for.

     

    "The politics behind Obama’s health-care ‘fix’," by Stephen Stromberg, The Washington Post, November 14, 2013 ---
    http://www.washingtonpost.com/blogs/post-partisan/wp/2013/11/14/the-politics-behind-obamas-health-care-fix/

    Is President Obama’s “fix” to the health-care rollout more about politics than substance? (Yoon S. Byun/The Boston Globe)

    (Yoon S. Byun/The Boston Globe)

    Probably, but not for the reasons that some Republican commentators spun up shortly after news of the plan leaked out.

    Obama’s plan is to allow insurance companies to extend certain health-care policies that don’t meet the Affordable Care Act’s minimum standards, offering a one-year reprieve to people upset about the cancellation notices their insurers sent them over the past several weeks.

    “Why only a year?” Sean Hannity asked of the president’s plan. “Because he wants to get past the midterms.”

    “One year from now is when an election occurs, and conveniently, the delay would occur right after the election,” said Republican National Committee spokesman Sean Spicer. “So all of these 2014 Democrats that are running for the hills right now would get a one-year reprieve until after their election.”

    Actually, the political timing could be worse for the Democrats under the president’s plan. Federal law requires insurers to give customers 90 days’ notice before canceling their insurance policies. That is why so many cancellation letters have gone out over the past couple months; insurance companies have been sending notice that plans up for renewal at the beginning of next year will terminate then instead. Under the president’s new policy, renewed plans would presumably expire on the same date, just shifted forward a year. So one would expect a similar wave of cancellation letters to hit right before next November’s midterm elections, not right after.

    That possibility could encourage the White House to offer another extension next year, before the wave would hit, in which case Hannity and Spicer’s accusation would be a plausible explanation for the second time shift.

    The calendar could also indicate that the White House doesn’t expect many people will end up renewing their noncompliant plans under its new scheme. Even though the Obama administration has given permission, state regulators might not allow it, insurance companies might not want to revive plans they were in the process of winding down and lots of customers might move on to different policies anyway. The practical effect of the president’s “fix” is likely to be small.

    For now, the desired political effect seems to be twofold. First, it might relieve some of the pressure Democrats in Congress feel to approve worse “fixes” that would undermine the new health-care insurance system. Second, it might enable Democrats to shift blame onto state regulators or insurance companies for this year’s cancellations. The first is understandable. The second is not.

    "ObamaCare's Nonfix:  Americans still can't keep their health plans, but Democrats get political cover," WSJ Editorial Board,  The Wall Street Journal, November 15, 2013 ---
    http://online.wsj.com/news/articles/SB10001424052702304243904579197892755143418?mod=djemEditorialPage_h

    . . .

    Now these mass cancellations are proving to be unpopular, and Democrats are panicking, so Mr. Obama is offering a temporary stay of execution. He is instructing his health regulators to suspend eight complicated rules that all insurance plans had to meet and had caused the market implosion.

    There is less reprieve here than Mr. Obama claims. It's hard to un-cancel insurance. The rules Mr. Obama is repudiating were written in 2010, and insurers have been adapting to them for years. They will now have to scramble to revive the policies they can while throwing all of their actuarial assumptions out the window.

    The faux reprieve also lasts for only one year and applies only to anyone who was covered in 2013. The insurers are essentially being asked to agree to accept losses on behalf of a rump group of policy holders in a legacy business that would then turn into a pumpkin in 2015.

    Continued in article

     

    Jensen Comment
    The President's plan seems to be a ploy to buy time and votes rather than fix the fundamental problem. The fundamental problem is that all the expensive additions to required coverage are making the plans too expensive for buyers of medical insurance until the government picks up the lion's share of the tab (nationalize those deductibles?) after the 2014 wipe out of Republicans (Obama hopes) in the next election.

    This is a real test of confrontational political power of President Obama (where the other side is comprised of scumbags) versus the Johnson era of backroom politics (where everybody on both sides of the fence is honorable).

    Johnson ushered in the Voting Rights Act, Aid to Education, Attack on Disease, Medicare, Medicaid, Urban Renewal, Beautification, Conservation, Development of Depressed Regions, a wide-scale fight against poverty ---
    http://en.wikipedia.org/wiki/Lyndon_B._Johnson

    Obama ushered in Obamacare. Yeah Right! With a total of 29 apologies (according to ABC News) to the public for his fumbles in connecting people to the exchanges.

    I think those "honorable "representatives in back rooms probably accomplish more that public media wars among scumbags on both sides of the fence.

    PS
    The President made one sorry excuse that riles my feathers.
    Yesterday he made the claim that "government is incapable of creating high quality Websites." That just has not been true over the past two decades. The Federal government created some of the finest Websites in the world. Exhibit A is the IRS Website. Exhibit B is the OLAP implementation of FedScope over 15 years ago ---
    http://www.fedscope.opm.gov/index.asp

    OLAP --- http://faculty.trinity.edu/rjensen/XBRLandOLAP.htm#OLAPextended


    Why not give HMO Obamacare, Medicare and Medicaid patients the worst doctors?
    "
    Report: UnitedHealth Drops Thousands Of Doctors From Insurance Plans," by Zeba Siddiqui, Reuters, November 15, 2013 ---
    http://www.businessinsider.com/unitedhealth-drops-thousands-of-doctors-from-insurance-plans-2013-11 


    "Affordable Care Act holds opportunities, challenges for internal auditors," by Ken Tysiac, Journal of Accountancy, November 7, 2013 ---
    http://journalofaccountancy.com/News/20139066.htm


    How to Lie With Naive Politically Correct Estimates

    "Affordable Care Act: 17 Million Can Get Subsidies," by Mary Agnes Carey, WebMD News from Kaiser Health News, November 5, 2013 ---
    http://www.webmd.com/health-insurance/20131105/17-million-people-eligible-for-premium-subsidies-study-finds

    Jensen Comment
    Fraud is inevitable and cannot be prevented when it comes to giving out subsidies to to insured that are not legally entitled to such subsidies. Firstly, there's the $2 trillion underground economy where people are receiving income that even the IRS cannot detect --- those folks who work for unreported cash earnings. We're talking about millions of people who do not report any income to the IRS or greatly under report their incomes ---
    http://www.cs.trinity.edu/~rjensen/temp/TaxNoTax.htm

    Secondly, the 17 million reported above does not jive with the estimated 49.5% (of 130 million) of taxpayers who file tax returns but do not pay any income taxes. Some of them have incomes offset by credits such as credits for dependents, but its likely that the nearly all of 50% of taxpayers who pay no qualify, at least on paper, for subsidies ---
    http://www.cs.trinity.edu/~rjensen/temp/TaxNoTax.htm

    Most of those making more than $100,000 pay some income taxes. Bloomberg reports that 98% of those that pay no income taxes have less than $100,000 in earnings. Most are availing themselves of recent tax breaks such as energy credits, tax breaks from employer contributions to medical insurance, increased tax breaks for dependents, and deferred tax breaks such as breaks professors get for employer contributions to TIAA-CREF.

    Watch the April 3, 2012 Bloomberg Video ---
    http://www.bloomberg.com/video/89503501/

    A family of four making less than $98,000 qualifies for a health insurance subsidy from the government.

    Hence I think the 17 million estimate is wildly inaccurate unless tens of millions of those eligible for subsidies simply go uninsured because they cannot afford the deductibles even if the premiums with subsidies are affordable.

    One added qualifier is the huge unknown (at least to me) number of Medicaid and Medicare recipients who are scoped out of the Affordable Health Care Act. Those on Medicaid do not pay income taxes. Most of those on Medicare do pay income taxes such that the sources of error in estimating the number of others who will actually claim subsidies under the Affordable Health Care Act is probably impossible to estimate within a 10 million range of error or more.

    The enormous source of error that cannot be eliminated is that $2 trillion underground cash-only economy that takes place under the noses of the IRS enforcers of taxes.


    "Obamacare Leaves Doctors On the Hook for Deadbeats: The Affordable Care Act doles out three months of free health care to individuals who choose to default on their premiums; providers and insurers pick up the tab," by Tori Richards, Reason.com, November 7, 2013 ---
    http://reason.com/archives/2013/11/09/obamacare-leaves-doctors-on-the-hook-for

    Tucked inside nearly 11,000 pages of the Affordable Care Act is a little-known provision that doles out three months of free health care to individuals who choose to default on their premiums.

    People who receive the federal subsidy to be part of Obamacare will be allowed to incur a three-month “grace period” if they can’t pay their premiums and then simply cancel their policies, stiffing the doctors and hospitals.

    Their only repercussion is that they have to wait until the following year’s open enrollment if they want coverage on the exchange.

    “It will help break the system,” said Rep. Louie Gohmert, R-Texas, one of a core group of Republicans who oppose Obamacare. “This is a huge piece of evidence to show this can’t work, you will break the system and bankrupt people involved.

    “The hospitals, doctors and insurance companies will be left holding the bag. There will be disagreements over who will pay for what. Lawyers will get involved because we are talking about a lot of money,” he said.

    Under Section 156.270 of the Affordable Care Act, the insured needs to pay a premium for just one month before qualifying for the three-month grace period. The insurance company must pay the claims during the first month of the grace period; during the second and third month doctors and hospitals are left to collect unpaid bills.

    This loophole wasn’t lost on some unnamed individuals who queried the Department of Health and Human Services during an open comment period for the new law in 2011.

    While officials at HHS did not respond to requests for comment on this story, they did offer a glimpse into their thinking in a March 27, 2012, report contained in the Federal Register.

    “HHS will continue to explore options for incentivizing appropriate use of the grace period,” the register said.  “HHS will monitor this issue moving forward and will continue to work on the development of policies to prevent misuse of the grace period.”

    Experts say the federal government has given people the green light to commit fraud.

    “In a sense, it legalizes fraud,” said Wesley J. Smith, a senior fellow at the Discovery Institute of Human Exceptionalism and a frequent critic of the Affordable Care Act. “It legalizes putting your burdens on the insurance companies’ shoulders and never paying your premiums. The government wants people to be irresponsible and apparently they want the whole system to descend into chaos.”

    In Massachusetts, where a variation of Obamacare already exists, the problem already has emerged, said Devon Herrick, senior fellow with the National Center for Policy Analysis.

    “People are signing up and getting care and bailing out,” Herrick said. “I was talking to an insurance agent a few years ago (in Massachusetts). She said once a week she would get a call from a college girl who discovers she’s pregnant and wants health insurance. That’s an example of a condition that you can schedule.”

    Some medical professionals are bracing themselves for the worst.

    The Texas Medical Association is educating its members about the loophole and receiving feedback from worried doctors. Many in that state operate on a shoestring budget, sometimes taking out loans to stay in business.

     

    November 10, 2013 reply from Bob Jensen

    Hi Bob
    Who picks it up now?
    Elliot

    November 10, 2013 reply from Bob Jensen

    I think that the patient eventually loses coverage for non-payment these days. If people, before Obamacare, could keep their coverage while not paying premiums what's the incentive to pay premiums?
     
    One time my wife fell out of a tree in San Antonio. The silly thing decided to cut a limb that she knew I had arranged for a tree service to remove the next day. She got impatient --- grrrr!  The North East Baptist Hospital (where she worked as an OR nurse before her back surgeries took command of her life)  was less than a block down the street. When I got home I took her to the ER down the street because I thought she needed X-rays. 
     
    To make a long story shorter, while we both were in the waiting room of the NE Baptist  Hospital ER an ambulance wheeled in patient on a stretcher who supposedly had a heart attack. The first thing the ER checked on was if he had insurance. He did not have insurance. Next a physician checked his vital readings. It was decided that he was stable enough to be put back in the ambulance with orders to take him to the huge downtown Bexar County Hospital  that had a contract with Bexar County to treat uninsured patients --- including many, many pregnant women who crossed the Rio Grande shortly before giving birth in the Bexar County Hospital.
     
    In another instance I know a neighbor woman who overdosed on pills and parked her car in the parking lot outside the NE Baptist Emergency Room. When she was discovered unconscious and needing her stomach pumped she was rushed by ambulance downtown to the Bexar County Hospital that saved her life and stole her purse --- a Bexar County Hospital ER nurse was caught later using this woman's  credit cards.
     
    That Elliot is what happens in a city if the patient has no medical insurance. Bob Jensen's Bexar County Property taxes included over a thousand dollars a year paid for uninsured to be treated in the Bexar County Hospital.

    The physicians and hospitals often do not treat uninsured patients through normal channels. They ship them off to "approved" hospitals that have tax-supported emergency rooms. The emergency rooms treat the patients who often endure the long waits of maybe a day in the waiting rooms unless there is a life-threatening emergency. The ER can eventually admit the patient to the hospital, and the hospital can take legal action to get what it can out of the uninsured patients.
     
    I don't know how this system will change for the uninsured under Obamacare.
    My guess is that the Bexar County Hospital will need more money to treat uninsured patients even though the insurance companies may have a somewhat harder time dumping customers who default on their premiums. An increasing number of babies born at the Bexar County Hospital will return south of the Rio Grande as USA Citizens thanks to the 14th  Amendment to the U.S. Constitution and the taxpayers of Bexar County.
     
    I'm not exaggerating when I say that a lot of people, including professors, who work in Bexar County reside outside the county just to save on property taxes. I don't mean to sound like a redneck, but that is the way it works. Many of us also lived in Bexar County and paid higher taxes thinking that this was a fair thing to do.
     
    PS
    In Boston hospitals like the New England Baptist hospital where Erika had many of her spine surgeries dropped its ER service entirely so it was no use for ambulances to bring in emergency patients to New England Baptist Hospital. It would be too costly to treat dire emergencies pro bono without a contract with the City of Boston to pay for uninsured patients. I think most of Boston's ER patients are shipped to Mass. General Hospital supported by Boston's property owners.
     
    Respectfully,
     
    Bob Jensen

     

    November 10, 2013 reply from Elliot Kamlet

    OK.  So as we all know,  someone always pays. It seems like arguments can be made for different constituencies picking up the tab.   Frankly I don't know the most "fair" approach but is the new reality of who pays worse than what you just described we have now?

    November 11, 2013 reply from Bob Jensen

    The myth is that insurance companies pay for bad debt customers in the long run. As with all costs in the long run they are passed on to customers or taxpayers if the companies do not go bankrupt.
     
    I don't think Obamacare envisions letting its exchanges, most of whom are financed with new low-interest government loans, go bankrupt. So bad debts will be passed on somewhat with increased premiums to customers. However, the lion's share will eventually be charged to income taxpayers --- the 50% of taxpayers who actually pay some income taxes.
     
    Alternatively, the government will bypass taxpayers with more Treasury bond borrowing or simply print money through a complicated process we know as Quantitative Easing.
     
    Who pays in the long run with more government borrowing and printing of money to pay its bills? That's a no brainer.
     
    The difference between Obamacare and national health Insurance is that even the poor and the middle class are sharing in some of taxes collected to pay for their national health insurance. In the USA the 50% paying no income taxes are paying for the premium costs net of premium subsidies.

    However, where non-Medicaid patients are getting hit hardest is in those deductibles that may ruin Obamacare unless taxpayers shovel in more to reduce those deductibles.
     

    Plan Type

    Select the metal levels you prefer.

    Bad debt expenses, premiums, premium subsidies, and deductible expenses are four things.

    The biggest "thing" will be the millions that remain uninsured who turn up at hospital ERs with no insurance after Obamacare is in full force. My understanding is that local property taxpayers will still pay the lion's share of those ER services, although some of the non-reimbursed expenses will be passed on to paying patients just like they are today. This a major reason why hospital rooms costing less than $50 per day when I was a kid are now well over $1,000 per day and going up and up and up.

    Respectfully,
    Bob Jensen


    Saving Our Top Medical Schools
    "Saving Academic Medicine from Obsolescence," by Benjamin P. Sachs, Ralph Maurer, Steven A. Wartman and Marc J. Kahn, Harvard Business Review Blog, November 8, 2013 ---
    http://blogs.hbr.org/2013/11/saving-academic-medicine-from-obsolescence/

    The United States spent 17.9% of the GDP on healthcare in 2012. Academic medicine, which makes up, approximately, 20% of these costs ($540 billion), is under profound threat. Teaching hospitals and medical schools are faced with declining clinical revenue, dwindling research dollars and increasing tuition costs. To meet these challenges, we believe academic medicine must embrace disruptive innovation in its core missions: educating the next generation of health professionals, offering comprehensive cutting-edge patient care, and leading biomedical and clinical research.  Medical schools and academic health centers will need to significantly adapt in each of these areas in order to ensure the long-term health of the medical profession. The following are a few examples of disruptive innovations Tulane School of Medicine has embraced.         

    Medical information doubles roughly every five years, making it impossible for physicians to stay current. Computing power has also increased to the point that machines like IBM’s Watson, first programed to play chess and Jeopardy, are now used to diagnose and recommend treatment for patients.  Mary Cummings, one of the first women aviators to land a plane on an aircraft carrier, faced a similar situation when she left the navy; a computer was replacing many of the skills she had acquired in order to fly.  Today, as the Director of the Human and Automation Lab at MIT, she poses an important and related question: “Are we in Medicine teaching the next generation of physicians skills or are we teaching them expertise?”  If we are teaching the former, then academic medicine faces obsolescence. However, if we emphasize the latter, our mission is durable. Skills equip people to respond to specific well-understood circumstances; expertise provides the capability to respond to highly complex, dynamic and uncertain environments.

    At Tulane University School of Medicine, we believe that the focus of medical education should be on how we teach; because what we teach will be largely out of date by the time students finish their training. The expertise required for the next generation of physicians is to be lifelong learners, team players, educators and problem solvers. We teach expertise through an “inverted” learning model. Students are expected to have reviewed the subject material before class. During class-time the students work in small groups to solve problems and explain to their colleagues issues they did not understand. Master teachers are still needed to facilitate students’ synthesis of material in a collaborative discussion-oriented environment, but this structure has the advantage of allowing investment in the areas where hands-on teaching adds value while providing cost savings in the areas where it does not. The organization that is likely to play a major role in providing on-line medical education is the Kahn Academy under Dr. Rishi Desai. A newly established three and a half year program for medical students with PhDs in the biomedical sciences leverages these adult learning principles. This program shortens the time to get a degree and so reduces the cost of tuition.

    Business models for patient care, a key source of revenue for medical schools, are also undergoing enormous change. Driven by the need to lower costs, and aided by new technologies, patient care is moving from the hospital to the outpatient setting and ultimately to wherever the patient happens to be located.  For example, when the ACA (Affordable Care Act) is fully implemented in 2014 with a substantial increase in Medicaid recipients, the need for more primary care, as experienced in Massachusetts, will overwhelm the available capacity to provide such care.

    One solution to this problem is moving the majority of primary and secondary healthcare delivery into the community.  After Hurricane Katrina, Tulane partnered with a network of Federally Qualified Health Centers in order to provide services to low and middle-income patients in community-based clinics designated as medical homes. These not only provide less expensive care, but also provide the kind of experiential learning necessary to teach expertise to trainees.  Expansion into telemedicine, which has been shown to reduce the cost of Medicaid in California and has had a dramatic impact in the United Kingdom on patients with diabetes, heart failure, and chronic obstructive pulmonary disease, will further reduce costs while improving the quality of care.

    Yet another driver of disruption in academic medicine is the changing nature of how research is performed.  It has been estimated that for every research grant dollar received by an academic health center, the institution must spend an additional 25 to 40 cents to support that research.  Given declining clinical revenues and the relative flattening of the NIH budget, the ability to garner research funding is increasingly competitive and difficult to sustain. For most medichttp://faculty.trinity.edu/rjensen/HigherEdControversies.htmal schools, this makes traditional research models inefficient and some institutions that have traditionally been primarily research focused will have to change their emphases.

    An additional disruptive technology in research is using “big data,” large data sets that can be analyzed in distributed and cloud computing environments. In 2011, the 3-dimensional structure of a retrovirus protease was finally determined after eluding scientists for over a decade.  The configuration was not discovered by a computer, by a single scientist or even by a group of scientists working in a laboratory.  Rather, the structure was determined by a group of gamers working in the cloud with a program called Foldit that was developed by computer scientists at the University of Washington in only three weeks. The ability to collaborate without physical interaction using a variety of skill sets challenges the definition and funding models of research (not to mention who gets credit), but has vastly superior economies of scale.

    Continued in article

    Jensen Comment
    One thing about top university hospitals is that they are being overwhelmed with patients. I'm most familiar with the great Dartmouth (Hitchcock) University Hospital that serves New Hampshire and surrounding states, including Canada. Yes Canada since Canada's National Health plan might delay some elective surgeries (think new knees and hips) for months or even years. All hospitals, including Hitchcock, like Canadians who pay up front cash at full prices. 

    It seems to Erika and me that getting access to some of the Hitchcock's specialty services is getting harder and harder. One way of cutting down on demand is for those specialty departments (Ophthalmology, Dermatology, etc.) to insist upon referrals from doctors/hospitals and refusing patients who are not given strong referrals. And when you finally get in you may not see a full-qualified doctor. My wife has had great service from Cardiology and Ophthalmology and poor service from Gastrology where she never has been able to get access to a real MD.  Dermatology put off her appointment for seven months. The Orthopedics Department refused to do her spine surgeries --- which is how we ended up with a top surgeon in Boston. I forgive Hitchcock for this since no hospital, including a university hospital, can be expected to have a nationally-acclaimed surgeon in every department ---
    http://faculty.trinity.edu/rjensen/Erika2007.htm

    Erika spent a few nights in Hitchcock's hospital (after a heart attack) and was not impressed with that hospital relative to the New England Baptist Hospital in Boston and San Antonio's North East Baptist Hospital and several other hospitals in San Antonio. One problem at Hitchcock is the pod design that greatly increases the noise level in the patient rooms. It saves steps for the nurses but prevents patients from sleeping nights.

    Hopefully, we will never have to seek out psychiatric services from Dartmouth Hitchcock. That must be a nightmare given the increased demand amidst huge shortages of psychiatrists.

    Bob Jensen's threads on higher education controversies ---
    http://faculty.trinity.edu/rjensen/HigherEdControversies.htm


    One of the many real scandals of the Affordable Healthcare Act
    Most Obamacare exchange insurance companies offer inferior policies, many of which come from newly-formed sham insurance companies started up on shoe-string government loans --- companies without any prior experience in the insurance business or any other type of business. Guess who will get stuck with the bills when those poorly capitalized and inexperienced new "insurance" companies declare bankruptcy? This is really a no-brainer question.

    "Top Hospitals Opt Out of Obamacare," USA Today, October 30, 2013 ---
    http://health.usnews.com/health-news/hospital-of-tomorrow/articles/2013/10/30/top-hospitals-opt-out-of-obamacare

    Americans who sign up for insurance on the state exchanges may not have access to the nation's top hospitals, Watchdog.org reports.

    The Obama Administration has been claiming that insurance companies will be competing for your dollars under the Affordable Care Act, but apparently they haven't surveyed the nation's top hospitals.

    Americans who sign up for Obamacare will be getting a big surprise if they expect to access premium health care that may have been previously covered under their personal policies. Most of the top hospitals will accept insurance from just one or two companies operating under Obamacare.

    [CHART: Which Top Hospitals Take Your Insurance Under Obamacare?]

    "This doesn't surprise me," said Gail Wilensky, Medicare advisor for the second Bush Administration and senior fellow for Project HOPE. "There has been an incredible amount of focus on the premium cost and subsidy, and precious little focus on what you get for your money."

    Regulations driven by the Obama White House have indeed made insurance more affordable – if, like Health and Human Services Secretary Kathleen Sebelius, you're looking only at price. But responding to Obamacare caps on premiums, many insurers will, in turn, simply offer top-tier doctors and hospitals far less cash for services rendered.

    Watchdog.org looked at the top 18 hospitals nationwide as ranked by U.S. News and World Report for 2013-2014. We contacted each hospital to determine their contracts and talked to several insurance companies, as well.

    The result of our investigation: Many top hospitals are simply opting out of Obamacare.

    Chances are the individual plan you purchased outside Obamacare would allow you to go to these facilities. For example, fourth-ranked Cleveland Clinic accepts dozens of insurance plans if you buy one on your own. But go through Obamacare and you have just one choice: Medical Mutual of Ohio.

    And that's not because their exchanges don't offer options. Both Ohio and California have a dozen insurance companies on their exchanges, yet two of the states' premier hospitals – Cleveland Clinic and Cedars-Sinai Medical Center – have only one company in their respective networks.

    A few, like No. 1-rated Johns Hopkins in Maryland, are mandated under state law to accept all insurance companies. Other than that, the hospital with the largest number of insurance companies is University Hospitals Case Medical Center in Cleveland with just four. Fully 11 of the 18 hospitals had just one or two carriers.

    "Many companies have selectively entered the exchanges because they are concerned that (the exchanges) will be dominated by risky, high-using populations who wanted insurance (before Obamacare) and couldn't afford it," said Wilsensky, who is also on the board of directors of UnitedHealth. "They are pressed to narrow their networks to stay within the premiums."

    Consumers, too, will struggle with the new system. Many exchanges don't even list the insurance companies on their web sites. Some that do, like California, don't provide names of doctors or hospitals.

    The price differences among hospitals "can be pretty profound," said Joe Mondy, spokesman for Cigna insurance. "When you are doing a cost comparison with doctors, you should look up the quality of the hospital as well. Hospital 'Y' could be great at pediatrics and not great at surgery."

    Insurers operating in the exchanges are apparently hesitant to talk about the trade-off between price and quality. Two of the nation's largest insurers – Wellpoint and Aetna – refused to respond to a dozen calls and emails placed over the course of a week.

    Wellpoint and Aetna's decision to not educate the public on its choices doesn't sit well with two experts.

    "There is no reason to keep that quiet. It's not going to be a good secret for very long when people want to use the plans," Wilensky said.

    "In many cases, consumers are shopping blind when it comes to what doctors and hospitals are included in their Obamacare exchange plans," said Josh Archambault, senior fellow with the think tank Foundation for Government Accountability. "These patients will be in for a rude awakening once they need care, and get stuck with a big bill for going out-of-network without realizing it."

    All of this represents a larger problem with the Affordable Care Act, said Archambault, who has extensively studied the law.

    "It reflects deeper issues in implementation," he said. "Some hospitals and doctors don't even know if they are in the network."

    Just look at Seattle Children's Hospital, which ranks No. 11 on the U.S. News & World Report best pediatric hospital list. When Obamacare rolled out, the hospital found itself with just two out of seven insurance companies on Washington's exchange. The hospital sued the state's Office of Insurance on Oct. 4 for "failure to ensure adequate network coverage."

    Continued in article

    Jensen Comment
    Of course this is correctable when Congress forces all accredited hospitals to accept insurance receivables from exchange companies that are likely to go bankrupt. Or the Congress can guarantee the payments from these unstable startup companies. But try getting this legislation past the "defeated" Republicans in Congress.

    The only hope for Obamacare is probably in the hands of the American voters who might kill and bury the Republican Party in the 2014 and 2016 elections. Will the nation be better off with a one-party system? Probably so if you talk to most college professors.


    "Yes, People Are Losing Their Insurance Under Obamacare." by John Tozzi,  Bloomberg Businessweek, October 29, 2013 ---
    http://www.businessweek.com/articles/2013-10-29/yes-people-are-losing-their-insurance-under-obamacare?campaign_id=DN103013

    . . .

    The Affordable Care Act sets standards that private insurance companies must follow. Health plans must pay for at least 60 percent of their members’ medical costs on average. They also have to provide 10 areas of coverage, called essential health benefits, such as hospitalization, mental health treatment, and maternity care. Plans that don’t meet these standards generally can’t be sold after 2013, unless they’re grandfathered (more on that below). Insurers are ending these plans and pushing people to buy more comprehensive policies, some of which may also have higher premiums. For low- and middle-income people, the law provides subsidies to make health coverage more affordable.

    . . .

    What about “grandfathered” plans?
    Health plans that existed before Obamacare was passed in 2010 could avoid some of the new standards if they didn’t change much else. It’s up to insurers and employers to decide whether they want to keep offering so-called grandfathered plans. But plans that significantly increased what people have to pay or changed the benefits offered in the last three years would lose their grandfathered status, and they have to follow the new rules starting in 2014. The grandfather option also gives some political cover to the White House, because it puts the decision to terminate a plan on insurance companies, not the government.

    Continued in article


    "NBC News: "Obama Administration knew millions could not keep their health insurance," by Bob Beauprez, Townhall, October 30, 2013 ---
    http://finance.townhall.com/columnists/bobbeauprez/2013/10/30/nbc-news-obama-administration-knew-millions-could-not-keep-their-health-insurance-n1733175 

    When Obama repeatedly made the claim – "If you like your health plan; you can keep your health plan" – objective observers knew it wasn't so. This morning, the media is buzzing with evidence that Obama knew it was a lie, but deliberately kept spinning the same phony claim for years.

    The shock in all this is not that Obama was lying; he has a well established record of that. It's that somebody has uncovered the evidence; the smoking gun. The following is the NBC News account of the mess du jour for the White House and ObamaCare.

    Our sources deeply involved in the Affordable Care Act tell NBC NEWS that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a “cancellation” letter or the equivalent over the next year because their existing policies don’t meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience “sticker shock.”

    None of this should come as a shock to the Obama administration….

    Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, “40 to 67 percent” of customers will not be able to keep their policy. And because many policies will have been changed since the key date, “the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.”

    That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.

    Yet President Obama, who had promised in 2009, “if you like your health plan, you will be able to keep your health plan,” was still saying in 2012, “If [you] already have health insurance, you will keep your health insurance.”

    Continued in article


    Jensen Question
    Will the Affordable Health Care Act taxpayer subsidies also help with the deductibles?

    On television the other night a woman who succeeded in signing up for Obamacare said the only plan she could afford cost her $140 per month with a $13,500 deductible.

    I don't know if this is better or worse than she can get on the market these days, but this does not seem especially affordable to me unless she has substantial savings and very low probability of filing large claims.  I think the subsidy only helps with the $140 monthly payments and not the deductibles. I could be wrong about this. The bottom line is that the people who can least afford the premiums are even less able to afford the higher deductibles.

    Will the subsidies also help with the deductibles or do they only help her with her $140 monthly payments if she qualifies for a subsidy?

    Subsidies are available to an insured person or family making 0% to 400% of the government-defined poverty threshold of declared (not including underground) revenue. But people on Medicaid are not required to buy added medical insurance and are covered free of charge jointly by the federal and state governments.

    One of the purposes of the Affordable Health Care Act is to sign up people with mental illnesses and other chronic conditions or pre-conditions that are not presently covered for them in currently available medical insurance plans. It does not seem to me that plans with $13,500 deductible gives them much improvement unless they have access to income or savings to cover such huge deductibles. The Affordable Health Care medical insurance plan should have been a national health care plan from the start. Oh Canada!

    It's very hard to provide help with deductibles since those that choose higher deductibles so they can have lower premiums might unfairly be getting government help relative to those that pay higher monthly premiums to get lower deductibles.

    It's a bit analogous to a fast food restaurant that allows refills on small cups of soda. Why would any body who eats inside the restaurant pay more for a large cup of soda?

    On Piers Morgan Live Tuesday, guest Bill Maher openly admitted Obama “lied” about Americans keeping their insurance plans, but insisted that he had to because of unified Republican opposition—and the increasingly “stupider” American public
    http://www.truthrevolt.org//news/bill-maher-obama-had-lie-stupider-americans
    Does this mean lying is a remedy for stupidity?
    Actually, throughout history lying by a political candidate is rationalized if leads to one side's political goals? On occasion political leaders do believe or are led to believe their own lies which makes the lies less less onerous than intentional lying. A more common form of "lying" is to tell the truth without filling in some crucial assumptions. For example, President Obama claims that he told the truth about individuals keeping their former health insurance plans. What he left out was the part about the parts of the law that made many individual plans illegal because they did not cover such things as maternity and mental health. He knew that many plans would be revoked but failed to mention this in his promotional speeches before the law was passed.

    Another example of huge lies were those expounded by FDR, before Lend-Lease became official in 1941, about the USA's neutrality in the earliest days of WW II. In the eyes of President Roosevelt a majority of Americans were just too stupid to realize the global threat of the Third Reich.

    The problem with lying to stupid people is that they don't always remain stupid enough over time to believe it when a liar later on when he or she is telling the truth or lying. They just don't believe most anything coming out of the mouth of a liar. Then again many people believe what they want to believe and deny what they want to deny. We no longer value truth and integrity in our political leaders. We only cheer when the other guy's oxen get gored to put meat on our table

     

    Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


    "Tax Realities for Self-Employed Who Get Obamacare Subsidies," by Karen E. Klein, Bloomberg Businessweek, October 10, 2013 ---
    http://www.businessweek.com/articles/2013-10-10/tax-realities-for-self-employed-who-get-obamacare-subsidies 


    From the CFO Journal's Morning Ledger on October 15, 2013

    Some small businesses are finding that if they don’t have a handle on the health-care law’s cost and impact, they may have a harder time getting a loan, Maxwell Murphy reports on CFOJ. To qualify for some loans, especially for growth capital, more companies are being required to provide assurances that they will be in compliance with the law by 2015. “To raise capital, if you’re in a growth mode, you want a [CFO] who exudes credibility,” says Christian Oberbeck, CEO of the lender Saratoga Investment.

    Among the small businesses that will be affected by the law, a survey of roughly 1,300 executives this summer by the U.S. Chamber of Commerce found just 30% said they were ready to comply. About 27% said they would cut hours to reduce full-time employees and 23% planned to replace full-time workers with part-timers. Those options might not help their loan applications, Mr. Oberbeck says, because firing workers and cutting hours can damage a business. He also says he would question a business plan that risks running afoul of the spirit of the law.

    Executives weighing their options also might have to wait awhile for any relevant data to come from the new public health-care exchanges created by the law. The exchanges have been beset by glitches and other problems, at both the federal and state levels. “It’s tougher to lend money to those companies until we see how the ACA will play through,” says Art Penn, managing partner at PennantPark Investment Advisers, a middle-market lender.


    From the CFO Journal's Morning Ledger on October 15, 2013

    Opening the Black Box: Five Questions for Your Tax Executive

    The complexities of federal, international, state and other taxes often leave CFOs wanting to deal with the tax function at arm's length. Doing so, though, may increase finance risk and dilute the value the tax function can bring. CFOs' discussions with tax executives should be more frequent, focused and strategic, and the place to start is by engaging them in targeted conversations, from succession planning to technology to compliance processes.

    Read More at CFO Journal »

     


    "Providing High-Quality Health Care to Americans Should Trump Politics," by Gregory Curfman and Stephen Morrissey, Harvard Business Review Blog, Harvard Business Review Blog, October 1, 2013 ---
    http://blogs.hbr.org/2013/10/providing-high-quality-health-care-to-americans-should-trump-politics/

    Jensen Comment
    Like it or not government and politics of government are at the heart and center of rationing most scarce essential goods and services as well as protecting the quantity and quality of non-scarce resources.

    Inequities are likely to arise when health care is is rationed by market pricing. However, scarce medical care services and medications will have inequities under any other rationing system.

    Your statement leads to the classic question of how very scarce goods and services can be rationed in ways other than market pricing. For example, socialism is replete with examples where health care is rationed according to power with the socialist party elite receiving the best health care available while the masses receive pretty lousy health care as in Cuba today and the Soviet Union in history.

    The fact of the matter is that scarce goods and services would not be "scarce" if they did not have to be rationed in some way. Socialist economist Oskar Lange proposed an economic theory that prices to ration scarce goods and services could be derived in the absence of markets --- http://en.wikipedia.org/wiki/Oskar_Lange 

    The fact of life is that scarce goods and services must be rationed by some means whatever the political and economic system. In nationalized health care systems like Canada the access to critical life saving services is available to virtually everybody, but access to elective surgeries for things like knee replacements may be delayed for months or years, thereby forcing Canadians to suffer in pain a very long time relative to the millions who have received rather speedy replacements in the USA.

    In England the national health play a few decades ago would not pay for kidney dialysis of older people. For many who cannot otherwise afford dialysis this is a prescription of death by age rationing. Rationing improved somewhat in recent years, but providing dialysis and kidney transplants is still problematic in most of Europe. The U.S. Provides twice as many kidney transplants per million people.

    In the USA it's not just the wealthy who receive speedy knee replacements.Rather low-waqe professors and factory workers get such replacements rather quickly and from the best surgeons if their employers provide health insurance to supplement low wages. But the high price for such insurance coverage must be borne by all members of the insurance plan.

    The very poor on Medicare and Medicaid can also get new knees rather quickly.

    The problem in the present health insurance system is that there are too many uninsured.who are not poor enough for Medicaid, not old or disabled enough for Medicare, and are either unemployed or their employers do not pay for health coverage. The main goal of the Affordable Health Care Act is to remedy that inequity. But much of the cost will be borne by taxpayers since the providers of scarce medical services and medications are still going to command high prices and the uninsured will not be able to afford decent health insurance unless it is heavily subsidized by employers and/or taxpayers.

    Market rationing may be imperfect for health care, but every other alternative known to mankind is also inequitable in some way for scarce medical services and medications. The countries having the best of both worlds are typically those nations with gazillions in oil revenues (e.g., Norway and Kuwait), small populations that are not poor (e.g., Switzerland), and nations without low income minorities to abuse (e.g., Finland and Denmark)..


    "The Business End of Obamacare," by James Surowiecki, The New Yorker, October 14, 2013 ---
    http://www.newyorker.com/talk/financial/2013/10/14/131014ta_talk_surowiecki

    Of the countless reasons that congressional Republicans hate the Affordable Care Act enough to shut down the government, the most politically potent is the claim that it will do untold damage to the economy and cripple small companies. Orrin Hatch has said that Obamacare will be “devastating to small business.” Ted Cruz argues that it is already “the No. 1 job killer.” And the vice-president of the National Federation of Independent Businesses called it simply “terrible.” So it comes as some surprise to learn that Obamacare may well be the best thing Washington has done for American small business in decades.

    The G.O.P.’s case hinges on the employer mandate, which requires companies with fifty or more full-time employees to provide health insurance. It also regulates the kind of insurance that companies can offer: insurance has to cover at least sixty per cent of costs, and premiums can’t be more than 9.5 per cent of employees’ income. Companies that don’t offer insurance will pay a penalty. Republicans argue that this will hurt companies’ profits, forcing them to stop hiring and to cut workers’ hours, in order to stay below the fifty-employee threshold.

    The story is guaranteed to feed the fears of small-business owners. But the overwhelming majority of American businesses—ninety-six per cent—have fewer than fifty employees. The employer mandate doesn’t touch them. And more than ninety per cent of the companies above that threshold already offer health insurance. Only three per cent are in the zone (between forty and seventy-five employees) where the threshold will be an issue. Even if these firms get more cautious about hiring—and there’s little evidence that they will—the impact on the economy would be small.

    Meanwhile, the likely benefits of Obamacare for small businesses are enormous. To begin with, it’ll make it easier for people to start their own companies—which has always been a risky proposition in the U.S., because you couldn’t be sure of finding affordable health insurance. As John Arensmeyer, who heads the advocacy group Small Business Majority, and is himself a former small-business owner, told me, “In the U.S., we pride ourselves on our entrepreneurial spirit, but we’ve had this bizarre disincentive in the system that’s kept people from starting new businesses.” Purely for the sake of health insurance, people stay in jobs they aren’t suited to—a phenomenon that economists call “job lock.” “With the new law, job lock goes away,” Arensmeyer said. “Anyone who wants to start a business can do so independent of the health-care costs.” Studies show that people who are freed from job lock (for instance, when they start qualifying for Medicare) are more likely to undertake something entrepreneurial, and one recent study projects that Obamacare could enable 1.5 million people to become self-employed.

    Even more important, Obamacare will help small businesses with health-care costs, which have long been a source of anxiety. The fact that most Americans get their insurance through work is a historical accident: during the Second World War, wages were frozen, so companies began offering health insurance instead. After the war, attempts to create universal heath care were stymied by conservatives and doctors, and Congress gave corporations tax incentives to keep providing insurance. The system has worked well enough for big employers, since large workforces make possible the pooling of risk that any healthy insurance market requires. But small businesses often face so-called “experience rating”: a business with a lot of women or older workers faces high premiums, and even a single employee who runs up medical costs can be a disaster. A business that Arensmeyer represents recently saw premiums skyrocket because one employee has a child with diabetes. Insurance costs small companies as much as eighteen per cent more than it does large companies; worse, it’s also a crapshoot. Arensmeyer said, “Companies live in fear that if one or two employees get sick their whole cost structure will radically change.” No wonder that fewer than half the companies with under fifty employees insure their employees, and that half of uninsured workers work for small businesses or are self-employed. In fact, a full quarter of small-business owners are uninsured, too.

    Obamacare changes all this. It provides tax credits to smaller businesses that want to insure their employees. And it requires “community rating” for small businesses, just as it does for individuals, sharply restricting insurers’ ability to charge a company more because it has employees with higher health costs. And small-business exchanges will in effect allow companies to pool their risks to get better rates. “You’re really taking the benefits that big companies enjoy, and letting small businesses tap into that,” Arensmeyer said. This may lower costs, and it will insure that small businesses can hire the best person for a job rather than worry about health issues.

    Continued in article

    Jensen Comment
    The New Yorker is a liberal (er progressive) magazine that generally backs anything said or done by President Obama. But The New Yorker was also among the first magazines to warn of deceptions early on in the Affordable Health Care Act.

    Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.
    John Cassidy, The New Yorker, March 2010

    Fuzzy CBO Accounting Tricks
    "ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---
    http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

    This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.

    EXPRESS:

    The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.

    The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.

    The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.

    Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.

    LOCAL:

    For future reference (or possibly to roll up and beat myself over the head with in my dotage) I have filed away a copy the latest analysis (pdf) of health-care reform from the Congressional Budget Office. By 2019, it says, the bills passed by the House and Senate will have cut the number of uninsured Americans by thirty-two million, raised the percentage of people with some form of health-care coverage from eighty-three per cent to ninety-four per cent, and reduced the federal deficit by a cumulative $143 billion. If all of these predictions turn out to be accurate, ObamaCare will go down as one of the most successful and least costly government initiatives in history. At no net cost to the taxpayer, it will have filled a gaping hole in the social safety net and solved a problem that has frustrated policymakers for decades.

    Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.

    The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.

    The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”

    Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.

    My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.

    Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.

    Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)

    If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”

    So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.

    The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.

    Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)

    In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.

    Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.

    The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.

    The C.B.O.’s analysis can’t be dismissed out of hand, but it is surely a best-case scenario. Again, I come back to where I started: the scale of the subsidies on offer for low and moderately priced workers. If economics has anything to say as a subject, it is that you can’t offer people or firms large financial rewards for doing something—in this case, dropping their group coverage—and not expect them to do it in large numbers. On this issue, I find myself in agreement with Tyler Cowen and other conservative economists. Over time, the “firewall” between the existing system of employer-provided group insurance and taxpayer-subsidized individual insurance is likely to break down, with more and more workers being shunted over to the public teat.

    At that point, if it comes, politicians of both parties will be back close to where they began: searching for health-care reform that provides adequate coverage for all at a cost the country can afford. What would such a system look like? That is a topic for another post, but I don’t think it would look much like Romney-ObamaCare.  

    Read more: http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html#ixzz0jrFSFK3j


     

     



    September 30. 2013

    "Germany Is Exporting Its Grandmas (to Poland)," by Naomi, Kresge, Bloomberg Business Week, September 26, 2013 ---
    http://www.businessweek.com/articles/2013-09-26/germany-exports-its-seniors-to-nursing-homes-abroad

    Jensen Comment
    Canada's approach to elderly grandmas who are only slightly impaired is to haul. at taxpayer expense, in portable Granny Cabins behind the homes of their children. When the time comes when Granny is no longer able to care for herself adequately in her Granny Cabin the cabin is hauled off for another grandma. I don't know if the same applies to a Grandpa Cabin, but I suspect the program is gender neutral. Usually grandpa kicks the bucket before grandma.

    In the USA Medicare does not pay for nursing home care or Grandma Cabins. The only patients who get taxpayer-funded nursing home care are the very poor on Medicaid. Most nursing care in the USA is funded by family savings until the patients become so ill that hospitalization is required. A major Medicare expense is keeping terminally ill people alive in hospitals, often in intensive care units costing over $10,000 per day. No other nation spends as much keeping terminally ill patients artificially live on machines.

    On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
    "The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/   

    On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
    "The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/   


    It's becoming chaos in the labor market as Obamacare deadlines approach. I certainly do not advocate ending or defunding the Affordable Health Care Act. But some delays may be desirable in order to stop the epidemic of conversion of full-time workers to part-time workers and the epidemic of dropping employer health insurance coverage.
     
    We should legislate greater penalties for companies and non-profit organizations who drop employee medical insurance coverage.
     
    We should also legislate greater penalties for individuals who simply opt out of health insurance. This will become an epidemic leading to long lines for medical services at emergency rooms and inferior health care as more and more hospitals simply close their emergency rooms.

    From the CFO Journal's Morning Ledger on September 26, 2013

    Companies drop cheapest health plans. The U.S. arm of Sweden’s Securitas plans to discontinue its lowest-cost health plans and steer roughly 55,000 workers to new government-sponsored insurance exchanges for coverage next year, in the latest sign of the fraying ties between employment and health care, writes the WSJ’s Scott Thurm. Securitas is among more than 1,200 employers that offer the kind of bare-bones health plans that must be phased out beginning Jan. 1. Nearly four million people are enrolled in these so-called mini-med plans, which cap benefits to participants, sometimes at as little as $3,000 a year. Other big employers, including Darden Restaurants, Home Depot and Trader Joe’s will stop offering health insurance to part-time workers, and will direct those employees to the state exchanges. Darden, Home Depot and Trader Joe’s previously offered mini-meds to their part-timers.

    From the CFO Journal's Morning Ledger on September 11, 2013

    CFOs are relying more on part-time workers
    That’s partly due to the looming rollout of the Affordable Care Act, but it’s also a reaction to lingering uncertainty about the economy,
    according to the latest Duke University/CFO Global Business Outlook Survey. The third-quarter survey findings were pretty positive overall, though the U.S. Business Optimism Index edged down to 58 on a scale of zero to 100 after shooting above 60 in Q2. In a nutshell: Profits are expected to jump by more than 10%, capital spending is seen rising by nearly 5% and full-time employment is anticipated to increase by 2%. And 59% of CFOs say they’ve increased the proportion of their workforce made up of temporary and part-time workers or shifted toward outside advisers and consultants.

    Among the companies making that shift, 38% say it’s due to health-care overhaul, while 44% say it’s down to extreme economic uncertainty. “Another trend that is affecting the growth in domestic employment is the hiring by U.S.-based companies of full-time employees in foreign countries,” says John Graham, professor of finance at Duke Fuqua School of Business and director of the survey. “More than one in four U.S. CFOs say their firms have hired full-time employees in other countries, and that number is expected to accelerate.” (Prof. Graham discusses the findings in this video.)

     

    From the CFO Journal's Morning Ledger on September 4, 2013

    A new approach to health-care benefits is gaining momentum ahead of the Affordable Care Act rollout. A growing number of employers plans to give workers a fixed sum of money and let them choose a plan from an online marketplace, the WSJ’s Anna Wilde Matthews reports.

    More health-industry players are launching such private exchanges, which are separate from the government-operated marketplaces being created in each state. And insurers are creating their own versions. Aetna plans to launch a “proprietary” marketplace model next year. WellPoint already has one, and UnitedHealth Group‘s Optum health-services arm owns an exchange operator.

    Sears Holdings and Darden Restaurants adopted this approach last year. The idea has been gaining the most traction among small and midsize employers, but interest is growing among companies of all sizes, Matthews writes. Bob Evans Farms, which owns about 560 restaurants and has about 34,000 employees including part-timers, will start directing workers to an exchange from Xerox's Buck unit that’s set to launch next January.

    From the CFO Journal's Morning Ledger on August 22, 2013

    Health-care law fuels part-time hiring
    U.S. businesses are hiring, but three out of four of the nearly one million hires this year are part-time and many of the jobs are low-paid, writes Reuters’s Lucia Mutikani.
    Executives at several staffing firms told Reuters that the Affordable Care Act, which requires employers with 50 or more full-time workers to provide health-care coverage, was a frequently cited factor in requests for part-time workers. A memo that leaked out from retailer Forever 21 last week showed it was reducing a number of full-time staff to positions where they will work no more than 29.5 hours a week, just under the law’s threshold. “They have put some of the full-time positions on hold and are hiring part-time employees so they won’t have to pay out the benefits,” said Client Staffing Solutions’ Darin Hovendick. “There is so much uncertainty. It’s really tough to design a budget when you don’t know the final cost involved.”

     


    "Prices Set for New Health-Care Exchanges Younger Buyers May Face Higher Insurance Premiums," by Louise Radnofsky, The Wall Street Journal, September 25, 2013 ---
    http://online.wsj.com/article/SB10001424052702303983904579095731139251304.html?mod=djemCFO_h

    U.S. officials for the first time disclosed insurance prices that will be offered through new federally run health-care exchanges starting Oct. 1, showing that young, healthy buyers likely will pay more than they do currently while older, sicker consumers should get a break.

    The plans, offered under the health-care overhaul to people who don't get insurance through an employer or government program, in many cases provide broader coverage than current policies.

    Costs will vary widely from state to state and for different types of consumers. Government subsidies will cut costs for some lower-income consumers.

    Across the country, the average premium for a 27-year-old nonsmoker, regardless of gender, will start at $163 a month for the lowest-cost "bronze" plan; $203 for the "silver" plan, which provides more benefits than bronze; and $240 for the more-comprehensive "gold" plan.

    But for some buyers, prices will rise from today's less-comprehensive policies. In Nashville, Tenn., a 27-year-old male nonsmoker could pay as little as $41 a month now for a bare-bones policy, but would pay $114 a month for the lowest-cost bronze option in the new federal health exchanges. More

    Shutdown Unlikely to Hit Health Law's Rollout

    Likewise, the least-expensive bronze policy would rise to $195 a month in Philadelphia for that same 27-year-old, from $73 today. In Cheyenne, Wyo., the lowest-cost option would be $271 a month, up from $82 today.

    The Affordable Care Act marks a fundamental shift in the way insurers price their products. Carriers won't be allowed to charge higher premiums for consumers who have medical histories suggesting they might be more expensive to cover because they need more care. They will have to treat customers equally, with limited variation in premiums based on buyers' ages or whether they smoke.

    Insurers also will have to offer a more generous benefits package that includes hospital care, preventive services, prescription drugs and maternity coverage.

    For consumers used to skimpier plans—or young, healthy people who previously enjoyed attractive rates—that could mean significantly higher premiums.

    The benefits are greater for people who previously were rejected for coverage because they were ill, or who were charged higher premiums. They are expected to find better coverage through the exchanges for the first time.

    The concern for supporters of the law, and the administration, is whether enough healthy people sign up to balance the likely higher costs incurred by the sick and newly covered.

    The data, which the administration was set to release Wednesday, cover 36 states where the federal government is operating insurance exchanges because state officials have declined to do so themselves. Fourteen states are operating exchanges on their own.

    The Obama administration called the rates a good deal for consumers.

    "The prices are affordable," said Gary Cohen, a top regulator at the Department of Health and Human Services.

    "Because of the Affordable Care Act, the health insurance that people will be buying will actually cover them in the case of them getting sick. It doesn't make sense to compare just the number the person was paying, you have to compare the value people are getting," Mr. Cohen added.

    Critics of the health law long have argued that the price changes represent a dramatic increase in premiums, and Senate Republicans repeated those arguments during a floor debate Tuesday.

    "Obamacare hasn't even been fully implemented yet, but we can already see the train wreck headed our way. Premiums are skyrocketing," said Senate Minority Leader Mitch McConnell (R., Ky.).

    Republicans are trying to repeal the law and have tied the issue to a bill to extend government funding beyond the Sept 30 end of the fiscal year. Sen. Ted Cruz (R., Texas) spoke on the Senate floor for hours into Tuesday night in what he said was a battle to block the law from taking effect.

    Continued in article

    Jensen Comment
    In my opinion we would be far better off if Congress had passed a national health insurance plan back in 2009 when the Democrats controlled the legislative and executive branches of Federal government. Instead we are left with a mess where the largest medical insurance companies are avoiding the state insurance exchanges. In some states there's almost no pricing competition such as in West Virginia where only one company offers the exchange insurance for individuals.

    An enormous problem is that both profit and non-profit organizations, including government agencies, are dropping their employee medical insurance plans and/or are shifting more and more into use of part-time workers. Many like Walgreen will instead offer cash allowances to full-time employees and force all employees to shop for their own medical insurance. There will be differences what employees are charged in the various states. I don't know that Walgree and the other companies will make allowances for state pricing differentials.

    Many young people benefit by being able to remain on the plans of their parents until age 26. High medical risk patients will have access that previously was denied or very high priced from insurance companies. Taxpayers will be paying for more poor people not eligible for Medicaid, although many states have resisted expanding their Medicaid roles.

    Meanwhile the U.S. Congress will keep its free gold-plated medical insurance for lifetime coverage of current and former legislators. Too bad legislators can legislate the Affordable Health Care act without having to participate in that act.

    Hopefully, health care in the USA will not be thrown entirely into chaos by failing to fund Obamacare at this late date. It would probably be best, however, if we could somehow adopt a national health care plan better than the one in Canada (which varies between provinces).


    From the CFO Journal's Morning Ledger on September 19, 2013

    Big insurers skip health exchanges
    When the consumer marketplaces for insurance go live Oct. 1, don’t expect to see much of familiar names like Cigna or Aetna, writes the WSJ’s Timothy W. Martin. The
    biggest health insurers are eschewing many of the exchanges out of concern that many of the individuals who will purchase coverage need it because they have chronic illnesses or other medical conditions that are expensive to treat. Their expected absence creates an opening for small regional players such as Molina Healthcare, Centene and Magellan Health Services to grab market share across multiple states in the rollout of the new federal health law.

    Jensen Comment
    Only one company will participate in West Virginia’s new individual health insurance marketplace.Media outlets report that Highmark Blue Cross Blue Shield and Carelink/Coventry applied and were accepted to participate in the individual marketplace. But Carelink/Coventry later decided to withdraw ---
    http://times-news.com/local/x789528391/Insurance-market-in-W-Va-will-have-one-company

    "Insurance market in W.Va. will have one company Carelink/Coventry withdraws leaving Highmark Blue Cross Blue Shield," Associated Press, Cumberland Times-News, September 12, 2013 ---
    http://times-news.com/local/x789528391/Insurance-market-in-W-Va-will-have-one-company 

    Only one company will participate in West Virginia’s new individual health insurance marketplace.

    Media outlets report that Highmark Blue Cross Blue Shield and Carelink/Coventry applied and were accepted to participate in the individual marketplace. But Carelink/Coventry later decided to withdraw.

    “We came to this decision (not to participate in the marketplace) as part of our ongoing review of Aetna’s overall company strategy, including the impact of the Coventry acquisition which closed in May, after the original exchange filings were submitted for both companies,” Walt Cherniak, a spokesman for Aetna, Carelink/Coventry’s parent company, told the Charleston Gazette.

    “We are taking a measured, multi-year approach to exchanges. In 2014 we are focusing on the markets where we can be most competitive and deliver the greatest value to our customers,” Cherniak said.

    Highmark plans to offer 11 different plans in the individual market and four plans in the state’s small business marketplace, the Charleston Daily Mail reported.

    “We do intend to make good on our commitment to continue to participate. We’ll be there and enrolling people in the West Virginia plan,” Highmark CEO William Winkenwerder said in a conference call Wednesday.

    The health insurance marketplace is part of the Affordable Care Act. Enrollment begins Oct. 1. Coverage will begin Jan. 1, 2014.

    Perry Bryant, executive director of West Virginians for Affordable Health Care, said that he hopes more companies over time will participate in the marketplace.

    “If we had more competition, you’d probably see more competitive premiums. Nobody knows what the premiums are yet, but will there be affordable prices despite lack of competition? We just don’t know yet,” Bryant said.


    "Preventive health services with no deductible qualify as high-deductible health plans," by Sally P. Schreiber, Journal of Accountancy, September 10, 2013 ---
    http://www.journalofaccountancy.com/News/20138694.htm


    From the CFO Journal's Morning Ledger on September 18, 2013

    Walgreen is joining the ranks of big companies shaking up their health-care benefits. The drugstore chain today is expected to unveil a plan to provide payments to eligible employees for the subsidized purchase of insurance starting in 2014, the WSJ reports. The plan will affect roughly 160,000 employees, and will require them to shop for coverage on a private health-insurance marketplace.

    It isn’t clear how much money the move might ultimately save Walgreen or whether its workers will face higher costs. Mark Englizian, Walgreen’s vice president of compensation and benefits, said the submitted bids for monthly premiums for the private exchanges were roughly equal to its current 2013 rates—meaning some savings could come from the fact the bids didn’t factor in year-over-year increases.

    But it’s another example of how dramatically the insurance landscape is shifting ahead of the rollout of the Affordable Care Act. IBM and Time Warner are both planning to move thousands of retirees from their own company-administered plans to private exchanges. Sears and Darden Restaurants said last year they would send employees to a private exchange. And last month, UPS said it would end benefits for 15,000 employee spouses who are able to get coverage through their own employers. By 2017, nearly 20% of American workers could get their health insurance through a private exchange, according to Accenture Research. And a recent report by the National Business Group on Health said that 30% of large employers are considering moving active employees to exchanges by 2015, Reuters notes.

     


    "Labor Unions: Obamacare Will 'Shatter' Our Health Benefits, Cause 'Nightmare Scenarios'," by Avik Roy, Forbes, July 15, 2013 ---
    http://www.forbes.com/sites/theapothecary/2013/07/15/labor-leaders-obamacare-will-shatter-their-health-benefits-cause-nightmare-scenarios/

    Labor unions are among the key institutions responsible for the passage of Obamacare. They spent tons of money electing Democrats to Congress in 2006 and 2008, and fought hard to push the health law through the legislature in 2009 and 2010. But now, unions are waking up to the fact that Obamacare is heavily disruptive to the health benefits of their members.

    Last Thursday, representatives of three of the nation’s largest unions fired off a letter to Harry Reid and Nancy Pelosi, warning that Obamacare would “shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”

    The letter was penned by James P. Hoffa, general president of the International Brotherhood of Teamsters; Joseph Hansen, international president of the United Food and Commercial Workers International Union; and Donald “D.” Taylor, president of UNITE-HERE, a union representing hotel, airport, food service, gaming, and textile workers.

    “When you and the President sought our support for the Affordable Care Act,” they begin, “you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat…We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision. Now this vision has come back to haunt us.”

    ‘Unintended consequences’ causing ‘nightmare scenarios’

    The union leaders are concerned that Obamacare’s employer mandate incentivizes smaller companies to shift their workers to part-time status, because employers are not required to provide health coverage to part-time workers. “We have a problem,” they write, and “you need to fix it.”

    “The unintended consequences of the ACA are severe,” they continue. “Perverse incentives are causing nightmare scenarios. First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.”

    What surprises me about this is that union leaders are pretty strategic when it comes to employee benefits. It was obvious in 2009 that Obamacare’s employer mandate would incentivize this shift. Why didn’t labor unions fight it back then?

    Regulations will ‘destroy the very health and wellbeing of our members’

    The labor bosses are also unhappy, because of the way Obamacare affects multi-employer health plans. Multi-employer plans, also called Taft-Hartley plans, are health insurance benefits typically arranged between a labor union in a particular industry, such as restaurants, and small employers in that industry. About 20 million workers are covered by these plans; 800,000 of Joseph Hansen’s 1.3 million UFCW members are covered this way.

    Taft-Hartley plans, they write, “have been built over decades by working men and women,” but unlike plans offered on the ACA exchanges, unionized workers will not be eligible for subsidies, because workers with employer-sponsored coverage don’t qualify.

    Obamacare’s regulatory changes to the small-group insurance market will drive up the cost of these plans. For example, the rules requiring plans to cover adult children up to the age of 26, the elimination of limits on annual or lifetime coverage, and the mandates that plans cover a wide range of benefits will drive premiums upward.

    But the key problem is that the Taft-Hartley plans already provide generous and costly coverage; small employers now have a more financially attractive alternative, which is to drop coverage and put people on the exchanges, once the existing collective bargaining agreements are up. That gives workers less reason to join a union; a big part of why working people pay union dues is because unions play a big role in negotiating health benefits.

    So the labor leaders are demanding that their workers with employer-sponsored coverage also gain eligibility for ACA subsidies. Otherwise, their workers will be “relegated to second-class status” despite being “taxed to pay for those subsidies,” a result that will “make non-profit plans like ours unsustainable” and “destroy the very health and wellbeing of our members along with millions of other hardworking Americans.”

    ‘The law as it stands will hurt millions of Americans’

    The leaders conclude by stating that, “on behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.”

    President Obama, of course, pledged that “if you like your plan, you can keep your plan.” But the labor leaders say that, “unless changes are made…that promise is hollow. We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions. We are looking to you to make sure these changes are made.”

    Continued in article

     


    "Do we need a new law to prevent fraud in Obamacare?" by Steven Mintz, Ethics Sage, September 17, 2013 ---
    http://www.ethicssage.com/2013/09/do-we-need-a-new-law-to-prevent-fraud-in-obamacare.html


    From the CFO Journal's Morning Ledger on September 11, 2013

    CFOs are relying more on part-time workers
    That’s partly due to the looming rollout of the Affordable Care Act, but it’s also a reaction to lingering uncertainty about the economy,
    according to the latest Duke University/CFO Global Business Outlook Survey. The third-quarter survey findings were pretty positive overall, though the U.S. Business Optimism Index edged down to 58 on a scale of zero to 100 after shooting above 60 in Q2. In a nutshell: Profits are expected to jump by more than 10%, capital spending is seen rising by nearly 5% and full-time employment is anticipated to increase by 2%. And 59% of CFOs say they’ve increased the proportion of their workforce made up of temporary and part-time workers or shifted toward outside advisers and consultants.

    Among the companies making that shift, 38% say it’s due to health-care overhaul, while 44% say it’s down to extreme economic uncertainty. “Another trend that is affecting the growth in domestic employment is the hiring by U.S.-based companies of full-time employees in foreign countries,” says John Graham, professor of finance at Duke Fuqua School of Business and director of the survey. “More than one in four U.S. CFOs say their firms have hired full-time employees in other countries, and that number is expected to accelerate.” (Prof. Graham discusses the findings in this video.)

    Another key finding is that finance chiefs are starting to think more about their competitors and less about their legislators, CFO’s David Owens writes. The survey shows that “price pressure from competitors” overtook “federal government agenda/policies” on the list of external concerns for respondents. Bill Velasco, controller for the Engineered Products Division at Flowserve, a supplier of industrial and heavy machinery, tells Owens that price competition is heating up, but it’s still unclear who gets the credit—or the blame. “We know the pressure is coming,” he says, “but I don’t know how much is being generated by activity in the market, and how much comes from customers asking us to be more efficient.” 

    Read the full results of the survey here.

     

    Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm

     


    From the CFO Journal's Morning Ledger on September 4, 2013

    A new approach to health-care benefits is gaining momentum ahead of the Affordable Care Act rollout. A growing number of employers plans to give workers a fixed sum of money and let them choose a plan from an online marketplace, the WSJ’s Anna Wilde Matthews reports.

    More health-industry players are launching such private exchanges, which are separate from the government-operated marketplaces being created in each state. And insurers are creating their own versions. Aetna plans to launch a “proprietary” marketplace model next year. WellPoint already has one, and UnitedHealth Group‘s Optum health-services arm owns an exchange operator.

    Sears Holdings and Darden Restaurants adopted this approach last year. The idea has been gaining the most traction among small and midsize employers, but interest is growing among companies of all sizes, Matthews writes. Bob Evans Farms, which owns about 560 restaurants and has about 34,000 employees including part-timers, will start directing workers to an exchange from Xerox's Buck unit that’s set to launch next January.

    From the CFO Journal's Morning Ledger on August 22, 2013

    Health-care law fuels part-time hiring
    U.S. businesses are hiring, but three out of four of the nearly one million hires this year are part-time and many of the jobs are low-paid, writes Reuters’s Lucia Mutikani.
    Executives at several staffing firms told Reuters that the Affordable Care Act, which requires employers with 50 or more full-time workers to provide health-care coverage, was a frequently cited factor in requests for part-time workers. A memo that leaked out from retailer Forever 21 last week showed it was reducing a number of full-time staff to positions where they will work no more than 29.5 hours a week, just under the law’s threshold. “They have put some of the full-time positions on hold and are hiring part-time employees so they won’t have to pay out the benefits,” said Client Staffing Solutions’ Darin Hovendick. “There is so much uncertainty. It’s really tough to design a budget when you don’t know the final cost involved.”

     

     


    From the CFO Journal's Morning Ledger on August 22, 2013

    UPS is delivering a big change to employee health-care benefits. The company is cutting off health benefits to working spouses of thousands of employees starting in 2014 and it says the health-care overhaul is partly to blame, the WSJ reports. UPS said in an internal memo to employees last month that rising costs for coverage of chronic and other health conditions, “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health-care benefits to our employees at an affordable cost.”

    The change applies to working spouses who can get health-care coverage through their own employers and doesn’t apply to spouses who can’t get their own coverage, or the spouses of unionized employees, who make up the bulk of the company’s work force. The change will affect about 15,000 spouses—slightly less than half of the 33,000 spouses covered today under its health plan for nonunionized workers.

    The shift is a sign of corporate America’s increasing willingness to make deep changes to benefits once taken as a given by workers, according to Bloomberg. “The feeling is drastic times call for drastic measures,” says Rich Fuerstenberg, a partner at benefits consultant Mercer. “What employers are adopting today are strategies that were considered crazy or out of the mainstream just a few years ago.”

    Jensen Comment
    Another article I read estimated that about 15,000 spouses will lose their UPS benefits.


    "Study: Tax Credits for Obamacare Expected to Average $2,700," by Gail Perry, AccountingWeb, August 20, 2013 ---
    http://www.accountingweb.com/article/study-tax-credits-obamacare-expected-average-2700/222274

    . . .

    Tax credits will be available to subsidize premiums for people who buy their insurance in the new marketplaces, do not have access to other affordable coverage, and have incomes between 100 percent and 400 percent of the federal poverty level (between about $11,500 and $46,000 for a single person, and $24,000 and $94,000 for a family of four).

    An estimated 48 percent of people who currently have individual market coverage will be eligible for tax credits, according to the study. Tax credits among those eligible will average $5,548 per family, and subsidies will average $2,672 across all families now purchasing their own insurance. Many people who are now uninsured also will be eligible for subsidies in the new marketplaces, and their tax credits will likely be higher on average because they have lower incomes than those who now buy their own coverage.

    There are many reasons why premium costs in the individual insurance market will change under the ACA before tax credits are applied. For instance, insurance companies will be prohibited from discriminating against people with pre-existing conditions, leading to higher enrollment of people with expensive health conditions. More young, healthy people may also enroll due to the ACA's individual mandate and premium subsidies.

    Furthermore, insurance providers will be required to meet a minimum level of coverage that will raise premiums for people buying skimpier coverage today, but also lower their out-of-pocket costs on average when they use those services. Premiums before and after the law goes into effect are not necessarily comparable, as health plans in the new marketplaces will be required to cover a broader range of services than are found in many current individual market policies, and the health needs of people who will enroll are likely to be different.

    The Kaiser Family Foundation also has developed a health reform subsidy calculator that estimates the premiums and tax credits available to people next year through the insurance marketplaces based on their income levels, family size, ages, and tobacco use.

    About the study:

    Based on data from the Congressional Budget Office (CBO) and the federal government's Survey of Income and Program Participation, the Kaiser Family Foundation analysis estimates the average impact of the Affordable Care Act on the individual market by quantifying how current enrollees will fare once relevant provisions of the health law are implemented. Premium data released by states to date suggest that the CBO premium projection is reliable. While subsidies and premiums will vary widely depending on each enrollee's personal characteristics, the analysis focuses on averages to provide an indication of how much overall assistance the law will provide to people buying their own coverage today.

    Related articles:

     

    Jensen Comment
    Note that a tax credit is much more lucrative than a tax deduction. For example, a deduction for home mortgage interest and medical expenses is subject to various adjustments to where each dollar of deduction may results in a much lower net tax benefit. Each dollar of credit, however, may be a full one dollar of benefit in the pocket of a taxpayer. And for some credits like the earned income credit, taxpayers having zero tax to pay can receive cash back from the government for the credit. It's a lot like getting a tax-free government paycheck without being a government employee. Nobel Economist Milton Friedman might have called it a negative income tax. He proposed replacing the the welfare system with a negative income tax system.

     


    August 14, 2013 message from Scott Bokacker regarding the Affordable Care Act implementation

    This looks like a pretty good collection -

    http://www.leavitt.com/newsandevents/healthcarereform.aspx

    There is one item that is not listed on that page -

    http://www.leavitt.com/newsandevents/healthcarereform.aspx?eid=2427266716788910805

    That one will be relevant if you are an employer required to give notice to employees.

    Repeal Obamacare? Too late.

    Scott Bonacker CPA – McCullough and Associates LLC – Springfield, MO

     


    Howard Dean, a physician, is the former Governor of Vermont and Chairman of the Democratic Party who launched an unsuccessful campaign to become President of the United States --- http://en.wikipedia.org/wiki/Howard_Dean

    In the earlier parts of the article he chastises Republicans and some Democrats who want to derail the Affordable Healthcare Act at this late stage. Then he explains a part of the Affordable Healthcare Act that truly needs amending.

    "The Affordable Care Act's Rate-Setting Won't Work:  Experience tells me the Independent Payment Advisory Board will fail," by Howard Dean. The Wall Street Journal, July 28, 2013 ---
    http://online.wsj.com/article/SB10001424127887324110404578628542498014414.html?mod=djemEditorialPage_h

    . . .

    That said, the law still has its flaws, and American lawmakers and citizens have both an opportunity and responsibility to fix them.

    One major problem is the so-called Independent Payment Advisory Board. The IPAB is essentially a health-care rationing body. By setting doctor reimbursement rates for Medicare and determining which procedures and drugs will be covered and at what price, the IPAB will be able to stop certain treatments its members do not favor by simply setting rates to levels where no doctor or hospital will perform them.

    There does have to be control of costs in our health-care system. However, rate setting—the essential mechanism of the IPAB—has a 40-year track record of failure. What ends up happening in these schemes (which many states including my home state of Vermont have implemented with virtually no long-term effect on costs) is that patients and physicians get aggravated because bureaucrats in either the private or public sector are making medical decisions without knowing the patients. Most important, once again, these kinds of schemes do not control costs. The medical system simply becomes more bureaucratic.

    The nonpartisan Congressional Budget Office has indicated that the IPAB, in its current form, won't save a single dime before 2021. As everyone in Washington knows, but less frequently admits, CBO projections of any kind—past five years or so—are really just speculation. I believe the IPAB will never control costs based on the long record of previous attempts in many of the states, including my own state of Vermont.

    If Medicare is to have a secure future, we have to move away from fee-for-service medicine, which is all about incentives to spend more, and has no incentives in the system to keep patients healthy. The IPAB has no possibility of helping to solve this major problem and will almost certainly make the system more bureaucratic and therefore drive up administrative costs.

    To date, 22 Democrats have joined Republicans in the House and Senate in support of legislation to do away with the IPAB. Yet because of the extraordinary partisanship on Capitol Hill and Republican threats to defund the law through the appropriations process, it is unlikely that any change in the Affordable Care Act will take place soon.

    The IPAB will cause frustration to providers and patients alike, and it will fail to control costs. When, and if, the atmosphere on Capitol Hill improves and leadership becomes interested again in addressing real problems instead of posturing, getting rid of the IPAB is something Democrats and Republicans ought to agree on.

    Mr. Dean, governor of Vermont from 1991 to 2002 and a former chairman of the Democratic National Committee, is a strategic adviser to McKenna Long & Aldridge LLP.


    "California Unveils Health Plans to Mixed Reactions," by Kathleen Doheny, WebMD, July 10, 2013 ---
    http://www.webmd.com/health-insurance/news/20130708/california-exchange-carriers-premiums-announced


    "Unworkable ObamaCare Opaque rules, big delays and rising costs: The chaos is mounting," by Governors Bobby Jindal and Scott Walker, The Wall Street Journal, July 25, 2013 ---
    http://online.wsj.com/article/SB10001424127887324110404578626452647631608.html?mod=djemEditorialPage_h

    Remember when President Obama famously promised that if you like your health-care plan, you'll be able to keep your health-care plan? It was a brilliantly crafted political sound bite. Turns out, the statement is untrue.

    Aside from that small detail, the slightly larger problem is that the Obama administration doesn't have a health-care plan. Yes, the White House has a law with thousands of pages, but the closer we get to Oct. 1, the day government-mandated health-insurance exchanges are supposed to open, the more we see that the administration doesn't have a legitimate plan to successfully implement the law.

    Unworkable. That word best describes ObamaCare. Government agencies in states across the country, whether red or blue, have spent countless hours and incalculable dollars trying to keep the ObamaCare train on its track, but the wreck is coming. And it is the American people who are going to pay the price.

    Fifty-five working days before the launch of the ObamaCare health-insurance exchanges on Oct. 1, the administration published a 600-page final rule that employers, individuals and states are expected to follow in determining eligibility for millions of Americans. Rather than lending clarity to a troubled project, the guidelines only further complicated it.

    If the experience of those working with the ObamaCare implementation at the state level had been taken into account, progress might have been possible, but the administration has treated states with mistrust. Perhaps that's because we can see that the federal government is repeating mistakes of the past and we know that outcomes rarely reflect what Washington has promised.

    Adding to this mounting problem, the guidance that President Obama has offered to date has been inconsistent, arbitrary and frustrating—contributing further to the grave uncertainty that surrounds this law. But not everything about it is uncertain: In February, the nonpartisan Congressional Budget Office reported that seven million Americans will lose their employer-based health insurance as a result of ObamaCare.

    On July 12, three of the country's largest unions sent a letter to Democratic leaders in Congress stating that ObamaCare would shatter not only hard-earned health benefits, but also destroy the 40-hour workweek that is the backbone of the American middle class. ObamaCare defines full-time employment as 30 hours per week. No wonder these unions are alarmed: They are widely credited with helping to get the votes to pass this unworkable law.

    The administration, recognizing that ObamaCare is a ticking bomb, earlier this month announced that it would delay until 2015 the requirement that businesses offer health-care insurance to their employees or pay a fine. Yet the administration didn't also grant relief to individuals.

    Think about that for a moment: The Obama team, for now, has spared employers but not employees. The day of reckoning for businesses is put off, but not for everyday citizens. Many Americans may wonder: On what authority does the administration arbitrarily decide which aspects of a law not to enforce and which ones to keep?

    As governors, we have been expressing concern about the unworkability of ObamaCare since its passage in 2010. We have seen the trouble the law poses for our own state economies. The most recent evidence: The government now says that it will not verify the eligibility of individuals who apply for subsidized insurance on the health-care exchanges.

    Governors have firsthand experience with implementing public-assistance programs. We know how important it is to care for our most vulnerable citizens and to ensure that people are healthy and able to work. We also know that a one-size-fits-all approach like ObamaCare simply doesn't work. It only creates new problems and inequalities. That's why if you look at all 50 states, you'll see 50 unique ways of handling Medicaid.

    Health-care premiums are going up. Many businesses have stopped hiring, to avoid reaching the limit of 50 full-time employees where they are required to offer health benefits. Those businesses that are hiring often take on part-time workers to stay under the full-time cap. Older individuals seeking work are finding that companies are reluctant to take a chance on their potential health-care costs.

    These are just a few of the problems resulting from a program that wasn't thought through before it was rushed into law. No wonder we hear that the Obama attack machine is gearing up to blame everyone but the law itself for the chaos that lies ahead.

    This law was a bad idea from the start, and the American public never supported it. The Obama team, taking advantage of an unusual two-year window when Democrats controlled all branches of government, foisted upon the country a liberal hodgepodge of unworkable notions that will wreak havoc on American health care. Delaying implementation of ObamaCare, not just the employer mandate, is a reasonable idea. But an even better one would be a complete repeal.

    Mr. Jindal is the governor of Louisiana. Mr. Walker is the governor of Wisconsin.


    "Here's What Happens If You Don't Sign Up For Obamacare," by Mandi Woodruff, Business Insider, July  1, 2013 ---
    http://www.businessinsider.com/heres-what-happens-if-you-dont-sign-up-for-obamacare-2013-7

    The $2.7 Trillion Medical Bill Colonoscopies Explain Why U.S. Leads the World in Health Expenditures (NYT) ---
    http://www.nytimes.com/2013/06/02/health/colonoscopies-explain-why-us-leads-the-world-in-health-expenditures.html?pagewanted=all&_r=1&

    MERRICK, N.Y. — Deirdre Yapalater’s recent colonoscopy at a surgical center near her home here on Long Island went smoothly: she was whisked from pre-op to an operating room where a gastroenterologist, assisted by an anesthesiologist and a nurse, performed the routine cancer screening procedure in less than an hour. The test, which found nothing worrisome, racked up what is likely her most expensive medical bill of the year: $6,385.

    That is fairly typical: in Keene, N.H., Matt Meyer’s colonoscopy was billed at $7,563.56. Maggie Christ of Chappaqua, N.Y., received $9,142.84 in bills for the procedure. In Durham, N.C., the charges for Curtiss Devereux came to $19,438, which included a polyp removal. While their insurers negotiated down the price, the final tab for each test was more than $3,500.

    “Could that be right?” said Ms. Yapalater, stunned by charges on the statement on her dining room table. Although her insurer covered the procedure and she paid nothing, her health care costs still bite: Her premium payments jumped 10 percent last year, and rising co-payments and deductibles are straining the finances of her middle-class family, with its mission-style house in the suburbs and two S.U.V.’s parked outside. “You keep thinking it’s free,” she said. “We call it free, but of course it’s not.”

    In many other developed countries, a basic colonoscopy costs just a few hundred dollars and certainly well under $1,000. That chasm in price helps explain why the United States is far and away the world leader in medical spending, even though numerous studies have concluded that Americans do not get better care.

    Whether directly from their wallets or through insurance policies, Americans pay more for almost every interaction with the medical system. They are typically prescribed more expensive procedures and tests than people in other countries, no matter if those nations operate a private or national health system. A list of drug, scan and procedure prices compiled by the International Federation of Health Plans, a global network of health insurers, found that the United States came out the most costly in all 21 categories — and often by a huge margin.

    Americans pay, on average, about four times as much for a hip replacement as patients in Switzerland or France and more than three times as much for a Caesarean section as those in New Zealand or Britain. The average price for Nasonex, a common nasal spray for allergies, is $108 in the United States compared with $21 in Spain. The costs of hospital stays here are about triple those in other developed countries, even though they last no longer, according to a recent report by the Commonwealth Fund, a foundation that studies health policy.

    While the United States medical system is famous for drugs costing hundreds of thousands of dollars and heroic care at the end of life, it turns out that a more significant factor in the nation’s $2.7 trillion annual health care bill may not be the use of extraordinary services, but the high price tag of ordinary ones. “The U.S. just pays providers of health care much more for everything,” said Tom Sackville, chief executive of the health plans federation and a former British health minister.

    Colonoscopies offer a compelling case study. They are the most expensive screening test that healthy Americans routinely undergo — and often cost more than childbirth or an appendectomy in most other developed countries. Their numbers have increased manyfold over the last 15 years, with data from the Centers for Disease Control and Prevention suggesting that more than 10 million people get them each year, adding up to more than $10 billion in annual costs.

    Largely an office procedure when widespread screening was first recommended, colonoscopies have moved into surgery centers — which were created as a step down from costly hospital care but are now often a lucrative step up from doctors’ examining rooms — where they are billed like a quasi operation. They are often prescribed and performed more frequently than medical guidelines recommend.

    The high price paid for colonoscopies mostly results not from top-notch patient care, according to interviews with health care experts and economists, but from business plans seeking to maximize revenue; haggling between hospitals and insurers that have no relation to the actual costs of performing the procedure; and lobbying, marketing and turf battles among specialists that increase patient fees.

    While several cheaper and less invasive tests to screen for colon cancer are recommended as equally effective by the federal government’s expert panel on preventive care — and are commonly used in other countries — colonoscopy has become the go-to procedure in the United States. “We’ve defaulted to by far the most expensive option, without much if any data to support it,” said Dr. H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for Health Policy and Clinical Practice.

    In coming months, The New York Times will look at common procedures, drugs and medical encounters to examine how the economic incentives underlying the fragmented health care market in the United States have driven up costs, putting deep economic strains on consumers and the country.

    Hospitals, drug companies, device makers, physicians and other providers can benefit by charging inflated prices, favoring the most costly treatment options and curbing competition that could give patients more, and cheaper, choices. And almost every interaction can be an opportunity to send multiple, often opaque bills with long lists of charges: $100 for the ice pack applied for 10 minutes after a physical therapy session, or $30,000 for the artificial joint implanted in surgery.

    The United States spends about 18 percent of its gross domestic product on health care, nearly twice as much as most other developed countries. The Congressional Budget Office has said that if medical costs continue to grow unabated, “total spending on health care would eventually account for all of the country’s economic output.” And it identified federal spending on government health programs as a primary cause of long-term budget deficits.

    ¶¶ While the rise in health care spending in the United States has slowed in the past four years — to about 4 percent annually from about 8 percent — it is still expected to rise faster than the gross domestic product. Aging baby boomers and tens of millions of patients newly insured under the Affordable Care Act are likely to add to the burden.

    With health insurance premiums eating up ever more of her flat paycheck, Ms. Yapalater, a customer relations specialist for a small Long Island company, recently decided to forgo physical therapy for an injury sustained during Hurricane Sandy because of high out-of-pocket expenses. She refused a dermatology medication prescribed for her daughter when the pharmacist said the co-payment was $130. “I said, ‘That’s impossible, I have insurance,’ ” Ms. Yapalater recalled. “I called the dermatologist and asked for something cheaper, even if it’s not as good.”

    The more than $35,000 annually that Ms. Yapalater and her employer collectively pay in premiums — her share is $15,000 — for her family’s Oxford Freedom Plan would be more than sufficient to cover their medical needs in most other countries. She and her husband, Jeff, 63, a sales and marketing consultant, have three children in their 20s with good jobs. Everyone in the family exercises, and none has had a serious illness.

    Like the Yapalaters, many other Americans have habits or traits that arguably could put the nation at the low end of the medical cost spectrum. Patients in the United States make fewer doctors’ visits and have fewer hospital stays than citizens of many other developed countries, according to the Commonwealth Fund report. People in Japan get more CT scans. People in Germany, Switzerland and Britain have more frequent hip replacements. The American population is younger and has fewer smokers than those in most other developed countries. Pushing costs in the other direction, though, is that the United States has relatively high rates of obesity and limited access to routine care for the poor.

    A major factor behind the high costs is that the United States, unique among industrialized nations, does not generally regulate or intervene in medical pricing, aside from setting payment rates for Medicare and Medicaid, the government programs for older people and the poor. Many other countries deliver health care on a private fee-for-service basis, as does much of the American health care system, but they set rates as if health care were a public utility or negotiate fees with providers and insurers nationwide, for example.

    “In the U.S., we like to consider health care a free market,” said Dr. David Blumenthal, president of the Commonwealth Fund and a former adviser to President Obama. ”But it is a very weird market, riddled with market failures.”

    Consider this:

    Consumers, the patients, do not see prices until after a service is provided, if they see them at all. And there is little quality data on hospitals and doctors to help determine good value, aside from surveys conducted by popular Web sites and magazines. Patients with insurance pay a tiny fraction of the bill, providing scant disincentive for spending.

    Continued in article

     

    Does Medical Care Cost Too Much in the United States? Posner ---
    http://www.becker-posner-blog.com/2013/06/does-medical-care-cost-too-much-in-the-united-states-posner.html

    Does Medical Care Cost Too Much in the United States? Becker ---
    http://www.becker-posner-blog.com/2013/06/medical-competition-and-the-cost-of-medical-care-becker.html

     

     



    April 1-June 30, 2013

    The Unaffordable Health Care Act
    "Coverage may be unaffordable for low-wage workers," by Ricardo Alonso-Zaldivar, Yahoo News, June 13, 2013 ---
    http://news.yahoo.com/coverage-may-unaffordable-low-wage-workers-151922273.html

    It's called the Affordable Care Act, but President Barack Obama's health care law may turn out to be unaffordable for many low-wage workers, including employees at big chain restaurants, retail stores and hotels.

    That might seem strange since the law requires medium-sized and large employers to offer "affordable" coverage or face fines.

    But what's reasonable? Because of a wrinkle in the law, companies can meet their legal obligations by offering policies that would be too expensive for many low-wage workers. For the employee, it's like a mirage — attractive but out of reach.

    The company can get off the hook, say corporate consultants and policy experts, but the employee could still face a federal requirement to get health insurance.

    Many are expected to remain uninsured, possibly risking fines. That's due to another provision: the law says workers with an offer of "affordable" workplace coverage aren't entitled to new tax credits for private insurance, which could be a better deal for those on the lower rungs of the middle class.

    Some supporters of the law are disappointed. It smacks of today's Catch-22 insurance rules.

    "Some people may not gain the benefit of affordable employer coverage," acknowledged Ron Pollack, president of Families USA, a liberal advocacy group leading efforts to get uninsured people signed up for coverage next year.

    "It is an imperfection in the new law," Pollack added. "The new law is a big step in the right direction, but it is not perfect, and it will require future improvements."

    Andy Stern, former president of the Service Employees International Union, the 2-million-member service-sector labor union, called the provision "an avoidance opportunity" for big business. SEIU provided grass-roots support during Obama's long struggle to push the bill through Congress.

    The law is complicated, but essentially companies with 50 or more full-time workers are required to offer coverage that meets certain basic standards and costs no more than 9.5 percent of an employee's income. Failure to do so means fines for the employer. (Full-time work is defined as 30 or more hours a week, on average.)

    But do the math from the worker's side: For an employee making $21,000 a year, 9.5 percent of their income could mean premiums as high as $1,995 and the insurance would still be considered affordable.

    Even a premium of $1,000 — close to the current average for employee-only coverage — could be unaffordable for someone stretching earnings in the low $20,000's.

    With such a small income, "there is just not any left over for health insurance," said Shannon Demaree, head of actuarial services for the Lockton Benefit Group. "What the government is requiring employers to do isn't really something their low-paid employees want."

    Based in Kansas City, Mo., Lockton is an insurance broker and benefits consultant that caters to many medium-sized businesses affected by the health care law. Actuaries like Demaree specialize in cost estimates.

    Another thing to keep in mind: premiums wouldn't be the only expense for employees. For a basic plan, they could also face an annual deductible amounting to $3,000 or so, before insurance starts paying.

    "If you make $20,000, are you really going to buy that?" asked Tracy Watts, health care reform leader at Mercer, a major benefits consulting firm.

    And low-wage workers making more than about $15,900 won't be eligible for the law's Medicaid expansion, shutting down another possibility for getting covered.

    It's not exactly the picture the administration has painted. The president portrays his health care law as economic relief for struggling workers.

    "Let's make sure that everybody who is out there working hard and doing the right thing, that they're not going to go bankrupt because they get sick, that they're going to have health care they can count on," Obama said in a Chicago appearance last summer during the presidential campaign. "And we got that done."

    White House senior communications advisor Tara McGuinness downplayed concerns. "There has been a lot of conjecture about what people might do or could do, but this hasn't actually happened yet," she said. "The gap between sky-is-falling predictions about the health law and what is happening is very wide."

    The administration believes "most businesses want to do right by their employees and will continue to use tax breaks to provide quality coverage to their workers," she added. Health insurance is tax deductible for employers, and the health law provides additional tax breaks to help small businesses.

    Virtually all major employers currently offer health insurance, although skimpy policies offered to many low-wage workers may not meet the requirements of the new law. Companies affected have been reluctant to telegraph how they plan to comply.

    "It clearly isn't going to be a morale-boosting moment when you redo your health plan to discourage participation," said Stern, the former labor leader, now a senior fellow at Columbia University. "It's not something most want to advertise until they are sure it's the right decision."

    The National Retail Federation's top health care expert said there's no "grand scheme to avoid responsibility" among employers. "That is a little too Machiavellian," said Neil Trautwein.

    Nonetheless, he acknowledged it's "a possible outcome" that low-wage workers could find coverage unaffordable because of the wrinkle in the law.

    Continued in article


    Belatedly The New York Times Fesses Up on the Obamacare Mess
    By David Brooks, April 2013

    David Brooks    
    Implementation got off to a bad start because the Obama administration didn’t want to release unpopular rules before the election. Regulators have been working hard but are clearly overwhelmed, trying to write rules that influence the entire health care sector — an economic unit roughly the size of France. Republicans in Congress have made things much more difficult by refusing to provide enough money for implementation.

    By now, everybody involved seems to be in a state of anxiety. Insurance companies are trying to put out new products, but they don’t know what federal parameters they have to meet. Small businesses are angry because the provisions that benefited them have been put on the back burner. Health care systems are highly frustrated. They can’t plan without a road map. Senator Max Baucus, one of the authors of the law, says he sees a “huge train wreck” coming.

    I’ve been talking with a bipartisan bunch of health care experts, trying to get a sense of exactly how bad things are. In my conversations with this extremely well-informed group of providers, academics and former government officials, I’d say there is a minority, including some supporters of the law, who think the whole situation is a complete disaster. They predict Obamacare will collapse and do serious damage to the underlying health system.

    But the clear majority, including some of the law’s opponents, believe that we’re probably in for a few years of shambolic messiness, during which time everybody will scramble and adjust, and eventually we will settle down to a new normal.

    What nobody can predict is how health care chaos will interact with the political system. There’s a good chance that Republicans will be able to use unhappiness with what is already an unpopular law to win back the Senate in 2014. Controlling both houses of Congress, they will be in a good position to alter, though not repeal, the program.

    The law’s biggest defenders will then become insurance companies and health care corporations. Having spent billions of dollars adapting to the new system, they are not going to want to see it repealed or replaced.

    The experts talk about the problems that lie ahead in cascades. First, there is what you might call the structural cascade. Everything is turning out to be more complicated than originally envisioned. The Supreme Court decision made the Medicaid piece more complicated. The decision by many states not to set up exchanges made the exchange piece more complicated. The lines of accountability between, for example, state and federally run exchanges have grown byzantine and unclear.

    A law that was very confusing has become mind-boggling. That could lead people to freeze up. Insurance companies will hesitate before venturing into state exchanges, thereby limiting competition and choice. Americans are just going to be overwhelmed and befuddled. Many are just going to stay away, even if they are eligible for benefits.

    Then there is the technical cascade. At some point, people are going to sit at computers and enroll. If the data process looks like some 1990s glitchmonster, if information doesn’t flow freely, then the public opinion hit will be catastrophic.

    Then there is the cost cascade. Nearly everybody not in the employ of the administration agrees this law does not solve the cost problem, and many of the recent regulatory decisions will send costs higher. A study in California found that premiums could increase by an average of 20 percent for people not covered by federal subsidies. A study by the Society of Actuaries found that by 2017 costs could rise by 32 percent for insurers covering people in the individual exchanges, and as high as 80 percent in states like Ohio.

    Then there is the adverse selection cascade. Under the law, young healthy people subsidize poorer, sicker and older people. But the young may decide en masse that it is completely irrational for them to get health insurance that subsidizes others while they are healthy. They’ll be better off paying the fines, if those are even enforced, and opting out. Without premiums from the young, everybody else’s costs go up even higher.

    Then there is the provider concentration cascade. The law further incentivizes a trend under way: the consolidation of hospitals, doctors’ practices and other providers. That also boosts prices.

    Over all, it seems likely that in some form or another Obamacare is here to stay. But the turmoil around it could dominate politics for another election cycle, and the changes after that — to finally control costs, to fix the mind-boggling complexities and the unintended consequences — will never end.

    Regulatory regimes can be simple and dumb or complex and sprawling. When you build complex, it takes a while to work through the consequences.

     


    Halifax Health To Pay Between $350-$600 Million In Whistleblower Suit --- Click Here
    http://standuptofraud.com/site/2013/06/05/1266halifax-health-to-pay-whistleblower-suit/?goback=.gde_3453910_member_247082893


    Overview Of The New 3.8% Investment Income Tax, Part 3: Gains From The Sale Of Property
    [Forbes, Part 1, Part 2.] Part 3]


    So when did the USA lawmakers ever want to impose their own laws (like minimum wage) and professional ethics on themselves and their employees?
    "Lawmakers, aides may get Obamacare exemption," by John Bresnahan and Jake Sherman, Poliico, April 24, 2013 ---
    http://www.politico.com/story/2013/04/obamacare-exemption-lawmakers-aides-90610.html#.UXiYUajBcrc.twitter

    Jensen Comment
    What's that old saying ---
    "Do as I say, not as I do."


    Obamacare Tax "Surprise" High Earners for May Have Failed to See Coming

     

    For married taxpayers filing jointly: $250,000.

    •For married taxpayers filing separately: $125,000.

    •For all other taxpayers: $200,000.



    "Overview Of The New 3.8% Investment Income Tax, Part 1," Forbes, April 26, 2013 ---
    http://www.forbes.com/sites/anthonynitti/2013/04/26/overview-of-the-new-3-8-investment-income-tax-part-1/

    Beginning January 1, 2013, Obamacare – through the enactment of Section 1411 — will impose upon certain high earners a brand spankin’ new 3.8% tax on their “net investment income.” This additional tax has been the source of much confusion and misinformation for taxpayers and tax advisors alike.

    Much of the uncertainty is to be anticipated; after all, Section 1411 is not an amendment, expansion, or alteration of preexisting law. Rather, this is brand new statute, which means there are no judicial precedents or administrative rulings available to help interpret the legal language.

    But this new statute presents hurdles beyond what we typically see with recently enacted legislation; specifically, the vagaries of a term as critical to its implementation as “net investment income” is to Section 1411.

    In my honest opinion (man, I wish there was a shorthand way to write that), the determination of what does and does not constitute “net investment income” for purposes of Section 1411 will vex tax advisors more than any other issue in 2013. So as a public service, I thought I’d take advantage of this post-April 15th downtime to put together a handy, four-part overview of the new investment income tax, focusing primarily on answering the question, “What IS net investment income?”

    Before we begin unraveling that mystery, however, let’s address the basic mechanics of Section 1411.

    Beginning January 1, 2013, taxpayers will pay an additional 3.8% Medicare tax on the lesser of:

    1. The taxpayer’s “net investment income,” or
    2. The taxpayer’s “modified adjusted gross income” (if the taxpayer does not have foreign earned income excluded under Section 911, this will be identical to adjusted gross income)” less the “applicable threshold;” specifically:

    •For married taxpayers filing jointly: $250,000.

    •For married taxpayers filing separately: $125,000.

    •For all other taxpayers: $200,000.

    There are two very important distinctions to be made about the math behind this lesser of calculation that should serve to dispel two popular misconceptions about the new tax:

    First, because this is a “lesser of” rather than “greater of” computation, the tax cannot apply unless an individual’s modified adjusted gross income exceeds the applicable threshold. If the taxpayer’s MAGI does not exceed the applicable threshold, the second component of the “lesser of” calculation will always be zero, and the last time I checked, zero will always be the lesser of two positive numbers. Thus, right from the start, we can eliminate from the reaches of Section 1411 all married filing jointly taxpayers with MAGI less than $250,000, married filing separately taxpayers with MAGI less than $125,000, and all other taxpayers with MAGI less than $200,000.

    Secondly, just because an individual’s MAGI exceeds the applicable threshold does not necessarily sentence the taxpayer to paying the 3.8% tax on all of their net investment income. Again, this is due to the mechanics of the “lesser of” calculation.

    Example: Hansel, a single taxpayer, earns $195,000 in compensation and $30,000 of dividend and interest income during 2013. These are his only items of income or loss.

    Hansel is subject to the 3.8% Medicare tax on the lesser of:

    1. Net investment income, or $30,000, or

    2. MAGI ($225,000) less the applicable threshold ($200,000) or $25,000.

    Thus, despite the fact that Hansel has both net investment income and MAGI in excess of his applicable threshold, he does not owe the 3.8% on all of his investment income. Rather, he owes the tax on the lesser of the two components, or $25,000.

    But let’s not kid ourselves; it’s not the mechanics or mathematics behind Section 1411 that will be the bane of the tax advisor’s existence during 2013, it’s the understanding of what constitutes “net investment income.” And for clarity on that issue, we must look to our only source of guidance on the topic.

    In late November, the IRS released long-awaited proposed regulations under Section 1411. While the proposed regulations are not effective until tax years beginning after December 31, 2013, they may be relied on until final regulations are issued, which is expected to happen sometime during 2013.

    The definition of “net investment income” is first introduced in Prop. Reg. Section 1.1411-4(a)(1), which breaks those items constituting “net investment  income” into three subparagraphs:

    (i)  Gross income from interest, dividends, annuities, royalties, rents, substitute interest payments, and substitute dividend payment.  (one little i income)

    (ii)  Other gross derived from a trade or business described in Prop. Reg. Section 1.1411-5 (two little i income); and

    (iii)  Net gain attributable to the disposition of property (three little i income).

    In parenthesis following each of the three types of income, you will find the term the tax community has begun to use to describe the income as part of its general parlance. As you can see, the term relates to which subparagraph the income is found in, and is as good a way as any to present the types of net investment income in this overview. So today, we take on “one little i income” – the interest, dividends, rent, etc… found in Prop. Reg. Section 1.1411-4(a)(1)(i) — and we’ll examine “two little i” and “three little i” income in subsequent posts.

    One Little i Income, In General

    While the Section 1411 regulations are full of surprises, the items that constitute net investment income under Prop. Reg. Section 1.1411-4(a)(1)(i) are not among them; in fact, these are the items we all anticipated to be included in net investment income before promulgation of the proposed regulations. As mentioned above, they include:

    • Interest
    • Dividends
    • Annuities
    • Royalties
    • Rents
    • Substitute interest and dividend payments (even though these amounts are not categorically “interest” and “dividends’” for income tax purposes.

    The preamble to the regulations offers additional detail. For example, gross income from dividends includes any item treated as a divided for purposes of chapter 1 of the Code (the income tax provisions). This includes:

    • Constructive dividends
    • Amounts treated as distributions under Section 1248(a), relating to the gain from the sale of stock in a controlled foreign corporation, and
    • Amounts distributed by an S corporation that are treated as a dividend by virtue of the fact that the distribution is deemed to have come from earnings and profits accumulated in prior C corporation years.

    Exceptions

    In general, any interest, dividends, etc… listed under Prop. Reg. Section 1.1411-4(a)(1)(i) will constitute net investment income. However, the regulations and preamble note four exceptions to this general rule:

    1. Interest earned on state and local bonds that is exempt from income tax under Section 103 is excluded from the definition of net investment income for purposes of Section 1411.
    2. Net investment income does not include distributions from a qualified plan described in Sections 401(a), 403(a), 403(b), 408, 408A or 457(b).
    3. Interest paid to an employee by an employer under a nonqualified deferred compensation plan is not considered net investment income.
    4. Any “one little i income” earned in the “ordinary course of a trade or business” is not included in net investment income. This is an important exclusion that warrants further examination.

    Assume you own an interest in an S corporation, partnership, or sole proprietorship. Assume further that interest and dividends are earned in the activity and are either allocated to you on a Schedule K-1 (in the case of an S corporation or partnership) or reported by you on Schedule C (in the case of a sole proprietorship).

    Naturally, you might assume that the interest and dividends are to be included in net investment income as “one little i income,” and nine times out of ten, you’d be correct. However, under the “ordinary course of trade or business exception” the interest and dividends, despite generally meeting the definition of net investment income under “one little i,” can be excluded from the computation of net investment income if four tests are met:

    Continued in article

    Jensen Comment
    Investors who do not get hit with this tax every year may bet blind sided in a year when they (or their estates) dispose of some property such as rental property or a farm investment.


    Remember those tiresome and frequent adds on television from "The Scooter Store"

    "Scooter Store Files For Bankruptcy After Overbilling Medicare At Least $47 Million," by Laura Northrup, Consumerist, April 15, 2013 ---
    http://consumerist.com/2013/04/15/scooter-store-files-for-bankruptcy-after-fbi-raid-and-medicare-fraud-allegations/

    If you watch daytime TV or have been stuck watching daytime TV while visiting your parents, surely you’re familiar with The Scooter Store. The power wheelchair vendor has had some trouble lately, including accusations of Medicare and Medicaid fraud, a raid by the FBI, and even a lawsuit from the company’s hometown, of New Braunfels, Texas. The company laid off most of its employees, and plans to deal directly with health care providers, rather than blanketing the airwaves and selling directly to consumers.

    Those investigations came after a a scathing investigative piece by CBS News about the company.  (Warning: the video at that link plays automatically.) Former salesmen and doctors who prescribed chairs in the past explained the company’s tactics: contact doctors’ offices incessantly to wear them down and convince them to prescribe scooters and power chairs whether the patient really needed one or not, and to depend on bureaucratic incompetence and error to get them approved by Medicare and Medicaid.

    That got the attention of the federal government, and led to a raid by the Federal Bureau of Investigation. The company’s CEO insists that The Scooter Store itself wasn’t accused of fraud. Just a few weeks later, the company furloughed all employees, then permanently laid off about 1,000.

    An independent audit found that the company had overbilled Medicare and Medicaid somewhere between $46.8 million and $87.7 million. The company had agreed to pay back $19.5 million. The Centers for Medicare and Medicaid Services is one of the largest creditors listed in the company’s bankruptcy petition, which details about $50 million in debt.

    Just a few short years ago, in 2009, the city of New Braunfels gave the Scooter Store economic development money to convert a former Kroger store into their sparkling new headquarters. On Friday, the city filed a lawsuit to to get $2.6 million of that money back.

    Continued in article

    Jensen Comment
    Milking Medicare and Medicaid seems to be the rule rather than the exception.

    Bob Jensen's Fraud Updates ---
    http://faculty.trinity.edu/rjensen/FraudUpdates.htm

     

     

     

     

     




    January 1-March 31. 2013

    "Which Governments Spend the Most Per Capita on Government Healthcare: France, Italy, the United States, Sweden, Canada, Greece, or the United Kingdom?" by Daniel J. Mitchell, Townhall, February 22, 2013
    http://www.townhallmail.com/fnbzdpfbzzgwdbzbwbdhfwcnnywnnbyfrrhpldgnrnybys_msycbpyncdb.html

     

    See bar chart at
    http://www.cs.trinity.edu/~rjensen/temp/HealthCostPerCapita.jpg

    . . .

    There are three big reasons why there’s more government-financed healthcare spending in the United States.

    1. Richer nations tend to spend more, regardless of how they structure their healthcare systems.

    2. As you can see at the 1:18 mark of this video, the United States is halfway down the road to a single-payer system thanks to programs such as Medicare and Medicaid.

    3. America’s pervasive government-created third-party payer system leads to high prices and costly inefficiency.

    So what’s the moral of the story? Simple, notwithstanding the shallow rhetoric that dominates much of the debate, the United States does not have anything close to a free-market healthcare system.

    That was true before Obamacare and it’s even more true now that Obamacare has been enacted.

    Indeed, it’s quite likely that many nations with “guaranteed” health care actually have more market-oriented systems than the United States.

    Avik Roy argues, for instance, that Switzerland’s system is the best in the world. And the chart above certainly shows less direct government spending.

    And there’s also the example of Singapore, which also is a very rich nation that has far less government spending on healthcare than the United States.

    Continued in article

    Jensen Comment
    Articles like this are controversial and misleading. Firstly, we may be comparing apples and kangaroos when it comes to the terms "health care" and "cost." Much of the USA health care "cost" gets buried in other accounts like "research" and "education." The many research universities in the USA are contributing tuition and state taxpayer money to fund biomedical science faculty and other science and engineering faculty who are doing medical research and development in one way or another. But these costs are treated as "education"  and "research" costs rather than medical costs.

    An enormous proportion of what the USA includes in costs of medical care is really the cost of fraud that other nations, especially those with either free market or nationalized coverage, avoid much more efficiently and effectively. The frauds are especially high in Medicare billings for our aged and disabled such as billings for nonexistent medical equipment and $6,384 cost of an aspirin administered inside a hospital.

    Much of what gets billed as "medical care" in the USA is the massive cost of malpractice insurance, costs which nations like Canada with national health care cover much more efficiently and effectively by leaving out the lawyers salivating over punitive damages.

    In the USA and Mexico much of the cost of geriatric and disability care is borne by patient savings and family earnings that does not pass through governmental or third-party insurance "medical care" accounts.. In nations with nationalized medicine like Norway such costs are more apt to be called "medical costs."

    In the USA most patients like me bear their own eye care and dental billings out-of-pocket and are not captured in governmental "medical care" accounts. In many other nations the costs of these services pass through governmental accounts.

    The USA spends (usually under Medicare) hundreds of billions on patients that are terminally ill, often extending their lives uselessly for weeks or a few months in intensive care and cardiac care units. Most other nations save this money by letting nature run its course for dying patients and/or facilitating euthanasia. CBS Sixty Minutes ran a module on this under the title "The High Cost of Dying" in the USA.
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

    Similar discrepancies arise for extremely premature and/or underweight new babies that are not saved in most nations outside the USA.

    The above comparison of nations by Daniel Mitchell is mostly an example of the many attempts (such as poverty and unemployment) to make international comparisons on variables that are inconsistently defined and subject to enormous measurement error and variation between nations

     

    "Sandwich Generation: What are our Ethical Obligations to Care for our Aged-Parents and Children?" by accounting professor Steven Mintz, Ethics Sage, January 25, 2013 ---
    http://www.ethicssage.com/2013/01/sandwich-generation.html

    Bob Jensen's threads on health care are at
    http://faculty.trinity.edu/rjensen/Health.htm


    A tax in sheep's clothing
    "Employers Blast Fees (that won't cover their workers) From New Health Law," by Janet Adamy, The Wall Street Journal, March 14, 2013 ---
    http://online.wsj.com/article/SB10001424127887324392804578358540464713464.html?mod=djemCFO_t

    . . .

    The fees will hit most large U.S. employers, and several have been lobbying to change the program, contending the levy is unfair because it subsidizes individually purchased plans that won't cover their workers. Boeing Co. BA -0.15% and a union health plan covering retirees of General Motors, GM +0.32% Ford Motor Co. F +0.22% and Chrysler, among other groups, have asked federal regulators to exclude or shield their insurance recipients from the fee.

    Insurance companies, which helped put the fee in the law, say the fee is essential to prevent rates from skyrocketing when insurers get an influx of unhealthy customers next year. The fee is part of a new insurance landscape created by the health law that will forbid insurers from denying coverage to people with pre-existing conditions.

    The $63 fee will apply to plans covering millions of Americans in 2014. It applies to employers that assume the risk for workers' medical bills, and many private plans sold by insurers. The fee will be smaller for 2015 and 2016, though regulators haven't set those amounts.

    Few noticed the fee when the 2010 Affordable Care Act passed. Employers have spent recent months trying to peel it back, but final regulations published Monday in the Federal Register left it largely intact.

    "It's caught most employers, if not all employers, by surprise," said Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington, which represents large employers. "They're very upset about it."

    The fee comes on top of other costs employers expect to face. Proponents of the law say it eventually will lower employers' health costs by expanding insurance coverage to 30 million Americans, meaning employers won't subsidize their unpaid medical bills.

    Continued in article


    The Health Care Market is Not a Market

    "Video:  Inside ‘Bitter Pill’: Steven Brill Discusses His TIME Cover Story," Time Magazine, February 22, 2013 ---
    http://healthland.time.com/2013/02/20/bitter-pill-inside-times-cover-story-on-medical-bills/

    Simple lab work done during a few days in the hospital can cost more than a car. A trip to the emergency room for chest pains that turn out to be indigestion brings a bill that can exceed the price of a semester at college. When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?

    Steven Brill spent seven months analyzing hundreds of bill from hospitals, doctors, and drug companies and medical equipment manufacturers to find out who is setting such high prices and pocketing the biggest profits. What he discovered, outlined in detail in the cover story of the new issue of TIME, will radically change the way you think about our medical institutions:

    · Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer—Medicare—from even trying to negotiate the price of drugs.

    · Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.

    · Cancer treatment—at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson—has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.

    · Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.

    Brill concludes:

    The health care market is not a market at all.
    It’s a crapshoot. Everyone fares differently based on circumstances they can neither control nor predict. They may have no insurance. They may have insurance, but their employer chooses their insurance plan and it may have a payout limit or not cover a drug or treatment they need. They may or may not be old enough to be on Medicare or, given the different standards of the 50 states, be poor enough to be on Medicaid. If they’re not protected by Medicare or protected only partially by private insurance with high co-pays, they have little visibility into pricing, let alone control of it. They have little choice of hospitals or the services they are billed for, even if they somehow knew the prices before they got billed for the services. They have no idea what their bills mean, and those who maintain the chargemasters couldn’t explain them if they wanted to. How much of the bills they end up paying may depend on the generosity of the hospital or on whether they happen to get the help of a billing advocate. They have no choice of the drugs that they have to buy or the lab tests or CT scans that they have to get, and they would not know what to do if they did have a choice. They are powerless buyers in a sellers’ market where the only consistent fact is the profit of the sellers.

     

    "Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---
    http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

    "Yes, Hospital Pricing Is Insane, But Why? Time magazine issues a 24,000-word memo on what we already knew," by Holman Jenkins Jr., The Wall Street Journal, March 1, 2013 ---
    http://online.wsj.com/article/SB10001424127887323978104578334082993009730.html?mod=djemEditorialPage_h

    Without diminishing the epic scope of Steven Brill's Time magazine piece about the U.S. health care system, he reiterates in lengthy detail perversities that are already well known, without offering a single useful insight on how it go that way, and even less on how to fix it.

    Yet Mr. Brill, founder of CourtTV and American Lawyer magazine, author of books on terrorism and education, has written the longest piece in Time's history—24,000 words—so attention must be paid.

    That health-care costs are inflated compared to what they would be in a reasonably transparent, competitive market (a point Mr. Brill never clearly makes) won't be a revelation. That hospitals allocate their costs to various items on their bills and price lists in ways that are opaque and arbitrary is not a new discovery either.

    He finds it shocking that a hospital charging $1,791 a night won't throw in the generic Tylenol for free (instead charging $1.50 each). But this is to commit the reification fallacy of thinking there is some organic relationship between what a hospital charges for a particular item and what that item costs in the first place.

    He dwells on the irrationality of hospitals charging their highest prices to their poorest customers, those without insurance. But he's also aware that these customers often pay little or nothing of what they are charged and hospitals reallocate the cost to the bills of other patients. He even notes that a hospital might collect as little as 18% of what it bills.

    He vaguely gets that hospital price lists are memos for the file, to be drawn out and waved as a reference in negotiations with their real customers, the big health-care insurers, Medicaid, Medicare and other large payers.

    The deals hammered out with these customers tend naturally to gravitate toward round numbers, leaving a hospital free to allocate its costs and profits to specific items however it wants. Mr. Brill may be offended that certain "non-profit" hospitals appear to be highly profitable. He probably wouldn't be happier, though, if they diverted their surplus revenues into even higher salaries and more gleamingly superfluous facilities.

    "What is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?" Mr. Brill asks. But his question is rhetorical since he doesn't exhibit much urge to understand why the system behaves as it does, treating its nature as a given.

    In fact, what he describes—big institutions dictating care and assigning prices in ways that make no sense to an outsider—is exactly what you get in a system that insulates consumers from the cost of their health care.

    Your time might be better spent reading Duke University's Clark Havighurst in a brilliant 2002 article that describes the regulatory, legal and tax subsidies that deprive consumers of both the incentive and opportunity to demand value from medical providers. Americans end up with a "Hobson's choice: either coverage for 'Cadillac' care or no health coverage at all."

    "The market failure most responsible for economic inefficiency in the health-care sector is not consumers' ignorance about the quality of care," Mr. Havighurst writes, "but rather their ignorance of the cost of care, which ensures that neither the choices they make in the marketplace nor the opinions they express in the political process reveal their true preferences."

    You might turn next to an equally fabulous 2001 article by Berkeley economist James C. Robinson, who shows how the "pernicious" doctrine that health care is different—that consumers must shut up, do as they're told and be prepared to write a blank check—is used to "justify every inefficiency, idiosyncrasy, and interest-serving institution in the health care industry."

    Hospitals, insurers and other institutions involved in health care may battle over available dollars, but they also share an interest in increasing the nation's resources being diverted into health care—which is exactly what happens when costs are hidden from those who pay them.

    Continued in article

    Jensen Comment
    Over a year ago Erika's Medicare-Anthem summary of charges for the month included an $11,376 charge for out patient surgery that was mistakenly billed to her account. We called our doctor who did the procedure in the hospital. Our doctor responded not to bother her or the hospital --- since Medicare-Anthem paid the entire bill it would not matter.

    This bothered us since the woman (I assume it was a woman) may not have been eligible for Medicare-Anthem. So I phoned Medicare. Medicare said not to bother them and advised us to contact the hospital where the procedure took place. Any corrections should be made by the hospital and the doctor.

    So I called the hospital's accounting office. They asked that I send in a copy of the Medicare-Anthem report. I hand-delivered the report to the the hospital accounting office --- which is miles from the hospital.

    Over the ensuing year we waited for a corrected Medicare-Anthem report. Nothing! So I did a follow up visit to the hospital's accounting office. The feedback was that since Medicare-Anthem paid the bill there was no need to waste time correcting this item.

    I keep thinking that some woman not eligible for Medicare got a windfall gain here. Who cares if it was Medicare-Anthem that got screwed?

    Erika and I changed to a doctor that we like better. But we cannot change hospitals.

    Moral of the Story
    If the third party insurer gets billed mistakenly or pays too much nobody cares, least of all the doctors and hospitals who got reimbursed.

    Question
    Who is telling a lie?

    Steven Brill wrote a long cover story for Time Magazine, In that story he describes having his team examine eight very complicated hospital bills from different hospitals. In every case they found that the bills were laced with errors and overcharges in favor of the hospital and possible frauds.
    Bitter Pill:  Why Medical Bills Are Killing Us," Time Magazine Cover Story, March 4, 2013, pp. 16-65 (a very long article)  ---
    http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/

    The following week Stamford Hospital CEO Brian G. Grissler replied as shown, in part, below. Steven Brill's reply to Grissler, Time Magazine, March 18, 2013, Page 2.

    Brian G. Grissler
    ". . . Brill refused to share the patient's name or the complete bill, so we are unable to answer those questions . . . "

    Steven Brill Responds
    "Stamford Hospital was shown the bill and never disputed its authenticity. I made clear in the article the hospital settled for cutting its bill entirely in half."

    Jensen Comment
    There are four possibilities behind this dispute:

    1. Brian Grissler could be lying through his teeth.

       
    2. Brian Grissler may not have thoroughly investigated the ultimate resolution of this bill by his staff.

       
    3. Steven Brill could be lying through his teeth.

       
    4. Steven Brill and Brian Grissler may not be discussing the same bill (although Brill claims he only picked one bill to examine from Stamford Hospital).

    My vote is that Answer 1 above is probably the correct answer, but we most likely will never know.

     

     


    From Paul Caron's TaxProf Blog on March 8, 2013

    ObamaCare Tax Increases Are Double Original Estimate

    Following up on Tuesday's post, House Holds Hearing Today on The Tax-Related Provisions in the President’s Health Care Law: Tax Foundation, Obamacare Tax Increases Will Impact Us All:

    The Joint Committee on Taxation recently released a 96 page report on the tax provisions associated with Affordable Care Act. The report describes the 21 tax increases included in Obamacare, totaling $1.058 trillion – a steep increase from initial assessment. The summer 2012 estimate is nearly twice the $569 billion estimate produced at the time of the passage of the law in March 2010. ...

     

    Provision  2010 Estimate, 2010-2019, $billion 2012 Estimate, 2013-2022, $billion
    0.9% payroll tax on wages and self-employment income and 3.8% t tax on dividends, capital gains, and other investment income for taxpayers earning over $200,000 (singles) / $250,000 (married) 210.2 317.7
    “Cadillac tax” on high-cost plans * 32 111
    Employer mandate * 52 106
    Annual tax on health insurance providers * 60.1 101.7
    Individual mandate * 17 55
    Annual tax on drug manufacturers/importers * 27 34.2
    2.3% excise tax on medical device manufacturers/importers*  20 29.1
    Limit FSAs in cafeteria plans * 13 24
    Raise 7.5% AGI floor on medical expense deduction to 10% * 15.2 18.7
    Deny eligibility of “black liquor” for cellulosic biofuel producer credit  23.6 15.5
    Codify economic substance doctrine 4.5 5.3
    Increase penalty for nonqualified HSA distributions * 1.4 4.5
    Impose limitations on the use of HSAs, FSAs, HRAs, and Archer MSAs to purchase over-the-counter medicines * 5.0  4
    Impose fee on insured and self-insured health plans; patient-centered outcomes research trust fund * 2.6 3.8
    Eliminate deduction for expenses allocable to Medicare Part D subsidy 4.5 3.1
    Impose 10% tax on tanning services * 2.7 1.5
    Limit deduction for compensation to officers, employees, directors, and service providers of certain health insurance providers 0.6  0.8
    Modify section 833 treatment of certain health organizations 0.4 0.4
    Other Revenue Effects 60.3 222**
    Additional requirements for section 501(c)(3) hospitals Negligible Negligible
    Employer W-2 reporting of value of health benefits Negligible Negligible
    Total Gross Tax Increase: 569.2 1,058.3
    * Provision targets households earning less than $250,000.

    ** Includes CBO’s $216.0 billion estimate for “Associated Effects of Coverage Provisions on Tax Revenues” and $6.0 billion within CBO’s “Other Revenue Provisions” category that is not otherwise accounted for in the CBO or JCT estimates.

    Source: Joint Committee on Taxation Estimates, prepared by Ways and Means Committee Staff

     


    March 4, 2013 message from Roger Collins

    Rivetting - and chilling - account of a care control system
    breakdown.Its in the UK  but could easily happen here. I sent this to a
    colleague in our School of Nursing yesterday - this evening she's
    suggested that we run a joint Nursing/School of Business seminar on the
    report.


    http://www.midstaffspublicinquiry.com/report

    http://www.midstaffspublicinquiry.com/sites/default/files/report/Volume%201.pdf


    http://www.midstaffspublicinquiry.com/sites/default/files/report/Volume%202.pdf


    http://www.midstaffspublicinquiry.com/sites/default/files/report/Volume%203.pdf


    Note - I found  the .pdf files to be troublesome to save; you may have
    to specify that the file should be opened with Adobe Reader and then
    save - but they repay the effort.

    Two quotes from the Chairman of the Public Inquiry, which began in 2010
     and cost around $20 million

    "This is a story of appalling and unnecessary suffering of hundreds of
    people.  They were failed by a system which ignored the warning signs
    and put
    corporate self interest and cost control ahead of patients and their
    safety. I  have today made 290 recommendations designed to change this
    culture and
    make sure that patients come first.
    ……

    There was a lack of care, compassion, humanity and leadership. The
    most basic standards of care were not observed, and fundamental rights
    to dignity were not respected. Elderly and vulnerable patients were left
    unwashed, unfed and without fluids. They were deprived of dignity and
    respect. Some patients had to relieve themselves in their beds when they
    offered no help to get to the bathroom. Some were left in excrement
    stained sheets and beds. They had to endure filthy conditions in their
    wards. There were incidents of callous treatment by ward staff. Patients
    who could not eat or drink without help did not receive it. Medicines
    were prescribed but not given. The accident and emergency department as
    well as some wards had insufficient staff to deliver safe and effective
    care. Patients were discharged without proper  regard for their welfare.
    "

    Roger

    Roger Collins
    Associate Professor
    OM1275
    TRU School of Business & Economics

     


    "The Coming Failure of 'Accountable Care' The Affordable Care Act's updated versions of HMOs are based on flawed assumptions about doctor and patient behavior,"
    Clayton Christensen is a professor of business administration at Harvard Business School and co-founder of Innosight Institute, a think tank focusing on disruptive innovation. Jeffrey Flier is dean of the faculty of medicine at Harvard University and professor of medicine at Harvard Medical School.and. Vineeta Vijayaraghavan is a senior research fellow at Innosight Institute.
    The Wall Street Journal, February 19, 2013 ---
    http://professional.wsj.com/article/SB10001424127887324880504578296902005944398.html?mod=djemEditorialPage_h&mg=reno64-wsj

    Spurred by the Affordable Care Act, hundreds of pilot programs called Accountable Care Organizations have been launched over the past year, affecting tens of millions on Medicare and many who have commercial health insurance.

    The ACOs are in effect latter-day health-maintenance organizations—doctors, hospitals and other health-care providers grouped together to provide coordinated care. The ACOs assume financial responsibility for the cost and quality of the care they deliver, making them accountable to patients. With President Obama's re-election making it certain that the Affordable Care Act will begin taking full effect next year, the number of ACOs will continue to increase.

    We believe that many of them will not succeed. The ACO concept is based on assumptions about personal and economic behavior—by doctors, patients and others—that aren't realistic. Health-care providers are spending hundreds of millions of dollars to build the technology and infrastructure necessary to establish ACOs. But the country isn't likely to get the improvements in cost, quality and access that it so desperately needs.

    The first untenable assumption is that ACOs can be successful without major changes in doctors' behavior. Many proponents of ACOs believe that doctors automatically will begin to provide care different from what they have offered in the past. Doctors are expected to adopt new behavior that reduces the cost of care while retaining the ability to do what's medically appropriate. But the behavior of doctors today has been shaped by decades of complicated interdependencies with other medical practices, hospitals and insurance plans. Such a profound behavior shift would likely require re-education and training, and even then the result would be uncertain.

    To give one example, if ACOs are to achieve their cost-saving goals and improve medical care, most doctors will need to change some of their approaches to treating patients. They'll need to employ evidence-based protocols more often to determine optimal treatment—for instance, in prescribing medication or deciding whether certain kinds of surgery are necessary. Doctors will also have to find ways to move some care to lower-cost sites of service, such as more surgery in ambulatory clinics instead of a hospital. ACOs aren't designed or equipped to transform physician behaviors on the scale that will be needed.

    The second mistaken assumption is that ACOs can succeed without changing patient behavior. In reality, quality-of-care improvements are possible only with increased patient engagement. Managed care, as formulated in the 1990s by the HMO model, left consumers with a bad taste because the HMOs acted as visible gatekeepers to patient access to care. ACOs, seemingly wary of stirring a similar backlash, allow Medicare patients to obtain care anywhere they choose, but there is no preferential pricing, discounting or other way for ACOs to steer patients to the most effective providers.

    The Everett Clinic in Washington state has taken steps to plug this hole by deciding not to become a full-fledged ACO. Last year, the clinic told patients that to remain with Everett, they must shift to Medicare Advantage—which encourages preventive care and supports disease-management programs. Those who want to remain on regular Medicare were required to obtain their care elsewhere.

    Accountable Care Organizations are also on the hook for patients who don't comply with recommended treatment or lifestyle changes. Patients can even decide not to share their claims data or medical history with the ACO. If a woman from, say, Massachusetts, spends half the year in Florida and receives care there, the Massachusetts ACO is still responsible for managing the patient's medical costs, though it in no way was able to manage the Florida care. The seems to be unfair both to the responsible ACO provider and to the patient, who will likely not receive optimal care in these transitions.

    In other words, ACOs hold caregivers accountable without requiring patient accountability. How can this work?

    The third and final flawed assumption of the Affordable Care Act is that ACOs will save money. Even if the pilot Medicare Pioneer ACOs—as the 32 most advanced Medicare ACOs are called—achieve their full desired impact, the Congressional Budget Office estimates that the savings would total $1.1 billion over the next five years. This is insignificant in a total annual Medicare budget of $468 billion. As for the commercial and Medicare ACOs that are operating outside these pilot programs, even the most optimistic assumptions come up with relatively small reductions to annual health-care spending nationally.

    The architects of the ACO initiative somehow assume that making the existing system more efficient will make health-care affordable. But slowing the rise of health-care costs can't address the challenge of adding 50 million uninsured to the system while keeping expenditures the same or even somewhat lower than the unsustainable percentage of national wealth that they already represent. No dent in costs is possible until the structure of health care is fundamentally changed.

    How can that level of change be achieved? We beseech policy makers in Washington to study a range of reform approaches that aren't burdened by as many untenable assumptions as Accountable Care Organizations, and go well beyond them in their aspirations.

    • Consider opportunities to shift more care to less-expensive venues, including, for example, "Minute Clinics" where nurse practitioners can deliver excellent care and do limited prescribing. New technology has made sophisticated care possible at various sites other than acute-care, high-overhead hospitals.

    • Consider regulatory and payment changes that will enable doctors and all medical providers to do everything that their license allows them to do, rather than passing on patients to more highly trained and expensive specialists.

    • Going beyond current licensing, consider changing many anticompetitive regulations and licensure statutes that practitioners have used to protect their guilds. An example can be found in states like California that have revised statutes to enable highly trained nurses to substitute for anesthesiologists to administer anesthesia for some types of procedures.

    • Make fuller use of technology to enable more scalable and customized ways to manage patient populations. These include home care with patient self-monitoring of blood pressure and other indexes, and far more widespread use of "telehealth," where, for example, photos of a skin condition could be uploaded to a physician. Some leading U.S. hospitals have created such outreach tools that let them deliver care to Europe. Yet they can't offer this same benefit in adjacent states because of U.S. regulation.

    These a ...

    Continued in the article


    "IBM Touts 'Watson' Supercomputer for the Health-Care Industry," by James Rogers, The Street, February 8, 2013 ---
    http://www.thestreet.com/story/11837053/1/ibm-touts-watson-supercomputer-for-the-health-care-industry.html

    . . .

    IBM has been working closely with WellPoint and Memorial Sloan Kettering to "teach" Watson how to process and analyze clinical data, specifically around cancer care. The supercomputer has already ingested more than 600,000 pieces of medical evidence, according to Big Blue, as well as 2 million pages of text from clinical oncology trials.

    Continued in article

    Jensen Comment
    The worst news for you is when the screen says nothing but "Checkmate."


    After reading this article I can barely lift one hand to the keyboard. The thought of going out to both shovel and blow snow in a wind chill well below zero makes me want "to crawl back in bed, assume a prenatal position, and turn the electric blanket up to nine" [as spoken by one of the Limelighters (the base player) years ago]. In truth I'm in great shape relative to the old folks discussed in the article below. Give me one for my baby and one more for the road.

    "Scary Health-Care Statistics on the Broken-Down Boomer Generation," by Peter Coy, Bloomberg Business Week, February 7, 2013 ---
    http://www.businessweek.com/articles/2013-02-07/scary-health-care-statistics-on-the-broken-down-boomer-generation

    Aging baby boomers are fatter and sicker than their predecessors were at the same age, says a new study that’s raising alarms about the future costs of health care and disability.

    The study, published online on Feb. 4 by JAMA Internal Medicine, says boomers were less likely to report excellent health and to do regular exercise, and more likely to suffer from obesity, hypertension, diabetes, and other maladies. To pick one sorrowful example, they were twice as likely to use a “walking assist device,” such as a cane. (See below for a statistical table.)

    Boomers who are in poor health will not only have more expensive health care; they are more likely to retire early, depriving employers of their specialized knowledge. That’s bad news for companies like Chrysler, FedEx (FDX), J.C. Penney (JCP), Raytheon (RTN), and Vanguard Group. All of those companies are members of the San Diego-based Disability Management Employer Coalition.

    The JAMA study, if accurate, is “very discouraging,” says Charlie Fox, president of the Disability Management Employer Coalition. “What we’d been hearing all along was that boomers were the most healthy,” agrees Terri Rhodes, the coalition’s manager of education programs. “There’s been some thought that if we can hang on to boomers longer, we can hang on to their intellectual capital. If we’re having a population now that’s going to be disabled, that definitely is going to impact the sheer number of available workers.”

    Since the start of the 2007-09 recession, there’s been a rise in the number of people filing for disability insurance and the government’s Supplemental Security Income program. The Council for Disability Awareness in Portland, Me., which represents insurers, said last year that in its survey, “most, but not all, companies continue to believe the economic environment is a factor.” But the JAMA Internal Medicine report makes clear that genuine deterioration in health is also a factor.

    The study is by five researchers from West Virginia University School of Medicine and the Medical University of South Carolina, led by Dr. Dana E. King of West Virginia’s Department of Family Medicine. It draws on data from the National Health and Nutrition Examination Survey, a project of the Centers for Disease Control. The boomer group had an average age of 54 during the study period of 2007-10. It was compared to a group of people who were the same age in 1988-94.

    The study says that although boomers have a longer life expectancy than their elders, their health is another matter. Better habits would help, the authors say. “The present study demonstrates a clear need for policies that expand efforts at prevention and healthy lifestyle promotion in the baby boom generation,” they write.

    Now, some statistics pulled from the two-page report:

    Eleven ways that aging boomers are worse off than their predecessors …

                                   Pre-
                                   Boomer  Boomer
    Excellent health status          32%     13%
    Use a walking assist device      3.3     6.9
    Limited in work                  10.1    13.8
    Functional limitation            8.8     13.5
    Obese                            29      39
    Regular exercise                 50      35
    Moderate drinking                37      67
    Hypertension                     36      43
    Hypercholesterolemia             34      74
    Diabetes                         12      16
    Cancer                           10      11

    … and three in which they’re better off …

                                   Pre-
                                   Boomer  Boomer
    Current smoker                   28      21
    Emphysema                        3.5     2.3
    Myocardial infarction            5       4

     

    Bob Jensen's threads on health care ---
    http://faculty.trinity.edu/rjensen/Health.htm

     


    "Why Not Drop Health Insurance and Pay the Penalty? It’s because the decision is not just a financial one. Here are the other factors to consider," by Benjamin S. Lupin, CFO.com, January 3, 2013 ---
    http://www3.cfo.com/article/2013/1/regulation_pay-or-play-healthcare-risk-lupin-insurance


    "Rahm's ObamaCare Brainstorm Chicago may dump its retiree health costs on federal taxpayers," The Wall Street Journal, January 25, 2013 ---
    http://professional.wsj.com/article/SB10001424127887323968304578245702495382788.html?mg=reno64-wsj#mod=djemEditorialPage_t

    Rahm Emanuel's parting gift to national taxpayers upon leaving Washington two years ago was a $1 trillion bill for ObamaCare. Now the Chicago Mayor may add billions more to the tab by dumping his city's retirees on the federally subsidized state health exchange.

    This public service announcement is brought to you by a city commission that the mayor appointed last summer to study the cost of continuing health benefits for retired workers. A 25-year-old legal settlement requiring the city and its pension funds to pay between 40% and 55% of most retirees' health costs conveniently expires this June—convenient because the city can't afford the bill.

    The city is running a $370 million budget deficit, which will blow up in 2015 when a $1.2 billion balloon payment for pensions comes due. The bill for retiree health benefits is $194 million this year and will grow to $540 million by 2023. Actuaries have recommended that the city sock away $2 billion this year to finance future benefits and pay down a $23 billion unfunded liability. Meanwhile, Chicago's pension funds, which are projected to run dry by the end of the decade, are scraping the bottoms of their barrels to pay for retiree health benefits as required by the settlement.

    Enter the Mayor's commission. The four-member panel issued a report this month suggesting that dumping pre-Medicare retirees onto the state's ObamaCare exchange in 2014 could be fab for retirees and city taxpayers. Nearly 60% of retirees and 94% of those who receive subsidies would pay less for their health care on the exchange. Married retirees with dependents would save an average of $4,300.

    Chicago and its pension funds in turn would shed $23 billion in liabilities, assuming supplemental benefits for Medicare recipients are also cancelled. (These calculations are based on models that assume public pensions are retirees' only source of income.)

    On the other hand, the cost to national taxpayers would be enormous, especially if other local and state governments joined the party. Federal subsidies for Chicago retirees would amount to $44 million in 2014 and increase as more workers retire in their early to mid-50s and health costs grow. All told, state and local governments are on the hook for between $700 billion and $1.5 trillion for retiree health benefits, and like Chicago most will soon be unable to afford even their minimum annual payments.

    Offloading the costs on Uncle Sam will look attractive since retiree health benefits don't enjoy the legal protections that some states have bestowed upon pensions. Stockton, California intends to shed its $400 million unfunded liability for retiree benefits in bankruptcy.

    Mr. Emanuel says the city's decision on retiree health benefits will "strike the right balance between meeting the needs of the retirees and providing them health-care choices with protecting the interests of the city's taxpayers." So, let's see. On the one hand, Chicago pays, on the other everyone else does. Which do you think he'll choose?

    The Chicago report illustrates once again how ObamaCare provides a convenient mechanism and incentive for employers to transfer health-care liabilities to national taxpayers—and how the costs will explode beyond Washington's phony projections.

     

     

     

     


     

     


     

     

     




     

    December 31, 2012

    National Bureau of Economic Research: Bulletin on Aging and Health --- http://www.nber.org/aginghealth/


    It is exceptionally difficult -- for all practical purposes, impossible," writes Eberstadt, "for a medical professional to disprove a patient's claim that he or she is suffering from sad feelings or back pain. In other words, many people are gaming or defrauding the system. This includes not only disability recipients but health care professionals, lawyers and others who run ads promising to get you disability benefits. Between 1996 and 2011, the private sector generated 8.8 million new jobs, and 4.1 million people entered the disability rolls.
    Michael Barone, "Men Find Careers in Collecting Disability," --- Click Here
    http://townhall.com/columnists/michaelbarone/2012/12/03/men_find_careers_in_collecting_disability?utm_source=thdaily&utm_medium=email&utm_campaign=nl
     
    Jensen Comment
     Even after one or more spine surgeries it is virtually impossible to determine whether remaining pain is real or faked. I can claim first hand that after 15 spine surgeries and metal rods from neck to hip that my wife's suffering is real. However, I know of at least two instances where the disability careers are faked in order to get monthly lifetime disability payments and access to Medicare long prior to age 65. This seems to be one of the unsolvable problems in society that becomes even more problematic when a disability career is easier to enter than a job-like career.


    "Hospital Will Stop Delivering Babies, Thanks to Obamacare," by Steven Ertelt, Life News, January 17, 2013 ---
    http://www.lifenews.com/2013/01/17/hospital-will-stop-delivering-babies-thanks-to-obamacare/

    . . .

    A southwestern Pennsylvania hospital will stop delivering babies after March 31 because its obstetricians are either leaving or refocusing their practices, and because hospital officials believe they can’t afford it based on projected reimbursements under looming federal health care reforms.

    The Windber Medical Center, about 60 miles southeast of Pittsburgh, is losing two obstetricians and two others are shifting their focus more to gynecology.

    Hospital officials say the population of women of child-bearing age is dropping and that the number of births the hospital would be called upon to perform isn’t enough for it to provide the service in the face of lower reimbursements under the federal Affordable Care Act.

    The hospital delivered about 200 babies each year since restarting its obstetrics program in 2005.

    Officials aren’t sure how many jobs will be lost.

    Continued in article

     


    The new payroll tax and other Obama care taxes that the media tends not to mention ---
    http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions


    "An Overview of the Affordable Care Act," by Matt Kukla, Scribed, November 2012 ---
    http://www.scribd.com/doc/109391737/An-Overview-of-the-ACA

    As you know, health care has been a highly politicized topic in recent years and become a focal point of theupcoming elections. Solving our health care crisis is crucial to the survival, productivity and well being of boththe U.S. economy and all its citizens. Fortunately, there exists a growing body of evidence from across theworld offering solutions for fixing our health system – evidence that bridges and blends the best of bothpolitical parties for those open minded enough to see it. Yet it is stuck behind the curtain of drama andpartisanship, and I fear the ongoing political theatre will prevent us from utilizing this body of knowledge.I recently finished my PhD in Health Systems Financing, Economics and Policy and returned from working atthe World Health Organization in Geneva. While my background focuses on the U.S. health care system, mostof my work involves reforming health systems in other developed and developing countries. I essentially dealwith (a) how institutional frameworks, governance, and political systems impact health care and (b) howhealth care dollars are collected, pooled, and redistributed / paid among the big three (insurance, individualsand medical providers). Because this is the primary goal of the Affordable Care Act (Obamacare) and given thetremendous amount of misinformation circulating about these issues, I have writtena summary of (a) whatour existing health care system looks like, notably the root causes of rising costs and the uninsured, (b) thetrue content of the Affordable Care Act, (c) what the ACA should have done differently, and (d) someadditional insights into our health care system that you might find prevalent and interesting.I realize that terms like “Evidence” and “Facts” are thrown around so frequently in American society,individuals rarely know which are truly accurate and non-biased. Political parties, special interest groups, andmany Americans are also willing to utilize sound research when it supports their arguments but are keen todebunk it as biased when it does not. As such, I want to ensure your confidence that this write-up is accurateand non-biased. My data comes from my own work and a range of sources including the World Bank, WorldHealth Organization, top academic literature, and the best non-partisan policy think tanks (RAND,Commonwealth Fund, Health Affairs, Kaiser). I have also been critical of many liberal and conservative "talkingpoints" as well as the ACA, while providing the most updated evidence where possible. If you have any questions about these sources or wish to read them, please don’t hesitate to email me.

    The Problem Interestingly, the U.S. health care system is not actually a system, but something that has been put togetherpiecemeal over decades of policymaking. Our political system is built for incremental policymaking at best;thus health care reforms have built on one another only to fill in any existing gaps. Yet we have never steppedback, looked at the big picture and restructured the entire system to be coordinated, efficient or effective. It'slike continuing to put band-aids on a gushing wound, when what's needed is surgery. Or it's like having 40workers operate an assembly line that's meant for 15 people -- instead of removing them and simplifying, weadd more people to manage those 40. The system becomes increasingly layered, inefficient, ineffective,complex and stagnant. The following is a brief overview of what our existing health care system looks like as aresult of this reform process. While there is no silver bullet or single change that will fix our health care system(despite what people tell you), overwhelming evidence from dozens of developed countries and the USsuggests that the following factors account for a significant portion of the growth in our healthcare costs (18percent of GDP vs. 8-13 percent in most other developed countries) and lack of health care coverage (19percent of the population / 49 million vs. 1-2 percent in other countries

    Continued in article

    Healthcare Video and Cases From PwC
    Why mobile technology may well define the future of healthcare... for everyone. ---
    http://www.youtube.com/watch?feature=player_embedded&v=qkm_7XUDqIY

    PwC mHealth (read that Mobile Health) Master Site --- http://www.pwc.com/gx/en/healthcare/mhealth/index.jhtml?WT.ac=vt-mhealth#&panel1-1

    Mobile is accelerating trends in healthcare

    Three major trends already happening in healthcare lend themselves to the revolution in mobile technology:

    Ageing population

    Ageing populations and chronic illness are driving regulatory reform. Public sector healthcare is seeking better access and quality, and it's looking to the private sector for innovation and efficiency. mHealth improves access and quality, and offers dramatic innovation and cost reduction.

    Foundations already in place

    The foundations of industrialisation of healthcare are already in place — electronic medical records, remote monitoring and communications. ‘Care anywhere’ is already emerging. The platform for mHealth is set.

    Personalisation

    Healthcare, like other industries, is getting personal. mHealth can offer personal toolkits for predictive, participatory and preventative care.


    "Obama's Electronic Medical Records Scam," by Michelle Malkin, Townhall, December 14, 2012 --- Click Here
    http://townhall.com/columnists/michellemalkin/2012/12/14/obamas-electronic-medical-records-scam-n1466808?utm_source=thdaily&utm_medium=email&utm_campaign=nl

    . . .

    The program was originally sold as a cost-saving measure. In theory, modernizing record-collection is a good idea, and many private health care providers have already made the change. But as with many government "incentive" programs, the EMR bribe is a tax-subsidized, one-size-fits-all mandate. This one pressures health care professionals and hospitals across the country into radically federalizing their patient data and opening up medical information to untold abuse. Penalties kick in for any provider that hasn't switched over by 2014.

    So, what's it to you? Well, $4 billion has already gone out to 82,535 professionals and 1,474 hospitals, and a total of $6 billion will be doled out by 2016. But the feds' reckless profligacy, neglect and favoritism have done more harm than good.

    Don't take my word for it. A recent report released by the Department of Health and Human Services Inspector General acknowledged that the incentive system is "vulnerable to paying incentives to professionals and hospitals that do not fully meet" the program's quality assurance requirements. The federal health bureaucracy "has not implemented strong prepayment safeguards, and its ability to safeguard incentive payments postpayment is also limited," the IG concluded.

    Translation: No one is actually verifying whether the transition from paper to electronic is improving patient outcomes and health services. No one is actually guarding against GIGO (garbage in, garbage out). No one is checking whether recipients of the EMR incentives are receiving money redundantly (e.g., raking in payments when they've already converted to electronic records). No one is actually protecting private data from fraud, abuse or exploitation.

    Little is being done to recoup ill-gotten payments. In any case, such "pay and chase" policing after the fact is a crummy way to run government in lean times -- or in fat times, for that matter.


    Adding Pain to Misery in Medicare Funding of the Future
    "The Dementia Plague:  As the world's population of older people rapidly grows in the coming years, Alzheimer's and other forms of dementia will become a health-care disaster," by Stephen S. Hall, MIT's Technology Review, October 5, 2012 --- Click Here
    http://www.technologyreview.com/featured-story/429494/the-dementia-plague/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20121005


    "Health-Care Law Spurs a Shift to Part-Time Workers," by By Julie Jargon, Louise Radnofsky, and Alsexantra Berzon, The Wall Street Journal, November 4, 2012 ---
    http://professional.wsj.com/article/SB10001424052970204707104578094941709047834.html?mod=ITP_marketplace_0&mg=reno-wsj

    Some low-wage employers are moving toward hiring part-time workers instead of full-time ones to mitigate the health-care overhaul's requirement that large companies provide health insurance for full-time workers or pay a fee.

    Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week. That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker.

    The shift is one of the first significant steps by employers to avoid requirements under the health-care law, and whether the trend continues hinges on Tuesday's election results. Republican presidential nominee Mitt Romney has pledged to overturn the Affordable Care Act, although he would face obstacles doing so.

    President Barack Obama is set to push ahead with implementing the 2010 law if he is re-elected.

    Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul, said Chief Executive Chris Russell. The company has 210 franchise hotels, under the Sheraton, Fairfield Inns, Hampton Inns and Holiday Inns brands.

    "The tendency is to say, 'Let me fill this position with a 40-hour-a-week employee.' "Mr. Russell said. "I think we have to think differently."

    Pillar offers health insurance to employees who work 32 hours a week or more, but only half take it, and Mr. Russell wants to limit his exposure to rising health-care costs. He said he planned to pursue new segments of the population, such as senior citizens, to find workers willing to accept part-time employment.

    He described the shift as a "cultural change" toward hiring more part-timers and not a prohibition against hiring full-timers.

    CKE Restaurants Inc., parent of the Carl's Jr. and Hardee's burger chains, began two months ago to hire part-time workers to replace full-time employees who left, said Andy Puzder, CEO of the Carpinteria, Calif., company. CKE, which is owned by private-equity firm Apollo Management LP, APO -3.31% offers limited-benefit plans to all restaurant employees, but the federal government won't allow those policies to be sold starting in 2014 because of low caps on payouts. Mr. Puzder said he has advised Mr. Romney's campaign on economic issues in an unpaid capacity.

    Home retailer Anna's Linens Inc. is considering cutting hours for some full-time employees to avoid the insurance mandate if the health-care law isn't repealed, said CEO Alan Gladstone.

    Mr. Gladstone said the costs of providing coverage to all 1,100 sales associates who work at least 30 hours a week would be prohibitive, although he was weighing alternative options, such as raising prices.

    The Costa Mesa, Calif., company currently offers benefits to workers who put in at least 32 hours a week.

    Supporters of the health-care overhaul said most large employers already covered workers voluntarily, and requiring others to do so or pay a penalty was important to level the playing field between businesses.

    A spokeswoman for the Department of Health and Human Services said the administration didn't believe the law would substantially affect employment, citing the Massachusetts health-care overhaul signed by then-Gov. Romney in 2006.

    "Consistent with the experience in Massachusetts and projections of the Congressional Budget Office, the health-care law will improve the affordability of health care while not significantly impacting the labor market," spokeswoman Erin Shields Britt said in a written statement. "This law will decrease costs, strengthen our businesses and make it easier for employers to provide coverage to their workers." Administration officials declined to answer further questions.

    Companies in industries that already offer full benefits have indicated that they weren't planning major changes around the law. Several employers with hourly workforces, including Marriott International Inc. MAR -0.73% hotels, the Costco Wholesale Corp. COST -1.04% warehouse chain and the Panera Bread Co. PNRA -0.01% restaurant chain also said they had no plans to change employee hours in response to the law.

    But benefits consultants said most retail and hotel clients have explored shifting toward part-time workers.

    Those industries are less likely to offer health coverage now, and if they do, the plans typically are too skimpy to meet the minimum-coverage requirements.

    "They've all considered it," Matthew Stevenson, a workforce-strategy principal at Mercer. In a July survey, 32% of retail and hospitality company respondents told the consulting firm that they were likely to reduce the number of employees working 30 hours a week or more.

    Consultants have warned that companies that use more part-time labor risk productivity losses from high staff turnover and lower morale. Laurence Geller, who until last week was CEO of Strategic Hotels & Resorts Inc., BEE +0.36% said he weighed moving toward part-time workers but decided against risking that highly trained staff at his high-end hotels would go elsewhere. The company owns hotels bearing the Four Seasons, Fairmont and Ritz-Carlton names.

    The insurance mandate applies to companies with the equivalent of 50 or more full-time workers, a calculation based on the number of people employed by the company and an average of hours they work in a week. Companies are adjusting schedules now because they will have to review employment rolls for up to a year in advance to determine which workers will be deemed full-time under the law.

    A company will have to pay a penalty of $2,000 for every such worker, after the first 30, if it doesn't offer qualifying health coverage. If a company offers health insurance but the coverage is deemed sparse or unaffordable, the company must pay $3,000 for every worker who gets a federal tax subsidy to purchase coverage as an individual.

    Continued in article


    Richard Kaplan --- http://www.law.illinois.edu/faculty/profile/RichardKaplan

    "Does Anyone Really Understand Medicare? Richard Kaplan Does, and You Can, Too (Jotwell) (reviewing Richard L. Kaplan (Illinois), Top Ten Myths of Medicare, 20 Elder L.J. 1 (2012)): ---
    http://tax.jotwell.com/does-anyone-really-understand-medicare-richard-kaplan-does-and-you-can-too/

    When former Massachusetts Governor Mitt Romney chose Paul Ryan to be his running mate in the 2012 United States Presidential election, he guaranteed that Medicare would become a central battleground of the campaign.  Ryan, a veteran Congressman from Wisconsin, is widely known for his efforts to turn the federal Medicare program into a voucher program (with the value of the vouchers deliberately calibrated not to keep up with health care costs over time), a transformation that would change everything about Medicare except its name.

    Ryan’s proposal is sufficiently controversial that the Romney/Ryan camp has gone to significant lengths to distance itself from it – refusing to use the word “vouchers,” for example, which they evidently believe is toxic politically.  At the same time, the Republican team’s strategists have made a point of highlighting the decreases in Medicare spending that have been projected as a result of various cost-saving measures in the Patient Protection and Affordable Care Act, calling those measures “cuts in Medicare” for which President Obama should be blamed.  Both parties apparently believe that there is such strong support among likely voters to preserve Medicare that they must try to convince voters that the other candidate is going to gut the program, even though only the Republican side has ever proposed actually doing so.

    Jotwell readers who wish to know more about Medicare might lament the lack of an accessible source of basic facts about how Medicare works.  That is where Professor Richard L. Kaplan comes in.  Kaplan, a noted tax scholar who teaches at the University of Illinois College of Law, is the founding advisor of the Elder Law Journal, and a noted expert in the field of elder law.  Professor Kaplan draws on his wealth of knowledge about the subject of health care for the elderly in “Top Ten Myths of Medicare,” which was published this past summer.  The article expertly walks the line between being technically accurate and broadly understandable.  Neophytes, as well as those of us who think we know a lot about these issues, will come away from Professor Kaplan’s short article (fewer than 14,000 words) with both knowledge and insight that are sorely lacking in public discussions about this crucial program.

    To put the importance of this article in some perspective, readers might consider that the forecasts of long-term U.S. budget deficits that are so often mentioned in the press are driven almost entirely by projected increases in health care costs.  As the economist Paul Krugman once put it, any long-term fiscal problem that the United States faces can be summarized “in seven words: health care, health care, health care, revenue.”  In other words, other than replacing the revenues lost to the Bush tax cuts of 2001 and 2003, the only thing that matters in our long-term fiscal picture is getting health care spending under control.  (I should also note that this means, as both Professor Kaplan and I have each written about in many other venues, Social Security is most definitely not part of the problem, nor need it be any part of a solution.)

    Professor Kaplan’s article, however, does not merely enlighten readers about the costs of the program and its interaction with federal budgeting (although he does that well).  He also includes explanations of the nuts and bolts of the program, while trying to correct the public’s misunderstandings about a wide range of issues regarding Medicare beneficiaries, medical providers, and so on.

    The article, as its title makes clear, is usefully organized as a “top ten” list.  In a short review like this one, one must fight the temptation simply to list the ten subject headings, even though each one offers its own enticing hint of what one might learn by reading the article.  In addition to debunking a few obvious myths (#2: “Medicare is Going Bankrupt,” and #10: “Increased Longevity Will Sink Medicare”), the reader is treated to some genuinely unexpected revelations, perhaps the most surprising of all being Myth #1:  “There is One Medicare Program.”  Some readers will know that Medicare has multiple parts (Part A, Part B, and so on), but few will know the specifics of those separate programs as well as Professor Kaplan does.

    This kind of academic article does, however, often run the risk of simply becoming a summary of a statute.  Fortunately, the myth-busting format provides an over-arching narrative to the article that allows Professor Kaplan to make some larger points – points that are truly counter-intuitive, or that are at least contrary to the conventional wisdom in U.S. policy circles today.

    One theme that infuses the article is that Medicare is not the gold-plated, overly generous big government program that so many portray.  On page 13 of the article, for example, we learn how stringently (and, I would argue, absurdly) the program restricts benefits for nursing home care.  After detailing five surprising requirements before a patient can qualify for such coverage at all, Kaplan notes that Medicare pays for only twenty days of such care, and then for no more than an additional eighty days, with an inflation-adjusted deductible currently set at $144.50 per day.

    This theme – that Medicare is hardly a freebie, forcing its enrollees to have serious financial “skin in the game” – is not merely a point about how well or poorly we actually provide for our elders’ care.  Professor Kaplan’s concern is also about planning, noting that too many people believe that Medicare simply covers everything, and so they fail to prepare for the large costs that they will actually face when they inevitably need health care.  Failure to plan, under the many onerous rules that Kaplan describes, is truly disastrous for many elderly Americans and their families.

    Finally, although Professor Kaplan is very obviously a passionate proponent of Medicare in its current basic form, he is more than willing to acknowledge some troubling facts – facts that might (at least partially) support those whose views of Medicare are less favorable than Kaplan’s.

    One of the common themes among supporters of Medicare is to point to the very low administrative costs associated with the program, compared to the costs borne by private, for-profit health insurers.  Even while debunking the myth that “Medicare Is Less Efficient than Private Health Insurance” – a myth that, as he points out, is based on little more than the presumption that government programs must be inefficient, because they are government programs – Kaplan carefully discusses why one key statistic is misleading: “Medicare spends only 1.4% of medical benefits paid on administrative expenditures, while private insurers spend 25% or more for such costs.”

    The most cynical explanation for this “apparently excellent result” is that any program can keep its administrative costs down if it does not put much effort into policing false claims.  Medicare, we learn, sometimes has a “practice of paying apparently reasonable claims for medical services with little verification of the claims’ validity.”  Moreover, some of the program’s administrative needs are already covered by other agencies, such as the IRS’s role in collecting Medicare premia from workers’ paychecks.  This means that Medicare itself need not expend those resources, but the government as a whole does.

    Still, the reader cannot help but come away with the sense that the lower administrative costs of Medicare mostly reflect genuine advantages over private plans.  Medicare need not advertise, and, perhaps most importantly, it has no reason to try to exclude sick people from its coverage, which is a major activity of private plans that must (for reasons of profit maximization) try to cherry-pick the healthiest customers and deny benefits to as many people as possible.

    In short, readers could not find a better article to explain Medicare’s basic workings, its budgetary and political realities, and its combination of shortcomings and truly significant benefits to American society.  Even if the next U.S. President were not going to be chosen on the basis of his commitment to protecting Medicare, reading this article would be worth anyone’s time.

    Jensen Comment
    One reason Medicare's administrative costs are so low, is that it is a piñata for fraud, including payments to scam artists for equipment to never delivered on fictitious claims. Medicare floods us with mailings about every payment they make on our behalf. However, when there's a billing error such as when report a charge that was not our charge (maybe a payment for some phony claim or for a patient not eligible for Medicare) the system seemingly does nothing about it. Of course we do not really, really care personally if we had not copays for a phony claim, but not investigating phony claims is one way of keeping Medicare's administrative costs low. Perhaps more would get done if we filed a claim with the Justice Department, but the Justice Department most likely would do nothing until a pattern of related claims are reported.


    Video:  A Risky Scenario: Disruption of Group Health Insurance, by Deloitte, CFO Journal, October 12, 2012 ---
    http://deloitte.wsj.com/cfo/2012/10/12/a-risky-scenario-disruption-of-group-health-insurance/?icontype=video

    The Patient Protection and Affordable Care Act creates, among many other things, a new marketplace for individuals and small businesses to purchase health insurance, and for the first time, the federal government will provide subsidies to individuals to make it affordable. These and other issues are discussed in Deloitte Insights and in a paper, Power to the People? How health care reform could result in the disruption of the group health insurance industry.

    The individual market starts January 1, 2014, and while no one really knows exactly what the size is going to be, it is certainly going to be much larger than it is today, which is about 14 million people. Depending on how many people decide to sign up for the new insurance products and the subsidies from the federal government, as well as how many employers might decide to drop coverage and promote their employees to go to the exchange, there could be anywhere between 25 million and 60 million people inside these individual market exchanges.

    Watch Deloitte Insights to learn how the growth of the new individual market could disrupt the existing health insurance industry. Deloitte Insights speakers are:

    • Bill Copeland, vice chairman, U.S. Life Sciences & Health Care leader and U.S. Health Plans leader, Deloitte LLP
    • Michael Raynor, director, Deloitte Consulting LLP, and a New York Times best-selling author

    Related Resources

     

    Bob Jensen's threads on health insurance controversies ---
    http://faculty.trinity.edu/rjensen/Health.htm


    October 8, 2012 message form Professor Saeed Roohani

    New healthcare standard for medical malpractice: disclosure –apology- offer  helps to lower the cost of healthcare.:

      http://healthcarenews.com/article.asp?id=3170 

    It’s hard to say "I’m sorry." Especially if it could get you sued.

    But physicians in Massachusetts say a new law represents a major breakthrough in how doctors and patients interact after a medical error causes harm — not to mention reforming a medical-liability system that has become onerous and expensive for doctors.

    The approach is called ’disclosure, apology, and offer’ (DA&O), and is included in the healthcare cost-control bill passed by the Massachusetts Legislature and signed into law by Gov. Deval Patrick in August.

    The reform language was hammered out in multi-year negotiations by representatives of the Mass. Medical Society (MMS), the Mass. Bar Assoc., and the Mass. Academy of Trial Attorneys, all of whom agree that the change will both improve patient safety and reduce the volume of unnecessary and protracted lawsuits — and perhaps lower ever-spiraling insurance costs for physicians.

    Saeed Roohani
    sroohani@bryant.edu
    XBRL and Healthcare Standardization

    Jensen Comment
    This does not go as far as the Texas constitutional amendment limiting punitive damages, but it's a good start for the blue, blue state of Massachusetts.

     

     

     

     



    September 30, 2012

    Why it's better to grow old in the United States (at least for the moment)
    United Kingdom National Health patients’ lives are at risk in NHS hospital wards that are “on the brink of collapse” due to a critical shortage of out-of-hours doctors and growing numbers of the elderly.

    "Patients' lives at risk in NHS hospital wards 'on brink of collapse," by Stephen Adams, The Telegraph, September 12, 2012 ---
    http://www.telegraph.co.uk/health/healthnews/9539872/Patients-lives-at-risk-in-NHS-hospital-wards-on-brink-of-collapse.html

    Some hospitals narrowly avoid “catastrophe” every weekend, research by the Royal College of Physicians has found, because doctors’ shifts are limited by the European Working Time Directive and they do not want to work anti-social hours.

    Some are “struggling to cope” with the volume of older patients. Many are discharged in the middle of the night or shunted around “like parcels” to free beds for new arrivals.

    If the problem is not tackled there will be more tragedies like the Mid Staffs scandal, in which up to 1,200 mainly elderly patients died from substandard care. A radical reorganisation of the NHS is needed, according to the college. It may include shutting the worst-performing hospitals to expand care at better ones, with more staff coverage at nights and weekends.

    The Hospitals on the Edge report warns that:

    • Four in 10 doctors surveyed said that staff shortages were jeopardising patient care
    • One in four was concerned about the impact of the Working Time Directive, with one warning that “weekends and bank holidays function on a skeleton staff of doctors – very dangerous”
    • Doctors are reluctant to work unsociable hours, leaving one in 10 consultant posts in emergency medicine vacant
    • Over-65s account for seven in 10 beds, but the “the system continues to treat older patients as a surprise, at best, or unwelcome, at worst”.

    The report notes that the number of beds in acute and general wards has fallen by a third over the past 25 years, while patients have increased. Beds have been cut as better care has led to shorter stays.

    Dr Andrew Goddard, medical director for the college’s workforce unit, said: “Many hospitals run a traffic light system for their status: they are green if they are taking in patients; amber if they need to be a bit more careful; red for full or black if they are shut.


     


    "KPMG: Healthcare System Disconnect," by Rob Starr, Content, Big Four Blog, August 29, 2012 ---
    http://www.big4.com/kpmg/kpmg-healthcare-system-disconnect/

    According to the findings from a recent survey by KPMG LLP, the U.S. audit, tax and advisory firm, healthcare and pharmaceutical executives are clearly uncertain whether or not existing business models are sustainable over the next five years, even though they do anticipate major change in the short-term.

    In fact, despite their majority opinions that current business models are at least somewhat sustainable, many provider (65 percent) and health plan (41 percent) executives do expect major business model changes in the next five years, while a majority of pharmaceutical executives (63 percent) expect only moderate changes.

    Payers were more optimistic about the possibility of partnerships involving providers and suppliers, with 55 percent of respondents saying it was possible. Additionally, they said they expect that healthcare information technology, evidence-based medicine, disease management, and pay for performance incentives will be the most effective approaches to curbing costs.

    Pharmaceutical executives are also struggling with change strategies. On one hand, 47 percent said a shift toward health system accountability would have a positive impact on their industry, and more than half said they are currently or will be using risk and outcome-based contracting in the future. Additionally, more than 70 percent of the executives said that comparative effectiveness research (CER) data would help show the value of their products.


    Two  Ivy League Professors Slugging It Out in a Political Arena

    Harvard History Professor Niall Ferguson --- http://en.wikipedia.org/wiki/Niall_Ferguson
    Princeton Economics Professor Paul Krugman --- http://en.wikipedia.org/wiki/Paul_Krugman

    "Kinds Of Wrong," by Paul Krugman, The New York Times, August 21, 2012 ---
    http://krugman.blogs.nytimes.com/2012/08/21/kinds-of-wrong/

    Looking at the comments on my Niall Ferguson takedown (see Ezra Klein, Matthew O’Brien, James Fallows, and Noah Smith for more), I found my memory jogged about a point I’ve been meaning to make about the nature of error in economics.

    It seems to me that when readers declare that some piece of economics commentary is “wrong”, they often confuse three different notions of wrongness, which are neither intellectually nor morally equivalent.

    First, there’s the ordinary business of expressing a view about the economy that the reader disagrees with – e.g., “Krugman is wrong, because the government can’t create jobs”; or, if you prefer, “Casey Mulligan is wrong, because we’re suffering from demand problems, not supply problems.” Obviously it’s OK to say things like this, and sometimes the criticism is correct. (I’m not wrong, but Mulligan is!) But equally obviously, there’s nothing, er, wrong about being wrong in this sense: people will disagree, and that’s legitimate.

    Second, and much less legitimate, is the kind of wrongness that involves making assertions that are logically or empirically indefensible. I’d put the Cochrane/Fama claims that government spending can’t increase demand as a matter of accounting in this category; this is a basic conceptual error, which goes beyond mere difference of opinion. And economists who are wrong in this sense should pay a professional price.

    That said, I don’t think it’s realistic to expect the news media to be very effective at policing this kind of wrongness. If professors with impressive-sounding credentials spout nonsense, it’s asking too much of a newspaper or magazine serving the broader public to make the judgment that they actually have no idea what they’re talking about.

    Matters are quite different when it comes to the third kind of wrongness: making or insinuating false claims about readily checkable facts. The case in point, of course, is Ferguson’s attempt to mislead readers into believing that the CBO had concluded that Obamacare increases the deficit. This was unethical on his part – but Newsweek is also at fault, because this is the sort of thing it could and should have refused to publish.

    Now, I don’t expect a publication that responds to daily or weekly news to do New Yorker-style fact checking. But it should demand that anyone who writes for it document all of his or her factual assertions – and an editor should check that documentation to see that it actually matches what the writer says.

    Continued in article

    "Unethical Commentary, Newsweek Edition," by Paul Krugman, The New York Times, August 19, 2012 ---
    http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/

    There are multiple errors and misrepresentations in Niall Ferguson’s cover story in Newsweek I guess they don’t do fact-checking — but this is the one that jumped out at me. Ferguson says:

    The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.

    Readers are no doubt meant to interpret this as saying that CBO found that the Act will increase the deficit. But anyone who actually read, or even skimmed, the CBO report (pdf) knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for.

    Now, people on the right like to argue that the CBO was wrong. But that’s not the argument Ferguson is making — he is deliberately misleading readers, conveying the impression that the CBO had actually rejected Obama’s claim that health reform is deficit-neutral, when in fact the opposite is true.

    More than that: by its very nature, health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. So of course reform comes with a positive number for subsidies — finding that this number is indeed positive says nothing at all about the impact on the deficit unless you ask whether and how the subsidies are paid for. Ferguson has to know this (unless he’s completely ignorant about the whole subject, which I guess has to be considered as a possibility). But he goes for the cheap shot anyway.

    Continued in article

    Jensen Comment
    The CBO assumes that the requirement (just upheld by a Supreme Court decision) that all people in the United States have health insurance or otherwise will have health insurance premiums deducted from their tax refunds that will fund the added cost of covering current poor people needing subsidies for health insurance coverage. This is what Krugman means above when he assumes "the insurance subsidies are fully paid for." This is why the Affordable Health Care Act (ACA) tried to get states to raise the number of people receiving state subsidies for Medicaid. About half the states, however, are refusing to along with the expanded coverage under Medicaid. This means that more higher-end low income people will depend on the ACA "subsidies" instead of Medicaid coverage from federal and state Medicaid funding.

    It seems to be a matter of semantics whether these tax return add-ons are a tax or not, but Krugman (probably rightfully) ignores this matter of semantics. But since about half the taxpayers in the U.S. pay no income taxes and over 90% of them are below the median in earnings it's not clear whether enough insurance premiums expected to be collected will really be collected. The CBO may have been planning on an economic recovery that perhaps will never materialize in this new era of global competition with Asia. The CBO expectations of lower unemployment may not materialize (currently there are nearly 13 million unemployed people not counting the many who've simply given up looking for work or received fraudulent Social Security lifetime disability awards). The required subsidies in reality may greatly exceed the added premiums "tax" collected. But nobody, including the CBO, knows what deficits will become.

    Also it's not at all clear that the CBO correctly estimated health care claims given the double-digit inflation in the cost of medical services. This is the real Achilles Heel of the Affordable Health Care Act. The costs of actually providing the promised services in the future may greatly exceed expectations.

    What may be more subject to dispute is how accurate the CBO is on estimating future costs of bringing on people who have prior conditions that prevent them from currently being able to obtain health care coverage. I'm definitely in favor of providing affordable coverage to these people with prior conditions. But I think the eventual coverage costs will exceed CBO estimates since many of them need high-cost organ transplants and other very expensive medical services.

    Professor Krugman has a very loyal crowd of liberal followers who seldom disagree with his liberal politics.
    The comment of NS
    The New York Times, August 19, 2012 ---
    http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
     

    I am very surprised by the hysterical reaction of many readers to Krugman's comment. The point of the argument is what the HBO report says. Does Ferguson lie about the HBO report in his Newsweek article? Either Ferguson or Krugman is correct. I would expect readers disagreeing with Krugman to provide quotations from the HBO report showing that he is wrong and that Ferguson is right.

    Instead of that I see a lot of ideological delirium in too many of the comments.

    NS, Paris, France

     

    Comment of Laurie Wick
    The New York Times, August 19, 2012 ---
    http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/

    I cancelled my subscription to Newsweek today. I do not need this kind of uninformed blather in my home. If I feel the need to read/hear totally unfactual, biased reporting, I can just turn on FOX news at any hour of the day or night. Which I will never do.

    Laurie Wick

    Jensen Comment
    Actually, since Tina Brown became editor, Newsweek became a liberal feminist magazine. Niall Ferguson's column is only there for tokenism. The Ferguson cover story is most likely a desperate attempt to recover the millions of conservative subscribers who've defected since Tina Brown took over. One of the recent cover's of Newsweek accuses Candidate Romney of "being a Wimp." Are you sure you want to cancel Newsweek Laurie?

    The Comment of J. Philip
    The New York Times, August 19, 2012 ---
    http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/

    FTA: "health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. "

    And, exactly,. Mr. Krugman, where do you think those subsidies are gonna come from? You can continue to carry Obama's water that's what you get paid to do, but the rest of us know a TAX when we see one.

    J. Phillip

    Closing Jensen Comment
    I wish the Democrats had rammed a national health care plan down our throats in that short window of time 2008-2010 when they controlled the entire executive and legislative branches of the federal government. Instead we ended up with a bastardized public-private ACA that pleases neither the left nor the right. I am inclined to believe that the ACA will always have insurance premiums falling way short of costs of delivering medical services. Whether or not this adds to the deficit is simply a matter of accounting gimmicks the familiar governmental accounting shell game ---
    http://faculty.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting

    Bob Jensen's threads on the ACA are at
    http://faculty.trinity.edu/rjensen/Health.htm


    Why U.S. Medical Costs Are so High:  Wastes Caused by Losing Causes

    As usual, I preface this by saying that I favor a national health care insurance system, possibly like the one in Canada where people of all levels of income pay their fair share for medical services. Having said this, I point out that in providing basic medical services to all citizens the quality of the medical services decline in terms of waits for such services, difficulties for many to get replacement knees, hips, and organs, and the need to come to the U.S. for some of the great specialty physicians and medical centers.

    Two reasons medical costs are higher in the U.S. is that the U.S. spends more on average per capita on futile extensions of life for a few weeks or months, which is the most single costly component of Medicare costs according to CBS Sixty Minutes. The other reason is the hundreds of billions spent in the U.S. on medical research where other nations become free riders on the the most successful discoveries.

    The High Cost of Dying
    On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
    "The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

    What is really sad is the way Republicans are standing in the way of making rational cost-benefit decisions about dying by exploiting the "Kill Granny" political strategy aimed at killing a government option in health care reform.
    See the "Kill Granny" strategy at --- www.defendyourhealthcare.us
    Other nations simply do not spend as much on saving extremely premature babies and the terminally ill.

    The High Cost of Research
    "How Much Would You Pay for Three More Months of Life?," by Laura Beil, Newsweek Magazine, September 3, 2012, pp. 40-44  ---
    http://www.thedailybeast.com/newsweek/2012/08/26/the-cancer-breakthroughs-that-cost-too-much-and-do-too-little.html

    In his more than 35 years of practice, Dr. Lowell Schnipper has seen a lot of women die from breast cancer. A patient’s options start to dwindle by the time tumor cells set up outposts in the bones, lungs, and other organs, defying all attempts to keep them under control. But in June, when the government approved Perjeta, Schnipper had something new to offer. The drug is one of an innovative class of drugs known as “targeted therapies.”

    As the chief of oncology at Beth Israel Deaconess Medical Center in Boston, Schnipper knew Perjeta was not a cure: added to a standard treatment with Herceptin—another targeted therapy that was hailed as a breakthrough in 1998—Perjeta gives the average woman only about six months more of calm before her disease starts to stir again. Given the limited benefit, the price was startling. For most women, a full course of the drug combination will cost $188,000—enough, he says, “to give anybody a cold sweat.”

    Americans spent more than $23 billion last year for cancer drugs, more than we paid for prescriptions to treat anything else. But many oncologists are starting to question what we are getting in return for that bill, whether the war on cancer has become too much of a race to produce the next blockbuster. “In general, progress for cancer has been halting and slow,” says David Howard of the Department of Health Policy and Management at Emory University. So far, most new drugs offer only marginal extensions of life and few cures. Howard says new so-called breakthroughs “overpromise and underdeliver.” Consider the popularity of Avastin, a targeted drug approved for metastatic colon cancer in 2004. A recent study found that almost 70 percent of patients on chemotherapy were receiving Avastin within a year of its release. In clinical trials, the drug increased survival by about five months. The cost? About $10,000 a month.

    Treating cancer has never been cheap, but today, the price of each new treatment seems to outpace the one before, with little bearing on its efficacy. According to figures from insurer United Healthcare, a standard cocktail of drugs for treating lung cancer used to run about $1,000 a month. Today’s regimens cost from more than $6,000 to almost $10,000—for about two more months of life. “There is no such thing as a cancer drug coming on the market that is some sort of regular drug price,” says Dr. Peter Bach of Memorial Sloan-Kettering Cancer Center in New York, who studies the impact of cancer costs on U.S. health care. “They’re all priced at spectacularly high levels.” Which leads to an unsettling question: how much is a little more time worth? Would you spend $50,000 for four more months? How about $15,000 for two weeks?

    Of three frontiers in cancer treatment, targeted therapies like Perjeta are widely seen as the best hope for a cure. Traditional chemotherapy is notorious for side effects because it wields destruction indiscriminately throughout the body. Targeted therapies are designed to hit cancer cells only. Perjeta, for example, targets a protein produced in excess amounts in some breast cancers; Avastin hinders the ability of a tumor to form new blood vessels to feed itself.

    . . .

    The Cancer “Breakthroughs” that Cost Too Much and Do Too Little

    Doctors envision the day when every patient will have therapy precisely matched to the genetic bull’s-eyes of their own cancers. The holdup has been that cancer has proven to be more genetically crafty than researchers once imagined. Scientists may build a drug to hit one target, but a tumor may also employ lots of yet-undiscovered genetic tricks to keep itself alive. Instead of a magic bullet, scientists now know that any particular tumor may need lots of magic bullets. With so many targets unknown, a lot of patients end up getting drugs that barely touch their cancers, which is why the effectiveness of many new drugs remains underwhelming.

    Not that this keeps a drug from becoming a blockbuster. Patients with advanced cancer, and their physicians, are hungry for progress. As a result, almost all of the 10 bestselling cancer drugs are targeted therapies, many less than a decade old. All came on the market at thousands of dollars a month, a trend that continues today with gusto. The drug Afinitor, a daily pill, was approved in July for patients with breast cancer. It costs more than $200 a tablet. But price rarely matters to patients or even doctors, says Dr. Oliver Sartor, medical director of the Tulane Cancer Center in New Orleans. “People have already been told there is no cure for their disease,” he says. “Every increment, every improvement, gives hope, and when options are extremely limited, we all focus on the positive possibilities.”

    In addition to targeted therapies, drugs have come on the market that can spur the body’s own immune cells to lead the charge. Significant hurdles have hindered this kind of treatment for years. But they are finally being overcome. The prostate cancer drug Provenge, which came on the market in 2010, was the first immune-therapy drug to gain governmental approval. It was followed the next year by Yervoy, when approved the only drug ever shown to extend survival in advanced melanoma. Men with a common kind of advanced prostate cancer who used Provenge lived an average of four months longer than the comparison group; patients on Yervoy got an average of 3.6 months. The gains are modest, but not the cost. When Sartor learned Provenge would run $93,000 per patient, “I was stunned,” he says. And even that was cheaper than Yervoy, which appeared the following year at $120,000 for four injections. He predicts the pricing of immune therapies may be seen as “a watershed moment” in the debate over health-care costs.

    The third area of touted breakthroughs has been in radiation, most recently by using protons instead of traditional X-rays to kill cancer cells. It’s a controversial undertaking: many doctors believe that protons offer better precision, able to get rid of tumors without collateral damage to nearby healthy tissues. But whether protons can treat with fewer side effects than traditional radiation is, to date, a matter of debate for almost all but pediatric and certain neurological tumors.

    As with new drugs, proton-beam radiation is expensive—it can run roughly twice as much as the current state-of-the-art form of radiation that uses X-rays. In the case of proton beams, much of the cost has to do with building a cyclotron to harvest the protons—a construction project that can cost upwards of $150 million. In 2001 just three centers in the country offered proton treatment, but that number is now up to 10, with a half dozen more planned. About three quarters of the proton patient population covered by Medicare are men with prostate cancer, which, because of the length of their therapy, are the most lucrative to treat.

    Why do new drugs cost so much? Pharmaceutical companies say it’s payment for scientific creativity, that high prices are necessary to recover the expense of developing and manufacturing their products and to encourage more research. A spokeswoman for Bristol-Myers Squibb, which makes Yervoy, says the cost of drugs is “based on a number of factors, including the value they deliver to patients, the scientific innovation they represent, and the cost to develop them.” Part of the price is also an investment in drug discovery. “We look at not only the past research and development, but development in the future,” says Krysta Pellegrino, a spokeswoman for Genentech, which developed Perjeta.

    That said, many cancer experts remain skeptical of the notion that drug companies are simply passing along the cost of doing business and funding the incubation of new drugs. In 2004 researchers tried to test the relationship between a drug’s development and its final asking price. In the Journal of Clinical Oncology, the scientists concluded “that the drug companies are not pricing their drugs to recuperate losses associated with research and development, marketing, and operating prices, but rather [the average wholesale price] depends on what the market itself can bear.”

    “It’s a marketplace where the seller has all of the control,” says Bach, from Memorial Sloan-Kettering, because private insurance companies and Medicare—the largest purchasers of drugs—are powerless to bargain for a less expensive deal. “Prices are high because they can be,” Bach says. As one doctor observed, “we are always paying for a Ferrari but often getting a Ford.” The occasional Ferrari does exist. The targeted drug Gleevec, which treats certain forms of leukemia and intestinal tumors, has allowed patients to live for years with their cancer in check.

    Continued in article

    Jensen Comment
    At a cost of $150 million each, how many other nations have built 10 cyclotrons for harvesting proton beams for cancer treatments and research?

    Only the most successful findings in the U.S. will motivate other free-rider nations to invest in such expensive hardware.

    If we adopt a national health care plan the medical services will be spread more evenly across all residents of the U.S. However, we will then have to come to grips with costs of dying and costs of research that we perhaps can no longer afford on the same scale.

    We will also have to come to grips with controlling punitive damage hundreds of billions in lawsuits like other nations control such frictions on medical services. Other nations like Canada provide for damages and lost income, but they do not turn medical litigation into a legal lottery.

    "Canadian Malpractice Insurance Takes Profit Out Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
    Click Here
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890  

    The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

    A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

    A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

    Why the difference?

    In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.

    In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.

    In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.

    Canadian Medical Protective Association

    Here’s how it works.

    Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium

    "We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.

    If a doctor is sued, the group pays the claim and provides legal counsel.

    In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.

    "We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''

    But the importance of limiting jury awards may not play into the big picture on health care reform.

    Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.

    Major Difference

    In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.

    In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.

    A bad outcome in itself is not the basis of a lawsuit.

    The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.

    In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.

    In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.

    Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”

    For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.

    2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.

    In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”

    Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #



    Read more:
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP

     


    November 12. 2010 message from Ramesh Fernando 

    Prof. Jensen,
    While it's true our spending on health-care is much lower than the US in terms of percentage of GDP and we don't have the level of malpractice suits as in the USA there are severe problems with the healthcare system. The federal government has a guaranteed I think 6% accelerator, much higher than inflation, transfer payment to the provinces for health care. I doubt the federal government can guarantee that kind of spending in the next negotiations between the provinces and the federal government.

    Then again federal government transfers amount to only about 15-20% of most provincial health spending and provinces spend about 40-50% of their budget on the health budget and growing larger as the boomers age. Provinces especially Ontario and Quebec but even Alberta with it's oil and natural gas royalties will not be able to keep this up,

    Ontario has a bigger deficit at $21 billion Canadian than California I think and Ontario only has 12-13 million people. Quebec which is usually a very socialist province, has actually liberalized the private element of health care services the most, there are many Ontarians who go to Quebec to get treated including private MRI scans etc. British Columbia is also following Quebec and has allowed private clinics to serve patients.

    There are two cures for reducing the deficits of the provinces, one is to stop the increase in health spending so per capita spending goes down along with co-payments for superficial emergencies like colds and coughs to the doctor or emergencies. Other is to create a two tier system with a fully private one along with the public system. All three federal parties, even the governing Conservatives who are most similar to your Republicans and the Bloc Quebecois (the Quebec nationalists-separatists) are against a private system but there is a lot of support for it from the more conservative elements in Canada, including Preston Manning, the former leader of the populist Reform and former Conservative premier of Ontario Mike Harris.

    They wrote a couple booklets published by the Fraser Insitute
    "A Canada Strong and Free"
    URL http://www.fraserinstitute.org/research-news/display.aspx?id=1277  and

    "Caring for Canadians"
    URL http://www.fraserinstitute.org/research-news/display.aspx?id=12928 
    which basically noted the problems with the Canada Health Act.

    Note I am not saying I agree with them or disagree with either way but they do have some valid points.

    Regards,
    Ramesh Fernando
    CMA Candidate
    Ottawa, Ontario, Canada


    Paul Ryan on the Affordable Health Care Act --- http://www.youtube.com/watch?v=zPxMZ1WdINs

    "Will Big Companies Drop Health Benefits? Once the dust settles on the forthcoming state insurance exchanges, small companies may not be the only ones seeking to shed employee health plans," by David McCann, CFO.com, July 12, 2012 ---
    http://www3.cfo.com/article/2012/7/health-benefits_state-insurance-exchanges-2014-affordable-care-act

    Large employers plan to continue offering health benefits after the health-insurance exchanges provided for under the Affordable Care Act (ACA) begin operating — whether that’s in 2014, as the law currently requires, or later, as seems more likely.

    At least, that’s what those employers are saying now. “My corporate clients, most of which are large, are asking a lot of questions about [the ACA], but none are about the exchanges,” says Priscilla Ryan, a partner at law firm Sidley Austin, which has a large health-care practice. “None of them are considering dropping their health-care coverage.”

    Many such companies considered the idea when the law was enacted in 2010, or even earlier, and rejected it, according to Ryan. “They’ve moved on and are well on to new plan designs and expanding coverage as required by the law,” she says.

    But companies have no reason to show their hands now. That’s especially so because timetables for the state-run exchanges, as well as federally operated exchanges that are to be created for residents of states that decline to tap federal subsidies and create their own, are so iffy. Thirty-six states have achieved less than 10% of the 109 milestones toward the establishment of an exchange identified by the National Academy for State Health Policy.

    That may mean it’s a long shot that a majority of states will meet a November 16 deadline to indicate whether they plan to set up an exchange and, if so, provide a blueprint demonstrating their readiness in 13 areas so that the exchange will be operational by January 1, 2014, as stipulated in the ACA. That will in turn delay the federal government’s work on creating the state exchanges it will run (which could turn out to be as many as half of them, by some estimates), since the health insurers that will participate in the exchanges will vary from state to state.

    “Maybe a few states will be ready, but it seems quite unlikely that most of these things will be running by 2014,” says Susan Nash, a partner at McDermott Will & Emery, another law firm with a strong health-care focus.

    So companies have plenty of time to make the “pay or play” decision. It’s called that because employers with more than 50 full-time-equivalent workers that decide to forgo offering health insurance will have to pay a tax, in most cases $2,000 per employee per year, minus 30 employees.

    Companies that now say they have no intention of abandoning employee health-care benefits — even though it likely would be a financial plus for them, because average per-employee costs are almost always greater than $2,000 per year — might change their mind if a competitor makes the move.

    “I think it’s going to be like the lemmings: who’s going to jump off the cliff first?” says Nash. “I haven’t heard any large employers say they’ll do it yet, but it’s highly possible. If Wal-Mart or Costco did it and were successful, it might become an easier and easier decision for other retailers to make and it could become a standard in that sector.”

    Indeed, retailers, restaurants, and other companies that employ many low-wage workers are the most likely to bid adieu to employee health benefits at some point. That’s partly because it’s a fiscal strain to provide a large number of employees with benefits whose worth is equal to a relatively high percentage of their wages.

    But it’s also partly because of the sliding-scale subsidies the federal government will provide under the ACA to workers who lose their health-care coverage. That’s important for employers who elect to nix their health plans, because it could lessen a potential blow to employee engagement stemming from the move. “The value of the subsidy to employees would dwarf the employer’s tax for not offering coverage,” says benefits consultant Ed Kaplan, senior vice president and national health practice leader at The Segal Co. “But at an engineering firm or an IBM, for example, employees’ incomes are much higher so their subsidies would be much smaller.”

    Some companies could opt for what Nash calls a “soft landing”: dropping their health plans but giving employees a certain amount of money with which to buy insurance on their own through an exchange.

    It remains to be seen, though, how well the exchanges will work. A key reason they may not be operational until after 2014, and why the federal government is subsidizing their creation, is that they are big undertakings.

    Continued in article

    Bob Jensen's threads on the Affordable Health Care Act ---
    http://faculty.trinity.edu/rjensen/Health.htm


    Concerning the Affordable Health Care Act
    "Biggest Tax Increase in History?" FactCheck, July 10, 21012 ---
    http://factcheck.org/2012/07/biggest-tax-increase-in-history/

    Q: Is the new health care law “the biggest tax increase in history”?

    A: In raw dollars, perhaps. But several tax increases just since 1968 were larger as percentages of the economy, or in inflation-adjusted dollars.

    FULL QUESTION

    Will “Obamacare” be the largest tax hike in US history?

    FULL ANSWER

    Several readers have asked us about this since Rush Limbaugh made a hugely exaggerated claim that the new health care law is “the biggest tax increase in the history of the world.”

    We’re not sure Limbaugh meant his statement to be taken seriously; He offered no figures or citations to back up what he said. But other critics of the law have made similar claims.

    The increase is certainly large. So let’s take a look at how the taxes and fees that finance “Obamacare” stack up against earlier increases.

    Continued in article

    Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


    "TOP TEN MYTHS OF MEDICARE," by Richard L. Kaplan, The Elder Law Journal, Vol. 20, No.1, 2012 --- 
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2111535

    In the context of changing demographics, the increasing cost of health care services, and continuing federal budgetary pressures, Medicare has become one of the most controversial federal programs. To facilitate an informed debate about the future of this important public initiative, this article examines and debunks the following ten myths surrounding Medicare: (1) there is one Medicare program, (2) Medicare is going bankrupt, (3) Medicare is government health care, (4) Medicare covers all medical cost for its beneficiaries, (5) Medicare pays for long-term care expenses, (6) the program is immune to budgetary reduction, (7) it wastes much of its money on futile care, (8) Medicare is less efficient than private health insurance, (9) Medicare is not means-tested, and (10) increased longevity will sink Medicare.

    Jensen Comment
    I don't agree with every conclusion in this paper, but it is one of the best summaries of Medicare that I can recommend.

    Waste, Fraud, and Abuse:  The gap between payments and payees in Medicare makes it a criminal's piñata

    It should be emphasized at the outset that this contention is not about the ever-present specter of “waste, fraud, and abuse” that haunts governmental programs generally. That Medicare is targeted by scammers and schemers of all sorts is both indisputable and hardly surprising. As the famed bank robber, Willie Sutton, reportedly replied when asked why he robbed banks: “That’s where the money is.”101 Indeed, Medicare is where the money is—specifically $509 billion in fiscal year 2010 alone.102 Any program that pays out this amount of money to a wide variety of service providers in literally every county in America will be very difficult to police. That reality notwithstanding, such violations of the public trust as are encapsulated in the phrase “waste, fraud, and abuse” should be ferreted out whenever possible and eliminated. No one excuses these leakages, just as no one has a sure-fire solution to stem them once and for all.
    Kaplan, Page 19

    One thing to think about is why Medicare may be losing hundreds of billions of dollars relative to the national health care plans of Canada, Europe, etc. The obvious thing to pick on is that Medicare is a third party payment system where medical services, medications, equipment such as battery-powered scooters and home hospital beds, and medical care centers are not directly managed by the government. This opens the door to millions of fraudulent claims, often by extremely clever criminals, unscrupulous physicians, etc. The gap between payments and payees in Medicare makes it more vulnerable to abuse and waste.

    This and other articles make a big deal about how administrative costs of Medicare are significantly less that the administrative costs of private insurance carriers like Blue Cross. However, what this article and related articles almost always fail to mention is that the major component of administrative cost to companies like Blue Cross lies in operating controls to prevent waste, fraud, and abuse.

    National plans like those in Canada have both lower administrative costs and less waste, fraud, and abuse because the government provides most of the services directly without the moral hazards that arise from the gap between funding and delivery of services. Personally, I favor national plans. Of course, in some nations like Germany  there are premium alternatives where people that can afford it can pay for premium services not covered in the national plans.
    http://faculty.trinity.edu/rjensen/Health.htm

     

    Futile Care Waste:  My former University of Maine colleague was given thirty days to live (because of Stage Four bone cancer) received two new hips but never walked again and died in less than two weeks

    But the issue of “futile care” is very different from “waste, fraud, and abuse.” The claim that Medicare should not pay for pointless medical interventions presumes that funds were indeed spent on actual medical procedures. The issue is whether those procedures should not have been done for reasons of inefficacy or insufficient “bang for the buck.” It is certainly true that Medicare spends a disproportionate amount of its budget on treatments in the final months of its beneficiaries’ lives. Some twenty-eight percent of the entire Medicare budget is spent on medical care in enrollees’ final year of life,103 and nearly forty percent of that amount is spent during a patient’s last month. The critical issue, of course, is whether these expenditures are pointless.

    In one respect, it is not surprising that the cost of a person’s final medical episode is unusually expensive. That person’s presenting condition must have been especially severe because he or she did in fact die during or shortly after treatment. Moreover, when circumstances are particularly bleak, more intensive and often much more expensive procedures, tests, and interventions seem appropriate. After all, the patient was literally fighting off death at that point, so medical personnel try everything in their armamentarium to win what was ultimately the patient’s final battle. Only after the fact does one know that the battle in question was indeed the patient’s last episode. Does that mean that the effort expended, and the attendant costs, were wasted?

    This question is more difficult than some might suspect. A recent study of Medicare claims data examined the association between inpatient spending and the likelihood of death within thirty days of a patient’s being admitted to a hospital.It found that for most of the medical conditions examined, including surgery, congestive heart failure, stroke, and gastrointestinal bleeding, a ten percent increase in inpatient spending was associated with a decrease in mortality within thirty days of 3.1 to 11.3%, depending upon the specific medical condition in question. Only for patients who presented with acute myocardial infarction was there no association of increased inpatient spending and improved outcomes. Thus, the authors concluded, “the amount [of waste] may not be as large as commonly believed, at least for hospitalized Medicare patients.” To be sure, the results might not be as encouraging in non-hospital settings, but Medicare does not cover the cost of nursing home patients who are lingering at death’s door while receiving “custodial care.”In any case, hospital costs represent the single largest component of Medicare’s expenditures— fully twenty-seven percent in the most recent year for which such data are available.

    That is not to say that some of Medicare’s expenditures near the end of beneficiaries’ lives provide insufficient benefit to justify their cost. But the tough questions are how to determine those wasteful expenditures in advance and who should make that determination. Such considerations are beyond the scope of this Article,but suffice it to note that end-of-life care discussions are extraordinarily contentious and easily demagogued. After all, former Vice Presidential candidate Sarah Palin effectively scuttled a rather benign effort to include payment for end-of-life counseling in Medicare’s newly provided “annual wellness visit[s]” by contending that such counseling was a first step to rationing health care by “death panels” run by government bureaucrats. Thus, while patients can individually indicate in advance how much treatment they want at the end of their lives, any comprehensive effort to root out Medicare’s wasteful expenditures on “futile care” might face serious political opposition.

    In any case, an authoritative analysis published in The New England Journal of Medicine concluded that “the hope of cutting the amount of money spent on life-sustaining interventions for the dying in order to reduce overall health care costs is probably vain.” The authors noted that “there are no reliable ways to identify the patients who will die” and that “it is not possible to say accurately months, weeks, or even days before death which patients will benefit from intensive interventions and which ones will receive ‘wasted’ care.” That leaves age-based rationing of care or more precisely, denial of medical services on the basis of chronological age, as the only easily implemented pathway to eliminate what some might regard as inefficacious expenditures of medical resources. Such age-based rationing of health care is practiced in other national health care systems, even though studies of prognostic models have demonstrated that “age alone is not a good predictor of whether treatment will be success ful.” In any case, polls of Americans have shown little support and significant opposition to the concept. One survey undertaken in late 1989 sought agreement with the following statement: “Lifeextending medical care should be withheld from older patients to save money to help pay for the medical care of younger patients.” Only 5.7% of respondents under age sixty-five strongly agreed with this statement while 38.3% of that group strongly disagreed with it.120 Interestingly, among respondents who were themselves age sixty-five and older, the gap between these opposing viewpoints was narrower: 8.8% strongly agreed with the statement in question while 35.4% strongly disagreed.

    Whether results would be substantially different today when the range of medical interventions has increased significantly and when the nation’s budgetary situation has worsened considerably is an open question. Yet, when the 2010 health care reform legislation created an Independent Payment Advisory Board to reduce Medicare’s expenses, the enabling statute was explicit that this Board may not make proposals that would “ration health care.” Clearly, the prospect of eliminating Medicare expenditures that are medically futile will not be an easy task to accomplish.
    Kaplan, pp. 19-22

    Jensen Comment
    My former Unive
    rsity of Maine colleague on Medicare was given thirty days to live (because of Stage Four bone cancer) received two new hips but never walked again and died in less than two weeks. I don't think he would've received those two useless and very expensive hips on any of the national plans of Canada or Europe.

     

    Where Did Medicare Go So Wrong?
    Medicare is a much larger and much more complicated entitlement burden relative to Social Security by a ratio of about six to one or even more. The Medicare Medical Insurance Fund was established under President Johnson in1965.

    Note that Medicare, like Social Security in general, was intended to be insurance funded by workers over their careers. If premiums paid by workers and employers was properly invested and then paid out after workers reached retirement age most of the trillions of unfunded debt would not be precariously threatening the future of the United States. The funds greatly benefit when workers die before retirement because all that was paid in by these workers and their employers are added to the fund benefits paid out to living retirees.

    The first huge threat to sustainability arose beginning in 1968 when medical coverage payments payments to surge way above the Medicare premiums collected from workers and employers. Costs of medical care exploded relative to most other living expenses. Worker and employer premiums were not sufficiently increased for rapid growth in health care costs as hospital stays surged from less than $100 per day to over $1,000 per day.

    A second threat to the sustainability comes from families no longer concerned about paying up to $25,000 per day to keep dying loved ones hopelessly alive in intensive care units (ICUs) when it is 100% certain that they will not leave those ICUs alive. Families do not make economic choices in such hopeless cases where the government is footing the bill. In other nations these families are not given such choices to hopelessly prolong life at such high costs. I had a close friend in Maine who became a quadriplegic in a high school football game. Four decades later Medicare paid millions of dollars to keep him alive in an ICU unit when there was zero chance he would ever leave that ICU alive.

    On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
    "The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

    What is really sad is the way Republicans are standing in the way of making rational cost-benefit decisions about dying by exploiting the "Kill Granny" political strategy aimed at killing a government option in health care reform.
    See the "Kill Granny" strategy at --- www.defendyourhealthcare.us

    The third huge threat to the economy commenced in when disabled persons (including newborns) tapped into the Social Security and Medicare insurance funds. Disabled persons should receive monthly benefits and medical coverage in this great land. But Congress should've found a better way to fund disabled persons with something other than the Social Security and Medicare insurance funds. But politics being what it is, Congress slipped this gigantic entitlement through without having to debate and legislate separate funding for disabled persons. And hence we are now at a crossroads where the Social Security and Medicare Insurance Funds are virtually broke for all practical persons.

    Most of the problem lies is Congressional failure to sufficiently increase Social Security deductions (for the big hit in monthly payments to disabled persons of all ages) and the accompanying Medicare coverage (to disabled people of all ages). The disability coverage also suffers from widespread fraud.

    Other program costs were also added to the Social Security and Medicare insurance funds such as the education costs of children of veterans who are killed in wartime. Once again this is a worthy cause that should be funded. But it should've been separately funded rather than simply added into the Social Security and Medicare insurance funds that had not factored such added costs into premiums collected from workers and employers.

    The fourth problem is that most military retirees are afforded full lifetime medical coverage for themselves and their spouses. Although they can use Veterans Administration doctors and hospitals, most of these retirees opted for the underfunded  TRICARE plan the pushed most of the hospital and physician costs onto the Medicare Fund. The VA manages to push most of its disabled veterans onto the Medicare Fund without having paid nearly enough into the fund to cover the disability medical costs. Military personnel do have Medicare deductions from their pay while they are on full-time duty, but those deductions fall way short of the cost of disability and retiree medical coverage.

    The fifth threat to sustainability came when actuaries failed to factor in the impact of advances in medicine for extending lives. This coupled with the what became the biggest cost of Medicare, the cost of dying, clobbered the insurance funds. Surpluses in premiums paid by workers and employers disappeared much quicker than expected.

    A sixth threat to Medicare especially has been widespread and usually undetected fraud such as providing equipment like motorized wheel chairs to people who really don't need them or charging Medicare for equipment not even delivered. There are also widespread charges for unneeded medical tests or for tests that were never really administered. Medicare became a cash cow for crooks. Many doctors and hospitals overbill Medicare and only a small proportion of the theft is detected and punished.

    The seventh threat to sustainability commenced in 2007 when the costly Medicare drug benefit entitlement entitlement was added by President George W. Bush. This was a costly addition, because it added enormous drains on the fund by retired people like me and my wife who did not have the cost of the drug benefits factored into our payments into the Medicare Fund while we were still working. It thus became and unfunded benefit that we're now collecting big time.

    In any case we are at a crossroads in the history of funding medical care in the United States that now pays a lot more than any other nation per capita and is getting less per dollar spent than many nations with nationalized health care plans. I'm really not against Obamacare legislation. I'm only against the lies and deceits being thrown about by both sides in the abomination of the current proposed legislation.

    Democrats are missing the boat here when they truly have the power, for now at least, in the House and Senate to pass a relatively efficient nationalized health plan. But instead they're giving birth to entitlements legislation that threatens the sustainability of the United States as a nation.

    In any case, The New York Times presents a nice history of other events that I left out above ---
    http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html

    "THE HEALTH CARE DEBATE: What Went Wrong? How the Health Care Campaign Collapsed --
    A special report.; For Health Care, Times Was A Killer," by Adam Clymer, Robert Pear and Robin Toner, The New York Times, August 29, 1994 --- Click Here
    http://www.nytimes.com/1994/08/29/us/health-care-debate-what-went-wrong-health-care-campaign-collapsed-special-report.html

    November 22, 2009 reply from Richard.Sansing [Richard.C.Sansing@TUCK.DARTMOUTH.EDU]

    The electorate's inability to debate trade-offs in a sensible manner is the biggest problem, in my view. See

    http://www.washingtonpost.com/wp-dyn/content/article/2009/11/19/AR2009111904053.html?referrer=emailarticle 

    Richard Sansing

    The New York Times Timeline History of Health Care Reform in the United States ---
    http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
    Click the arrow button on the right side of the page. The biggest problem with "reform" is that it added entitlements benefits without current funding such that with each reform piece of legislation the burdens upon future generations has hit a point of probably not being sustainable.

    Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
    Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1

    . . .

    In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.

    . . .

    Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.

    Continued in article

    This is now President Obama's problem with or without new Obamacare entitlements that are a mere drop in the bucket compared to the entitlement obligations that President Obama inherited from every President of the United States since FDR in the 1930s. The problem has been compounded under both Democrat and Republican regimes, both of which have burdened future generations with entitlements not originally of their doing.

    Professor Niall Ferguson and David Walker are now warning us that by year 2050 the American Dream will become an American Nightmare in which Americans seek every which way to leave this fallen nation for a BRIC nation offering some hope of a job, health care, education, and the BRIC Dream.

    Bob Jensen's threads on health care ---
    http://faculty.trinity.edu/rjensen/Health.htm

    Bob Jensen's threads on entitlements ---
    http://faculty.trinity.edu/rjensen/entitlements.htm


    U.S. National Debt Clock --- http://www.usdebtclock.org/
    Also see http://www.brillig.com/debt_clock/

    Question
    Should we keep increasing the government spending deficit and the national debt every year ad infinitum?

    Answers
    Although in these down economic times, the liberal's Keynesian hero and Nobel Prize economist, Paul Krugman, thinks recovery is stalled because the government is not massively increasing spending deficits. But he's not willing to commit himself to never reducing deficits or never paying down some of the national debt. Hence, he really does not answer the above question ---
    http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html

    So let's turn to a respected law professor who advocates increasing the government spending deficit and the national debt every year ad infinitum?

    "Why We Should Never Pay Down the National Debt (even partly)," by Neil H. Buchanan George Washington University Law School), SSRN, 2012 ---
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2101811

    Abstract:
    Calls either to balance the federal budget on an annual basis, or to pay down all or part of the national debt, are based on little more than uninformed intuitions that there is something inherently bad about borrowing money. We should not only ignore calls to balance the budget or to pay down the national debt, but we should engage in a responsible plan to increase the national debt each year. Only by issuing debt to lubricate the financial system, and to support the economy’s healthy growth, can we guarantee a prosperous future for current and future citizens of the United States.

    Student Assignment

    Since many of the most liberal economists are not quite willing to assert that "we should never pay down the national debt," what questionable and unmentioned assumptions have been made by Neil H. Buchanan that need to be addressed?

    Are some of these assumptions unrealistic in any world other than a utopian world?

    Bob Jensen's Answers ---
    http://www.cs.trinity.edu/~rjensen/temp/NationalDeficit-Debt.htm


     

     

     


    June 30, 2012

    The Bright Side (it has a chance of working) and Dark Side (fiscal disaster) of the Affordable Care Act
    Interestingly, among the quotes below a University of Chicago law professor sides with liberals and a U.C. Berkeley law professor sides with conservatives
    That is academia at it's best.
     

    I might note that Michael Moore, in his famed documentary Sicko, was snookered by Cuban leaders into thinking that all Cubans got the premium health care reserved for only to elites in Cuba ---
    http://feathersblog.blogspot.com/2007/10/michael-moores-sicko-and-gruesome.html

    Video:  'No Going Back': Michael Moore on the Last Word With Lawrence O'Donnell, 6/28/12  ---
    http://www.michaelmoore.com/words/must-read/no-going-back-michael-moore-last-word-lawrence-odonnell-62812

    The Supreme Court has upheld the Affordable Care Act, President Obama’s signature bill, clearing the way for the largest revamp of America’s healthcare system since the 1960s. We get reaction from acclaimed filmmaker Michael Moore, whose 2007 documentary, "Sicko," tackled many failures of the U.S. healthcare system. "This really is a huge victory for our side, in spite of all of my concerns with this law," Moore says. "We have to work toward Medicare for all, so that everyone’s covered ... We can’t allow private insurance — people making a profit off of people getting sick." [includes rush transcript]
    http://www.democracynow.org/2012/6/29/michael_moore_supreme_court_healthcare_ruling

    The Supreme Court’s decision in National Federation of Independent Business v. Sebelius—the healthcare cases—was a tremendous political victory for the Obama administration and, more importantly, the tens of thousands of Americans who will be saved from illness and death by the law. But make no mistake: the decision could also be a significant legal victory for the political forces committed to limiting the state’s ability to care for the weak and fragile among us.
    Ariz Huq (University of Chicago Law School) , "In the Healthcare Decision, a Hidden Threat?" The Nation, June 29, 2012 ---
    http://www.thenation.com/article/168677/healthcare-decision-hidden-threat

     

    "Health Care Reform and the Supreme Court (Affordable Care Act), The New York Times, June 29, 2012 ---
    http://topics.nytimes.com/top/reference/timestopics/organizations/s/supreme_court/affordable_care_act/index.html

    Since you can easily access this article for free, I will not waste space by quoting it here


    "The Affordable Care Act: A Doctor's View," by Thomas H. Lee (Harvard Medical School), Harvard Business Review Blog, June 29, 2012 --- Click Here
    http://blogs.hbr.org/cs/2012/06/placeholder_for_lee_obamacare.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

    Since you can easily access this article for free, I will not waste space by quoting it here.



    Jensen Comment
    If over half the nation's graduates (higher percentage for Literature, Music, and Philosophy PhDs) and unemployed teachers are not finding jobs or can only get part-time McJobs it's never been clear what we will do with them if they really cannot afford the mandated health insurance coverage mandated for them. Do they go to jail or will Uncle Sam simply pick up their insurance premiums? And do emergency rooms refuse services to the uninsured. Yeah Right!

    The Affordable Health Care Act is a sorry excuse for what should have been the More Like Canada Health Care Act.

    The Journal of Accountancy discusses tax implications of the Affordable Health Care Act ---
    "Supreme Court upholds health care law," by Sally P. Schreiber and Alistair M. Nevius, Journal of Accountancy, June 28, 2012
    http://www.journalofaccountancy.com/News/20125972.htm


    "ObamaCare—Upheld and Doomed Regardless of the Supreme Court, fiscal reality will prevail," by Holman W. Jenkins Jr., The Wall Street Journal, June 29, 2012 ---
    http://professional.wsj.com/article/SB10001424052702303649504577496850233678284.html?mod=djemEditorialPage_t&mg=reno64-wsj

    Worse, in doing so, he may have read any constitutional limit on Congress out of the Constitution while pretending to do the opposite. Congress cannot compel you to do anything Congress wishes, but it can impose taxes on you until you finally have no rational alternative but to do whatever Congress wishes.

    History will judge whether Mr. Roberts saved the reputation of the court or lost his nerve. Many conservatives obviously suspect the latter. Resolved: The government cannot make you eat broccoli, though it may levy a non-broccoli-eating tax on any who refuse.

    Yet he may also think—and would not be wrong to think—that ObamaCare is doomed in any case. His opinion makes clearer than ever that ObamaCare is a tax program—throwing more tax dollars at an unreformed health-care system. ObamaCare is a huge new entitlement in a nation laboring under commitments it already can't afford. Those who gripe that he just authorized a vast expansion of the welfare state haven't reckoned with this fiscal reality principle.

    What's more—and save us your constitutional brickbats—the mandate's survival could actually be a convenience to those who remain seriously interested in fixing health care.

    GOPers, including Mitt Romney, immediately adopted "repeal" as their mantra. But repealing ObamaCare would just leave us with the health-care system we have, which is already ObamaCare in many respects—an unsustainable set of subsidies bankrupting the nation.

    The solution is a tweak. Republicans already are lip-committed to a national health-insurance charter that allows insurers to design their own policies and market them across state lines. Republicans are also lip-committed to a tax reform to equalize the tax treatment of health care whether purchased by individuals or by employers on behalf of individuals.

    Now just modify the Affordable Care Act so buying any health policy authorized by the new charter, no matter how minimalist, satisfies the employer and individual mandate.

    What would follow is a boom in low-cost, high-deductible plans that leave individuals in charge of managing most their ordinary health-care costs out of pocket. Because it would be cheap, millions who would opt not to buy coverage will buy coverage. Because it will be cheap, companies will direct their low-wage and entry-level employees to this coverage.

    Now these workers will be covered for serious illness or injury, getting the rest of us off the hook. As they grow older, wealthier and start families, they will choose more extensive but still rationally limited coverage. Meanwhile, the giant subsidies ObamaCare would dish out to help the middle class afford ObamaCare's gold-plated mandatory coverage would be unneeded.

    With consumers shouldering a bigger share of health expenses directly, hospital and doctors would discover the advantages of competing on price and quality. This way lies salvation. In the long run, whatever share of GDP society decides to allocate to health care, it will get its money's worth—the fundamental problem today.

    Perhaps a not-discreditable sense of the political moment lies behind the chief justice's opinion after all. The court's job, he wrote, is not to "protect the people from the consequences of their political choices."

    He may have meant: The chief justice's job is to get the court out of the way while the body politic still remains suspended between recognizing the unsustainabilty of the current welfare model and deciding what to do about it.

    This was always the fatal problem of ObamaCare. Reality could not have instructed President Obama more plainly: The last thing we needed, in a country staggering under deficits and debt, a sluggish economy and an unaffordable entitlement structure, was a new Rube Goldberg entitlement. The last thing we needed was ObamaCare. The nation and the times were asking Mr. Obama to reform health care, not to double-down on everything wrong with the current system.

    Even with this week's Court success, he failed—and it's not as if there wasn't a deep well of policy understanding in Washington that he could have drawn on to take the country in a better direction. Regardless of any Supreme Court ruling, reality will pass its own judgment on the Affordable Care Act and it won't be favorable.


    "Study: Obama's Health Care Law Would Raise Deficit," SmartPros, April 10, 2012 ---
    http://accounting.smartpros.com/x73682.xml


    "Chief Justice Roberts and His Apologists:  Some conservatives see a silver lining in the ObamaCare ruling. But it's exactly the big-government disaster it appears to be," by John Yoo (U.C. Berkeley Law School Professor) , The Wall Street Journal, June 29, 2012 ---
    http://professional.wsj.com/article/SB10001424052702303561504577496520011395292.html?mod=djemEditorialPage_t&mg=reno-wsj

    White House judge-pickers sometimes ask prospective nominees about their favorite Supreme Court justice. The answers can reveal a potential judge's ideological leanings without resorting to litmus tests. Republican presidential candidates similarly promise to appoint more judges like so-and-so to reassure the conservative base.

    Since his appointment to the high court in 2005, the most popular answer was Chief Justice John Roberts. But that won't remain true after his ruling on Thursday in NFIB v. Sebelius, which upheld President Barack Obama's signature health-care law.

    Justice Roberts served in the Reagan Justice Department and as a White House lawyer before his appointment to the D.C. Circuit Court of Appeals and then to the Supreme Court by President George W. Bush. Yet he joined with the court's liberal wing to bless the greatest expansion of federal power in decades.

    Conservatives are scrambling to salvage something from the decision of their once-great judicial hero. Some hope Sebelius covertly represents a "substantial victory," in the words of conservative columnist George Will.

    After all, the reasoning goes, Justice Roberts's opinion declared that the Constitution's Commerce Clause does not authorize Congress to regulate inactivity, which would have given the federal government a blank check to regulate any and all private conduct. The court also decided that Congress unconstitutionally coerced the states by threatening to cut off all Medicaid funds if they did not expand this program as far as President Obama wants.

    All this is a hollow hope. The outer limit on the Commerce Clause in Sebelius does not put any other federal law in jeopardy and is undermined by its ruling on the tax power (discussed below). The limits on congressional coercion in the case of Medicaid may apply only because the amount of federal funds at risk in that program's expansion—more than 20% of most state budgets—was so great. If Congress threatens to cut off 5%-10% to force states to obey future federal mandates, will the court strike that down too? Doubtful.

    Worse still, Justice Roberts's opinion provides a constitutional road map for architects of the next great expansion of the welfare state. Congress may not be able to directly force us to buy electric cars, eat organic kale, or replace oil heaters with solar panels. But if it enforces the mandates with a financial penalty then suddenly, thanks to Justice Roberts's tortured reasoning in Sebelius, the mandate is transformed into a constitutional exercise of Congress's power to tax.

    Some conservatives hope that Justice Roberts is pursuing a deeper political game. Charles Krauthammer, for one, calls his opinion "one of the great constitutional finesses of all time" by upholding the law on the narrowest grounds possible—thus doing the least damage to the Constitution—while turning aside the Democratic Party's partisan attacks on the court.

    The comparison here is to Marbury v. Madison (1803), where Chief Justice John Marshall deflected President Thomas Jefferson's similar assault on judicial independence. Of the Federalist Party, which he had defeated in 1800, Jefferson declared: "They have retired into the judiciary as a stronghold. There the remains of federalism are to be preserved and fed from the treasury, and from that battery all the works of republicanism are to be beaten down and erased." Jeffersonians in Congress responded by eliminating federal judgeships, and also by impeaching a lower court judge and a Supreme Court judge.

    In Marbury, Justice Marshall struck down section 13 of the Judiciary Act of 1789, thus depriving his own court of the power to hear a case against Secretary of State James Madison. Marbury effectively declared that the court would not stand in the way of the new president or his congressional majorities. So Jefferson won a short-term political battle—but Justice Marshall won the war by securing for the Supreme Court the power to declare federal laws unconstitutional.

    While some conservatives may think Justice Roberts was following in Justice Marshall's giant footsteps, the more apt comparison is to the Republican Chief Justice Charles Evans Hughes. Hughes's court struck down the centerpieces of President Franklin Roosevelt's early New Deal because they extended the Commerce Clause power beyond interstate trade to intrastate manufacturing and production. Other decisions blocked Congress's attempt to delegate its legislative powers to federal agencies.

    FDR reacted furiously. He publicly declared: "We have been relegated to a horse-and-buggy definition of interstate commerce." After winning a resounding landslide in the 1936 elections, he responded in February 1937 with the greatest attack on the courts in American history. His notorious court-packing plan proposed to add six new justices to the Supreme Court's nine members, with the obvious aim of overturning the court's opposition to the New Deal.

    After the president's plan was announced, Hughes and Justice Owen J. Roberts began to switch their positions. They would vote to uphold the National Labor Relations Act, minimum-wage and maximum-hour laws, and the rest of the New Deal.

    But Hughes sacrificed fidelity to the Constitution's original meaning in order to repel an attack on the court. Like Justice Roberts, Hughes blessed the modern welfare state's expansive powers and unaccountable bureaucracies—the very foundations for ObamaCare.

    Hughes's great constitutional mistake was made for nothing. While many historians and constitutional scholars have referred to his abrupt and unprincipled about-face as "the switch in time that saved nine," the court-packing plan was wildly unpopular right from the start. It went nowhere in the heavily Democratic Congress. Moreover, further New Deal initiatives stalled in Congress after the congressional elections in 1938.

    Justice Roberts too may have sacrificed the Constitution's last remaining limits on federal power for very little—a little peace and quiet from attacks during a presidential election year.

    Given the advancing age of several of the justices, an Obama second term may see the appointment of up to three new Supreme Court members. A new, solidified liberal majority will easily discard Sebelius's limits on the Commerce Clause and expand the taxing power even further. After the Hughes court switch, FDR replaced retiring Justices with a pro-New Deal majority, and the court upheld any and all expansions of federal power over the economy and society. The court did not overturn a piece of legislation under the Commerce Clause for 60 years.

    If a Republican is elected president, he will have to be more careful than the last. When he asks nominees the usual question about justices they agree with, the better answer should once again be Scalia or Thomas or Alito, not Roberts.

     


    On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
    "The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

    What is hypocritical is that most families only want to keep Granny alive only when Medicare will pay. The instant Granny's estate will have to bear the cost these hypocrites instantly agree to pull Granny off life support.

    What is really sad is the way Republicans are standing in the way of making rational cost-benefit decisions about dying by exploiting the "Kill Granny" political strategy aimed at killing a government option in health care reform.
    See the "Kill Granny" strategy at --- www.defendyourhealthcare.us


    "Chief Justice Roberts and His Apologists:  Some conservatives see a silver lining in the ObamaCare ruling. But it's exactly the big-government disaster it appears to be," by John Yoo (U.C. Berkeley Law School Professor) , The Wall Street Journal, June 29, 2012 ---
    http://professional.wsj.com/article/SB10001424052702303561504577496520011395292.html?mod=djemEditorialPage_t&mg=reno-wsj

    White House judge-pickers sometimes ask prospective nominees about their favorite Supreme Court justice. The answers can reveal a potential judge's ideological leanings without resorting to litmus tests. Republican presidential candidates similarly promise to appoint more judges like so-and-so to reassure the conservative base.

    Since his appointment to the high court in 2005, the most popular answer was Chief Justice John Roberts. But that won't remain true after his ruling on Thursday in NFIB v. Sebelius, which upheld President Barack Obama's signature health-care law.

    Justice Roberts served in the Reagan Justice Department and as a White House lawyer before his appointment to the D.C. Circuit Court of Appeals and then to the Supreme Court by President George W. Bush. Yet he joined with the court's liberal wing to bless the greatest expansion of federal power in decades.

    Conservatives are scrambling to salvage something from the decision of their once-great judicial hero. Some hope Sebelius covertly represents a "substantial victory," in the words of conservative columnist George Will.

    After all, the reasoning goes, Justice Roberts's opinion declared that the Constitution's Commerce Clause does not authorize Congress to regulate inactivity, which would have given the federal government a blank check to regulate any and all private conduct. The court also decided that Congress unconstitutionally coerced the states by threatening to cut off all Medicaid funds if they did not expand this program as far as President Obama wants.

    All this is a hollow hope. The outer limit on the Commerce Clause in Sebelius does not put any other federal law in jeopardy and is undermined by its ruling on the tax power (discussed below). The limits on congressional coercion in the case of Medicaid may apply only because the amount of federal funds at risk in that program's expansion—more than 20% of most state budgets—was so great. If Congress threatens to cut off 5%-10% to force states to obey future federal mandates, will the court strike that down too? Doubtful.

    Worse still, Justice Roberts's opinion provides a constitutional road map for architects of the next great expansion of the welfare state. Congress may not be able to directly force us to buy electric cars, eat organic kale, or replace oil heaters with solar panels. But if it enforces the mandates with a financial penalty then suddenly, thanks to Justice Roberts's tortured reasoning in Sebelius, the mandate is transformed into a constitutional exercise of Congress's power to tax.

    Some conservatives hope that Justice Roberts is pursuing a deeper political game. Charles Krauthammer, for one, calls his opinion "one of the great constitutional finesses of all time" by upholding the law on the narrowest grounds possible—thus doing the least damage to the Constitution—while turning aside the Democratic Party's partisan attacks on the court.

    The comparison here is to Marbury v. Madison (1803), where Chief Justice John Marshall deflected President Thomas Jefferson's similar assault on judicial independence. Of the Federalist Party, which he had defeated in 1800, Jefferson declared: "They have retired into the judiciary as a stronghold. There the remains of federalism are to be preserved and fed from the treasury, and from that battery all the works of republicanism are to be beaten down and erased." Jeffersonians in Congress responded by eliminating federal judgeships, and also by impeaching a lower court judge and a Supreme Court judge.

    In Marbury, Justice Marshall struck down section 13 of the Judiciary Act of 1789, thus depriving his own court of the power to hear a case against Secretary of State James Madison. Marbury effectively declared that the court would not stand in the way of the new president or his congressional majorities. So Jefferson won a short-term political battle—but Justice Marshall won the war by securing for the Supreme Court the power to declare federal laws unconstitutional.

    While some conservatives may think Justice Roberts was following in Justice Marshall's giant footsteps, the more apt comparison is to the Republican Chief Justice Charles Evans Hughes. Hughes's court struck down the centerpieces of President Franklin Roosevelt's early New Deal because they extended the Commerce Clause power beyond interstate trade to intrastate manufacturing and production. Other decisions blocked Congress's attempt to delegate its legislative powers to federal agencies.

    FDR reacted furiously. He publicly declared: "We have been relegated to a horse-and-buggy definition of interstate commerce." After winning a resounding landslide in the 1936 elections, he responded in February 1937 with the greatest attack on the courts in American history. His notorious court-packing plan proposed to add six new justices to the Supreme Court's nine members, with the obvious aim of overturning the court's opposition to the New Deal.

    After the president's plan was announced, Hughes and Justice Owen J. Roberts began to switch their positions. They would vote to uphold the National Labor Relations Act, minimum-wage and maximum-hour laws, and the rest of the New Deal.

    But Hughes sacrificed fidelity to the Constitution's original meaning in order to repel an attack on the court. Like Justice Roberts, Hughes blessed the modern welfare state's expansive powers and unaccountable bureaucracies—the very foundations for ObamaCare.

    Hughes's great constitutional mistake was made for nothing. While many historians and constitutional scholars have referred to his abrupt and unprincipled about-face as "the switch in time that saved nine," the court-packing plan was wildly unpopular right from the start. It went nowhere in the heavily Democratic Congress. Moreover, further New Deal initiatives stalled in Congress after the congressional elections in 1938.

    Justice Roberts too may have sacrificed the Constitution's last remaining limits on federal power for very little—a little peace and quiet from attacks during a presidential election year.

    Given the advancing age of several of the justices, an Obama second term may see the appointment of up to three new Supreme Court members. A new, solidified liberal majority will easily discard Sebelius's limits on the Commerce Clause and expand the taxing power even further. After the Hughes court switch, FDR replaced retiring Justices with a pro-New Deal majority, and the court upheld any and all expansions of federal power over the economy and society. The court did not overturn a piece of legislation under the Commerce Clause for 60 years.

    If a Republican is elected president, he will have to be more careful than the last. When he asks nominees the usual question about justices they agree with, the better answer should once again be Scalia or Thomas or Alito, not Roberts.


    "ObamaCare—Upheld and Doomed Regardless of the Supreme Court, fiscal reality will prevail," by Holman W. Jenkins Jr., The Wall Street Journal, June 29, 2012 ---
    http://professional.wsj.com/article/SB10001424052702303649504577496850233678284.html?mod=djemEditorialPage_t&mg=reno64-wsj

    Worse, in doing so, he may have read any constitutional limit on Congress out of the Constitution while pretending to do the opposite. Congress cannot compel you to do anything Congress wishes, but it can impose taxes on you until you finally have no rational alternative but to do whatever Congress wishes.

    History will judge whether Mr. Roberts saved the reputation of the court or lost his nerve. Many conservatives obviously suspect the latter. Resolved: The government cannot make you eat broccoli, though it may levy a non-broccoli-eating tax on any who refuse.

    Yet he may also think—and would not be wrong to think—that ObamaCare is doomed in any case. His opinion makes clearer than ever that ObamaCare is a tax program—throwing more tax dollars at an unreformed health-care system. ObamaCare is a huge new entitlement in a nation laboring under commitments it already can't afford. Those who gripe that he just authorized a vast expansion of the welfare state haven't reckoned with this fiscal reality principle.

    What's more—and save us your constitutional brickbats—the mandate's survival could actually be a convenience to those who remain seriously interested in fixing health care.

    GOPers, including Mitt Romney, immediately adopted "repeal" as their mantra. But repealing ObamaCare would just leave us with the health-care system we have, which is already ObamaCare in many respects—an unsustainable set of subsidies bankrupting the nation.

    The solution is a tweak. Republicans already are lip-committed to a national health-insurance charter that allows insurers to design their own policies and market them across state lines. Republicans are also lip-committed to a tax reform to equalize the tax treatment of health care whether purchased by individuals or by employers on behalf of individuals.

    Now just modify the Affordable Care Act so buying any health policy authorized by the new charter, no matter how minimalist, satisfies the employer and individual mandate.

    What would follow is a boom in low-cost, high-deductible plans that leave individuals in charge of managing most their ordinary health-care costs out of pocket. Because it would be cheap, millions who would opt not to buy coverage will buy coverage. Because it will be cheap, companies will direct their low-wage and entry-level employees to this coverage.

    Now these workers will be covered for serious illness or injury, getting the rest of us off the hook. As they grow older, wealthier and start families, they will choose more extensive but still rationally limited coverage. Meanwhile, the giant subsidies ObamaCare would dish out to help the middle class afford ObamaCare's gold-plated mandatory coverage would be unneeded.

    With consumers shouldering a bigger share of health expenses directly, hospital and doctors would discover the advantages of competing on price and quality. This way lies salvation. In the long run, whatever share of GDP society decides to allocate to health care, it will get its money's worth—the fundamental problem today.

    Perhaps a not-discreditable sense of the political moment lies behind the chief justice's opinion after all. The court's job, he wrote, is not to "protect the people from the consequences of their political choices."

    He may have meant: The chief justice's job is to get the court out of the way while the body politic still remains suspended between recognizing the unsustainabilty of the current welfare model and deciding what to do about it.

    This was always the fatal problem of ObamaCare. Reality could not have instructed President Obama more plainly: The last thing we needed, in a country staggering under deficits and debt, a sluggish economy and an unaffordable entitlement structure, was a new Rube Goldberg entitlement. The last thing we needed was ObamaCare. The nation and the times were asking Mr. Obama to reform health care, not to double-down on everything wrong with the current system.

    Even with this week's Court success, he failed—and it's not as if there wasn't a deep well of policy understanding in Washington that he could have drawn on to take the country in a better direction. Regardless of any Supreme Court ruling, reality will pass its own judgment on the Affordable Care Act and it won't be favorable.

    Bob Jensen's universal health care messaging --- http://faculty.trinity.edu/rjensen/Health.htm


    "Study: Obama's Health Care Law Would Raise Deficit," SmartPros, April 10, 2012 ---
    http://accounting.smartpros.com/x73682.xml

    Reigniting a debate about the bottom line for President Barack Obama's health care law, a leading conservative economist estimates in a study to be released Tuesday that the overhaul will add at least $340 billion to the deficit, not reduce it.

    Charles Blahous, who serves as public trustee overseeing Medicare and Social Security finances, also suggested that federal accounting practices have obscured the true fiscal impact of the legislation, the fate of which is now in the hands of the Supreme Court.

    Officially, the health care law is still projected to help reduce government red ink. The Congressional Budget Office, the government's nonpartisan fiscal umpire, said in an estimate last year that repealing the law actually would increase deficits by $210 billion from 2012 to 2021.

    The CBO, however, has not updated that projection. If $210 billion sounds like a big cushion, it's not. The government has recently been running annual deficits in the $1 trillion range.

    The White house dismissed the study in a statement late Monday. Presidential assistant Jeanne Lambrew called the study "new math (that) fits the old pattern of mischaracterizations" about the health care law.

    Blahous, in his 52-page analysis released by George Mason University's Mercatus Center, said, "Taken as a whole, the enactment of the (health care law) has substantially worsened a dire federal fiscal outlook.

    "The (law) both increases a federal commitment to health care spending that was already unsustainable under prior law and would exacerbate projected federal deficits relative to prior law," Blahous said.

    The law expands health insurance coverage to more than 30 million people now uninsured, paying for it with a mix of Medicare cuts and new taxes and fees.

    Blahous cited a number of factors for his conclusion:

    - The health care's law deficit cushion has been reduced by more than $80 billion because of the administration's decision not to move forward with a new long-term care insurance program that was part of the legislation. The Community Living Assistance Services and Supports program raised money in the short term, but would have turned into a fiscal drain over the years.

    - The cost of health insurance subsidies for millions of low-income and middle-class uninsured people could turn out to be higher than forecast, particularly if employers scale back their own coverage.

    - Various cost-control measures, including a tax on high-end insurance plans that doesn't kick in until 2018, could deliver less than expected.

    The decision to use Medicare cuts to finance the expansion of coverage for the uninsured will only make matters worse, Blahous said. The money from the Medicare savings will have been spent, and lawmakers will have to find additional cuts or revenues to forestall that program's insolvency.

    Under federal accounting rules, the Medicare cuts are also credited as savings to that program's trust fund. But the CBO and Medicare's own economic estimators already said the government can't spend the same money twice.

    Continued in article


    s Unethical as it Gets in the Whitehouse
    "Axelrod's ObamaCare Dollars Emails suggest the White House pushed business to the presidential adviser's former firm to sell the health-care law," by Kimberly A. Strassel, The Wall Street Journal, June 21, 2012 ---
    http://professional.wsj.com/article/SB10001424052702304765304577480871706139792.html?mod=djemEditorialPage_t&mg=reno-wsj

    Rewind to 2009. The fight over ObamaCare is raging, and a few news outlets report that something looks ethically rotten in the White House. An outside group funded by industry is paying the former firm of senior presidential adviser David Axelrod to run ads in favor of the bill. That firm, AKPD Message and Media, still owes Mr. Axelrod money and employs his son.

    The story quickly died, but emails recently released by the House Energy and Commerce Committee ought to resurrect it. The emails suggest the White House was intimately involved both in creating this lobby and hiring Mr. Axelrod's firm—which is as big an ethical no-no as it gets.

    Mr. Axelrod—who left the White House last year—started AKPD in 1985. The firm earned millions helping run Barack Obama's 2008 campaign. Mr. Axelrod moved to the White House in 2009 and agreed to have AKPD buy him out for $2 million. But AKPD chose to pay Mr. Axelrod in annual installments—even as he worked in the West Wing. This agreement somehow passed muster with the Office of Government Ethics, though the situation at the very least should have walled off AKPD from working on White-House priorities.

    It didn't. The White House and industry were working hand-in-glove to pass ObamaCare in 2009, and among the vehicles supplying ad support was an outfit named Healthy Economy Now (HEN). News stories at the time described this as a "coalition" that included the Pharmaceutical Research and Manufacturers of America (PhRMA), the American Medical Association, and labor groups—suggesting these entities had started and controlled it.

    House emails show HEN was in fact born at an April 15, 2009 meeting arranged by then-White House aide Jim Messina and a chief of staff for Democratic Sen. Max Baucus. The two politicos met at the Democratic Senatorial Campaign Committee (DSCC) and invited representatives of business and labor.

    A Service Employees International Union attendee sent an email to colleagues noting she'd been invited by the Baucus staffer, explaining: "Also present was Jim Messina. . . . They basically want to see adds linking HC reform to the economy. . . . there were not a lot of details, but we were told that we wd be getting a phone call. well that call came today."

    The call was from Nick Baldick, a Democratic consultant who had worked on the Obama campaign and for the DSCC. Mr. Baldick started HEN. The only job of PhRMA and others was to fund it.

    Meanwhile, Mr. Axelrod's old firm was hired to run the ads promoting ObamaCare. At the time, a HEN spokesman said HEN had done the hiring. But the emails suggest otherwise. In email after email, the contributors to HEN refer to four men as the "White House" team running health care. They included John Del Cecato and Larry Grisolano (partners at AKPD), as well as Andy Grossman (who once ran the DSCC) and Erik Smith, who had been a paid adviser to the Obama presidential campaign.

    In one email, PhRMA consultant Steve McMahon calls these four the "WH-designated folks." He explains to colleagues that Messrs. Grossman, Grisolano and Del Cecato "are very close to Axelrod," and that "they have been put in charge of the campaign to pass health reform." Ron Pollack, whose Families USA was part of the HEN coalition, explained to colleagues that "the team that is working with the White House on health-care reform. . . . [Grossman, Smith, Del Cecato, Grisolano] . . . would like to get together with us." This would provide "guidance from the White House about their messaging."

    According to White House visitor logs, Mr. Smith had 28 appointments scheduled between May and August—17 made through Mr. Messina or his assistant. Mr. Grossman appears in the logs at least 19 times. Messrs. Del Cecato and Grisolano of AKPD also visited in the spring and summer, at least twice with Mr. Axelrod, who was deep in the health-care fight.

    A 2009 PhRMA memo also makes clear that AKPD had been chosen before PhRMA joined HEN. It's also clear that some contributors didn't like the conflict of interest. When, in July 2009, a media outlet prepared to report AKPD's hiring, a PhRMA participant said: "This is a big problem." Mr. Baldick advises: "just say, AKPD is not working for PhRMA." AKPD and another firm, GMMB, would handle $12 million in ad business from HEN and work for a successor 501(c)4.

    A basic rule of White House ethics is to avoid even the appearance of self-dealing or nepotism. If Mr. Axelrod or his West Wing chums pushed political business toward Mr. Axelrod's former firm, they contributed to his son's salary as well as to the ability of the firm to pay Mr. Axelrod what it still owed him. Could you imagine the press frenzy if Karl Rove had dome the same after he joined the White House?

    Continued in article

     


    "Why I No Longer Support the Health Insurance Mandate:  Should ObamaCare be overturned by the Supreme Court, insurers have solutions ready to go," by Former Aetna CEO Ron Williams, The Wall Street Journal, June 17, 2012 ---
    http://professional.wsj.com/article/SB10001424052702303734204577464713182634028.html?mg=reno64-wsj#mod=djemEditorialPage_t

    Soon the U.S. Supreme Court will rule on the constitutionality of the Affordable Care Act. I am not a lawyer, or an expert on the Constitution. But as the chairman and CEO of a major health plan, I had a ringside seat to the entire health-care reform process. After much reflection, I have concluded that the federal individual mandate, which requires all Americans to purchase health insurance starting in 2014, will not be upheld.

    I don't say this lightly, as I have long been a vocal advocate of getting and keeping every American covered. As a society, we have a moral obligation to ensure everyone has access to affordable health care. We must find a way to cover those who are no longer healthy but need care.

    A workable solution used by many states is a high-risk insurance pool funded by broad-based taxes. But Congress and the president chose to require health-insurance companies to guarantee issue—that is, to insure anyone at anytime.

    This approach encourages people to only purchase insurance when care is needed. Insurance does not work if you only pay two months of premiums and receive hundreds of thousands of dollars of health care. This is the equivalent of getting a free ride. Under such a system, consumers would end up paying more to offset the added costs of free riders. Insurance would soon become unaffordable.

    Once the government mandates guaranteed issue, then a second mandate is required for individuals to purchase and maintain insurance. My early support for an individual mandate had always been grounded in this companion solution, supported by broadly funded subsidies for lower-income Americans.

    Yet, as I studied the arguments for and against the individual mandate, it became clear to me that the legislation raises serious constitutional concerns.

    For starters, the legislative process that produced the Act was driven by partisan politics, and traditional oversight mechanisms that would have facilitated bipartisan and reasoned policy development were discarded in favor of rapid enactment. Several structural flaws emerged as a result. For example, the mandate should have been framed as a traditional tax—a move that could have bolstered the Act's constitutionality.

    Most seriously, Congress insisted on describing personal inactivity—in this case, the failure to purchase insurance—as interstate commerce within its regulatory reach. Americans were alarmed, rightly, that this could empower future legislatures to mandate that citizens engage in activities none of us would think reasonable today.

    Should the Act or part of it be overturned by the high court, I believe many of the consumer-friendly aspects already implemented will be adopted by the industry or quickly find their way into new legislation.

    The federal government should encourage rather than micromanage market reform in all 50 states. Since health care is local, private-sector innovation in conjunction with state-level reform of the individual and small-group markets is a better approach.

    But no matter how the Supreme Court rules, we still need bipartisan solutions that work for all Americans. One benefit of the past two years has been the vigorous public policy discussion that we should have had prior to passing the legislation—and a recognition that the core problems are health-care cost and value. Simply put, we must create more value for consumers by improving the quality and long-term affordability of health care.

    The private sector is hard at work creating new ways to deliver health care. Health plans are collaborating with hospital systems to develop innovative accountable care organizations that provide physicians with incentives to cooperate and enhance patient outcomes. Hospitals are encouraging physicians to improve the accuracy and quality of patient data, enhancing clinical decision-making to improve the quality of care.

    Health plans and employers are cooperating on decision-support tools to help employees better understand their conditions and choices. These tools are making quality and costs more transparent, encouraging employees to make better decisions. Finally, employers are implementing condition-management programs to help employees manage chronic illnesses such as diabetes and hypertension. They are also investing in on-site clinics, value-based health plans to increase medication adherence and incentive-based wellness programs.

    As the law continues to evolve, we must not let politics impede our collective efforts to reinvent American health care.


    "Honey, I Shrunk the Entitlement:  Another budget ruse that disguises ObamaCare's real costs," The Wall Street Journal, June 8, 2012 ---
    http://professional.wsj.com/article/SB10001424052702303753904577450320997798422.html?mg=reno-wsj#mod=djemEditorialPage_t

    One detail revealed by Tuesday's debt forecast is that there's another budget gimmick that makes it seem as if ObamaCare costs less than it really will, and the ruse deserves more scrutiny than it's received. Who was it who said we need to pass the bill to find out what's in it?

    The Congressional Budget Office explained clearly for the first time that the Affordable Care Act's subsidies aren't indexed over the long term. Indexation is the standard practice that adjusts policies so they are constant over time as the value of the dollar and the cost of living change.

    Social Security payments, for example, rise automatically to preserve their purchasing power. When Congress created the Alternative Minimum Tax (AMT) in 1969 to target 21 millionaires, it didn't index its income brackets, which is why it now hits the middle class.

    ObamaCare's insurance subsidies are like an AMT in reverse. People making up to 400% of the poverty line—or about $96,000 for a family of four in 2016—are eligible for refundable tax credits to offset the premiums and cost-sharing of their government-approved health plans. The system is insanely complicated, but the amounts of the tax credits vary by how much people earn and rise over time so that people never contribute more than a certain share of their paycheck to health care.

    Through 2018, the subsidies are indexed to grow in tandem with incomes and health-care costs. When premiums follow their historical pattern of rising faster than income, the subsidies grow by more too so that the individual out-of-pocket percentage is constant year to year. So far, so routine.

    But then in 2019, ObamaCare's drafters slip in what they euphemize as "additional indexing." According to this new technical formula, the government is never allowed to spend more than 0.504% of the economy on subsidies. If normal indexing applied, CBO expects that the subsidies would blow through the GDP cap in 2022 and keep climbing. But as a result of the additional indexing, and as more and more people flood into ObamaCare, every individual will get a smaller piece of the subsidy pie, which will offset less and less of premiums.

    It sounds like great news for taxpayers—the incredible shrinking entitlement. The problem is that CBO doesn't think Congress will make the benefits less generous as scheduled, and the pity is that's probably right. Washington rarely if ever takes away entitlements (e.g., the political firedrill when seniors decide Social Security's cost-of-living increases are too small). CBO's euphemism is that the additional indexing "might be difficult to sustain over a long period."

    Therefore in its alternative fiscal scenario, CBO assumes that Congress will suspend the indexing change every year, just as it passes an annual "patch" to prevent AMT bracket creep. The upshot is that billions of dollars are not counted as part of the formal budget—one more reason that, after ObamaCare, federal bookkeeping is a worthless guide to future spending.

    On paper, Medicare, Medicaid, the Affordable Care Act and other government health programs will consume 9.6% of GDP in 25 years, up from 5.4% today. But then count the indexing ruse, other ObamaCare budget gimmicks like Medicare "cuts" to hospitals that CBO doesn't think will happen, and the Medicare formula that says doctor payments will plunge next year by 27%, which President Obama promised to fix but didn't. In that case government health care will hit 10.4% of GDP in 2037.

    Almost 1% of the economy is a lot of money. And it's part of the epic deception that was necessary to pass this not-so-shrinking entitlement, as Americans continue to discover.

     


    Ernst & Young's annual outside audit of the HHS balance sheet last November was considered a triumph because several material weaknesses were downgraded merely to significant deficiencies. But on a "day-to-day or even monthly basis" HHS cannot accurately track its spending, according to the audit. The agency is in violation of numerous federal accounting rules written specifically for the bureaucracy, to say nothing of the financial reporting required of public companies.
    "Fannie Med:  Health and Human Services gets into the venture capital game," The Wall Street Journal, June 4, 2012 ---
    http://online.wsj.com/article/SB10001424052702303360504577408150150837834.html#mod=djemEditorialPage_t

    Perhaps you thought that the Affordable Care Act is all about making insurance more affordable. Too bad no one told Americans that the law also turned the Health and Human Services Department into a giant venture capital investor for health care. This won't turn out well.

    Awash in ObamaCare dollars, HHS has a growing investment portfolio that includes everything from new insurance companies to health-care start-ups to information technology. Secretary Kathleen Sebelius is rushing out loans and subsidies like nobody's business in case the Supreme Court overturns the law or Mitt Romney wins.

    "We're moving forward with implementing this law, including moving forward with this very important commitment by the President, by the Administration, to community health centers and the people they serve," said senior White House aide Cecelia Munoz on a recent conference call with reporters. She was referring to $728 million in seed money for new clinics that HHS dispensed last month.

    HHS already makes more grants than all other agencies combined, and it is the purchaser of health care for about one of three Americans via Medicare, Medicaid or both. The problem is that HHS spends its money—$788 billion for entitlements in 2012 and another $78 billion to run HHS's 300-odd programs—so badly.

    Ernst & Young's annual outside audit of the HHS balance sheet last November was considered a triumph because several material weaknesses were downgraded merely to significant deficiencies. But on a "day-to-day or even monthly basis" HHS cannot accurately track its spending, according to the audit. The agency is in violation of numerous federal accounting rules written specifically for the bureaucracy, to say nothing of the financial reporting required of public companies.

    The HHS inspector general revealed this year that his team can barely monitor HHS because its staff is too busy chasing the criminals exploiting HHS's incompetence. Experts disagree about how much is stolen from taxpayers through entitlement fraud—the Government Accountability Office puts it at $48 billion annually—but one sign of the problem is that Medicare allows doctors (or "doctors") to register for billing privileges as "other."

    One particular ObamaCare boondoggle that needs fly-specking is the HHS decision to finance nonprofit insurance companies with up to $7.25 billion in ultra-low-cost loans. These co-ops were a consolation prize for liberals after Democratic opposition killed the government-run public option, and the co-ops are supposed to be managed by and for consumers. But it turns out that running an insurance company is hard for amateurs who can't attract private financing.

    HHS officially estimates that the default rate on the loans will hit between 35% and 40%, which would be bad enough. But White House budget documents show that HHS expects to lose $3.1 billion of the $3.4 billion appropriated so far—which implies a default rate of 91%. The lack of accountability to shareholders or capital markets may help explain this propensity for failure.

    Another problem is the way HHS chose to structure the co-op loans. To protect the insured, states require insurers to maintain reserves in the event they go bankrupt—and debts that are supposed to be repaid are viewed as liabilities. To end run these solvency requirements, HHS is issuing "surplus notes" that subordinate the taxpayer to everyone else for repayment if a co-op fails.

    That seems likely, given the challenges of building a provider network and attracting members when expertise in such matters is legally prohibited under HHS rules. Any organization that wrote insurance policies prior to 2009—as it were, the pre-existing insurers of the Bush era—is barred from applying for loans or any significant role in the operations of a co-op. So the co-ops can't benefit from the business experience that might give them a chance to succeed.

    Continued in article

    Bob Jensen's threads on the sad state of governmental accounting ---
    http://faculty.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting

    Bob Jensen's threads on health care ---
    http://faculty.trinity.edu/rjensen/Health.htm


    "ObamaCare's Secret History:  How a Pfizer CEO and Big Pharma colluded with the White House at the public's expense," The Wall Street Journal, June 11, 2012 ---
    http://professional.wsj.com/article/SB10001424052702303830204577446470015843822.html?mod=djemEditorialPage_t&mg=reno64-wsj

    On Friday House Republicans released more documents that expose the collusion between the health-care industry and the White House that produced ObamaCare, and what a story of crony capitalism it is. If the trove of emails proves anything, it's that the Tea Party isn't angry enough.

    Over the last year, the Energy and Commerce Committee has taken Nancy Pelosi's advice to see what's in the Affordable Care Act and how it passed. The White House refused to cooperate beyond printing out old press releases, but a dozen trade groups turned over thousands of emails and other files. A particular focus is the drug lobby, President Obama's most loyal corporate ally in 2009 and 2010.

    The business refrain in those days was that if you're not at the table, you're on the menu. But it turns out Big Pharma was also serving as head chef, maître d'hotel and dishwasher. Though some parts of the story have been reported before, the emails make clear that ObamaCare might never have passed without the drug companies. Thank you, Pfizer. ***

    The joint venture was forged in secret in spring 2009 amid an uneasy mix of menace and opportunism. The drug makers worried that health-care reform would revert to the liberal default of price controls and drug re-importation that Mr. Obama campaigned on, but they also understood that a new entitlement could be a windfall as taxpayers bought more of their products. The White House wanted industry financial help and knew that determined business opposition could tank the bill.

    Initially, the Obamateers and Senate Finance Chairman Max Baucus asked for $100 billion, 90% of it from mandatory "rebates" through the Medicare prescription drug benefit like those that are imposed in Medicaid. The drug makers wheedled them down to $80 billion by offsetting cost-sharing for seniors on Medicare, in an explicit quid pro quo for protection against such rebates and re-importation. As Pfizer's then-CEO Jeff Kindler put it, "our key deal points . . . are, to some extent, as important as the total dollars." Mr. Kindler played a more influential role than we understood before, as the emails show.

    Thus began a close if sometimes dysfunctional relationship with the Pharmaceutical Research and Manufacturers of America, or PhRMA, as led by Billy Tauzin, the Louisiana Democrat turned Republican turned lobbyist. As a White House staffer put it in May 2009, "Rahm's calling Nancy-Ann and knows Billy is going to talk to Nancy-Ann tonight. Rahm will make it clear that PhRMA needs a direct line of communication, separate and apart from any coalition." Nancy-Ann is Nancy-Ann DeParle, the White House health reform director, and Rahm is, of course, Rahm.

    Terms were reached in June. Mr. Kindler's chief of staff wrote a memo to her industry colleagues explaining that "Jeff would object to me telling you that his communication skills and breadth of knowledge on the issues was very helpful in keeping the meeting productive." Soon the White House leaked the details to show that reform was making health-care progress, and lead PhRMA negotiator Bryant Hall wrote on June 12 that Mr. Obama "knows personally about our deal and is pushing no agenda."

    But Energy and Commerce Chairman Henry Waxman then announced that he was pocketing PhRMA's concessions and demanding more, including re-importation. We wrote about the double-cross in a July 16, 2009 editorial called "Big Pharma Gets Played," noting that Mr. Tauzin's "corporate clients and their shareholders may soon pay for his attempt to get cozy with ObamaCare."

    Mr. Hall forwarded the piece to Ms. DeParle with the subject line, "This sucks." The duo commiserated about how unreasonable House Democrats are, unlike Mr. Baucus and the Senators. The full exchange is among the excerpts from the emails printed nearby.

    Then New York Times reporter Duff Wilson wrote to a PhRMA spokesman, "Tony, you see the WSJ editorial, 'Big Pharma Gets Played"? I'm doing a story along that line for Monday." The drug dealers had a problem.

    The White House rode to the rescue. In September Mr. Hall informed Mr. Kindler that deputy White House chief of staff Jim Messina "is working on some very explicit language on importation to kill it in health care reform. This has to stay quiet."

    PhRMA more than repaid the favor, with a $150 million advertising campaign coordinated with the White House political shop. As one of Mr. Hall's deputies put it earlier in the minutes of a meeting when the deal was being negotiated, "The WH-designated folks . . . would like us to start to define what 'consensus health care reform' means, and what it might include. . . . They definitely want us in the game and on the same side."

    In particular, the drug lobby would spend $70 million on two 501(c)(4) front groups called Healthy Economy Now and Americans for Stable Quality Care. In July, Mr. Hall wrote that "Rahm asked for Harry and Louise ads thru third party. We've already contacted the agent."

    Mr. Messina—known as "the fixer" in the West Wing—asked on December 15, 2009, "Can we get immediate robo calls in Nebraska urging nelson to vote for cloture?" Ben Nelson was the last Democratic holdout toward the Senate's 60-vote threshold, and, as Mr. Messina wrote, "We are at 59, we have to have him." They got him.

    At least PhRMA deserves backhanded credit for the competence of its political operatives—unlike, say, the American Medical Association. A thread running through the emails is a hapless AMA lobbyist importuning Ms. DeParle and Mr. Messina for face-to-face meetings to discuss reforming the Medicare physician payment formula. The AMA supported ObamaCare in return for this "doc fix," which it never got.

    "We are running out of time," this lobbyist, Richard Deem, writes in October 2009. How can he "tell my colleagues at AMA headquarters to proceed with $2m TV buy" without a permanent fix? The question answers itself: It was only $2 million. ***

    Mr. Waxman recently put out a rebuttal memo dismissing these email revelations as routine, "exactly what Presidents have always done to enact major legislation." Which is precisely the point—the normality is the scandal. In 2003 PhRMA took a similar road trip with the Bush Republicans to create the Medicare drug benefit. That effort included building public support by heavily funding a shell outfit called Citizens for a Better Medicare.

    Of course Democrats claim to be above this kind of merger of private profits and political power, as Mr. Obama did as a candidate. "The pharmaceutical industry wrote into the prescription drug plan that Medicare could not negotiate with drug companies," he said in 2008. "And you know what? The chairman of the committee who pushed the law through"—that would be Mr. Tauzin— "went to work for the pharmaceutical industry making $2 million a year."

    Continued in article


    "Exposing the Medicare Double Count:  The same money can't be spent twice. ObamaCare tries to do precisely that, and the government will have to borrow the difference," by By Charles Blahous and James C. Capretta, The Wall Street Journal, May 1, 2012 ---
    http://online.wsj.com/article/SB10001424052702304299304577346332422834276.html?mod=djemEditorialPage_t

    One of the enduring mysteries of President Obama's health law is how its spending constraints and payroll tax hikes on high earners can be used to shore up Medicare finances and at the same time pay for a massive new entitlement program. Isn't this double counting?

    The short answer is: Yes, it is. You can't spend the same money twice. And so, thanks to the new health law, federal deficits and debt will be hundreds of billions of dollars higher in the next decade alone.

    Here's how it works. When Congress considers legislation that alters taxes or spending related to Medicare's Hospital Insurance Trust Fund, the changes are recorded not just on the Hospital Insurance Trust Fund's books, but also on Congress's "pay-as-you-go" scorecard.

    The "paygo" requirement is supposed to force lawmakers to find "offsets" for new tax cuts or entitlement spending, and thus protect against adding to future federal budget deficits. Putting the Medicare payroll tax hikes and spending constraints on the "pay-as-you-go" ledger was instrumental in getting the health law through Congress, because doing so fostered a widespread misperception that the law would reduce future deficits.

    But the same provisions add to the Hospital Insurance Trust Fund's reserves, which expands Medicare's spending authority. Medicare can only pay full benefits so long as its trust fund has sufficient reserves to meet these obligations. If the trust fund has insufficient resources, then spending must be cut automatically to ensure the fund does not go into deficit. The health law's Medicare provisions prevent these spending cuts from taking place for several more years.

    In short, the scoring convention is not widely understood and thus obscures the double-counting.

    Perhaps the easiest way to understand this is to look at Social Security. If we generate $1 in savings within that program, then that's $1 that Social Security can spend later. If we also claimed this same $1 to finance a new spending program, we would clearly be adding to the total federal deficit. There has long been bipartisan understanding of this aspect of Social Security, which is why Congress's paygo rules prohibit using Social Security savings as an offset to pay for unrelated federal spending.

    No such prohibition exists in the budget process against committing Medicare savings simultaneously to Medicare and to pay for a new federal program. It's this budget loophole, unique to Medicare, that gives the health law's spending constraints and payroll tax hikes the appearance of reducing federal deficits. But it is appearance, not reality. If you have only $1 of income and are obliged to pay a dollar each to two different recipients, then you will have to borrow another $1. This is effectively what the health law does. It authorizes far more in spending than it creates in savings.

    How much more? Charles Blahous's study, "The Fiscal Consequences of the Affordable Care Act," published last month by the Mercatus Center, found that the health law would add over $340 billion to federal deficits over the next 10 years. Over the longer term, deficits would run into the trillions.

    Medicare spending cuts and tax increases have always been double-counted—recorded both on the paygo scorecard and added to the Hospital Insurance Trust Fund. No budgetary rules were bent. But the fiscal stakes in the Affordable Care Act are extraordinarily high. The health law's Medicare hospital insurance spending cuts and tax hikes are now claimed to have eliminated most of the program's medium- and long-term deficits—even as they have also paved the way for the most expensive entitlement expansion in a generation.

    Continued in article

    Bob Jensen's threads on the sad state of governmental accounting ---
    http://faculty.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting

    Bob Jensen's threads on health care ---
    http://faculty.trinity.edu/rjensen/Health.htm

    Bob Jensen's threads on entitlements ---
    http://faculty.trinity.edu/rjensen/Entitlements.htm


    Dartmouth University Professor's Suggestions for Reduced Costs of Health Care in the United States

    "Health Care for 1% of the Cost," by Vijay Govindarajan, Harvard Business Review Blog, April 9, 2012 ---
    http://blogs.hbr.org/cs/2012/04/saving_and_improving_lives_for.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

    This blog post is written with Pepijn Veling, Utrecht University, Netherlands.

    There is a general consensus that U.S. healthcare needs major reform. Can reverse innovation — innovations originating from poor countries — provide one important answer? Most definitely.

    In the U.S., the approach is to spend more money on major technological advances and come up with innovative products and solutions. In poor countries, the innovation paradigm is just the opposite: spend less and innovate new business models. Poor countries face severe resource constraints. They just cannot afford to spend a lot. Constraints need not be limiting, they can actually be liberating.

    The ultra low-cost, high-quality prostheses innovation of Dr. Therdchai Jivacate and the Prostheses Foundation of Thailand is an inspiring example of this. Over the years, they have developed and delivered over 25,000 affordable and appropriate artificial legs to amputees in remote areas of Thailand and surrounding countries. In the U.S., an artificial leg costs about $10,000 and the delivery time is 7-10 days. The Prostheses Foundation of Thailand is able to do it for less than $100, about 1% of the U.S. cost, and their delivery time is 1-3 days.

    Though Dr. Jivacate spent four years as a resident of physical medicine and rehabilitation in Northwestern University, he understood that conventional artificial legs were unaffordable and inappropriate for the majority of Thai amputees. There are several reasons. First, customers in rural Thailand simply cannot afford to pay a high price. For the poor making $2 a day, a $10,000 product would require 5,000 days of income. (With 200 working days a year, that amounts to an incredible 50 years). Second, the context and functional requirements for amputees in Thailand are vastly different from those in the U.S. Thai people do many of their daily activities with bare feet, sitting squat on the floor or cross-legged, and many work in wet paddy fields. Furthermore, while many roads in the U.S. are paved, Thai people walk on uneven roads. Finally, the expensive artificial legs are only available in Bangkok, thus making it virtually inaccessible to the rest of the population.

    Dr. Jivacate defined the most essential customer problem: to be able to walk without pain. He set out to develop a solution. His mission was not just to reduce costs — but to shift the price-performance paradigm. Actually, the artificial leg has to be higher-quality than in the U.S. to meet the more demanding functional requirements in Thailand, yet it has to be ultra low-cost. How did he achieve such an impossible goal?

    There are two major cost drivers in an artificial leg — raw material cost and the cost of technicians.

    Dr. Jivacate realized that he could not achieve his goal with expensive materials such as titanium, which is used in rich countries. One of his technological breakthroughs was to make artificial legs from recycled plastic yogurt bottles. These artificial limbs were extremely cheap. Raw material cost was close to zero since he used waste. More importantly, the limbs were lightweight, durable and comfortable. Dr. Jivacate converted waste into wealth.

    He also knew that professionally-skilled technicians were in short supply and too expensive to hire. Dr. Jivacate therefore instituted training programs for those amputees who showed a special interest in the fitting process. He hired amputees as technicians to do the fitting and help with rehabilitation and training with new patients. This approach had several benefits. First, it dramatically reduced costs. Second, the amputee-technicians approached their work with passion since they personally benefited from the product. Third, it stimulated the demand for the product since these technicians could credibly convince patients that the product works. Fourth, it improved quality since Dr. Jivacate's technicians understood, based on personal experience, how to fit the prosthetic leg without pain and discomfort. Dr. Jivacate's technicians were thus most customer-centric. Fifth, they understood customer feedback, which led to continuous process improvements. Sixth, it created an instant empathy and a high degree of trust between the amputee-technicians and the patients. Finally and most importantly, it created much-needed job opportunities for the poor.

    He also re-invented the delivery model. Patients in remote areas of Thailand could not afford to travel to clinics in an urban setting. So, Dr. Jivacate innovated highly-efficient mobile clinics and 27 satellite workshops in local areas. Between 1992 and 2011, the mobile units have made more than 115 trips serving over 16,000 amputees. It has recently broken the Guinness Book of World Records by serving 864 amputees in 13 days.

    Finally, Dr. Jivacate tailored the devices to meet unique local needs — for instance, he custom-built artificial legs specifically for farmers who worked in wet fields.

    Originally targeting the poor, continuous innovations have drastically improved the quality of the artificial legs over time (ISO certificates pending). The limbs are now also used by more affluent amputees in Thailand and in other neighboring countries such as Indonesia, Malaysia, Laos, and Burma.

    In addition to treating humans, Dr. Jivacate fabricated a prosthetic leg for Baby Mosha, a 7 month-old elephant, who was injured in a landmine in 2009 — a remarkable medical achievement captured in the award winning documentary film The Eyes of Thailand.

    If we can make an artificial leg for an elephant for less than $100, why does a less complicated procedure for humans have to cost $10,000?

    Continued in article

    Comment at the end of the article by SVNert

    Interesting article, although not particularly any new insight. :) As a patient with emergency needs and proper insurance coverage, it is better to be in the US (maybe Japan or UK are also good places to be....) As a patient with some wealth and no insurance and in need of emergency care, India (and some other countries) would be good places to be ... although in India pre-op/post-op care is currently lacking and slowly improving.

    In my opinion, short of socialized care, even these two diametrically opposite US/India situations are primarily driven by capitalism - of course the parameters of population, disposable wealth etc etc will play into the equation.

    Whereas lawyers 'run' the US healthcare, countries like India seem to be driven by patient processing factories, and as factories, economies of scale and low cost come into play, whether its the services or locally copied/invented devices/systems. From device (software/hardware/materials etc) invention perspective, the new generation of technological advances and scientific discoveries surely will make some of these innovations cheaper - a lot cheaper.

    Comment from Ned Keit-Pride

    You do not seem to account for the crippling malpractice insurance costs of most healthcare providers in the US. It is these costs and the fact that their transactions are largely with insurance companies rather than patients that drive much of what physicians charge here. Until healthcare services are sold more directly to patients, I believe comparing the relative practices of US and Indian physicians to be very apples-to-oranges.

    "Canadian Malpractice Insurance Takes Profit Out Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
    Click Here
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890  

    The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

    A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

    A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

    Why the difference?

    In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.

    In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.

    In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.

    Canadian Medical Protective Association

    Here’s how it works.

    Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium

    "We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.

    If a doctor is sued, the group pays the claim and provides legal counsel.

    In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.

    "We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''

    But the importance of limiting jury awards may not play into the big picture on health care reform.

    Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.

    Major Difference

    In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.

    In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.

    A bad outcome in itself is not the basis of a lawsuit.

    The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.

    In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.

    In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.

    Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”

    For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.

    2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.

    In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”

    Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #



    Read more:
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP

     

     


     

    "Providential Design A study shows that Medicaid reform is working in Rhode Island," The Wall Street Journal, April 5, 2012 ---
    http://online.wsj.com/article/SB10001424052970204632204577126650419797954.html#mod=djemEditorialPage_t

    In his parade of Republican horribles, President Obama poured special scorn this week on the idea of handing Medicaid to the states with a fixed annual federal payment. He says it wouldn't save money without hurting "poor children" and "middle-class families who have children with autism and Down's Syndrome." Someone needs to tell Mr. Obama about the results of Medicaid reform in Rhode Island.

    The experiment dates to the final days of the Bush Administration, when Health and Human Services granted a Global Consumer Choice Waiver exempting Rhode Island from many of Medicaid's federal rules and mandates. The state used it to move to managed care from traditional fee for service, in return for accepting a spending cap over five years of $12.1 billion, including federal matching payments.

    How's that working out? Well, a study released late last year by the Lewin Group, a consulting firm, found that the Ocean State's reform with a federal waiver has been "highly effective in controlling Medicaid costs" and improving "access to more appropriate services."

    Rhode Island's Medicaid spending, which had been projected to reach $3.8 billion, came in at $2.7 billion for the 18 months following the introduction of the waiver, according to Rhode Island's Office of Health and Human Services. The state benefited in part from one-time stimulus money, but it also saved money from such reforms as better case management by private insurers and competitive bidding for health-care providers.

    For example, Lewin examined the state's shift to home and community-based care from nursing homes for long-term care patients. Lewin found the reform helped save $35.7 million over three years, $15 million in 2010 alone.

    The Lewin study also "found evidence of lower emergency room utilization and improved access to physician services" from "care management programs" for Medicaid patients with asthma, diabetes, heart problems and mental health disorders. Emergency room care is a major driver of Medicaid costs.

    The total savings from all of Rhode Island's reforms were more than $55 million—a big deal in such a small state. According to an analysis by Gary Alexander, who ran the Medicaid program in Rhode Island when the federal waiver was granted and who now serves as the Secretary of Public Welfare in Pennsylvania, if these savings were extrapolated for all 50 states, they would exceed $200 billion in lower Medicaid costs over the next decade.

    These findings contradict predictions from liberal critics like the Center on Budget and Policy Priorities, which in 2008 called the Rhode Island waiver a "radical" and "perilous" plan that would hurt the poor. On quality of care, Lewin found that the waiver ensures that "Medicaid members in Rhode Island receive the right services, at the right time, in the right setting." In other words, Down Syndrome children are not roaming the streets of Woonsocket.

    Not every Rhode Island idea has worked, and critics say some reforms may not be applicable to larger, more diverse, and less population-dense states like Texas. Perhaps so. But that's why letting 50 states tailor their own service-delivery reforms is the best model for controlling a program that cost the feds and states a combined $404 billion in fiscal 2010. State experimentation is how welfare was reformed so successfully in the 1990s.

    Our guess is that President Obama's real objection to Medicaid black grants is political. He doesn't want Washington to lose control. He and most Democrats want to use Medicaid to cover as many people as possible as a way to pave the road to single-payer national health care. It's no accident that ObamaCare was written to add about 15 million more people to the Medicaid rolls, most of whom will be middle-income earners.

    The nation's governors are looking at this imminent new burden in horror, and more than half of them have signed a letter pleading with the Obama Administration to give them less Medicaid money in exchange for fewer rules and mandates. Medicaid now costs the states $159 billion a year. Without reform the federal cost will double to $587 billion in 2021 from $274 billion last year, according to the Congressional Budget Office.

    If the Obama Administration won't grant more waivers, then Republicans ought to investigate the Rhode Island results and educate the voters during this election campaign.

     

     


    A Historic and Dysfunctional Alternative to Expensive Malpractice Claims

    "Violent Crimes in China’s Hospitals Spread Happiness," by Adam Minter, Bloomberg, March 29, 2012 ---
    http://www.bloomberg.com/news/2012-03-29/violent-crimes-in-china-s-hospitals-spread-happiness.html

    Last Friday afternoon, Wang Hao, a young internist at the First Affiliated Hospital of Harbin Medical University in northeast China, was brutally murdered by a disgruntled patient. It was a spectacular crime, but it was not an unusual one: Violence against doctors, including murder, is commonplace and reportedly increasing. In 2006, the last year for which detailed records on patient-doctor violence was reported publicly (including violence perpetrated by patient family members and friends), the Chinese Ministry of Health stated that 5,519 medical personnel had been “injured” in disputes -- a substantial increase over previous years. And on March 29, the China Daily cited an “official source” who said that in 2010, 17,000 violent incidents took place, affecting roughly 70 percent of all public hospitals in China.

    Why so much violence against one of the caring professions? Chinese media, and microblogs, are filled with theories.

    In 2007, Xinhua, the state-owned news agency, explained it as a function of “patients' families and friends [becoming] more likely to use violence to vent their rage over hospital errors.” There’s some truth to that. China lacks a credible and independent medical malpractice system to determine compensation for medical errors. But that’s just the beginning. The more critical issue relates to the comically low compensation medical professionals receive (the starting salary for a doctor is around $500 per month). To supplement their income, they legally receive commissions on prescriptions and medical services. On Thursday, Shanghai media reported that the city’s doctors also commonly notify funeral homes of impending patient deaths in exchange for kickbacks.

    Chinese patients often enter a hospital prepared to pay bribes for the care that they need. I’ve personally witnessed a “tip” handed to a doctor in advance of a surgical procedure at a top Shanghai hospital. They can also be tricked into undergoing unnecessary but revenue-generating procedures. Three years ago, for instance, at another Shanghai hospital, I was told I should get a CT scan so as to better understand the causes of a sinus infection, and then asked to purchase a Percocet prescription to manage my pain. I didn’t need either. Combine this norm, however, with crowded waiting rooms, high and expensive hurdles to see specialists, and a pointed lack of means to civilly contest malpractice and one can see why resentment against the Chinese medical profession has boiled for decades.

    Last Friday’s murder, even in the context of other Chinese patient-doctor murders, doesn’t reveal much about the scale of patient bitterness in China. That proof is provided by an astonishing online poll posted by People’s Daily, the official mouthpiece of the Chinese Communist Party, a few hours after news of the murder went viral in China. The now deleted survey (posted as an attachment to this article) asked readers to express their feelings about Wang Hao’s murder by clicking on emoticons symbolizing feelings ranging from anger (a red fuming face) to happiness (a yellow smiley face). Shockingly, of the first 6,161 readers to respond to the poll, 4,018 --- 65 percent -- chose happiness. Anger came in a distant second with 14 percent. The third choice, sadness (a teary, yellow face) received 6.8 percent.

    Continued in article

    Jensen Question
    What do extreme alternatives of violence versus multi-million dollar malpractice recovery claims have in common?

    Answer
    Both can lead to physicians and hospitals refusing high risk medical services. For example, when Romney Care was implemented in Massachusetts it made obstetrics unprofitable to hospitals having to bear enormous expenses of obstetrics malpractice insurance. It's common for courts to pass on costly judgments in sympathy for parents who had a defective baby even though the hospitals and doctors did nothing wrong. As a result of not being able to cover expenses of malpractice insurance and lawsuit risks, quite a few hospitals in Massachusetts closed down their obstetrics services. They would probably do the same under risk of being damaged by disgruntled Chinese parents.


    "Looking for Solutions in a Rapidly Changing Health Care Environment," Knowledge@wharton, University of Pennsylvania, March 28, 2012 ---
    http://knowledge.wharton.upenn.edu/article.cfm?articleid=2963

    While the U.S. health care system is not yet on life support, it remains a fragmented and unwieldy structure whose rising costs bear little relation to improvements in access or quality. This is despite the introduction of patient management programs, some restructuring of insurance models and efforts to adjust incentives for decision making all across the care continuum.

    But during the keynote presentations and panel discussions at Wharton's 18th Annual Health Care Business Conference titled, "Innovation in a Changing Health Care Environment," the emphasis was on solutions. Participants analyzed some of the ways that individual companies are digging deep into the system to come up with approaches that rely on new technology, new business models and new marketing strategies.

    Two keynote speeches served as thematic bookends to the day's discussions. The morning kickoff keynote by Glenn D. Steele Jr., president and CEO of Geisinger Health System, defined the scope of the problem in dollars and disease. Steele focused on the inverse relationship between cost and quality, citing several studies that found that more than 50% of health care spending in the U.S. is wasted or actually harmful. The conference ended with a keynote by Robert Pearl, president and CEO of The Permanente Medical Group, who stated that the survival of the U.S. depends on reining in health care costs. He challenged the audience to save the country from economic collapse by redesigning how health care is delivered and paid for.

    Overall, conference presenters provided a ground-level view of what some of the problems, and solutions, look like in this transformative time.

    Strategizing for Survival

    The cost of health care is directly related to our larger national economic health, as noted by Pearl. "Our problems go back 40 years.... Costs have been rising 7% to 8% a year; health care is 18% of GDP this year, and it is set to double again, to 36% of GDP, by 2030.... That leaves no money for education, infrastructure, police and fire." The current players, he added, are strategizing for survival today because the trajectory is unsustainable, and change will come. "Currently, we are fragmented, piecemeal, paper-based and leaderless."

    According to David Jones, Jr., chairman and managing director of Chrysalis Ventures, a private equity and venture capital firm, the days for tinkering around the edges are gone. "The provider side re-engineering is doomed to failure because of a fundamental governance problem. You heard in the keynote this morning that 40% to 50% of the money spent is useless or actually harmful to outcomes. All of the change initiatives are focused on solving it in an incremental way."

    Jones described that as a "pants-on-fire problem.... I don't think there is a possibility in the world that a bunch of ungovernable non-profits with no motivation to change quickly will go after that problem. I think the solution ultimately -- like the Greek [economic bail-out] solution or the GM solution -- is that you must have restructuring in the traditional financial sense. Everyone talks about hospitals going bankrupt because of politics. That is nonsense. Bankruptcy is a restructuring, and the system is going to change dramatically."

    This urgency, and a new economy driven by information technology, have created an environment in which change is happening no matter what laws are passed or what the courts uphold or overturn, conference participants stated.

    "Good regulations, bad regulations: Change has thrown the pickup sticks into the air, and they will come down in other ways," Jones said. "The iPhones have taken over the world. More than 80% of doctors use an iPhone or a smartphone. You can't wall off change. The health plans are changing fast. As a venture capitalist, that is exciting stuff."

    Aetna CEO Mark Bertolini told the conference that his firm is evolving into a health technology company with a big insurance vehicle attached. Bertolini discussed Aetna's competitors' similar investments in electronic health record software that is transforming the nature of the health insurance industry. "UnitedHealth recently announced its Optum healthcare cloud which is meant to be a collaboration platform. It's not Epic, it's not Cerner, it's not McKesson [referring to some of the dominant electronic health record software companies]. It's got a lot of resources behind it; it's got a lot of cash flow, and I think it's worth watching."

    Jones of Chrysalis also referred to insurance company investments in software that are changing the way patients are cared for. As an example, he cited Humana's platform called Vitality, an incentive system to encourage individuals to make good choices about eating, exercising and other health issues. While the problems remain, solutions are starting to emerge either through creative new business models, technological advances or creative patient engagement initiatives, he said.

    Recovering Costs

    According to Jones, Congress did not offer true health reform with the passage of the Patient Protection and Affordable Care Act, but instead offered health insurance reform that will address how consumers pay for health care. "Health insurance is a dysfunctional, shrinking market on the private side. Plans aren't changing voluntarily; they are changing because their old business model was crushed and destroyed. We are getting rid of the chokehold that insurance brokers have on health care. An 8% to 12% commission goes to Joe Box-of-Donuts," he said, referring to the fact that health insurance brokers get a commission that is built into the cost of the price of health insurance. The regional health insurance exchanges (HIEs) that have been established under the Affordable Care Act eliminate health insurance brokers -- and their commissions - and allow patients to buy insurance directly from a pool of health plans, Jones added. "The health exchanges will drive out that cost and will focus on brand value."

    By eliminating the insurance brokers -- the middle men in the system -- patients will focus on the value of the insurance product and choose a tool that works for their situation out of a menu of options offered through a health insurance exchange, Jones said. As direct consumers of health insurance, he added, patients will be required to ascend a learning curve about their options.

    According to John Keith, a principal at Deloitte, "No matter how exchanges evolve, when consumers start looking at their local networks and what they are getting for their dollar, there will be chaos for a few years. There will be a period of adjustment as people realize they are responsible for those costs, and that will drive change down the road."

    Providers and suppliers will compete for business in this new paradigm, where cost and quality are expected to be in alignment, said Keith. "This is truly an opportunity for real change. ACOs (Accountable Care Organizations) aren't anything new," Keith added, referring to the outcomes-based payment system being piloted by Medicare as mandated in the Patient Protection and Affordable Care Act. "Bundled payment systems have been around since DRGs (Diagnosis Related Groups), and there have been lots of revolutions, like HMOs (Health Maintenance Organizations). They all resulted in very minimal change. Fee for service abhorred information, but economic duress is causing price pressure, and it opens the door to an industry focused on value, and demands collaborative tools. We're going from a feudal system to a Renaissance."

    Response to Consumers

    Consumers as patients are still at the nexus of change, either as they gravitate toward providers who are convenient and effective, or as they learn to manage the health dollars that are spent, if not directly out of pocket, then on their behalf either by an employer or a government program, conference participants suggested. "People will behave like they do in normal consumer markets," said Ashish Kaura, a partner at Booz & Company. "What are the cornerstones of the consumer markets? Three things: One is value in product design, which is standardization and driven by what most people need. Two is simplicity: It must be easy to navigate to get the information you need. You don't want to spend five hours on the phone. Three is trust: The biggest value for payers today is trust."

    Permanente's Pearl also noted the influence of consumers on the direction of health care. Consumer demands will need to drive innovation, since the current uncertainty in the regulatory and financial environment has many investors waiting on the sidelines for a clear signal, he said. "Find a single business able to achieve success if R&D and finance are fighting each other."

    According to David Kirchoff, president and CEO of Weight Watchers, products like Weight Watchers' online tracking system -- which engages patients in their ongoing care -- have succeeded because they work: Patients use them, they get results and tackling obesity bends the cost curve down in a host of related diseases, especially diabetes.

    "The challenges of obesity are complicated to solve," he added. "People have difficult choices surrounded by a sea of temptations. What's at stake? The future of the health care system. There is a strong link between obesity and diabetes. If you have a BMI (Body Mass Index) over 30, you are 500% more likely to have diabetes." Today, 10% of Americans have diabetes, he says. "By 2050, it is expected to be one-third. This is not a vanity [issue]. This is a health condition that is a function of the choices we make in our daily lives."

    Ultimately, providers and suppliers -- the pharmaceutical and medical device companies -- will be required to prove their value in the marketplace or face extinction, according to conference panelists. Payment systems continue to move at accelerated speed toward a value-based model with payment for quality and outcomes, and move away from a fee-based system that simply pays for individual services or products for which there is no proof of efficacy. Due to this proof-of-concept stringency, the pharmaceutical sector is financially riskier than it used to be, but there is still opportunity. That means bio-pharmaceutical investors are keeping their wallets buttoned until later in the clinical trial process, panelists said during a discussion about the risks of biopharma investment.

    Luke Duster, a principal at Capital Royalty, a private equity firm providing royalty-based financing to health care companies, reported that "last year, there were $90 billion in royalties [paid to biopharma investors]. There are late stage investment opportunities, but smaller companies are starved for cash flow because there is less investment in early stage. We are still raising capital, but only raising one-third as much as [we did] at the peak. Only the strongest are surviving."

    Duster said he sees more cooperation between the FDA and industry to move products through the pipeline. He identified drugs with companion diagnostics as a growth area. Companion diagnostics represent an opportunity in that market segment because the diagnostic test identifies genetic markers and so takes the guesswork out of whether the drug will be effective in a particular patient with an identifiable genetic mutation. This assures outcomes and, by extension, guarantees the value of the product to the payer. In companion diagnostics, a genetic test is developed to identify whether a patient has a particular marker that indicates a specific drug will work in that patient -- thus the name "companion diagnostic" -- because the diagnostic is tied directly to the efficacy of one particular pharmaceutical product.

    As to the role the FDA is playing in creating a risk-averse pharmaceutical sector, Ronald W. Lennox, a partner with CHL Medical Partners, a venture capital firm that focuses on seed and early-stage companies in the medical sector, said it is the FDA's own aversion to clinical risk that is trickling down to investors. "FDA approvals ought to be a balance of risk and benefit. If one million people benefit from a drug, how many shouldn't? Are we willing to risk one adverse event? We are tilting toward no adverse events at all, with little regard to patients who will benefit. Partly it is because of the litigious U.S. population and partly because we have trials on a small population and we try to extrapolate from 2,000 clinical trial patients to millions of patients. That is hard to do."

    Finding that Magic Mix of Providers

    Panelists discussed the way that transformed payment models based on outcomes are half of a solution; it is incumbent on providers to transform what the payers are paying for. Moving from a fee for service system where a product or service is paid because it was delivered to an individual patient, to an outcomes-based value model -- where the payment is determined by overall performance delivered at a population level -- requires systems to generate the metrics to support reimbursement, panelists noted.

    Emad Rizk, president of McKesson Health Solutions, talked about what that looks like from a provider's perspective. "Down here at the execution level, it is ugly. So let's just look at where delivery systems can go. Supposedly, you have managed populations, which means you have to have the data. You have to stratify; you have to put processes together to intervene, measure outcomes and then demonstrate those outcomes. Then you have to go show the payer that you did it.

    Continued in article

    Hi Zafar,

    By now I'm used to your innuendos and  insults of my intelligence. My issue with medical malpractice lawyers has zero to do with political party affiliation. I have two issues with lawyers. One is political in the sense that they traditionally vote in laws favorable to themselves whenever they dominate state and federal legislatures --- which most of the time.


    My second issue with medical malpractice lawyers is that they prefer to work on a contingency fee basis in the punitive damages legal lottery. These same lawyers then play to the sympathies of judges and/or juries to award multimillion dollar sympathy settlements even when the medical service providers did absolutely nothing wrong. This, in turn, unfairly damages their reputations and in some instances drives them out of the medical service business such as when obstetricians either quit altogether or drop obstetrics from their OB/GYN combined practices.If you want one absurd case with a lot of skin in the game (even the plaintiff's lawyer conceded the initial $60 million awarded for loose skin was absurd) go to
    http://www.chicagomedicalmalpracticelawyerblog.net/2011/08/court-lowers-60-million-medica.html 


    The above two issues is at the heart of my disagreement with lawyers.
    Firstly, lawyer-legislators made the legal system so complicated that in order to file a malpractice claim into the legal system you need to employ a lawyer.


    Secondly, the lawyers prefer to be paid on a contingency fee bases such that in states like Texas that took the punitive damage legal lottery out of malpractice lawsuits, the lawyers must now charge on an hourly basis rounded upward by the week.


    Insert Figure 1


    When the lawyers charge on an hourly basis instead of playing a legal lottery, this hurts poor people who cannot afford even a few hours of law firm time. Hence, when the punitive damage, contingency fee lottery was taken out of the equation by constitutional amendment in Texas, many poor people cannot afford to file medical malpractice lawsuits.


    Here's where I differ from Jagdish

    I differ from Jagdish on the basis of who determines the settlements. In Finland and other parts of Europe, professional medical boards determine the settlements rather than the legal system.


    Jagdish wants to leave lawyers in the malpractice claims business either on a contingency fee or hourly fee basis. I want to cut lawyers and the legal system out of the claims filing process and have the medical system deal directly with malpractice claims, thereby making it possible for poor people to file claims even when the state or nation does not have a punitive damages legal lottery.


    My model is the malpractice claims process that modifies the Canadian process

    In both Texas and Canada the punitive damages are severely capped to a point that the punitive damages legal lottery is taken out of the equation. But both systems require even poor people to pay up front investigation costs and filing fees.


    I think investigation and filing fees should be paid for by the medical system as a shared cost spread among all medical service billing fees (which in Canada ultimately spreads it among taxpayers). There should be no up front cost for filing a claim, although the system might impose penalties of some sort for claims found to be fraudulent or frivolous.


    This is not entirely the way it works in Canada at the moment.

     

    "Canadian Malpractice Insurance Takes Profit Out Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
    Click Here
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890  

    The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

    A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

    A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

    Why the difference?

    In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.

    In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.

    In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.

    Canadian Medical Protective Association

    Here’s how it works.

    Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium

    "We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.

    If a doctor is sued, the group pays the claim and provides legal counsel.

    In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.

    "We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''

    But the importance of limiting jury awards may not play into the big picture on health care reform.

    Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.

    Major Difference

    In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.

    In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.

    A bad outcome in itself is not the basis of a lawsuit.

    The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.

    In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.

    In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.

    Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”

    For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.

    2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.

    In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”

    Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #



    Read more:
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP

    Bob Jensen's threads on health care ---
    http://faculty.trinity.edu/rjensen/Health.htm


     

     



    March 31. 2012

    Graphic:  How Much People Pay for Health Care Around the World ---
    http://visual.ly/how-much-people-pay-health-care-around-world


    Jonathan Gruber --- http://en.wikipedia.org/wiki/Jonathan_Gruber_%28economist%29#Controversies

    . . .

    In January 2010, after news emerged that Gruber was under a $297,000 contract with the Department of Health and Human Services, while at the same time promoting the Obama administration's health care reform policies, some conservative commentators suggested a conflict of interest.[17][18][19] While he did disclose his HHS connections in an article for the New England Journal of Medicine, his oversight in doing this earlier was defended by Paul Krugman in The New York Times.[20]

    One heavily-scrutinized part of the ACA reads that subsidies should be given to healthcare recipients who are enrolled "through an Exchange established by the State". Some have read this to mean that subsidies can be given only in states that have chosen to create their own healthcare exchanges, and do not use the federal exchange, while the Obama administration says that the wording applies to all states. This dispute is currently part of an ongoing series of lawsuits referred to collectively as King v. Burwell. In July 2014, two separate recordings of Gruber, both from January 2012, surfaced in which he seemed to contradict the administration's position.[5] In one, Gruber states, in response to an audience question, that "if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits",[21] while in the other he says, "if your governor doesn't set up an exchange, you're losing hundreds of millions of dollars of tax credits to be delivered to your citizens."[22] When these recordings emerged, Gruber called these statements mistaken, describing them as "just a speak-o — you know, like a typo".[21]

    In November 2014, a series of four videos emerged of Gruber speaking at different events, from 2010 to 2013, about ways he felt the ACA was misleadingly crafted and marketed to get the bill passed; in several of these videos he specifically refers to American voters as ill-informed and "stupid." In the first, most widely-publicized video taken at a panel discussion about the ACA at the University of Pennsylvania in October 2013, Gruber said the bill was deliberately written "in a tortured way" to disguise the fact that it creates a system by which "healthy people pay in and sick people get money." He said this obfuscation was needed due to "the stupidity of the American voter" in ensuring the bill's passage. Gruber said the bill's inherent "lack of transparency is a huge political advantage" in selling it.[23] The comments caused significant controversy.[24][25][26][27][28] In two subsequent videos, Gruber was shown talking about the decision (which he attributed to John Kerry) to have the bill tax insurance companies instead of patients, which he called fundamentally the same thing economically but more palatable politically. In one video, he stated that "the American people are too stupid to understand the difference" between the two approaches, while in the other he said that the switch worked due to "the lack of economic understanding of the American voter."[29] In another video, taken in 2010, Gruber expressed doubts that the ACA would significantly reduce health care costs, though he noted that lowering costs played a major part in the way the bill was promoted.[30]

    "Academic Built Case for Mandate in Health Care Law," by Catherine Rampell, The New York Times, March 28, 2012 ---
    http://www.nytimes.com/2012/03/29/business/jonathan-gruber-health-cares-mr-mandate.html?pagewanted=all&_r=1&

    After Massachusetts, California came calling. So did Connecticut, Delaware, Kansas, Minnesota, Oregon, Wisconsin and Wyoming.

    They all wanted Jonathan Gruber, a numbers wizard at M.I.T., to help them figure out how to fix their health care systems, just as he had helped Mitt Romney overhaul health insurance when he was the Massachusetts governor.

    Then came the call in 2008 from President-elect Obama’s transition team, the one that officially turned this stay-at-home economics professor into Mr. Mandate.

    Mr. Gruber has spent decades modeling the intricacies of the health care ecosystem, which involves making predictions about how new laws will play out based on past experience and economic theory. It is his research that convinced the Obama administration that health care reform could not work without requiring everyone to buy insurance.

    And it is his work that explains why President Obama has so much riding on the three days of United States Supreme Court hearings, which ended Wednesday, about the constitutionality of the mandate. Questioning by the court’s conservative justices has suggested deep skepticism about the mandate, setting off waves of worry among its backers — Mr. Gruber included.

    “As soon as I started reading the dispatches my stomach started churning,” Mr. Gruber said of the arguments on Tuesday, while taking a break from quizzing his son for a biology test. “Losing the mandate means continuing with our unfair individual insurance markets in a world where employer-based insurance is rapidly disappearing.”

    Mr. Gruber, 46, hates traveling without his wife and three children, so he is tracking the case from his home in Lexington, Mass. There he crunches numbers and advises other states on health care, in between headbanging at Van Halen concerts with his 15-year-old son and cuddling with the family’s eight parrots. (His wife, Andrea, volunteers at a bird rescue center.)

    If the court rules against the mandate, Mr. Gruber says he believes the number of newly insured Americans could fall to eight million from the projected 32 million. He insists that without a mandate, the law will result in a terrible spiral: only relatively sick Americans will choose to get insurance, leading premium prices to rise and causing the healthier of even those sick people to drop their insurance, sending prices higher and higher.

    Some other economists quibble, though, with Mr. Gruber’s pessimistic assessment.

    “My general thought about the mandate is if insurance is affordable and accessible, most people will buy it anyway,” said David Cutler, an economist at Harvard and longtime collaborator of Mr. Gruber’s.

    Others, like Paul Starr, a Princeton sociologist, say they believe Mr. Gruber’s work does not account for how hard it will be to enforce the mandate.

    “There is this groupthink about how important the mandate is,” Mr. Starr says. “Most people don’t understand or won’t acknowledge how weak the enforcement mechanism is.”

    Mr. Starr said he thought Mr. Gruber in particular was overstating the effectiveness of the mandate because “it’s his baby.”

     That said, it is difficult for too many other experts to categorically refute Mr. Gruber’s work, since he has nearly cornered the market on the technical science behind these sorts of predictions. Other models exist — built by nonprofits like the RAND Corporation or private consultancies like the Lewin Groupbut they all use Mr. Gruber’s work as a benchmark, according to Jean Abraham, a health economist at the University of Minnesota and former senior economist in both the Obama and George W. Bush administrations.

    “He’s brought a level of science to an issue that would otherwise be just opinion,” Mr. Cutler says. “He’s really the only person who has been doing all this careful modeling for so long. He’s the only person you can go to for that kind of thing, which is why the White House reached out to him in the first place.”

    Mr. Obama had made health care reform a cornerstone of his campaign, and wanted to announce a credible proposal quickly after taking office. But members of the Obama administration’s transition team said they had inherited an executive branch that had vastly underinvested in modeling research on health care, especially compared to the technical modeling that had been done in areas like tax policy.

    “Creating a good model from scratch would have taken months, maybe years,” said Lawrence H. Summers, who was the director of President Obama’s National Economic Council and had advised Mr. Gruber on his dissertation when they were at Harvard.

    Mr. Gruber had already spent years researching government mandates, starting with his 1991 dissertation about how mandated employer benefits cut into workers’ wages.

    He also did similar analyses, on a broader range of public policies for the Treasury Department in the Clinton administration from 1997-98. He was recruited by Mr. Summers, who was then deputy secretary of Treasury.

    Then in 2001, after returning to M.I.T., Mr. Gruber received an e-mail from Amy Lischko, who was then an assistant commissioner in the Massachusetts healthy policy department under then-Gov. Jane M. Swift, a Republican.

    She was familiar with his work, and contracted him to model some potential ways that Massachusetts could expand health insurance coverage.

    “He certainly wasn’t as well known then as he is now in the health care arena,” said Ms. Lischko, now a professor at Tufts University School of Medicine. “We couldn’t exactly kick the tires on these kinds of models back then, but we knew he had done work on simulations before.”

    Mr. Gruber calls himself a “card-carrying Democrat.” He and his wife host a “great quadrennial Democratic victory party” whether or not the Democratic candidate wins, he said. But given his reputation and relatively rare expertise, he still ended up working for two Republican governors in Massachusetts.

    When Mr. Romney succeeded Ms. Swift in 2003, he proposed using an individual mandate to help the state achieve universal health care coverage. Mr. Gruber was again brought in to analyze the idea, which he had not formally modeled before.

    “Romney saw it as a traditional Republican moral issue of personal responsibility, getting rid of the free riders in the system, not as much of an economic issue,” Mr. Gruber said. “Not only were the Republicans for it, the liberals hated it. People forget that.”

    Mr. Obama had vehemently opposed an individual mandate before his election in 2008.

    After the Massachusetts plan passed in 2006, Arnold Schwarzenegger, then the Republican governor of California, invited Mr. Gruber to Sacramento to help model a similar proposal.

    “That was awesome,” Mr. Gruber says, his eyes widening at the memory. “I got to see the sword from Conan the Barbarian.”

    The California proposal fell apart, but soon Mr. Gruber had a little cottage industry helping states model potential health system changes. He also serves on the Massachusetts board that oversees the state’s new health care exchanges.

    Along with these credentials, Mr. Gruber’s position as an adviser to the influential Congressional Budget Office also left him perfectly positioned to advise the White House on health reform.

    “The most important arbiter of everything was the C.B.O.,” said Neera Tanden, who was a senior adviser for health reform at the Department of Health and Human Services.

    The C.B.O.’s assessment of a bill’s efficacy and costs strongly influences political debate, but the office does not publicly reveal how it calculates those numbers.

    “We knew the numbers he gave us would be close to where the C.B.O. was likely to come out,” Ms. Tanden said. She was right.

    After Mr. Gruber helped the administration put together the basic principles of the proposal, the White House lent him to Capitol Hill to help Congressional staff members draft the specifics of the legislation.

    This assignment primarily involved asking his graduate student researchers to tweak his model’s software code. It was also almost entirely conducted from his home office, while his children were at school and then after they had gone to bed.

    “If I wanted to be in Washington, I’d have taken a job in Washington,” he said. “I wanted to be around for my family.”

    Even though he was brought in by the White House, Congressional staff members from both parties trusted him because he was seen as an econometric wonk, not a political agent. But soon his very involvement with the bill caused questions about his objectivity to be raised in the news media.

    During and after the bill’s slog through Congress, he frequently spoke with reporters and wrote opinion pieces supporting the Affordable Care Act but did not always mention his role in helping to devise it.

    He says he regrets not being more upfront about his involvement with the administration. But he does not apologize for publicly advocating the legislation, and continuing to do so — including through a comic book he wrote to explain the law.

    Yes, I want the public to be informed by an objective expert,” he says. “But the thing is, I know more about this law than any other economist.”


    Page Readings on Affordable Health Care Act --- http://www.youtube.com/watch_popup?v=HcBaSP31Be8&vg=medium


    "Looking for Solutions in a Rapidly Changing Health Care Environment," Knowledge@wharton, University of Pennsylvania, March 28, 2012 ---
    http://knowledge.wharton.upenn.edu/article.cfm?articleid=2963

    While the U.S. health care system is not yet on life support, it remains a fragmented and unwieldy structure whose rising costs bear little relation to improvements in access or quality. This is despite the introduction of patient management programs, some restructuring of insurance models and efforts to adjust incentives for decision making all across the care continuum.

    But during the keynote presentations and panel discussions at Wharton's 18th Annual Health Care Business Conference titled, "Innovation in a Changing Health Care Environment," the emphasis was on solutions. Participants analyzed some of the ways that individual companies are digging deep into the system to come up with approaches that rely on new technology, new business models and new marketing strategies.

    Two keynote speeches served as thematic bookends to the day's discussions. The morning kickoff keynote by Glenn D. Steele Jr., president and CEO of Geisinger Health System, defined the scope of the problem in dollars and disease. Steele focused on the inverse relationship between cost and quality, citing several studies that found that more than 50% of health care spending in the U.S. is wasted or actually harmful. The conference ended with a keynote by Robert Pearl, president and CEO of The Permanente Medical Group, who stated that the survival of the U.S. depends on reining in health care costs. He challenged the audience to save the country from economic collapse by redesigning how health care is delivered and paid for.

    Overall, conference presenters provided a ground-level view of what some of the problems, and solutions, look like in this transformative time.

    Strategizing for Survival

    The cost of health care is directly related to our larger national economic health, as noted by Pearl. "Our problems go back 40 years.... Costs have been rising 7% to 8% a year; health care is 18% of GDP this year, and it is set to double again, to 36% of GDP, by 2030.... That leaves no money for education, infrastructure, police and fire." The current players, he added, are strategizing for survival today because the trajectory is unsustainable, and change will come. "Currently, we are fragmented, piecemeal, paper-based and leaderless."

    According to David Jones, Jr., chairman and managing director of Chrysalis Ventures, a private equity and venture capital firm, the days for tinkering around the edges are gone. "The provider side re-engineering is doomed to failure because of a fundamental governance problem. You heard in the keynote this morning that 40% to 50% of the money spent is useless or actually harmful to outcomes. All of the change initiatives are focused on solving it in an incremental way."

    Jones described that as a "pants-on-fire problem.... I don't think there is a possibility in the world that a bunch of ungovernable non-profits with no motivation to change quickly will go after that problem. I think the solution ultimately -- like the Greek [economic bail-out] solution or the GM solution -- is that you must have restructuring in the traditional financial sense. Everyone talks about hospitals going bankrupt because of politics. That is nonsense. Bankruptcy is a restructuring, and the system is going to change dramatically."

    This urgency, and a new economy driven by information technology, have created an environment in which change is happening no matter what laws are passed or what the courts uphold or overturn, conference participants stated.

    "Good regulations, bad regulations: Change has thrown the pickup sticks into the air, and they will come down in other ways," Jones said. "The iPhones have taken over the world. More than 80% of doctors use an iPhone or a smartphone. You can't wall off change. The health plans are changing fast. As a venture capitalist, that is exciting stuff."

    Aetna CEO Mark Bertolini told the conference that his firm is evolving into a health technology company with a big insurance vehicle attached. Bertolini discussed Aetna's competitors' similar investments in electronic health record software that is transforming the nature of the health insurance industry. "UnitedHealth recently announced its Optum healthcare cloud which is meant to be a collaboration platform. It's not Epic, it's not Cerner, it's not McKesson [referring to some of the dominant electronic health record software companies]. It's got a lot of resources behind it; it's got a lot of cash flow, and I think it's worth watching."

    Jones of Chrysalis also referred to insurance company investments in software that are changing the way patients are cared for. As an example, he cited Humana's platform called Vitality, an incentive system to encourage individuals to make good choices about eating, exercising and other health issues. While the problems remain, solutions are starting to emerge either through creative new business models, technological advances or creative patient engagement initiatives, he said.

    Recovering Costs

    According to Jones, Congress did not offer true health reform with the passage of the Patient Protection and Affordable Care Act, but instead offered health insurance reform that will address how consumers pay for health care. "Health insurance is a dysfunctional, shrinking market on the private side. Plans aren't changing voluntarily; they are changing because their old business model was crushed and destroyed. We are getting rid of the chokehold that insurance brokers have on health care. An 8% to 12% commission goes to Joe Box-of-Donuts," he said, referring to the fact that health insurance brokers get a commission that is built into the cost of the price of health insurance. The regional health insurance exchanges (HIEs) that have been established under the Affordable Care Act eliminate health insurance brokers -- and their commissions - and allow patients to buy insurance directly from a pool of health plans, Jones added. "The health exchanges will drive out that cost and will focus on brand value."

    By eliminating the insurance brokers -- the middle men in the system -- patients will focus on the value of the insurance product and choose a tool that works for their situation out of a menu of options offered through a health insurance exchange, Jones said. As direct consumers of health insurance, he added, patients will be required to ascend a learning curve about their options.

    According to John Keith, a principal at Deloitte, "No matter how exchanges evolve, when consumers start looking at their local networks and what they are getting for their dollar, there will be chaos for a few years. There will be a period of adjustment as people realize they are responsible for those costs, and that will drive change down the road."

    Providers and suppliers will compete for business in this new paradigm, where cost and quality are expected to be in alignment, said Keith. "This is truly an opportunity for real change. ACOs (Accountable Care Organizations) aren't anything new," Keith added, referring to the outcomes-based payment system being piloted by Medicare as mandated in the Patient Protection and Affordable Care Act. "Bundled payment systems have been around since DRGs (Diagnosis Related Groups), and there have been lots of revolutions, like HMOs (Health Maintenance Organizations). They all resulted in very minimal change. Fee for service abhorred information, but economic duress is causing price pressure, and it opens the door to an industry focused on value, and demands collaborative tools. We're going from a feudal system to a Renaissance."

    Response to Consumers

    Consumers as patients are still at the nexus of change, either as they gravitate toward providers who are convenient and effective, or as they learn to manage the health dollars that are spent, if not directly out of pocket, then on their behalf either by an employer or a government program, conference participants suggested. "People will behave like they do in normal consumer markets," said Ashish Kaura, a partner at Booz & Company. "What are the cornerstones of the consumer markets? Three things: One is value in product design, which is standardization and driven by what most people need. Two is simplicity: It must be easy to navigate to get the information you need. You don't want to spend five hours on the phone. Three is trust: The biggest value for payers today is trust."

    Permanente's Pearl also noted the influence of consumers on the direction of health care. Consumer demands will need to drive innovation, since the current uncertainty in the regulatory and financial environment has many investors waiting on the sidelines for a clear signal, he said. "Find a single business able to achieve success if R&D and finance are fighting each other."

    According to David Kirchoff, president and CEO of Weight Watchers, products like Weight Watchers' online tracking system -- which engages patients in their ongoing care -- have succeeded because they work: Patients use them, they get results and tackling obesity bends the cost curve down in a host of related diseases, especially diabetes.

    "The challenges of obesity are complicated to solve," he added. "People have difficult choices surrounded by a sea of temptations. What's at stake? The future of the health care system. There is a strong link between obesity and diabetes. If you have a BMI (Body Mass Index) over 30, you are 500% more likely to have diabetes." Today, 10% of Americans have diabetes, he says. "By 2050, it is expected to be one-third. This is not a vanity [issue]. This is a health condition that is a function of the choices we make in our daily lives."

    Ultimately, providers and suppliers -- the pharmaceutical and medical device companies -- will be required to prove their value in the marketplace or face extinction, according to conference panelists. Payment systems continue to move at accelerated speed toward a value-based model with payment for quality and outcomes, and move away from a fee-based system that simply pays for individual services or products for which there is no proof of efficacy. Due to this proof-of-concept stringency, the pharmaceutical sector is financially riskier than it used to be, but there is still opportunity. That means bio-pharmaceutical investors are keeping their wallets buttoned until later in the clinical trial process, panelists said during a discussion about the risks of biopharma investment.

    Luke Duster, a principal at Capital Royalty, a private equity firm providing royalty-based financing to health care companies, reported that "last year, there were $90 billion in royalties [paid to biopharma investors]. There are late stage investment opportunities, but smaller companies are starved for cash flow because there is less investment in early stage. We are still raising capital, but only raising one-third as much as [we did] at the peak. Only the strongest are surviving."

    Duster said he sees more cooperation between the FDA and industry to move products through the pipeline. He identified drugs with companion diagnostics as a growth area. Companion diagnostics represent an opportunity in that market segment because the diagnostic test identifies genetic markers and so takes the guesswork out of whether the drug will be effective in a particular patient with an identifiable genetic mutation. This assures outcomes and, by extension, guarantees the value of the product to the payer. In companion diagnostics, a genetic test is developed to identify whether a patient has a particular marker that indicates a specific drug will work in that patient -- thus the name "companion diagnostic" -- because the diagnostic is tied directly to the efficacy of one particular pharmaceutical product.

    As to the role the FDA is playing in creating a risk-averse pharmaceutical sector, Ronald W. Lennox, a partner with CHL Medical Partners, a venture capital firm that focuses on seed and early-stage companies in the medical sector, said it is the FDA's own aversion to clinical risk that is trickling down to investors. "FDA approvals ought to be a balance of risk and benefit. If one million people benefit from a drug, how many shouldn't? Are we willing to risk one adverse event? We are tilting toward no adverse events at all, with little regard to patients who will benefit. Partly it is because of the litigious U.S. population and partly because we have trials on a small population and we try to extrapolate from 2,000 clinical trial patients to millions of patients. That is hard to do."

    Finding that Magic Mix of Providers

    Panelists discussed the way that transformed payment models based on outcomes are half of a solution; it is incumbent on providers to transform what the payers are paying for. Moving from a fee for service system where a product or service is paid because it was delivered to an individual patient, to an outcomes-based value model -- where the payment is determined by overall performance delivered at a population level -- requires systems to generate the metrics to support reimbursement, panelists noted.

    Emad Rizk, president of McKesson Health Solutions, talked about what that looks like from a provider's perspective. "Down here at the execution level, it is ugly. So let's just look at where delivery systems can go. Supposedly, you have managed populations, which means you have to have the data. You have to stratify; you have to put processes together to intervene, measure outcomes and then demonstrate those outcomes. Then you have to go show the payer that you did it.

    Continued in article

    Bob Jensen's threads on health care ---
    http://faculty.trinity.edu/rjensen/Health.htm

     


    "5% of patients account for half of health care spending," by Kelly Kennedy, USA Today, January 20, 2012 ---
    http://www.usatoday.com/news/washington/story/2012-01-11/health-care-costs-11/52505562/1


    "How the Chevy Volt Is Like ObamaCare," by Merrill Mathews, Forbes, March 9, 2012 ---
    http://www.forbes.com/sites/merrillmatthews/2012/03/09/how-the-chevy-volt-is-like-obamacare/

    March is an important month in the ongoing saga of President Obama’s abject policy failures.  First, Chevrolet announced that it would temporarily cease production of the president’s much-touted car for the green economy, the Chevy Volt.  Second, the U.S. Supreme Court will hear the state-led challenge to the president’s health care legislation.  And while “ObamaCar” and ObamaCare may seem like unrelated topics, in this case they have at least three elements in common.

    Both were sold as a key to creating jobs and economic growth. Only last year the president predicted that there would be 1 million electric cars on U.S. roads by 2015—just three years away.  And New York Senator Chuck Schumer doubled down on that economic vision:  “We need a business model based on cars of the future, and we already know what that future is: the plug-in hybrid electric car.”

    Similarly, Obama defended his takeover of the health care system by proclaiming, “We must lay a new foundation for future growth and prosperity, and a key pillar of a new foundation is health insurance reform.”  Speaker Nancy Pelosi saw health reform as a jobs factory: “In its life [health care reform] will create 4 million jobs, 400,000 jobs almost immediately.”

    Well, that economic wave of the future can wave goodbye.  Green energy isn’t creating jobs and boosting the economy.  Indeed, many green energy companies are cutting back, laying off or closing down—even with billions of dollars in taxpayer subsidies.

    Meanwhile, oil and gas production—the left’s biggest nightmare—is resurgent, and the U.S. is once again becoming a global leader in energy production.  Several state economies are booming because of the energy explosion, with low unemployment and high wages—everything the president promised from the green economy, but has failed to deliver.

    However, left unrepealed the health care law probably will create jobs—government jobs!  Thousands of new government employees will be added to the federal payroll to manage the millions of people put in the government-run Medicaid program, and IRS agents to ensure Americans are buying ObamaCare, or slap them with a penalty if they don’t.

    The government has heavily subsidized both. Neither Obama’s green energy or universal health care visions would work without pumping in billions of taxpayer dollars—and they probably won’t work even with the subsidies.

    The administration has created an $80 billion clean-energy investment program to subsidize green companies—$5 billion just for electric cars—many of which, as the Washington Post recently reported, also happen to be big Obama donors.  And did I mention bonuses?  ABC News reports that Beacon Power Corp. of Massachusetts “paid cash bonuses of $259,285 to three executives in part due to progress made on the $43 million energy loan … Last October, Beacon Power filed for Chapter 11 bankruptcy.”

    Hmmm, so our taxes paid big bonuses based in part on executives’ success in siphoning off our taxes from the Obama administration.

    But green energy subsidies are chump change when it comes to the federal dollars Obama will pour down the health care drain.  Official figures calculated a cost of about $1 trillion over 10 years, both from new taxes and robbing from Medicare.  But if you can find a federal official who tells the truth, such as Medicare Chief Actuary Richard Foster, you’ll discover that Democrats way underestimated the costs.

    Continued in article


    The Amish are exempt from the entire health care reform law.
    Catholics are not exempt.

    "Amish, Ok. Catholics, No," by Maryann Walsh, Rhode Island Catholic Conference, March 9, 2012 ---
    http://www.faithfulcitizenri.org/2012/03/amish-ok-catholics-no/

    The Amish are exempt from the entire health care reform law. So are members of Medi-Share, a program of Christian Care Ministry. Yet, when the Catholic Church asks for a religious exemption from just one regulation issued under the law – the mandate that all employers, including religious institutions, must pay for sterilization and contraceptives, including abortion-inducing drugs – the Administration balks.

    The government respects the First Amendment that guarantees the right to freely exercise one’s religious beliefs, but only to a point. In the health care law it picks and chooses which beliefs it respects. The Amish do not believe in insurance, and the government understands. Christian Care Ministry believes people should form a religious community and pay medical bills for one another, and the government says okay. Yet when the Catholic Church opposes being forced to pay for services that violate its beliefs, the Administration says “tough.”

    What is so special about this mandate that it cannot be touched? It was added after Congress passed the health care law and offers no exemption for religious charitable or educational institutions. It will not accept Catholic charities and schools as “religious enough” unless they hire only Catholics, serve only Catholics, have the narrow tax exempt status granted to houses of worship, and teach religion as their purpose. Amazingly, this mandate has more force than the overall health care law. In fact recent regulations allow states to decide which “essential health benefits” to require in health plans, such as hospitalization, prescription drugs and pediatric services. At the same time, all insurance plans must include the objectionable services mentioned above. Here federal law trumps state law and threatens to fine into submission institutions that dare oppose it. The going rate is at least $100 per day per employee.

    What has the government got against the Catholic Church? Has it forgotten the contributions the church has made to the poor and needy for centuries?

    Catholic elementary and secondary schools provide the only real alternative to public schools in many parts of the nation. Catholic colleges offer outstanding education, be it at the university or the community college. The contribution has a long history, back to 1789 when Georgetown University was founded by the Jesuits. Yet under the health care law, if these schools and colleges wish to remain faithful to their religious principles the government will fine them into submission. There’s a thank-you note.

    Many Catholic hospitals were founded by religious orders of women, and today one out of six persons seeking hospital care in the United States goes to a Catholic hospital. Until now, religious background of the patient has not been an issue. “Where does it hurt?” is the first question, not “Where is your baptismal certificate?” This approach threatens to deny hospitals any real protection as “religious employers” under the new rule. Yet their Catholicity means many of these hospitals have an added benefit. At Providence Hospital in Washington, DC, for example, patients not only get medical care, they can get clothing too if they need it. It comes through the Ladies of Charity, an auxiliary of the Daughters of Charity who founded the hospital in 1861. Catholic social service agencies, including adoption and foster care agencies, parish food banks, and soup kitchens, meet human concerns. Services depend on need, not creed. Church sponsorship means the services have a little extra, be they volunteers from parishes, financial donations through diocesan appeals, or the dedication that comes from working for God as well as paycheck.

    Continued in article


    "Will Employers Undermine Health Care Reform by Dumping Sick Employees?" by Amy Monahan and Daniel Schwarcz, Virginia Law Review 125 (2011) ---
    http://www.virginialawreview.org/articles.php?article=321
    Thank you Paul Caron for the heads up.

    This Article argues that federal health care reform may induce employers to redesign their health plans to encourage high-risk employees to opt out of employer-provided coverage and instead acquire coverage on the individual market. It shows that such a strategy can reduce employer health care expenditures without substantially harming either high-risk or low-risk employees. Although largely overlooked in public policy debates, employer dumping of high-risk employees may threaten the sustainability of health care reform. In particular, it potentially exposes individual insurance markets and insurance exchanges to adverse selection caused by the entrance of a disproportionately high-risk segment of the population. This risk, in turn, threatens to indirectly increase the cost to the federal government of subsidizing coverage for qualified individuals and to exempt more individuals from complying with the so-called individual mandate. The Article concludes by offering several potential solutions to the threat of employer dumping of high-risk employees.

    Jensen Comment
    Since it's illegal to dump sick employees without justifiable reasons, the impact of Health Care Reform may be to both increase the number of law suits and increase the number of hurdles that employees must surmount to obtain and keep jobs. For example, factory employees and store clerks must be able to stand without a break for x minutes, diabetic and epileptic bus and taxi drivers may be dropped at the first episode of unconsciousness, drug testing may become more common, Mental health patients may be particularly vulnerable to dismissal.

    Then there is an even bigger risk that employers will drop health coverage of all employees

    "No, You Can't Keep Your Health Insurance:  A new study by McKinsey suggests that as many as 78 million Americans could lose employer health coverage," by Grace-Marie Turner, The Wall Street Journal, June 7, 2011 ---
     http://online.wsj.com/article/SB10001424052702304432304576371252181401600.html?mod=djemEditorialPage_

    "'The Flight to the Exchanges':  The Wall Street Journal writes that ObamaCare may cause small businesses to drop insurance coverage," The Wall Street Journal, July 25, 2011 ---
    http://online.wsj.com/article/SB10001424053111903554904576462010405702984.html#mod=djemEditorialPage_t

    McKinsey & Co. made itself the White House's public enemy number—well, we've lost count—after releasing a survey last month showing that nearly one in three businesses may drop insurance coverage as a result of the new health-care law. The real offense of the management consultants seems to be accurately portraying reality.

    Consider a suggestive new survey to be released today by the National Federation of Independent Business, the trade group for small businesses. William Dennis, a senior research fellow who has conducted the study for 35 years, reports that 57% of a cross-section of companies that employ 50 or fewer workers and offer coverage may stop doing so. Look out below.

    About two of five small companies sponsor insurance—a share that, according to NFIB, has on net held mostly stable or declined very slightly since the passage of the Affordable Care Act. Yet 12% of these companies—one of eight—have either had their plans cancelled or have been told that they will be in the future. This churn in the private small-group market is a direct result of ObamaCare's new rules and mandates—but a far larger destabilization could be in the offing, what Mr. Dennis calls "the flight to the exchanges."

    Those would be the dispensaries of heavily subsidized insurance, and the NFIB finds that 26% of small businesses today sponsoring insurance are "very likely" to drop it should their employees start to flood government coverage. Another 31% of the 750 firms surveyed report they are "somewhat likely."

    Small-business workers are eligible for exchange subsidies even if they can get job-based coverage. The incentive is for them to take it—given that the new government payments will be so generous, small-group coverage is generally costly and the insurance tax break for employers usually doesn't go very far when the employer is small.

    If enough workers split, in other words, private coverage will soon erode and cease to exist as an option. Meanwhile, start-ups are constantly entering and exiting the market, and the ones with fewer benefits and liabilities will gain a competitive advantage. Businesses with fewer than 50 employees also aren't subject to any "play or pay" penalties. As Mr. Dennis put it in an interview, "Once you pull the string, everything may unravel."

    ObamaCare's partisans claim none of this will happen because of the social norm theories of behavioral economics. Businesses offer insurance to attract workers, the thinking goes, and it's the right thing to do. But that assumes utter irrationality—that workers won't take a cheaper deal when they see it and businesses won't try to compete against their rivals.

    Continued in article

    Bob Jensen's threads on health care are at
    http://faculty.trinity.edu/rjensen/Health.htm


    "Guidance provided on electronic health record incentives," by Ken Tysiac, Journal of Accountancy, January 6, 2012 ---
    http://journalofaccountancy.com/Web/20124972.htm


    "Health Reform Built to Fail How Medicare rigs competitive bidding and hurts patients," The Wall Street Journal, February 6, 2012 ---
    http://online.wsj.com/article/SB10001424052970204740904577193224024421442.html#mod=djemEditorialPage_t

    Americans may not be familiar with the medical innovation called negative pressure wound therapy, though it has helped hundreds of thousands of patients with complex or chronic injuries like burns or diabetic ulcer complications that could never heal on their own. Now President Obama's Medicare team is about to severely damage this field, and many others too—all in the name of reforming how the entitlement pays for care.

    Last week a Medicare competitive-bidding program went live in 91 metro regions—nearly all the U.S. population—for what's known as durable medical equipment. That bureaucratic jargon covers advanced devices like wound therapy, respiratory assist equipment for people who can't breathe, and feeding tube systems for people who can't eat. It also lumps in things like walkers, scooters and "support surfaces." Those would be beds.

    The good intentions of this saga date to 2003, when Congress in a fit of sanity ended Medicare's price controls in favor of auctions. Both political parties soon rebelled when oxygen tank suppliers, scooter stores and such in their home districts started whining about being asked to compete on market prices, rather than plod along with the guaranteed revenue of the fee schedule. But the much deeper problem is that Medicare cooked up an auction process that defies all economic sense.

    Normally when the government wants to buy something, it asks companies how much they can provide and to name their price. Winners are selected from the lowest bid up until the government has what it needs at the lowest possible cost, and thereby finds competitive equilibrium prices.

    Under Medicare's highly unusual version of competitive bidding, it will pay the winners the median price of all the winning bids, rather than using the clearing price. Bids are also for some reason nonbinding.

    This matters because it creates incentives for unscrupulous third-party companies to make low-ball "suicide bids." If the median price shakes out high enough, they automatically win the contract, buy the medical products from manufacturers and turn a profit. If it isn't, they can dump the contract since bidding involves no commitment.

    Medicare will then offer the contract at the median price to the honest companies that have made bids aligned with their true costs, and they can take it or leave it. Medicare benefits because the median prices will be biased below the clearing price—in other words, the "auction" is merely another way of generating arbitrary below-cost price controls.

    The Bush Administration road-tested this scheme in 2008 with pilot projects in nine cities. For illustration let's return to negative pressure wound therapy, a technique that involves a sealed dressing attached to a vacuum pump to prevent infection and improve recovery. Patients can recuperate at home but require 24/7 clinical and safety support, typically provided by the device's maker. Advanced wound treatment is far more complex than, say, a cane.

    In 2008, only 17 of the 88 winning bidders bothered to supply wound therapy devices. Only 10 of them had any actual expertise in how the technology is used or in patient support. The supply crisis was so deep that for several weeks no Medicare patients in two of the cities could receive this treatment at home, and the government threw out the entire program and said it would retool competitive bidding.

    Yet by one estimate, a 2011 reprise had roughly one-fifth of the bids going to companies that were on credit hold with device manufacturers—i.e., they couldn't buy if they wanted to. Medicare, meanwhile, boasts that it will reduce prices for durable medical equipment by 35% and "save" taxpayers $28 billion. All it is really doing is rewarding the fly-by-night operators while harming innovative companies and ultimately patients.

    The current nationwide rollout has no substantive revisions from the failed pilots, despite the objections of 244 economists and auction scientists led by the University of Maryland's Peter Cramton. The consensus of basically everyone who knows anything about auctions is that the no-risk bids and median pricing are idiotic and designed for failure.

    At a December meeting, a coalition of device makers and professional clinical groups even accepted these flaws but begged Medicare deputy administrator Jonathan Blum merely to accredit wound therapy bidders. He refused to apply any such basic quality control standards. The Administration does not care.

    The larger tragedy is that market methods like auctions are the only way to rationalize the entitlement state. They're at the core of the reform ambitions of Paul Ryan and Ron Wyden—and they're already tough enough to achieve given the resistance of the providers that want more of Medicare's money. This fiasco turns on 1.4% of Medicare's annual spending, yet it risks discrediting competitive bidding for good.

    Bob Jensen's threads on the health care mess ---
    http://faculty.trinity.edu/rjensen/Health.htm


    "Why Obamacare won't work: Reason #4,566,"  Rick Moran, The American Thinker, January 13, 2012 ---
    http://www.americanthinker.com/blog/2012/01/why_obamacare_wont_work_reason_4566.html

    The crisis in health care is manageable - without the radical, extreme measures passed in the Affordable Care Act.

    USA Today reports that just 5% of patients account for 50% of health care spending. And just 1% account for 22% of the spending.

    That's about $90,000 per person, according to the Agency for Healthcare Research and Quality. U.S. residents spent $1.26 trillion that year on health care.

    Five percent accounted for 50% of health care costs, about $36,000 each, the report said.

    The report's findings can be used to predict which consumers are most likely to drive up health care costs and determine the best ways to save money, said Steven Cohen, the report's lead author.

    While the report showed how a tiny segment of the population can drive health care spending, the findings included good news. In 1996, the top 1% of the population accounted for 28% of health care spending.

    "The actual concentration has dropped," Cohen said. "That's a big change."

    About one in five health care consumers remained in the top 1% of spenders for at least two consecutive years, the report showed. They tended to be white, non-Hispanic women in poor health; the elderly; and users of publicly funded health care.

    Other studies have shown that most of this spending is on "end of life" care - that is, patients who have very little chance of recovery but who have numerous hospital stays and even surgeries that don't extend life, but deal with unrelated symptoms to their primary disease. Someone dying of heart disease getting a kidney transplant, for instance.

    The question is how to manage our eventual demise in a compassionate, but reasonable manner? One thing for sure - government doesn't have the answer to that. Only families and their physicians should be involved in those decision.

    Of course, insusrance companies will get involved and are likely to balk at paying for more and more treatments at this stage of life. But we can sue insurance companies if they refuse to pay for a necessary procedure. We can't sue the government.

    In fact, the decisions of the government when it comes to Medicare spending will be above and beyond any legal review. Mona Charen:

    All decisions about controlling Medicare costs will be decided by the Independent Payment Advisory Board (IPAB).

    IPAB is a new thing in American government. Unlike most other boards and commissions, the panel's 15 members (appointed by the president and approved by the Senate) need not be bipartisan. Also unlike other boards, commissions, and federal agencies, the IPAB's decisions are virtually unreviewable. IPAB doesn't have to adhere to the notice and comment rules of federal agencies, which permit citizens to respond to proposed rule-makings. IPAB dictates automatically become law unless Congress itself intervenes. Ah, but they've thought of that and made it virtually impossible. The law prescribes that Congress has a limited period of time in which it can modify IPAB rulings and then it must do so by a three-fifths majority. Even ratifying treaties and proposing amendments to the Constitution require only two-thirds majorities. As for the courts, forget it. The judiciary is forbidden to review IPAB decisions.

    The really bizarre part, reminiscent of the "I wouldn't do that, Dave" scene in 2001: A Space Odyssey, is that Congress can only repeal IPAB itself under strict conditions. Clint Bolick of the Goldwater Institute explains:

    "Under the statute, any bill to repeal IPAB must be introduced within the one-month period between January 1 and February 1, 2017. If introduced, it must be enacted by a three-fifths super-majority no later than August 15, 2017. If passed, the IPAB repeal will not become effective until 2020 - leaving an out-of-control agency in operation for three years after Congress votes to abolish it."


    Read more: http://www.americanthinker.com/blog/2012/01/why_obamacare_wont_work_reason_4566.html#ixzz1jNehUhgv
     

    December 31, 2011

    Medicaid is America’s single biggest health programme. This year roughly one in five Americans will be covered by Medicaid for a month or more. It gobbles more federal and local money than any state programme, other than education. Costs will rise even more when Barack Obama’s health-care reform expands the programme by easing eligibility rules in 2014. Congress’s “supercommittee” is already considering cuts. However, there are more immediate pressures behind the present drive for change.
    "Health Care:  A new prescription for the poor:  America is developing a two-tier health system, one for those with private insurance, the other for the less well-off," The Economist, October 8-14, 2011 ---
    http://www.economist.com/node/21531491

    “IT’S time for Dancing with the Stars!”, a woman announces enthusiastically. At this New York health centre, wedged between housing projects to the east and Chinatown to the west, “dancing with the stars” means dancing with a physical therapist. An old man stands up with a nurse and begins a determined samba.

    Comprehensive Care Management (CCM), which runs this centre, tries to keep old people active. To do so, explains Joseph Healy, the chief operating officer, is in the company’s best interest. The government pays CCM a capped rate for the care of its members. If someone gets sick, his health costs rise and the company’s margin shrinks. Mr Healy argues that the system is the best way to provide good care at a low cost. Increasingly others seem to agree.

    Medicaid, America’s health programme for the poor, is in the process of being transformed. Over the next three years, New York will move its entire Medicaid population into “managed care”, paying companies a set rate to tend to the poor, rather than paying a fee for each service. New York is not alone. States from California to Mississippi are expanding managed care. It is the culmination of a steady shift in the way most poor Americans receive their health-care treatment.

    Medicaid is America’s single biggest health programme. This year roughly one in five Americans will be covered by Medicaid for a month or more. It gobbles more federal and local money than any state programme, other than education. Costs will rise even more when Barack Obama’s health-care reform expands the programme by easing eligibility rules in 2014. Congress’s “supercommittee” is already considering cuts. However, there are more immediate pressures behind the present drive for change.

    Enrolment in Medicaid jumped during the downturn, from 42.7m in December 2007 to 50.3m in June 2010. Mr Obama’s stimulus bill helped to pay for some of this, but that money has dried up. Faced with gaping deficits, some desperate governors slashed payments to hospitals and doctors, or refused to pay for trips to the dentist or oculist. But much the most important result has been structural: the expansion of managed care.

    States have dabbled in managed care for decades. The trend accelerated in the 1990s, with the share of Medicaid patients under this form of care reaching 72% by 2009. Now, however, there is a strong push for the remainder. States that did not have managed care, such as Louisiana, are introducing it. Other states are extending it to people previously deemed off limits: California and New York, for example, are moving the elderly and disabled into that system of care. Texas is targeting more than 400,000 Medicaid beneficiaries in the Rio Grande Valley. Local politicians had resisted the move, nervous that care might deteriorate. But the yawning deficit meant that they were overruled.

    The result is a country with two distinct tiers of health care. Most Americans with private insurance are still horrified by thoughts of health-management organisations and prefer to pay fees for each medical service. For the poor, managed care is becoming the norm.

    Advocates of managed care have high expectations. First, they hope that it will make costs more predictable. Second, they believe that the change will improve patients’ health. In managed care, a patient has a network of doctors and specialists. If the programme works properly, doctors can monitor all aspects of care, in contrast to the fragmented fee-for-service system. The contracts that states have with firms can set standards for quality. Texas, for instance, will cut 5% from a company’s payment if it does not meet what is required.

    The next step is to integrate care for those eligible for both Medicaid and Medicare, the federal programme for the old. These “duals” account for almost 40% of Medicaid’s costs and just 15% of its population. “If managed care can really deliver better care than fee-for-service”, says Diane Rowland, chair of the commission that advises Congress on Medicaid, “this is the population that could prove it.”

    But some, such as Norma Vescovo, are sceptical. As the head of the non-profit Independent Living Centre of Southern California (ILCSC), Ms Vescovo serves Medicaid patients with severe health problems. Over the years she has often sued California on policies that she thinks will hurt her vulnerable clients. On October 3rd her case moved to the Supreme Court.

    The outcome of Douglas v Independent Living Centre will have profound implications for the future of Medicaid. Ms Vescovo’s suit concerns cuts to hospitals and doctors. But the case will also guide the course of managed care. If ILCSC and its co-plaintiffs win, private groups will continue to be able to challenge states on policies they think violate federal Medicaid law. Ms Vescovo, who argues that California’s payment cuts would eviscerate her clients’ access to services, worries that under managed care the disabled might not be able to see the specialists they need.

    The question is how to supervise the experiments with managed care that are being carried out in various states. To date, Medicaid beneficiaries have been able to challenge the states in court. However, if the Supreme Court rules against ILCSC, that avenue will be closed. The Centres for Medicare and Medicaid Services (CMS) technically can intervene if states do not provide proper access to care. In reality, CMS has few tools to do so.

    Continued in article

    Jensen Comment
    Actually various nations like Germany have a two-tier health system where those who can afford it supplement the national health care program with private insurance.

    February 8, 2010 message from a friend in Germany

    Hello Bob and Erika,

    as it is Super Bowl Sunday I am sitting here reminiscing about my time in the US, and, of course, thinking about the people that I met. So I’m sending you an email as I am waiting for the Super Bowl to come on in about an hour. Once again they will show the big game on German TV. I have to take the rest of my vacation time from last year until the end of March of this year, so I decided to take tomorrow off to get rid of some of the vacation time (I have done this almost every year since I came back from the US, and two years ago I was even so lucky to be in the US for the Patriots-Giants Super Bowl, the greatest Super Bowl I have seen). So I am still quite busy at work, and still enjoy what I do very much. Since I am in an energy-related field, I am so to speak ‘part of’ this huge ‘push’ (for lack of a better word) that is going on towards renewable energy right now. Even though superconducting power cables are not a renewable energy source but rather one form of transmitting energy , there is a lot of interest in the technology right now. Taking a day off tomorrow turned out to be a good choice, as all public transportation workers in the city of . . .  will be on strike, so I would have had to take the car to get to work.

    I hope you are doing well in the mountains of New Hampshire, which I assume didn’t get hammered by the snowstorm the last few days, but are covered in snow anyway. I am reading Bob’s emails with great interest, especially regarding the banking situation and the health insurance situation. These are also two significant issues over here (you could actually argue that the strike tomorrow has a little to do with the bank bailout, see below….).

    The new German government is trying to reform our health care system. Medical care in Germany is probably among the best in the world, and costs are quite high (so I guess it’s quite similar to the US in these manners…). We have this system of public option insurance, which covers ~ 80% of the population, and private insurance, which covers almost everyone else (except for the few percent that fall through the cracks). In any case, the underlying idea of the system is not so bad, but the administration is so complex that a) only the Germans could come up with it and b) only the Germans can run it without going nuts. What is interesting is that Germany is one of only a few countries in Europe that has this private insurance option, most have only the public option (or so I read in an article recently, I am not the expert on health insurance). The public option insurance had to curtail what they reimburse quite a bit in recent years to cut costs, so more and more people try to get into private insurance. This, however, is not so easy: You have to earn a certain amount of money, and the insurance companies can deny coverage or exclude certain pre-existing conditions. (I have pre-existing conditions, so for me private insurance would be almost useless, as they would exclude these conditions, or rack up my premiums, or both). Plus, my wife (while she is not working, when she is working she will be covered herself again, and have to pay the premium (percentage of income))) and kid are covered with no additional premium in the public option, so it is always a safe bet, despite the fact that it may not pay for all the treatments the private insurance pays for (they generally pay for everything that is medically necessary though, even quite complex and costly procedures). So in any case, if you are interested I can tell you a bit more about health insurance in Germany. (There is actually another similarity between Germany and the US: With Germany being the biggest economy in Europe, medication costs a lot more here than in neighboring countries (or so I’ve read), which to me seems similar to the US/Canada medication cost issue).

    As I said before, there will be a strike here in . . .  tomorrow as the greedy public works employees (part of which are the transportation workers) show little solidarity to all the poor bankers bailed out by government funds. Since German governments (state and federal) had to fund the solidarity fund for starving bankers to keep them from bankruptcy and local governments have lower tax receipts due to the economic crisis, there is very little money for pay raises for public works employees, which, of course, should be happy to have a job and be able to collect a paycheck. (But thanks to the banks and the great work the bankers do, they all have jobs (except for the ones that got laid off, of course, but hey, if we laid off some bankers or let their banks go belly up, more people doing real work would be sure to get laid off too, because it’s a trickle-down economy, as we all know)). Collecting a paycheck is obviously something the greedy workers couldn’t do if it wasn’t for banks having money (and handing it out via ATMs, and central banks printing as much of it as is necessary, or maybe even more), which goes to show that there is a true lack of solidarity from the general public towards the poor starving bankers bailed out by government funds.

    So the poor bankers will have a hard time driving their BMWs and Mercedes to work tomorrow, as the roads will be clogged up by the cheap and smelly cars of people that would otherwise take public transportation to work (I assume that everyone that can take the day off will do so, just like I do. People were actually advised to take the day off if they can). Maybe I should check the newspaper again to make sure there isn’t an impromptu bank holiday tomorrow, after all, when bankers do so much good for us year-round they shouldn’t have to suffer through such a rough commute to work because of some greedy workers going on strike.

    In any case, I would normally ride my bike to work if it wasn’t for this rather rough winter, which for me is the latest piece of evidence that global warming is maybe not all it’s cracked up to be. It’s pretty reasonable to assume that human activity has an influence on climate, obviously, but when almost every seasonal forecast is dead wrong, it’s hard to se how the source can be believed to be correct in forecasts over many decades. In any case, I hope to be able to live to see, and wouldn’t be surprised if indeed it gets warmer, but I wouldn’t be shocked if it gets colder or stays the same either). Nonetheless, energy efficiency and renewable energy development is a reasonable thing to shoot for anyway, whether there is global warming or not…
     http://network.nationalpost.com/np/blogs/fpcomment/archive/2010/01/17/lawrence-solomon-bbc-drops-top-ipcc-source-for-climate-change-data.aspx 

    So the Hadley center in Britain predicted a winter with mild temperatures, but this may end up being the coldest winter in central-northern Europe in 30 years. We’ve had snow on the ground since mid-December, and the 15 day forecast right now has not a single day with a daytime high above freezing… (nonetheless, every now and then we have a day that is slightly above freezing, which usually leads to some melting of the snow and ice on the ground, and subsequently even more treacherous road conditions). The local governments were woefully unprepared for this winter, which is certainly not surprising when you are being told to expect a milder than normal winter. The road crews didn’t clear the roads properly in mid-December (probably assuming, like everyone else, including me, that this was going to melt rather quickly), and so we’ve had a mess on the ground ever since. I haven’t ridden my bike in 8 weeks now.

    I am still traveling to Norway quite a bit, and I thoroughly enjoy these trips. I also travel to the US, but only maybe once or twice a year; I was in Tucson last June. I really enjoy these trips also, I am quite lucky that I get to go on business trips to the US as I really enjoy spending time there. Business trips to places you’d like to visit anyway are not such a bad thing. (Of course, at work I am trying to not let on that I enjoy business trips, but I think they have me figured out anyway…. Luckily my wife puts up with it too). Whenever I travel to the US, I wonder how my life would be had I stayed there six years ago. In any case, now I am a happily married man with a house and a kid, which you can see in the attached pictures.

    Second Message on February 15, 2010 from my friend in Germany

    Hi Bob,

    the longer I am living in Germany again the stranger Germans seem to me. In any case, to understand the German attitude to health insurance I think it is important to bear in mind Bismarck's social legislation ( http://en.wikipedia.org/wiki/Otto_von_Bismarck#Bismarck.27s_social_legislation )
    and the German mind in general. Germans are a rather risk-averse bunch that believes that things are likely to get worse rather than better.

    I have recently come across a few articles on health insurance in Germany that essentially say that the private insurance is facing problems, or rather private insurance is jacking up the rates for two reasons: Private insurers pay more for the same services than the public insurance option (except for their basic tariffs) does: there is a so-called multiplier which says what you can charge for a given procedure when charged to private insurance. I have seen the factor of 2.3 used, but the way doctors can charge for their services in Germany is rather difficult to grasp for me so this factor of 2.3 may or may not be the multiple of what a public option insured person is charged. The higher pay for the same services is one of the reasons privately insured people have shorter waiting times in doctor's offices.

    The second reason for higher rates seems to be that privately insured patients do not care how much a procedure costs, as soon as they are above the co-pay limit (often there is a co-pay limit of a few hundred euros or so a year, above that there is no co-payment anymore for privately insured people). (There is an upper limit on how much a doctor can spend on average for publicly insured people, but I am not sure how much of a deterrent this is for a doctor to prescribe what is necessary).

    In any case, recently it has been argued that the medical doctors are now charging private insurance patients more to make up for what they do not get from the publicly insured people.

    So the issue of public health insurance in Germany remains an interesting one, and, as everywhere else, rates are likely to rise.....

    Regards,
    XXXXX

    Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance
    Note that pre-existing conditions drive up the private insurance rates for individuals.
    Private insurance often leads to preferential treatment from physicians and hospitals.
    My friend also tells me that having private insurance is somewhat of a status symbol in Germany.


    "Research Roundup: Improving Intelligence Forecasts, Vertically Integrated Health Care, and 'Worrisome' Health Care Costs," Knowledge@wharton,  December 20, 2011 ---
    http://knowledge.wharton.upenn.edu/article.cfm?articleid=2917    

    How can intelligence agencies improve accountability and forecasting accuracy? Can hospitals become more efficient through vertical integration with home health agencies and nursing homes? Do taxpayers fully understand how the expansion of health care will be financed? Wharton professors Philip Tetlock and Barbara Mellers; Guy David and Evan Rawley; and Mark Pauly, respectively, examine these issues -- and what they mean for business -- in recent research articles.

    Helping Intelligence Agencies -- and Companies -- Avoid the Blame Game

    When business leaders fail to make accurate forecasts, profitability is at risk. When intelligence agencies miss the mark on their predictions, however, the results can be far worse. In a new analysis of behavior in the intelligence community, with implications for business managers, Wharton management professor Philip E. Tetlock and Wharton marketing professor Barbara A. Mellers present a framework to improve accountability and forecasting accuracy, particularly in a politically polarized climate.

    In their article, "Intelligent Management of Intelligence Agencies: Beyond Accountability Ping-Pong," published in the September 2011 edition of American Psychologist, the authors note that forecasts by intelligence organizations frequently are open to harsh criticism for either underreporting potential danger or overreacting to threats that never materialize. A clear recent example of underreporting would be the September 11, 2011, terrorist attacks on the United States, Tetlock says. At the other extreme, he points to reports -- which later proved to be unfounded -- that Iraq had developed weapons of mass destruction.

    "The intelligence community is often whipsawed between these conflicting criticisms," says Tetlock. "The question is: Is it possible in this kind of political environment to learn anything beyond avoiding the last mistake?" The authors propose three steps to end the "blame game" in intelligence predictions and improve accountability and intelligence forecasting.

    First, the authors argue that intelligence agencies and constituents in government and throughout society need to come together and agree to put an end to bitter, often ideologically driven, assignment of blame. Tetlock suggests that "thoughtful moderates" with a long-term view of policy will need to drive this part of the process, especially during periods of deep division.

    Next, intelligence agencies need to step up and agree to have their forecasting assessed on clear metrics. Tetlock says that meaningful forecasts could result from reports that put a hard number on predictions. For example, analysts could be required to put specific percentage odds on the likelihood that a coup, or uprising in a given country, would occur in a certain period of time. Agencies would amass large databases of predictions that could, over time, be reviewed to assess which were accurate and why.

    Finally, in the authors' view, intelligence groups and their overseers should acknowledge that ideology plays a part in forecasting. "If you want ... the left and right to hold back their fire on unfair criticism, the best way to do that is to reassure people on the left and the right that their points of view are at least being used in the prediction process," Tetlock notes.

    Continued in article


    The Wall Street Journal, in an investigational piece (December 20, 2010), reported that five spine surgeons at Norton Hospital in Louisville, Kentucky, who performed the third-most spinal fusions of Medicare patients in the country, had received more than $7 million in “royalties” from Medtronic, the nation’s biggest manufacturer of spinal implants.
    "Physician Payment Sunshine Act Signals New Dawn for Compliance," by Joseph J. Feltes, MD News, November 14, 2011 ---
    http://www.mdnews.com/news/2011_11/05737_novdec2011_physician-payment-sunshine

    Once upon a time, physicians and their families used to be able to enjoy exotic cruises sponsored by pharmaceutical companies where their only obligation, it seems, was to sign in briefly at sparsely attended meetings before embarking on offshore adventures. It’s been awhile since the sun slowly set on the wake of the last ship’s 
sybaritic junket.

    Today, the Federal Physician Payment Sunshine Act — part of national healthcare reform — signals a new dawn of transparency, compliance obligations, and regulatory scrutiny. Beginning January 1, 2012, manufacturers of drugs, devices, biologicals or medical supplies, covered by Medicare, Medicaid or other federal healthcare program, must report to the Department of Health and Human Services all payments or transfers of value they make to physicians or 
teaching hospitals.

    The Sunshine Act applies to payments or transfers of value covering a broad array of activities, including: consulting fees; compensation for services other than consulting; honoraria; gifts; entertainment; food; travel (including specified destinations); education and research; charitable contributions; royalties or licenses; current or prospective ownership or investment interests (other than through publicly traded securities or mutual funds); direct compensation for serving as faculty or as a speaker for medical education programs; grants; or falling within the catchall “any other nature of payment or other transfer of value as defined by the Secretary of HHS.” Additionally, if the payment or transfer of value relates to marketing, education, or research which pertains to a covered drug, biological, device or supply, that also must be reported, along with the name of the covered product.

    Remaining outside the aura are certain excluded items that need not have to be reported, such as the transfer of items having a value of less than $10 (unless the items exceed an annual aggregate of $100); product samples for patient use not intended to be sold; educational materials that directly benefit patients or are intended for patient use; the loan of a covered device for 90 days or less for evaluation purposes; items or services provided under a contractual warranty; certain discounts and rebates; and in-kind items used to provide charity care, to name a few.

    Covered manufacturers must disclose to the Secretary in electronic form the name of the physician (or teaching hospital); the physician’s business address, specialty and National Provider Identifier; the amount of payment or value of transfer; the dates on which payments or transfers are made; a description of whether payment or transfer was made in cash or cash equivalents, in-kind items or services, or stocks or stock options. This information will be stored in a database.

    While the burden of reporting rests with covered manufacturers, access to and use of the electronic information stored in the database can be accessed by the media, consumers, the Office for Inspector General, and by prosecutors. That could pose potential liability risk to physicians for non-compliance with federal Anti-Kickback (illegal remuneration), the Stark laws (financial interest), or the False Claims Act (ill-gotten gain). It also could create potential reputational damage — fairly or unfairly — if it were to appear that research was flawed or a physician’s choice of drug was influenced by payments or other transfers of value.

    The Wall Street Journal, in an investigational piece (December 20, 2010), reported that five spine surgeons at Norton Hospital in Louisville, Kentucky, who performed the third-most spinal fusions of Medicare patients in the country, had received more than $7 million in “royalties” from Medtronic, the nation’s biggest manufacturer of spinal implants.

    The WSJ indicated that it had “mined” certain Medicare databases as the source of its exposé. The new Sunshine Act likely will eliminate the need to dig deeply, since the information will be collected in one database, there for the picking. Critics of the law, including Thomas Peter Stossel, MD, Professor of Medicine at Harvard Medical School, objects that the term “Sunshine” carries with it the “implicit aura of corruption,” which indeed is unfortunate.

    Continued in article

    Bob Jensen's Fraud Updates are at
    http://faculty.trinity.edu/rjensen/FraudUpdates.htm

    Bob Jensen's healthcare news threads are at
    http://faculty.trinity.edu/rjensen/Health.htm


    "ObamaCare Starts to Unravel:  The real story behind the Class program failure, and what to do now," The Wall Street Journal, October 17, 2011 ---
    http://online.wsj.com/article/SB10001424052970204479504576635200446357240.html?mod=djemEditorialPage_t

    Now that one of ObamaCare's major new benefit programs has been scrapped, liberals are trying to make stone soup by claiming that the Obama Administration merely committed an act of "good government." They claim that when this long-term care insurance program proved to be unworkable, the Administration conceded as much, and now it's gone. So let's review the evidence, not least because it so perfectly illustrates the recklessness that produced the Affordable Care Act.

    When Democrats were pasting it together in 2009 and 2010, the immediate attraction of the program known by the acronym Class was that its finances could be gamed to create the illusion that a new entitlement would reduce the deficit. Ending the complicated Class budget gimmick erases the better part of ObamaCare's purported "savings," but it's also worth focusing on the program's long-run political goals.

    For decades Democrats have been trying to put government on the hook for middle-class costs like home health services ($1,800 a month on average) and nursing homes ($70,000 to $80,000 per year). On paper, Class was supposed to be like normal insurance, funding benefits through premiums with no subsidy. But since the budget gimmick and the program's larger structure meant that premiums could never cover benefits, Democrats were trying to force a future Congress to prevent a Class bankruptcy using taxpayer dollars.

    As the costs to the federal fisc continued to climb, the Democratic gambit was that Class would gradually morph into another part of Medicare. Insurance depends on younger, healthier people signing up to cross-subsidize the older and sicker, but under the Class program as written almost all of its enrollees would soon also be beneficiaries.

    So to fix this "adverse selection," the plan was for Congress to eventually make participation mandatory, with the so-called premiums converted into another payroll tax and the benefits into another entitlement. Former White House budget director Peter Orszag has been writing that the long-term care insurance market can't function without a mandate, while HHS Secretary Kathleen Sebelius declined to rule one out at a Senate hearing in February. Now they tell us.

    The only reason the Health and Human Services Department pre-emptively called off this scheme is that former New Hampshire Senator Judd Gregg succeeded in inserting a proviso that required the Class program's reality to match Democratic promises as a matter of law. If HHS couldn't provide "an actuarial analysis of the 75-year costs of the program that ensures solvency throughout such 75-year period," it couldn't be legally implemented.

    In other words, HHS had to prove that the Class program wouldn't go broke the way it was designed to—and actuarial analysis is a matter of math, not politics. In a 48-page report that HHS submitted to Congress Friday, the department concedes that it is literally impossible to create any kind of long-term care program under the law's statutory text in which revenues match expenditures. Such a plan would cost as much as $3,000 per month, which no one would ever buy.

    The HHS gnomes even considered "features deviating from or going beyond a plain reading of the statutory language" that its lawyers didn't think could pass legal muster, and they still couldn't avoid violating the known laws of mathematics despite 19 months of trying. HHS lawyers also said the government would have to warn enrollees that the promised benefits weren't contracts and could be abrogated to "dispel any claims that the Class program had misled the public or had encouraged reliance on its programs under false pretenses."

    Continued in article

     

     

     


    Updates for September 30, 2011

    "GOP lawmakers seek answers from Sebelius regarding CLASS Act," by Tina Korbe, Hot Air, September 22, 2011 ---
    http://hotair.com/archives/2011/09/22/gop-lawmakers-seek-answers-from-sebelius-regarding-class-act/

    Last week, a report from a Republican working group revealed that administration officials, in the rush to pass Obamacare, ignored internal warnings from government experts about the fiscal sustainability of a long-term care insurance entitlement program included in the health reform law. Throughout the health care debate, officials within the Centers for Medicare and Medicaid Services, as well as the Health and Human Services Department, repeatedly warned that the CLASS Act would be a fiscal disaster. Yet, the final version of Obamacare not only included the CLASS Act; it even counted CLASS as a cost-saving measure.

    Now, the Republicans behind the report want to know how high the warnings reached: Was HHS Secretary Kathleen Sebelius, for example, aware of the concerns about CLASS even before Obamacare passed? Amid rumors the administration might reassign CLASS personnel or close the CLASS office entirely, they also want to know what the administration plans to do moving forward to ensure — if the CLASS program is, in fact, implemented — that the program is sustainable.

    To that end, House Oversight Committee Chairman Darrell Issa (R-Calif.) and House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), along with key drivers Sens. Jeff Sessions (R-Ala.), John Thune (R-S.D.) and others, today sent a letter to Sebelius asking her to clarify how many people have been reassigned or asked to leave the CLASS office, to put forward a plan to make CLASS sustainable if the program is going to be implemented and to divulge when concerns about CLASS were first made known to her and what steps she took to address them.

    . . .

    As Sessions explained in a statement, the central question is “whether a deliberate effort was made by administration officials to conceal CLASS’s true cost in order to advance the president’s agenda. Accountability goes to the top. Lawmakers and the American people deserve to know when internal concerns over CLASS were first communicated to Secretary Sebelius and what, if any, actions she took to address them. Out of control government spending is threatening our nation’s future, making a prompt and thorough explanation all the more imperative.”

    Thune said it appears the administration sought to uphold its own agenda with the inclusion of the CLASS Act in the PPACA.

    “Our recent Congressional investigation revealed that the Obama Administration ignored repeated warnings about the fiscal insolvency of the CLASS Act in the effort to score a political win with the passage of the new health care law,” he said. “The time is long overdue for Secretary Sebelius to come forward with more details on what the administration knew about the insolvency of the program, when they knew about it, and how they propose to remedy this fiscal disaster for taxpayers. The American people deserve to know more about this massive new entitlement program.”

    In the meantime, you can bet that, if Sebelius doesn’t provide adequate answers, the calls for a CLASS Act repeal will grow ever louder. In fact, the Senate Appropriations Committee has already decided not to fund implementation of the Act.

    Update: Because of a scheduling error, this post appeared briefly on the HotAir.com homepage at around 11:25 a.m. ET today. At the time, the letter had not yet been sent to Secretary Sebelius. The post above is essentially unchanged, but the second and third paragraphs have been updated to include information that recently emerged that the administration might shuffle CLASS personnel.


    "The Preferential Treatment of Employer-Provided Health Care," by Paul Caron, TaxProf Blog, September 17, 2011 ---
    http://taxprof.typepad.com/

    Benjamin D. Gehlbach (J.D. 2011, Catholic), Note, The Preferential Treatment of Employer-Provided Health Care: Time for a Change?, 27 J. Contemp. Health L. & Pol'y:

    This Note argues that the current treatment of employer-provided health insurance is inequitable and needs reform in order to drive down overall health care costs and to provide revenue for other provisions of the ACA (or for a replacement, should repeal be successful), or alternatively, to help bring down the budget deficit. Part II examines the history and scope of the exclusion, as well as the rationales advanced prior to its adoption. Part III studies criticisms of the exclusion to understand better the weaknesses of the current system, including job lock, excess insurance, and loss of revenue. Part IV evaluates some of the proposals for changing the current exclusion, including those proposed by members of Congress and by outside policy groups. Some of these proposals include repealing the exclusion, capping the exclusion based on income or value of the insurance policy, and providing new tax incentives altogether. Part V argues that the best option for reforming this flawed system is to cap the exclusion based on income and the cost of the insurance plan. A cap on the exclusion would accomplish the dual objectives of bringing overall health care costs down and providing necessary revenue to finance other provisions of the ACA or its replacement, or alternatively, to reduce the deficit. In addition, a cap would not create some of the drawbacks of the other proposals

     


    "Mystery Diagnosis: An Era of Uncertainty for the Health Care Sector," Knowledge@Wharton, September 14, 2011 ---
    http://knowledge.wharton.upenn.edu/article.cfm?articleid=2847

    The U.S. health care sector is experiencing a time of enormous change and uncertainty. Although President Obama's health care reform plan was signed into law last year, several legal challenges to the legislation are working their way through the courts. Questions also remain about whether the law will deliver on its promises of greater access to care and stricter containment of soaring health care costs.

    Meanwhile, the pharmaceutical industry is also dealing with a period of insecurity, with generic markets soon opening up for some of the world's best-selling drugs. And although the health care sector is one of the few employment bright spots in a stagnant job market, questions arise as to whether it is in danger of becoming too bloated. Wharton health care management professors Arnold Rosoff, Patricia Danzon, Lawton Burns and Mark Pauly discussed their research on these issues and others during a recent presentation to incoming health care MBA students.

    Politics over Policy?

    After decades of debate over national health care reform, Wharton legal studies and health care management professor Arnold Rosoff warned that struggles over the Affordable Care Act (ACA), signed into law by President Obama in March 2010, may be far from over. It is uncertain whether the reform legislation, which was passed in a greatly compromised form after years of "partisan wrangling," can deliver on its promises of cost containment and expanded access to health care for the uninsured, Rosoff noted. "But before we get to that, we have to ask, 'Will ACA even stay on the books?'"

    Continued in article


    "When Health Insurance is Free," by John C. Goodman, Townhall, September 10, 2011 ---
    http://townhall.com/columnists/johncgoodman/2011/09/10/when_health_insurance_is_free

    Did you know that an estimated one of every three uninsured people in this country is eligible for a government program (mainly Medicaid or a state children’s health insurance plan), but has not signed up?

    Either they haven’t bothered to sign up or they did bother and found the task too daunting. It’s probably some combination of the two, and if that doesn’t knock your socks off, you must not have been paying attention to the health policy debate over the past year or so.

    Put aside everything you’ve heard about Obama Care and focus on this bottom line point: going all the way back to the Democratic presidential primary, Obama Care was always first and foremost about insuring the uninsured. Yet at the end of the day, the new health law is only going to insure about 32 million more people out of more than 50 million uninsured. Half that goal will be achieved by new enrollment in Medicaid. But if you believe the Census Bureau surveys, we could enroll just as many people in Medicaid by merely signing up those who are already eligible!

    What brought this to mind was a series of editorials by Paul Krugman and Health Affairs blog and at my blog) asserting that government is so much more efficient than private insurers. Can you imagine Aetna or UnitedHealth Care leaving one-third of its customers without a sale, just because they couldn’t fill out the paperwork properly? Well that’s what Medicaid does, day in and day out.

    Put differently, half of everything Obama Care is trying to do is necessary only because the Medicaid bureaucracy does such a poor job — not of selling insurance, but of giving it away for free!

    Writing in Health Affairs the other day, health policy guru Alain Enthoven and health care executive Leonard Schaeffer revealed some of the gory details of what people encounter when they do try to sign up for free health insurance from Medi-Cal (California Medicaid) in the San Diego office:

    Continued in article


    The Big Idea: How to Solve the Cost Crisis in Health Care
    "What Health Care Really Costs," Harvard Business Review Blog, August 18, 2011 --- Click Here
    http://blogs.hbr.org/ideacast/2011/08/what-health-care-really-costs.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date

    Featured Podcast Interview Guest: Robert S. Kaplan, Harvard Business School professor and
    coauthor of the HBR article How to Solve the Cost Crisis in Health Care.

    "The Big Idea: How to Solve the Cost Crisis in Health Care," by Robert S. Kaplan and Michael E. Porter, Harvard Business Review, August 2011 ---
    http://hbr.org/2011/09/how-to-solve-the-cost-crisis-in-health-care/ar/1?referral=00134

    . . .

    Fortunately, we can change this state of affairs. And the remedy does not require medical science breakthroughs or top-down governmental regulation. It simply requires a new way to accurately measure costs and compare them with outcomes. Our approach makes patients and their conditions—not departmental units, procedures, or services—the fundamental unit of analysis for measuring costs and outcomes. The experiences of several major institutions currently implementing the new approach—the Head and Neck Center at MD Anderson Cancer Center in Houston, the Cleft Lip and Palate Program at Children’s Hospital in Boston, and units performing knee replacements at Schön Klinik in Germany and Brigham & Women’s Hospital in Boston—confirm our belief that bringing accurate cost and value measurement practices into health care delivery can have a transformative impact.

    Continued in article (for a fee)

    Jensen Comment
    The article does not address all aspects of the cost of healthcare, including the enormous cost of fraud in all aspects of healthcare from the funding of unneeded medical procedures to phony medical equipment invoices to substandard medications to medical services for people not eligible for funding of such services such as undocumented aliens who enter this country for the purpose of free obstetrics and other types of medical services.

    There is also the cost of malpractice insurance which is often ten times what it is in Canada because of differences between how malpractice claims are processed in Canada versus the United States (where 80% of the world's lawyers practice).


    "'The Flight to the Exchanges':  The Wall Street Journal writes that ObamaCare may cause small businesses to drop insurance coverage," The Wall Street Journal, July 25, 2011 ---
    http://online.wsj.com/article/SB10001424053111903554904576462010405702984.html#mod=djemEditorialPage_t

    McKinsey & Co. made itself the White House's public enemy number—well, we've lost count—after releasing a survey last month showing that nearly one in three businesses may drop insurance coverage as a result of the new health-care law. The real offense of the management consultants seems to be accurately portraying reality.

    Consider a suggestive new survey to be released today by the National Federation of Independent Business, the trade group for small businesses. William Dennis, a senior research fellow who has conducted the study for 35 years, reports that 57% of a cross-section of companies that employ 50 or fewer workers and offer coverage may stop doing so. Look out below.

    About two of five small companies sponsor insurance—a share that, according to NFIB, has on net held mostly stable or declined very slightly since the passage of the Affordable Care Act. Yet 12% of these companies—one of eight—have either had their plans cancelled or have been told that they will be in the future. This churn in the private small-group market is a direct result of ObamaCare's new rules and mandates—but a far larger destabilization could be in the offing, what Mr. Dennis calls "the flight to the exchanges."

    Those would be the dispensaries of heavily subsidized insurance, and the NFIB finds that 26% of small businesses today sponsoring insurance are "very likely" to drop it should their employees start to flood government coverage. Another 31% of the 750 firms surveyed report they are "somewhat likely."

    Small-business workers are eligible for exchange subsidies even if they can get job-based coverage. The incentive is for them to take it—given that the new government payments will be so generous, small-group coverage is generally costly and the insurance tax break for employers usually doesn't go very far when the employer is small.

    If enough workers split, in other words, private coverage will soon erode and cease to exist as an option. Meanwhile, start-ups are constantly entering and exiting the market, and the ones with fewer benefits and liabilities will gain a competitive advantage. Businesses with fewer than 50 employees also aren't subject to any "play or pay" penalties. As Mr. Dennis put it in an interview, "Once you pull the string, everything may unravel."

    ObamaCare's partisans claim none of this will happen because of the social norm theories of behavioral economics. Businesses offer insurance to attract workers, the thinking goes, and it's the right thing to do. But that assumes utter irrationality—that workers won't take a cheaper deal when they see it and businesses won't try to compete against their rivals.

    Continued in article


    College Financial Officers Contemplate Dropping Health Insurance Coverage
    "Health Care Costs Up Again," by Kevin Kiley, Inside Higher Ed, July 25, 2011 ---
    http://www.insidehighered.com/news/2011/07/25/surveys_highlight_health_care_questions_on_the_horizon_for_hr_administrators

    . . .

    Because of these challenges, college administrators, like employers in other fields, are weighing the advantages and disadvantages of dropping coverage for some or all employees once several provisions of the Patient Protection and Affordable Care Act, the health care overhaul legislation passed by Congress in 2010, goes into effect in 2014.

    "I don't think we're going to be able to provide that lifetime security like we used to," said Brad Kimler, executive vice president of benefits consulting at Fidelity Investments, during a presentation at the annual conference of the National Association of College and University Business Officers. "And I don't think it's realistic to expect that."

    A recent Inside Higher Ed survey of business officers found that a large percentage of business officers, particularly at private universities and public baccalaureate institutions, listed health care liability as one of the most significant challenges of the next two to three years. Despite that concern, the question of how to manage these costs seems often to be going unaddressed. The CUPA-HR survey found that only a quarter of responding institutions had developed a strategy for what their health care benefits should be in three years.

    The major question that hangs over administrators about upcoming health benefits decisions involves the components of the health care overhaul law that go into effect in 2014, notably the requirement that companies offer a reasonable level of health care benefits to their employees. Companies with more than 50 employees that don't offer health benefits will have to pay a penalty of $2,000 per worker. Individuals who do not not receive health benefits from their employers will receive income-indexed premium and out-of-pocket cost-sharing subsidies, enabling them to obtain private coverage they would not be able to afford on the current market. These options will be available in state or regional health care "exchanges."

    It might be cheaper for employers, including colleges and universities, to pay the penalties and forgo whatever tax breaks come with offering employer-supported health benefits than to continue to provide benefits. "As a result, whether to offer ESI [employer-sponsored insurance] after 2014 becomes mostly a business decision," states a much-discussed survey conducted by McKinsey and Company, a management consulting firm. "Employers will have to balance the need to remain attractive to talented workers with the net economics of providing benefits -- taking into consideration all the penalties and tax advantages of offering or not offering any given level of coverage," the report states.

    That survey found that 30 percent of employers will definitely or probably stop offering employer-sponsored coverage, a significantly higher percentage than the 7 percent of employers that the Congressional Budget Office predicted. Among employers who are well-versed in the law, the proportion increases to 50 percent, and 60 percent said they would pursue alternatives, the McKinsey survey found.

    The report did not break down respondents by field, but did note it would be unlikely for only one company in a given field to dramatically alter its plans. Higher education institutions, on average, tend to be more generous with benefits than other types of employers, so the sector as a whole might see few shifts after the new provisions go into effect.

    Getting out of the employer-supported health benefit game could be economically viable for some employers, but it could also be beneficial to employees. The McKinsey study notes that "because of the subsidies, many low-income employees will be able to obtain better health coverage, for less out of pocket, on an exchange than from their employer."

    Aside from the economic decision, colleges and universities are also going to have weigh the cost of health benefits as a recruiting and retention tool. Kyle Cavanaugh, vice president for human resources at Duke University, said his institution would be hard-pressed to abandon its plan for that reason. "Faculty and staff tell us that one of the most significant things they value in working here is the health care plan we provide," he said. "The plan is highly valued, and because of that, we would have to very seriously weigh the cost of continuing to provide that."

    But he noted that it is too early in the process to know what the exchange system will look like and therefore to actually make a judgment on that front. Most states have not even begun to design the health care exchanges (some have even said outright that they will not create them). A lot of politics remain between now and 2014, administrators say, including major deals regarding national spending and a presidential election.

    Because so many factors will go into a college or university's decision on whether to abandon or modify its plans in three years, Cavanaugh stressed that institutions should be gathering and analyzing their data now. "Health care benefits have to, now more than ever, be managed in a strategic way," he said. "The combination of costs, faculty and staff expectations, and the ongoing evolution of national health care reform drive the need to be looking at this from a strategic standpoint."

    Doing so could also show returns in the short term, if colleges find ways to drive down costs and measure the effectiveness of different programs. Cavanaugh said his college has found savings by increasing the use of generic drugs. By tracking conditions associated with avoidable and repeat hospital admissions, the university has also been able to work with providers to lower admissions. While Duke's costs have still gone up, Cavanaugh said they have been below the national average for the past few years.

    CUPA's survey did find some notable widespread efforts to contain health care costs. More than 60 percent of colleges in CUPA-HR's survey said they offered wellness programs, but participation of employees at colleges was less than 20 percent at many institutions.

    The survey also found the highest percentage of respondents providing same-sex domestic partner benefits -- 56 percent -- since the survey began. That is a significant increase from the 37 percent of respondents who reported offering same-sex benefits in 2005.


    "A Federal Jump-start for Health IT: White House aide leads push to improve health-care IT with billions in stimulus funds," by David Talbot, MIT's Technology Review, September 6, 2011 ---
    http://www.technologyreview.com/business/38475/?nlid=nldly&nld=2011-09-06 

    In a landmark government effort to drive American health care into the information age, the February 2009 stimulus bill earmarked about $30 billion in incentives for doctors and hospitals who install electronic medical records—paying up to $63,750 to individual physician and millions to hospitals.

    Now comes the tough part: implementing "EMRs" and proving they really can reduce medical errors or get doctors to keep better track of chronically ill people. As National Coordinator for Health IT, Farzad Mostashari coordinates federal efforts to promote adoption of EMRs and to prod reluctant hospitals to share patient data.

    Mostashari was recruited to take over the federal effort in February, after leading a patient-records initiative as an assistant health commissioner in New York City. He spoke with Technology Review's chief correspondent, David Talbot, about when we'll start seeing evidence that the technology is working.

    TR: What problems are we attacking with this huge medical IT outlay? 

    Mostashari: Start with "First, do no harm." Right now we do harm to patients through health care. The estimates, conservatively, are 100,000 to 200,000 people killed each year by things like hospital-acquired infections and adverse drug events. Electronic medical records provide an opportunity to create standardized protocols, to provide decision-support and reminders for doctors, and to tell them about the patient's medications and drug allergies, as well as any dangerous drug interactions, at the point of care. Those are all proven interventions.

    What else can software do besides cut back on accidental hospital deaths?

    All too often, people come into the doctor's office with high blood pressure which will kill them from stroke or heart attack, but the patient is complaining about something else. Doctors can get distracted and not pay attention to the most important thing—which might be that the patient's blood pressure is out of control, or the flu shot that hasn't been given. Electronic records can make it easy to provide these reminders. It can also make a list of patients who have not come in, who have high blood pressure or diabetes, and must be seen.

    Why is the health care industry so far behind other industries?

    Unfortunately, the business case often has not been strong enough to support adoption and use of electronic records.  But we have now reached a point where the incentives are turning the other way—with greater emphasis on paying for outcomes and value rather than volume.

    Bring us up to date since February 2009, when the bill passed. What is the progress to date on getting the IT installed?

    The ice has broken after decades of talk. Back in 2009, only 10 percent of hospitals and 20 percent of primary care providers used basic EMRs. Within a year, the doctors went from 20 percent to 30 percent. I expect it to get to 40 percent this year. We have about 10,000 new providers a month registering for incentives. About $400 million has gone out in payments already, and is expected to hit the $1 billion mark by early 2012.

    But this is more than installing software—it's about a concept called "meaningful use." The health IT incentive payments are predicated on very specific criteria. For example, the electronic health record must contain blood pressure readings, height and weight, lab data, the patient's problem list, and allergies; the patients' preferred language will be recorded; and the system must have a whole series of functionalities around sharing information with] patients and public health agencies.

    Continued in article

    Bob Jensen's health care threads are at
    http://faculty.trinity.edu/rjensen/Health.htm

     

     

     

     

     



     

    Updates for June 30, 2011

    "The Deficit Is Worse Than We Think:  Normal interest rates would raise debt-service costs by $4.9 trillion over 10 years, dwarfing the savings from any currently contemplated budget deal," by Lawrence B. Lindsey, The Wall Street Journal, June 28, 2011 ---
    http://online.wsj.com/article/SB10001424052702304657804576401883172498352.html?mod=djemEditorialPage_t

    Washington is struggling to make a deal that will couple an increase in the debt ceiling with a long-term reduction in spending. There is no reason for the players to make their task seem even more Herculean than it already is. But we should be prepared for upward revisions in official deficit projections in the years ahead—even if a deal is struck. There are at least three major reasons for concern.

    First, a normalization of interest rates would upend any budgetary deal if and when one should occur. At present, the average cost of Treasury borrowing is 2.5%. The average over the last two decades was 5.7%. Should we ramp up to the higher number, annual interest expenses would be roughly $420 billion higher in 2014 and $700 billion higher in 2020.

    The 10-year rise in interest expense would be $4.9 trillion higher under "normalized" rates than under the current cost of borrowing. Compare that to the $2 trillion estimate of what the current talks about long-term deficit reduction may produce, and it becomes obvious that the gains from the current deficit-reduction efforts could be wiped out by normalization in the bond market.

    To some extent this is a controllable risk. The Federal Reserve could act aggressively by purchasing even more bonds, or targeting rates further out on the yield curve, to slow any rise in the cost of Treasury borrowing. Of course, this carries its own set of risks, not the least among them an adverse reaction by our lenders. Suffice it to say, though, that given all that is at stake, Fed interest-rate policy will increasingly have to factor in the effects of any rate hike on the fiscal position of the Treasury.

    The second reason for concern is that official growth forecasts are much higher than what the academic consensus believes we should expect after a financial crisis. That consensus holds that economies tend to return to trend growth of about 2.5%, without ever recapturing what was lost in the downturn.

    But the president's budget of February 2011 projects economic growth of 4% in 2012, 4.5% in 2013, and 4.2% in 2014. That budget also estimates that the 10-year budget cost of missing the growth estimate by just one point for one year is $750 billion. So, if we just grow at trend those three years, we will miss the president's forecast by a cumulative 5.2 percentage points and—using the numbers provided in his budget—incur additional debt of $4 trillion. That is the equivalent of all of the 10-year savings in Congressman Paul Ryan's budget, passed by the House in April, or in the Bowles-Simpson budget plan.

    Third, it is increasingly clear that the long-run cost estimates of ObamaCare were well short of the mark because of the incentive that employers will have under that plan to end private coverage and put employees on the public system. Health and Human Services Secretary Kathleen Sebelius has already issued 1,400 waivers from the act's regulations for employers as large as McDonald's to stop them from dumping their employees' coverage.

    But a recent McKinsey survey, for example, found that 30% of employers with plans will likely take advantage of the system, with half of the more knowledgeable ones planning to do so. If this survey proves correct, the extra bill for taxpayers would be roughly $74 billion in 2014 rising to $85 billion in 2019, thanks to the subsidies provided to individuals and families purchasing coverage in the government's insurance exchanges.

    Underestimating the long-term budget situation is an old game in Washington. But never have the numbers been this large.

    There is no way to raise taxes enough to cover these problems. The tax-the-rich proposals of the Obama administration raise about $700 billion, less than a fifth of the budgetary consequences of the excess economic growth projected in their forecast. The whole $700 billion collected over 10 years would not even cover the difference in interest costs in any one year at the end of the decade between current rates and the average cost of Treasury borrowing over the last 20 years.

    Continued in article

    "Shutting Up McKinsey:  The White House vilifies a company for reporting health-care reality," The Wall Street Journal, June 29, 2011 ---
    http://online.wsj.com/article/SB10001424052702304070104576400004065859190.html#mod=djemEditorialPage_t

    The White House routinely tries to intimidate its health-care critics, but the campaign against McKinsey & Co. is something else. The management consultants attempted to find out how U.S. business will respond to the government restructuring of 17.3% of the economy, Democrats don't like the results, and so McKinsey must pay with its reputation.

    The firm's sin was to canvass some 1,300 companies and report that nearly a third will "definitely" or "probably" stop offering insurance to employees after 2014, dumping them instead into ObamaCare's subsidized exchanges. McKinsey conducted the survey as part of its routine market research.

    Democrats immediately blasted the results, attacked McKinsey's integrity and demanded that it release its methodology and full responses. Nancy-Ann DeParle, the deputy chief of staff who is running ObamaCare from the White House, was withering. Senate Finance Chairman Max Baucus chimed in with questions like "Who are your biggest clients? Do you expect McKinsey & Co. to benefit financially from the results of this survey?"

    So this week McKinsey opened its books, and what do you know, the survey was rigorous. Respondents were a representative cross-section of businesses of many sizes and across industries and regions, and the questions were impartial.

    Ms. DeParle and others claimed vindication because McKinsey conceded it was not a "predictive economic analysis," while forecasters like the Congressional Budget Office think the law will have little effect on employer coverage. In other words, an analysis of business attitudes in the real world is less credible than CBO's macroeconomic models that depend on undisclosed assumptions. These are the same models that claim the stimulus "created or saved" millions of jobs.

    The furor says less about McKinsey than about the politically damaging reality of the new law. As the McKinsey survey shows in detail, many businesses may be better off if they drop coverage and pay workers slightly more to compensate for fewer benefits, along with paying the new penalty for not providing insurance. Many workers earning up to $102,000 may also be better off because the ObamaCare subsidies are so much larger than the current tax break for employer coverage.

    As more people partake of "free" health care, taxpayer costs will explode. Consumers will gradually lose the choice and quality of private insurance for the politically mandated policies that will be offered in most exchanges. Increasing the share of the insurance market operating under Washington command and control will increase costs and distortions in the health markets.

    McKinsey's study merely echoes what economist Doug Holz-Eakin has also been shouting from the rafters about ObamaCare's impact on private coverage. Ditto for Eugene Steuerle of the Urban Institute. Is that left-leaning outfit now a GOP mouthpiece too? McKinsey isn't known for its partisan sympathies, and most top-drawer consulting firms deliberately avoid the political fray. Clients want intelligence, not controversy.

    The White House method is nonetheless to assail even disinterested analysts as dishonest or motivated by bad faith, and the habit is especially pronounced against businesses that have something to lose. Think of the public trashing of the insurers WellPoint and Humana for accurately describing how costs will soar under the new entitlement, or the companies like AT&T and Verizon that ObamaCare forced to take huge writedowns last year.

    The fact that the White House feels it must vilify businesses for telling the truth about ObamaCare shows just how destructive the law really is.

     

    "Shutting Up McKinsey:  The White House vilifies a company for reporting health-care reality," The Wall Street Journal, June 29, 2011 ---
    http://online.wsj.com/article/SB10001424052702304070104576400004065859190.html#mod=djemEditorialPage_t

    The White House routinely tries to intimidate its health-care critics, but the campaign against McKinsey & Co. is something else. The management consultants attempted to find out how U.S. business will respond to the government restructuring of 17.3% of the economy, Democrats don't like the results, and so McKinsey must pay with its reputation.

    The firm's sin was to canvass some 1,300 companies and report that nearly a third will "definitely" or "probably" stop offering insurance to employees after 2014, dumping them instead into ObamaCare's subsidized exchanges. McKinsey conducted the survey as part of its routine market research.

    Democrats immediately blasted the results, attacked McKinsey's integrity and demanded that it release its methodology and full responses. Nancy-Ann DeParle, the deputy chief of staff who is running ObamaCare from the White House, was withering. Senate Finance Chairman Max Baucus chimed in with questions like "Who are your biggest clients? Do you expect McKinsey & Co. to benefit financially from the results of this survey?"

    So this week McKinsey opened its books, and what do you know, the survey was rigorous. Respondents were a representative cross-section of businesses of many sizes and across industries and regions, and the questions were impartial.

    Ms. DeParle and others claimed vindication because McKinsey conceded it was not a "predictive economic analysis," while forecasters like the Congressional Budget Office think the law will have little effect on employer coverage. In other words, an analysis of business attitudes in the real world is less credible than CBO's macroeconomic models that depend on undisclosed assumptions. These are the same models that claim the stimulus "created or saved" millions of jobs.

    The furor says less about McKinsey than about the politically damaging reality of the new law. As the McKinsey survey shows in detail, many businesses may be better off if they drop coverage and pay workers slightly more to compensate for fewer benefits, along with paying the new penalty for not providing insurance. Many workers earning up to $102,000 may also be better off because the ObamaCare subsidies are so much larger than the current tax break for employer coverage.

    As more people partake of "free" health care, taxpayer costs will explode. Consumers will gradually lose the choice and quality of private insurance for the politically mandated policies that will be offered in most exchanges. Increasing the share of the insurance market operating under Washington command and control will increase costs and distortions in the health markets.

    McKinsey's study merely echoes what economist Doug Holz-Eakin has also been shouting from the rafters about ObamaCare's impact on private coverage. Ditto for Eugene Steuerle of the Urban Institute. Is that left-leaning outfit now a GOP mouthpiece too? McKinsey isn't known for its partisan sympathies, and most top-drawer consulting firms deliberately avoid the political fray. Clients want intelligence, not controversy.

    The White House method is nonetheless to assail even disinterested analysts as dishonest or motivated by bad faith, and the habit is especially pronounced against businesses that have something to lose. Think of the public trashing of the insurers WellPoint and Humana for accurately describing how costs will soar under the new entitlement, or the companies like AT&T and Verizon that ObamaCare forced to take huge writedowns last year.

    The fact that the White House feels it must vilify businesses for telling the truth about ObamaCare shows just how destructive the law really is.

     


    "No, You Can't Keep Your Health Insurance:  A new study by McKinsey suggests that as many as 78 million Americans could lose employer health coverage," by Grace-Marie Turner, The Wall Street Journal, June 7, 2011 ---
     http://online.wsj.com/article/SB10001424052702304432304576371252181401600.html?mod=djemEditorialPage_t

    ObamaCare will lead to a dramatic decline in employer-provided health insurance—with as many as 78 million Americans forced to find other sources of coverage.

    This disturbing finding is based on my calculations from a survey by McKinsey & Company. The survey, published this week in the McKinsey Quarterly, found that up to 50% of employers say they will definitely or probably pursue alternatives to their current health-insurance plan in the years after the Patient Protection and Affordable Care Act takes effect in 2014. An estimated 156 million non-elderly Americans get their coverage at work, according to the Employee Benefit Research Institute.

    Before the health law passed, the Congressional Budget Office estimated that only nine million to 10 million people, or about 7% of employees who currently get health insurance at work, would switch to government-subsidized insurance. But the McKinsey survey of 1,300 employers across industries, geographies and employer sizes found "that reform will provoke a much greater response" and concludes that the health overhaul law will lead to a "radical restructuring" of job-based health coverage.

    Another McKinsey analyst, Alissa Meade, told a meeting of health-insurance executives last November that "something in the range of 80 million to 100 million individuals are going to change coverage categories in the two years" after the insurance mandates take effect in 2014.

    Many employees who will need to seek another source of coverage will take advantage of the health-insurance subsidies for families making as much as $88,000 a year. This will drive up the cost of ObamaCare.

    In a study last year, Douglas Holtz-Eakin, a former director of the Congressional Budget Office, estimated that an additional 35 million workers would be moved out of employer plans and into subsidized coverage, and that this would add about $1 trillion to the total cost of the president's health law over the next decade. McKinsey's survey implies that the cost to taxpayers could be significantly more.

    The McKinsey study, "How US health care reform will affect employee benefits," predicts that employers will either drop coverage altogether, offer defined contributions for insurance, or offer coverage only to certain employees. The study concludes that 30% of employers overall will definitely or probably stop offering health insurance to their workers. However, among employers with a high awareness of the health-reform law, this proportion increases to more than 50%.

    The employer incentives to alter or cease coverage under the health-reform law are strong. According to the study, at least 30% of employers would gain economically from dropping coverage, even if they completely compensated employees for the change through other benefit offerings or higher salaries. That's because they no longer would be tethered to health-insurance costs that consistently rise faster than inflation.

    Employers should think twice if they believe the fine for not offering coverage will stay unchanged at $2,000 per worker. "If many companies drop health insurance coverage, the government could increase the employer penalty or raise taxes," according to the new study, authored by McKinsey consultants Shubham Singhal, Jeris Stueland and Drew Ungerman.

    Continued in article


    "The Accountable Care Fiasco Even the models for health reform hate the new HHS rule," The Wall Street Journal, June 20, 2011 ---
    http://online.wsj.com/article/SB10001424052702304520804576343410729769144.html?mod=djemEditorialPage_t

    The Obama Administration is handing out waivers far and wide for its health-care bill, but behind the scenes the bureaucracy is grinding ahead writing new regulations. The latest example is the rule for Accountable Care Organizations that are supposed to be the crown jewel of cost-saving reform. One problem: The draft rule is so awful that even the models for it say they won't participate. ***

    The theory for ACOs, as they're known, is that hospitals, primary-care doctors and specialists will work more efficiently in teams, like at the Mayo Clinic and other top U.S. hospitals. ACOs are meant to fix health care's too-many-cooks predicament. The average senior on Medicare sees two physicians and five specialists, 13 on average for those with chronic illnesses. Most likely, those doctors aren't coordinating patient care.

    This fragmentation is largely an artifact of Medicare's price control regime: The classic case study is Duke University Hospital, which cut the costs of treating congestive heart failure by 40% but then dumped the integration program because it lost money under Medicare's fee schedule.

    Intelligent liberals now concede this reality but claim that the government merely needs to devise better price controls. By changing the way it pays, Medicare under the ACO rule is effectively mandating a new business model for practicing medicine. The vague cost-control hope is that ACOs will run pilot programs like Duke's and the successful ones will become best practices. While the program is voluntary for now, the government's intention is to make it mandatory in the coming years.

    But what if they had an ACO revolution and no one showed up? The American Medical Group Association, a trade association of multispeciality practice groups and other integrated providers, calls the rule recently drafted by the Department of Health and Human Services "overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve." In a survey of its members, 93% said they won't enroll.

    The Administration wrote its rule based on an ACO pilot program that started in 2005 among 10 high-performing physician groups, including Geisinger Health System and Dartmouth-Hitchcock. All 10 say they have "serious reservations" about the new rule and that without major revisions "we will be unable to participate." In other words, the providers that are already closest to being an ACO have rejected the Administration's handiwork.

    And no wonder, since the 429-page rule is a classic of top-down micromanagement. ACOs will need to comply with a kitchen sink of 65 clinical measures that are meant to produce efficiencies, like reducing infections or ensuring that patients take their medications after hospital discharge. If care at an ACO costs less than Medicare predicts it will cost under the status quo, then the ACO will receive a share of the savings as a bonus payment. The rule also includes financial penalties if an ACO misses its targets.

    Incredibly, the ACO teams won't know in advance which patients they're supposed to manage. Seniors will be "retrospectively assigned" to an ACO at the end of every year, based on an arbitrary algorithm, for the purposes of calculating costs.

    Continued in article


    "Vermont Gives the 'Public Option' a Clinical Trial The governor claims it is 'all about containing costs.' The evidence is not encouraging," by David Gratzer, The Wall Street Journal, May 21, 2011 ---
    http://online.wsj.com/article/SB10001424052748703655404576293020190881258.html?mod=djemEditorialPage_t

    In America's courtrooms, ObamaCare is on trial. A majority of states have filed lawsuits arguing that its mandate requiring individuals to purchase health insurance is unconstitutional. But in Vermont, ObamaCare is about to get a trial of a different sort—a clinical one.

    This coming Thursday, Gov. Peter Shumlin will sign a bill doing what President Obama and his allies have hoped to do all along: sell a public insurance option alongside competing private insurance as a first step toward a single-payer, government-run system. Unlike the president, Mr. Shumlin has been up-front in his support for single-payer care, even on the campaign trail last fall. At least he can say he has a mandate from voters to do what he's doing.

    The last time Vermont's health system gained national attention was in 2004, when Howard Dean, then governor of the state, ran for president. As governor, Mr. Dean expanded public insurance eligibility, struggling to get as close to single-payer health care as he legally could. New regulations pushed out private insurers, reducing competition. Vermont imposed a guaranteed-issue mandate, which requires insurers to sell to any applicant, and forced insurers to use community rating, which requires them to offer the same price to everyone, regardless of age and health. Both measures also appeared in the final ObamaCare law.

    The result? The number of uninsured Vermonters barely budged. But costs sure moved—in the wrong direction. From 1991 to 2004, according to the Kaiser Foundation, Vermont's health costs grew by 7.6% annually. Across the U.S. comparable costs grew only 5.5% on average. From 2005 to 2008, in data cited by Dr. William Hsaio, a Harvard consultant studying this for the state, growth in Vermont's health costs grew 8.2%, against a national average of 5.7%.

    The current governor says his plan is "all about containing costs," echoing Mr. Obama's absurd claim that increased health spending would mean lower deficits. Mr. Shumlin can talk about government health care and savings in the same breath because millions of Americans still believe the myth that socialized health-care models are immune from cost inflation.

    Yet data from the Organization for Economic Cooperation and Development show that U.S. health inflation rates are roughly identical to those seen in European and Canadian systems. From 1990 to 2006, U.S. health costs grew an average of 1.66% faster than the economy vs. 1.62% for OECD nations.

    Socialized medicine advocates say the point is moot because government-run systems start from a cheaper baseline. That's true, but that advantage is eroding quickly. A recent paper projected that Canadian health-care costs were growing so fast that they should consume 19% of GDP by 2031. The chief author of the paper is David Dodge, Canada's former deputy minister of health and a former governor of the Bank of Canada.

    Single-payer countries also keep costs below U.S. levels by rationing care, not by being more efficient. Several weeks ago, the government-run, government-appointed health authority in the Canadian city where I was born admitted that a dozen patients died in the last three years while waiting for routine cardiac surgery. None was classified as an emergency case. In Canada's system, that made them "elective" surgery patients, triggering wait times that can delay treatment for weeks or even months. Yet single-payer activists persistently claim that "death by rationing" is a myth invented by insurance lobbyists.

    In the U.S., Medicare hasn't seen much rationing yet, because it can rely on a privately funded reserve of resources to meet surges in demand. Whenever Congress flirts with serious cuts to Medicare fees, doctors push back. Then, Congress flinches—a sign that the program is more dependent on the private-sector than its champions admit.

    Now Vermont is on course to repeat others' mistakes. For American liberals, there's no better place to test-run a public option. But if the new plan doesn't work, Vermont is so small that government-care supporters can pretend it's the state's fault and not a flaw in the concept. Darcie Johnston of Vermonters for Health Care Freedom fears the worst: "the largest tax hike in Vermont history" and a dysfunctional system.

    It's a pity, because Vermont is an ideal place to run a very different experiment. Health-care policy thinkers are shifting focus to the potential benefits of a true wellness policy. Your health is as important to health outcomes as your health insurance, after all. Europeans have better life expectancy than Americans because they take better care of themselves on average, not because they get better care in their hospitals.

    Through their own lifestyle choices, Vermont residents already have lower than average obesity levels and below-median smoking rates. With a more patient-centered insurance market, Vermont residents could receive, for example, cash incentives to prevent diseases caused by obesity, tobacco, and other lifestyle choices, all at a fraction of the cost of future treatments.

    Continued in article

    Jensen Comment
    In this experiment Vermont suffers from a relatively small population over which to spread health insurance costs for very expensive treatments such as AIDs medications, organ transplants, premature baby care, and the costs of dying (especially extended intensive care unit confinements while dying) for patients not on Medicare. Medical cost  In the 2010 census, Vermont only had 630,337 people, many of whom are children and elderly that will not pay medical insurance premiums in Vermont's public plan --- http://en.wikipedia.org/wiki/Vermont

    Vermont residents also rely heavily on out--of-state medical providers such as physicians and hospitals in bordering states of New Hampshire (especially the Dartmouth-Hitchcock Medical Center), Massachusetts (especially in the metropolitan area of Boston), and Canada. This greatly limits cost containment initiatives that accompany Vermont's public medical insurance plans.

    Freakonomics
    "Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
    http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/

    In a new working paper called “Technology Growth and Expenditure Growth in Health Care” (abstract here, PDF here), Amitabh Chandra and Jonathan S. Skinner offer an explanation:


    "Look who's getting out of ObamaCare," by Michelle Malkin, New York Post, May 19, 2011 --- Click Here
    http://www.nypost.com/p/news/opinion/opedcolumnists/look_who_getting_out_of_obamacare_m4OxnfKVajFAfgKRCazP3H?CMP=OTC-rss&FEEDNAME=

    Hear that? It's the escalating cry of American employers and workers trying to hold on to their health-care benefits in the age of stifling Obama health-insurance mandates: Gangway! Gangway! Save me! Waive me!

    ObamaCare refugees first began beating down the exit doors last October. Waiver-mania started with McDonald's and Jack in the Box; spread to Dish Networks, hair-salon chain Regis Corp and resort giant Universal Orlando; took hold among major Big Labor outfits from the AFL-CIO to the CWA to the SEIU; roped in the nationalized health-care promoters at the Robert Wood Johnson Foundation; and is now gripping entire states

    The latest to catch the waive? West Coast liberals.

    Yes, amid House Democratic Leader Nancy Pelosi's congressional district, a cluster of San Francisco small businesses is among the latest waiver recipients. At least two dozen Bay Area companies -- including bars, restaurants, hotels, tourist shops, real-estate and auto firms -- have secured temporary, one-year reprieves from the federal law.

    Another noteworthy waiver winner: Seattle-based REI. The trendy outdoor-equipment retailer's progressive CEO, Sally Jewell, appeared with President Obama in 2009 to tout White House health-care-reform initiatives. Two years later, REI snagged a waiver to protect the health benefits of a whopping 1,180 workers from the big-government bureaucrats that Jewell embraced at Obama's roundtable.

    To date, the Health and Human Services Department has granted health-care-law exemptions to more than 3 million workers covered by more than 1,300 unions, companies and insurers who'd voluntarily offered low-cost health plans with annual benefits limits.

    ObamaCare architects outlawed those private plans (nicknamed "mini med" plans) in the name of "patients' rights." Without waivers, the escapees would have had to hike premiums or drop insurance coverage for mostly low-wage, seasonal and part-time workers.

    Among the most recent union affiliates to secure pardons:

    * Teamsters Local 485 Health and Welfare Fund in Brooklyn

    * Detroit and Vicinity Trowel Trades Health and Welfare Fund

    * Communications Workers of America Local 1182 Security Benefits Fund

    * CWA Local 1183 Health and Welfare Fund

    * Bakers Union and Food Employees Labor Relations Association Health and Welfare Fund

    * SEIU Healthcare Illinois Home Care and Child Care Fund

    * United Food and Commercial Workers San Diego Employers Health and Welfare Trust

    * Welfare Fund of the International Union of Operating Engineers Local 15, 15A, 15C, 15D AFL-CIO

    * United Steelworkers Local 1-0318 Health and Welfare Trust Fund

    * United Association of Journeymen and Apprentices Local 198 AFL-CIO Health and Welfare Trust

    * Teamsters Local 617 Welfare Fund in Ridgefield, NJ

    * Plumbers and Steamfitters Local 60 Health and Welfare Fund

    * New York State Nurses Welfare Plan for New York City Employed Registered Professional Nurses

    Pelosi and the Golden Ticket Administrators in Washington deny preferential treatment for waiver beneficiaries. But the stench of waivers-for-favors won't be dispelled until and unless the Obama administration releases a full list not only of those who won exemptions, but also of those who applied and were denied.

    With San Francisco businesses caught with their hands in the waiver jar, Pelosi's office could do nothing else but pout: "It is pathetic," said Pelosi spokesman Drew Hammill, "that there are those who would be cheering for Americans to lose their minimum health coverage or see their premiums increase for political purposes."

    It is far more pathetic to have cheered, as Pelosi did on the one-year anniversary of ObamaCare, the law's onerous benefits limits from which thousands of her own constituents have now been exempted.

    Continued in article


    "Liberal Washington State Tries to Kiss Medicaid Goodbye:  The governor and the legislature unanimously back a block-grant model similar to welfare reform," by Nansen Malin, The Wall Street Journal, June 4, 2011 ---
    http://online.wsj.com/article/SB10001424052702303657404576363812467438234.html#mod=djemEditorialPage_t

    Medicaid has plunged Washington state into fiscal crisis. This fact was recognized by legislators from both sides of the aisle during a contentious special session that concluded last week. The result was Senate Bill 5596, a Medicaid block-grant bill.

    The block-grant concept was remarkably nonpartisan: The bill, requiring the state to apply to the federal Department of Health and Human Services (HHS) for a waiver that would replace its current Medicaid program with a block grant, passed with unanimous support. On Tuesday, Gov. Christine Gregoire, previously an opponent of block grants, signed the bill. Now the waiver request will go to HHS Secretary Kathleen Sebelius.

    A block grant would free state and local officials from being de facto appendages of the faraway federal government. Just the latest in the long line of unnecessary federal strings are the costly "maintenance of effort" requirements imposed by the federal stimulus bill and ObamaCare. This requirement will add an estimated 176,000 people to our state's Medicaid rolls by 2013 and prohibit the state from modifying eligibility rules without risking a loss of all Medicaid funding.

    In contrast, SB 5596's authors explain that the block grant would "allow the state to operate as a laboratory of innovation for bending the cost curve, preserving the safety net, and improving the management of care for low-income populations." Rhode Island has had success under a similar waiver granted in 2009, saving $100 million within the first 18 months. With a block grant, state legislators will have the ability to alter eligibility and benefits to best serve the unique needs of their constituents without having to opt out of Medicaid entirely.

    Continued in article

    Bob Jensen's threads on health care reform are at
    http://faculty.trinity.edu/rjensen/Health.htm


    "Mediscare: The Surprising Truth Republicans are being portrayed as Medicare Grinches, but ObamaCare already has seniors' health care slated for draconian cuts," by Thomas Saving and John C. Goodman, The Wall Street Journal, May 28, 2011 ---
    http://online.wsj.com/article/SB10001424052702304066504576345732775990392.html?mod=djemEditorialPage_t

    The Obama administration has repeatedly claimed that the health-reform bill it passed last year improved Medicare's finances. Although you'd never know it from the current state of the Medicare debate—with the Republicans being portrayed as the Medicare Grinches—the claim is true only because ObamaCare explicitly commits to cutting health-care spending for the elderly and the disabled in future years.

    Yet almost no one familiar with the numbers thinks that the planned brute-force cuts in Medicare spending are politically feasible. Last August, the Office of the Medicare Actuary predicted that Medicare will be paying doctors less than what Medicaid pays by the end of this decade and, by then, one in seven hospitals will have to leave the Medicare system.

    But suppose the law is implemented just as it's written. In that case, according to the Medicare Trustees, Medicare's long-term unfunded liability fell by $53 trillion on the day ObamaCare was signed.

    But at what cost to the elderly? Consider people reaching the age of 65 this year. Under the new law, the average amount spent on these enrollees over the remainder of their lives will fall by about $36,000 at today's prices. That sum of money is equivalent to about three years of benefits. For 55-year-olds, the spending decrease is about $62,000—or the equivalent of six years of benefits. For 45-year-olds, the loss is more than $105,000, or nine years of benefits.

    In terms of the sheer dollars involved, the law's reduction in future Medicare payments is the equivalent of raising the eligibility age for Medicare to age 68 for today's 65-year-olds, to age 71 for 55-year-olds and to age 74 for 45-year-olds. But rather than keep the system as is and raise the age of eligibility, the reform law instead tries to achieve equivalent savings by paying less to the providers of care.

    What does this mean in terms of access to health care? No one knows for sure, but it almost certainly means that seniors will have difficulty finding doctors who will see them and hospitals who will admit them. Once admitted, they will enjoy fewer amenities such as private rooms and probably a lower quality of care as well.

    Are there better ways of solving the problem? The graph nearby shows three proposals, including the new law, and compares them to the current system. For the past 40 years, real Medicare spending per capita has been growing about two percentage points faster than real gross domestic product (GDP) per capita. Since real GDP per capita grows at just about 2%, that means Medicare is growing at twice the rate of our economy—and is clearly unsustainable. If nothing is done, we'll see a doubling of the Medicare tax burden in less than 20 years.

    There are currently an array of proposals to slow Medicare spending to a rate of GDP growth plus 1%. These include a proposal by President Obama's debt commission, chaired by Bill Clinton's former chief of staff, Erskine Bowles, and former Sen. Alan Simpson; one by former Clinton budget director Alice Rivlin and Rep. Paul Ryan (R., Wis.); and another by former Sen. Pete Domenici and Ms. Rivlin. Unlike the Medicare Trustees, the Congressional Budget Office (CBO) also scores ObamaCare at GDP plus 1%.

    Of greater political interest is the House Republican budget proposal, sponsored by Mr. Ryan. This proposal largely matches the new law's Medicare cuts for the next 10 years and then provides new enrollees with a sum of money to apply to private insurance (premium support). Even though the CBO assumed premium support would increase with consumer prices (price indexing), the resolution that House Republicans actually voted for contains no specific escalation formula. A natural alternative is letting premium support payments grow at the annual rate of increase in per-capita GDP (GDP indexing).

    In light of the heated rhetoric of recent days, it is worth noting that for everyone over the age of 55, there is no difference between the amount of money the House Republicans voted to spend on Medicare and the amount that the Democrats who support the health-reform law voted to spend. Even for younger people, the amounts are virtually identical with GDP indexing.

    The law's spending path depends on making providers pay for all the future Medicare shortfalls. But since no one can force health-care providers to show up for work, short of a health-care provider draft this reform ultimately cannot succeed. The House Republican path, on the other hand, would make a sum of money available to each senior to choose among competing private plans—much the way Medicare Advantage provides insurance today for about one out of every four Medicare beneficiaries.

    That's a good starting point. But we believe that a truly successful overhaul of Medicare will require at least three additional elements.

    Continued in article

    "How Medicare Was Saved What a future us will say about the Great Entitlement Fight of 2011m" by Holman Jenkins Jr. The Wall Street Journal, May 27, 2011 ---
    http://online.wsj.com/article/SB10001424052702304520804576349223226233288.html#mod=djemEditorialPage_t

    News item dated May 28, 2041 at BataviaOnlineNow!, a news site devoted to Western New York: As they have for the past 30 years, the Democratic faithful in the 26th congressional district turned last night's Jefferson-Jackson Dinner into an opportunity also to commemorate Medicare-As-We-Knew-It Salvation Day. Last night's celebration was extra special, thanks to the presence of Barack Obama. "I just came for the wings," quipped the former president. (Nearby Buffalo, N.Y., of course, is the birthplace of the chicken wing.) On a serious note, Mr. Obama, 79, recalled the watershed Democratic special election victory of 2011 as a turning .point in his battle to save Medicare, the health-care program for seniors.

    Earlier, dignitaries had visited the Hamburg Regional Medicare Center, specially unlocked by a janitor for the occasion. Normally the center is open between noon and 2 p.m. on Saturday to help a trickle of financially struggling local seniors apply for Medicaid.

    The delegation also visited the Greater Hamburg Medical Megalopolis, adjacent to the Jack Kemp Retirement Community and Country Club. Many older residents, stopping in for discount knee adjustments or massage therapy, said they vividly recalled the 2011 congressional election. A high point was the visit of "Bowzer," of the singing group Sha Na Na, to campaign for the Democratic winner.

    Historians say the race was a nationally watched referendum on the so-called Ryan Plan, which some critics likened to a plan to solve Medicare's then-pending bankruptcy by wheeling an elderly woman off a cliff.

    "At the time, Medicare's fiscal shortfalls were very, very serious," says SUNY Geneseo Prof. DeWayne Wise Srinivasan. "But after NY-26, it was clear there would be no political will in Washington to address the problem. The senior lobby and other interest groups were too powerful."

    However, that was not the end of the story. After the upset Democratic win in the 26th, both parties turned to the more politically palatable job of meeting a clamor from younger workers for tax-law changes to help them save for their own retirements.

    Politicians had inadvertently tapped into a principle known as Ricardian Equivalence, says Prof. Srinivasan. "Polls showed nobody under 40 believed that Medicare and Social Security would be around to support them in retirement. So these younger workers were determined to increase their own savings to help pay for the long, healthy, active retirements they envisioned for themselves."

    The result was the Tax Reform Act of 2013, which greatly reduced the burden of taxation on savings, investment and business profits. One upshot was what economists now call The Long Boom II, a period of unparalleled prosperity that continues to this day.

    Not present for this week's festivities was the victor in that long-ago congressional race, former Erie County Clerk Kathy Hochul

     


    "The Trouble with ObamaCare Counting the problems with the president's health care plan," by David Harsanyi, Reason Magazine, June 8, 2011 ---
    http://reason.com/archives/2011/06/08/the-trouble-with-obamacare

    Democrats will often get irritable when some clingy philistine refers to ObamaCare as "socialized medicine." It's simply not a precise phrase for the Patient Protection and Affordable Care Act. In any event, it's not socialized yet, you ignoramuses! Progress doesn't happen overnight. No worries, though, recent signs portend that ObamaCare will give us the state-run plan we proles deserve.

    A new study published in McKinsey Quarterly claims that in 2014, the provisions of ObamaCare will induce 3 in 10 employers to "definitely or probably" stop offering health coverage to their employees. And we can only assume the companies have had the good sense not to read the legislation.

    Sure, the president promised we could keep our insurance if we liked it. But why would you want to be mixed up with pitiless corporations that focus on profits, anyway? ObamaCare courageously forces states to implement concocted "exchanges" so that someone much smarter than you can pick participants, regulate prices and keep an eye on things. Sounds like a vigorous marketplace. It's only a wonder that more Americans aren't clamoring for government-run supermarkets, smartphones, and dating exchanges, as well.

    You'll also recall that the un-socialized system allowed 20, 30, 40 million (please feel free to come up with any number you'd like; The New York Times won't care) people to go uninsured. Medicare's chief actuary estimated that 400,000 would sign up for these high-risk pools before ObamaCare kicked in. The Congressional Budget Office estimated that the budget would be able to handle 200,000, and others claimed that the program would need eight times the funding to meet demand. This was the driving reason for ObamaCare. But as Megan McArdle of The Atlantic points out, just as with the exchanges, folks have been standoffish, with only about 18,000 people signing up.

    Victory, right? The success of a government handout is always measured by how little Americans need to use it, right? Well, judging from the food stamp administration's actions, that would be a big no. What this probably calls out for is more public service announcements or a wider net. Hey, we'll just get some toffee-nosed yacht jockeys to offset the cost.

    That's not to say there aren't people out there who really need support. The president has generously handed out nearly 1,400 ObamaCare waivers to the neediest among us. About 20 percent of them have been awarded to an upmarket district in San Francisco that, by pure chance, is represented by Nancy Pelosi. Others, such as the AARP and local unions, had demanded we pass ObamaCare so they could not take part in it immediately.

    We'll also soon be hearing more about the lawsuits challenging ObamaCare's individual mandate. Randy Barnett, a professor of constitutional law at Georgetown University Law Center, recently asked, "If Congress can impose this economic mandate on the people, what can't it mandate the people to buy?" Everything and nothing. And that's the beauty of it.

    And let's not forget it was Obama, the newfound holy savior of Medicare, who pinned the key cost control component of health care reform on Medicare through his Independent Payment Advisory Board, or what bitter righties call a rationing board.

    Continued in article

    "The ObamaCare Bad News Continues:  Projected costs escalate and tens of millions will lose their current coverage," by Karl Rove, The Wall Street Journal, June 16, 2011 ---
    http://online.wsj.com/article/SB10001424052702304319804576387542318531626.html#mod=djemEditorialPage_t

    A kerfuffle was stirred up last week by a devastating McKinsey & Company study that concluded up to 78 million Americans would lose their current health coverage as employers stopped offering insurance because of President Obama's Patient Protection and Affordable Care Act.

    The report contradicted Mr. Obama's frequent pledge that under his reform, "if you like your health-care plan, you can keep your health-care plan." And McKinsey's was at least the fourth such analysis calling the president's promise into question.

    In May 2010, former Congressional Budget Office (CBO) Director Douglas Holtz-Eakin concluded that employers would drop coverage for about 35 million Americans because of ObamaCare. A month later, in June 2010, the National Center for Policy Analysis (NCPA) pegged the number between 87 million to 117 million. And last November, Allisa Meade, a McKinsey analyst, told health-insurance company executives that 80 million to 100 million people might lose their employer-provided health insurance.

    Simple economics is the reason. According to the Kaiser Family Foundation's Employer Health Benefits 2010 Annual Survey, the annual premium for an average policy last year was $5,049 for a single worker, with the company picking up roughly $4,150 and the employee the rest. For a family of four, the total cost was $13,770, with the company picking up $9,773.

    Yet under ObamaCare, businesses can stop providing health-care coverage, paying a $2,000 per-worker fine instead. For small businesses, the trade-off is even more attractive: They are given a pass on the first 50 workers.

    Workers losing coverage will be moved into the "exchange," a government-run marketplace to buy health plans. Those whose insurance costs were more than a specified share of their income (9.5% in 2014) could get subsidies. The exchange starts in 2014 and is fully operational by 2016.

    Perversely, ObamaCare both drives up the cost of insurance with mandates and rules while making it attractive for companies to dump the increasingly more expensive coverage and pay a lesser fine. There will be huge ramifications for the country's finances if more workers lose coverage than was estimated.

    When Mr. Obama's health-care bill passed in March 2010, the CBO and the congressional Joint Committee on Taxation predicted that 24 million workers would be covered by the exchange. Of these, nine million to 11 million would lose their employer-provided coverage, offset by six million to seven million who would be getting employer-provided insurance, for a net of three million workers losing company-sponsored coverage. The CBO said the exchanges would cost $511 billion over ObamaCare's first decade.

    But what if more people are dumped into the exchange than originally estimated? Costs from the increased subsidies will explode.

    Continued in article

     


    Freakonomics
    "Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
    http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/

    In a new working paper called “Technology Growth and Expenditure Growth in Health Care” (abstract here, PDF here), Amitabh Chandra and Jonathan S. Skinner offer an explanation:

    In the United States, health care technology has contributed to rising survival rates, yet health care spending relative to GDP has also grown more rapidly than in any other country.  We develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth.  We show that health care productivity depends on the heterogeneity of treatment effects across patients, the shape of the health production function, and the cost structure of procedures such as MRIs with high fixed costs and low marginal costs.  The model implies a typology of medical technology productivity:  (I) highly cost-effective “home run” innovations with little chance of overuse, such as anti-retroviral therapy for HIV, (II) treatments highly effective for some but not for all (e.g.  stents), and (III) “gray area” treatments with uncertain clinical value such as ICU days among chronically ill patients.  Not surprisingly, countries adopting Category I and effective Category II treatments gain the greatest health improvements, while countries adopting ineffective Category II and Category III treatments experience the most rapid cost growth. Ultimately, economic and political resistance in the U.S. to ever-rising tax rates will likely slow cost growth, with uncertain effects on technology growth.

    This paper strikes me as sensible, explanatory, and non-ideological to the max. It would be nifty if the people who work in Washington read it, and thought about it, and maybe even acted on it. (And it would be nifty if the Knicks beat the Celtics too, but I’m not holding my breath for either outcome …)

    Here’s a very good paragraph from the paper:

    The science section of a U.S. newspaper routinely features articles on new surgical and pharmaceutical treatments for cancer, obesity, aging, and cardiovascular diseases, with rosy predictions of expanded longevity and improved health functioning (Wade, 2009). The business section, on the other hand, features gloomy reports of galloping health insurance premiums (Claxton et al., 2010), declining insurance coverage, and unsustainable Medicare and Medicaid growth leading to higher taxes (Leonhardt, 2009) and downgraded U.S. debt (Stein, 2006). Not surprisingly, there is some ambiguity as to whether these two trends, in outcomes and in expenditures, are a cause for celebration or concern.

    And the authors offer good specific examples of what they built their argument on, noting the …

    Continued in article


    "The Truth About Health Care Reform and the Economy:  Separating economic fact from economic myth," by Veronique de Rugy, Reason Magazine, April 15, 2011 --- http://reason.com/archives/2011/04/15/the-truth-about-health-care-re

    Myth 1: Health care reform will reduce the deficit.

    Fact 1: Health care reform will increase the deficit.

    The Patient Protection and Affordable Care Act includes many provisions that have nothing to do with health care: the CLASS act, a student loan overhaul, and many new taxes. These provisions don't change the health care system. They just raise money to pay for the new law. Strip them away and the law’s actual health care provisions don't lower the deficit—they increase it!

    The chart below uses data from Congressional Budget Office (CBO) to clarify the fiscal consequences of health care reform.

    . . .

    As you can see, from 2012 to 2021, the Congressional Budget Office estimates that the health care act will reduce deficits by $210 billion (note that this estimate differs from the widely cited $143 billion figure used during the lead-up to the passage of the act). During this same time period, however, the actual health care reform provisions of the law will increase deficits by $464 billion.

    Of course, one should not evaluate the health care legislation on its fiscal impacts alone. In theory we should get some fiscal benefits. But the key question is how they net out. Still, no matter what you think about the benefits of the health care legislation, it is incorrect to claim that health care reform will save money. It won’t.

    Myth 2: The U.S. health care system is a free-market system.

    Fact 2: Roughly half of all U.S. health care is currently paid for by the government.

    . . .

    Even in the absence of the health care reform law, government programs including Medicare and Medicaid already fund almost half of American health care. Roughly a third of the remaining expenditures are funded by private insurers—mainly through subsidized and highly regulated employee plans. Not exactly a free market.

    As this chart shows, state and federal entities make up over half of the health insurance market. Of course, the Patient Protection and Affordable Care Act will only increase the share of government involvement in the health care market.

    Myth 3: Medicare spending increases life expectancy for seniors. Reductions in Medicare spending will therefore reduce their life expectancy.

    Fact 3: Increases in life expectancy for seniors are due to increased access to health care, not to Medicare.

    While Medicare spending has certainly decreased seniors’ out of pocket health care expenses (by 1970, Medicare reduced out of pocket expenses by an estimated 40 percent relative to pre-Medicare levels), the program’s effect on mortality is much less clear.

    . . .

    Continued in article


    Questions
    Is it possible to eliminate a $1.5 trillion deficit by increasing rates for taxpayers earning more than $250,000 per year?
    Is it possible to eliminate the above deficit by increasing tax rates for all taxpayers?

    Answers
    In theory no to Question 1 and yes to Question 2, but in reality, closing the Federal spending gap with tax rate increases would be a total disaster on the economy to a point where the government might take in less rather than more tax revenue.

    Firstly the answer is no unless you more than double what the poor and middle class pay in taxes. And since nearly half the households in the U.S. do not pay any Federal income tax, Congress would probably have to figure how to squeeze blood out of turnips. This would have an extremely adverse impact on middle and lower income families already deep in debt to to pay medical, housing, and education expenses.

    Secondly, the answer is no if you anticipate that most taxpayers that have any form of savings would probably stampede to invest in tax free alternatives such as tax free municipal bonds and bond funds. This would be a disaster for business firms seeking capital.

    Thirdly, many taxpayers now paying something into the U.S. Treasury would be thrown out of work and impact on the economy would be far worse than the Great Depression of the 1930s.

    But if we could wave a magic wand and prevent all the dynamic reactions to tax rate increases, one solution would look something like this --- keeping in mind that all of this is pure fantasy since the dynamic reactions really cannot be prevented. From Paul Caron's TaxProf Blog on April 18, 2011 ---
    http://taxprof.typepad.com/

    "Why Aren't The Rich Paying 50 Percent in Income Taxes?" by Nick Gillespie and Meredith Bragg, Reason Magazine, April 8, 2011 ---
    http://reason.com/blog/2011/04/08/why-arent-the-rich-paying-50-p

    "Paul Ryan's Reverse Robin Hood Budget His plan for reducing the deficit isn't 'the only game in town.' It's only the worst," by Alan Blinder," The Wall Street Journal, April 19, 2011 ---
    http://online.wsj.com/article/SB10001424052748703916004576270832244940992.html?mod=djemEditorialPage_t

    Jensen Comment
    Professor Blinder's main criticism is that the Ryan Plan is too long term and does not do enough to reduce the trillions in deficits over the next decade. But like most progressives he offers zero hints as to what will be a "better game in town" to reduce deficits now. Presumably he wants to confiscate the incomes of people now making over $250,000 per year, but he really doesn't want to discuss a proposed game plan for tax increases because he secretly knows this will not be enough to make much difference on the deficits and probably will be highly dysfunctional in terms of unemployment. Secretly he most likely supports his Princeton colleague's, Krazy Krugman's, solution of printing dollars to reduce deficits and pay for  my wife's forthcoming very expensive surgery.
     

    Zimbabwe showed Ben Bernanke, Alan Blinder, and Paul Krugman the way to reduce government deficits. Why can't they convince the rest of us that printing presses are the answer to deficit reduction?
     

    And, if we keep redefining inflation by taking more and more commodities and services out of the calculation, things won't look so bad while were printing $15 trillion dollars for starters.

    Eventually, the "Core" CPI might only include empty houses and vacant yachts.

    April 20, 2011 reply from Bob Jensen

    Hi Louis and Linda,
    I probably would never do research on privileged budget items because it is so complicated and confounded with externalities.


    When it comes to government spending, one has to first distinguish those budget items that are discretionary versus non-discretionary. To do this we need some type of criterion. One criterion to consider is whether or not a contract would make the item binding in court. As I mentioned previously many retirement contracts allow beneficiaries to take breaches of contract to court, which is why Congress does not mess with cutting military pensions.


    There are, of course, gray zones. Presumably Congress can choose to add surtaxes to all pensions that it pays, including military pensions and Social Security. Or it can choose to tax medical benefits that it pays such as taxes on usage of Veterans Hospitals or taxes and higher deductibles on Medicare claims.


    Another gray area that makes non-discretionary budget items somewhat discretionary is already being practiced in Medicare. You can keep allowing less and less for medical  services such that claimants can only get cheap and inferior doctors. For example, the surgeon who performed my wife's surgeries three and four under Medicare would not do surgery Number 5 because he stopped accepting any Medicare patients. This means by law that he cannot accept patients who are eligible for Medicare even if they are willing to pay his fees from private funds. May wife had to find another surgeon in another state.


    Under the Romney Care "universal" health insurance plan in Massachusetts, some hospitals discovered the plan was not paying enough to cover out-of-pocket expenses, especially malpractice insurance premiums. So those hospitals dropped the services that had the highest malpractice insurance premiums. Read that as meaning that those hospitals dropped obstetrics departments and refused obstetrics services to all women. These women can still find hospitals that offer such services but the distances are further and the lines are longer and the services are not nearly as good in many instances.


    Also the outstanding orthopaedic hospital in Boston where my wife now has spinal surgeries dropped its emergency room services. An externality of Romney care was reduced medical services for all patients, including those that have premium medical insurance plans from employers. Those on premium plans have fewer choices for emergency rooms and trauma centers because of Romney Care.


    There's a huge difference between General Motors and the government when it comes to budget cutting. General Motors cannot print money and reached a point where it was impossible to meet pension and health care contracts with retirees. In that case the bankruptcy court modified the contracts. In the case of government pensions and medical benefits for retirees, rather than declare bankruptcy our Federal government will probably just print the money needed to honor the contracts. Welcome to Zimbabwe.


    Our state governments like California are in more of a bind. State governments might have to declare bankruptcy and have the bankruptcy courts restructure retirement contracts. At one time Canada came close to losing its national government in favor of provincial governments that would, among other things, print their own currencies. This is no longer entirely out of the question for our 50 states in the United States who would like an option to print their own currencies.


    As far as "privileges" within government budget items deemed discretionary, the top privileges typically go to public safety. Police, fire, and National Guard budgets are being cut somewhat but they are protected from enormous cuts by fears in the minds of voters.  As far as Federal government military budgets are concerned, an extremely expensive item in budgets is for advanced warfare and defense technology. However, not many voters are willing to fall behind our enemies on warfare technology, including technology for blocking communications --- such as when an unnamed advanced-technology nation allegedly shut down the nuclear centrifuges in Iran.


    Another extremely expensive budget item is our CIA, but not many voters will accept CIA budget cuts on the premise that "ignorance is bliss."


    It's one thing to point out research about tax increases and spending cuts on a very broad scale, but when it comes to specifics it becomes an explosive debate that can be political suicide. We now have two choices with trillions in budget deficits. We can raise taxes and make huge spending cuts. Or we keep putting off remedies like we've done for the past two decades at reach a point where it's no longer possible to save the patient.


    Some professors in ivory towers might think it is possible to totally eliminate our international fighting force in favor of a beefed up domestic police force. But the unfunded expenses of past wars will continue to linger over our heads. And it's questionable how many terror attacks this nation is willing to experience with an impotent international fighting force for prevention of future attacks.


    But I really don't want to get into the question of line item budget cuts. This is also probably too explosive for the AECM in terms of politics. We can, however, debate broad issues like whether it's possible to tax ourselves out of trillion dollar deficits with very little serious budget cutting.


    Respectfully,
    Bob Jensen

     


     

     


    Updates for March 31, 2011

    Half of All States Now Suing to Stop Obamacare --- http://blog.heritage.org/2011/01/12/half-of-all-states-now-suing-to-stop-obamacare/


    "Vt. House passes single-payer bill," by Dave Gram, Burlington Banner, March 24m 2011 ---
    http://www.benningtonbanner.com/ci_17695099?source=rss_viewed

    Every Vermonter could sign up for state-financed health insurance under a bill passed by the House on Thursday that would put the state on a path to a single-payer health care system by the middle of this decade.

    Senate next

    "This bill takes our state one step closer to a system that ensures that all Vermonters have access to the care they deserve and contains costs," House Speaker Shap Smith said shortly after the House passed the bill 92-49.

    The measure now goes to the Senate, where it is expected to pass, but with some possible changes.

    Gov. Peter Shumlin, who made single-payer health care a centerpiece of his gubernatorial campaign last year, also praised the legislation. He said it would make Vermont "the first state in the country to make the first substantive step to deliver a health care system where health care will be a right and not a privilege, where health care will follow the individual, not be a requirement of the employer, and where we’ll have an affordable system that contains costs."

    Costs are an open question. The bill sets up a five-member state board to design a benefit package to be called Green Mountain Care, but doesn’t require the governor to propose a way to pay for it until 2013. That drew fire from minority Republicans in the House, who said the hard partof reform -- paying for it -- won’t be tackled until after Shumlin campaigns for a second two-year term in

    . . .

    The Shumlin administration and supporters of the bill need to address numerous uncertainties as the process goes forward. One concerns the more than 100,000 Vermonters who get health coverage from employers who are self-insured, meaning they assume the financial risks of coverage, and are chartered under federal law.

    The House defeated a proposed amendment to allow those employers, among them the state’s largest, like IBM, to be exempt from paying taxes to support Green Mountain Care. Rep. Anne Donahue, R-Northfield, said that would leave them in a similar situation to parents who send their children to private schools, but pay taxes to support public ones.

    Jensen Comment
    One enormous problem faced by such a small state is that so many of its residents must go elsewhere for specialized medical care, including such medical centers as Dartmouth Hitchcock in New Hampshire and the various medical centers in Boston and Canada. Cost containment is more difficult when a provider of insurance cannot regulate the cost of services.

    There are other questions such as whether the State of Vermont will pick up the supplemental costs of Medicare. With such a small population, this can be troublesome when spreading the insurance risks among a small funding base. One of the heavy hits taken by supplemental insurers is for the high cost of dying when older folks must be hospitalized for lengthy stays, often in intensive care units. CBS on Sixty Minutes claims the major issue with Medicare and its supplemental insurers is the "High Cost of Dying."

    On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
    "The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/ 


    "In Health Care, Cost-Cutting Pays Investors If you're looking to profit from health-care stocks, start with companies helping to save money in the sector," by David Bogoslaw, Business Week, January 13, 2011 ---
    http://www.businessweek.com/investor/content/jan2011/pi20110111_604809.htm?link_position=link1


    "Health Insurance Monopoly," by John C. Goodman, Townhall, March 22, 2011 ---
    http://townhall.com/columnists/johncgoodman/2011/03/22/health_insurance_monopoly

    The single most important feature of the Affordable Care Act (ObamaCare) is the establishment of a health insurance exchange where people will be required to buy health insurance if they are not insured by their employer or a government plan. As envisioned by its supporters, the exchange will be a model of competition.

    But rather than moving toward a competitive world, we seem to be moving toward the opposite extreme: monopoly. Major consolidation is underway both on the provider and insurer sides of the market. And while this trend was already underway before Barack Obama became president, without doubt it is accelerating because of ObamaCare.

    The following bullet points describe what things look like in the market for commercial insurance in major Texas cities:

    ·Blue Cross already has 70% of the market in three of the nine largest metropolitan areas.

    ·In all of them, and for the state as a whole, more than 60% of all customers buy from only two insurers.

    Since the passage of the health reform bill, Harvard Pilgrim has announced its departure from the Medicare Advantage market (leaving 22,000 enrollees to search for coverage elsewhere) and the Principal Financial Group has left the health insurance market altogether (leaving 725,000 people behind). Many other small- and medium-sized insurers are struggling to hold on.

    What is causing the immediate problem? One big problem is a new federal requirement that insurance companies spend no more than 15% of their revenues on “administration.”

    In almost every state, rarely does a session of the legislature adjourn before someone files a bill to require the public schools to spend a certain percent of their income “in the classroom.” How well does this work? Here is Michael Barba’s description in a forthcoming NCPA Brief Analysis:

    "Nationwide, schools spend an average of about $10,000 per student each year. On average, 60 percent of this is instructional, according to the National Center for Education Statistics (NCES). Instructional spending includes such things as teacher and staff salaries, extracurricular activities such as sports or academic clubs, and classroom supplies. However, each state can define instructional spending as it chooses, and expenses labeled as instructional are often not exclusively classroom expenses. In Texas, for example, the upkeep of vehicles, equipment and computers, as well as food service, travel, property insurance and refreshments for meetings are all considered instructional…

    Continued in article


    "Mayberry OMG:  Those false ads cost taxpayers $3.5 million," The Wall Street Journal, March 25, 2011 ---
    |http://online.wsj.com/article/SB10001424052748704604704576220640964310506.html#mod=djemEditorialPage_t

    President Obama met with the winner of the "save award" in the Oval Office the other day, the contest for federal employees who find ways to make government more efficient. Trudy Givens, of Portage, Wisconsin, suggested that the feds stop mailing out paper copies of the Federal Register (available online since 1994) to the provinces. Her good idea will cut about $4 million a year in printing and postage.

    We don't work for the government, but here's our "save" suggestion: How about not spending some $3.5 million to deceptively promote ObamaCare?

    It turns out it cost the Health and Human Services Department $2.78 million to buy airtime for three cable TV ads last year, featuring Andy Griffith praising the new entitlement. The "Matlock" eminence rendered his services pro bono, but Porter Novelli didn't. The media consulting firm racked up 668 billable hours and earned $404,384.40 producing the spots, according to documents released by the outside GOP advocacy group Crossroads GPS through the Freedom of Information Act.

    At least Porter Novelli didn't charge taxpayers for fact-checking. Among Mr. Griffith's many deceptive claims, he tells his fellow seniors that their Medicare benefits won't change (they will, most immediately in Medicare Advantage) and that ObamaCare strengthens the program's finances (it doesn't, according to the chief Medicare actuary). Lovable ol' Andy of Mayberry then says "that new health-care law sure sounds good" to him, in a transparent bid to win over senior voters in advance of the 2010 election.

    The next time the President wants to run misleading ads ahead of an election, he might hit up the Democratic Party or use his bully pulpit, rather than passing the bill to taxpayers. Meantime, an Administration functionary says in a new promotional Web video for the save award—how much did that one cost to produce?—that "Something that seems relatively small if replicated over the full length of the federal government can really result in substantial savings."

    How about we go one better and save several trillion dollars by repealing a health-care bill that Americans still hate despite Sheriff Andy's endorsement?


    "Bachmann Exposes $105 Billion Secret," by Phyllis Schlaffy, Townhall, March 15, 2011 ---
    http://townhall.com/columnists/phyllisschlafly/2011/03/15/bachmann_exposes_$105_billion_secret

    When ObamaCare was passed by the Senate on Christmas Eve of 2009, senators had less than 72 hours to compare a 383-page package of amendments to the 2,074-page bill. Public outrage over backroom deals (such as the Cornhusker Kickback and the Louisiana Purchase) led to the election of Scott Brown in Massachusetts.

    Democrats then cooked up a plan to link the now-2,409-page Senate-passed ObamaCare bill to dozens of amendments contained in a separate 150-page Budget Reconciliation bill that could pass both houses by a simple majority. That's when then-Speaker Nancy Pelosi famously told the then-Democratic majority, "We have to pass the bill so that you can find out what is in it."

    When President Obama signed ObamaCare into law, that set in motion a series of funding triggers and money transfers that add up to $105,464,000,000 in pre-authorized appropriations that are scheduled to be paid up through FY2019. In laymen's language, that means writing postdated checks that are guaranteed to be paid out over the next eight years.

    This money was divided into dozens of smaller amounts so the big total would not be apparent. For example, Section 2953 of ObamaCare included a pre-funded appropriation of $75 million a year for five years to "educate adolescents" in "adult preparation subjects" such as "stress management" and "the development of healthy attitudes and values about adolescent growth and development, body image, racial and ethnic diversity, and other related subjects."

    Section 4101(a) of ObamaCare prefunded $200 million a year over four years for the construction of school-based health centers. In Section 4002, a total of $17,750,000,000 will be deposited over 10 years to a discretionary account controlled by the HHS secretary (currently Kathleen Sebelius), who may spend that money "to provide for expanded and sustained national investment in prevention" and to "help restrain the rate of growth in private and public sector health care costs."

    Continued in article


    "How to Live Freer in New Hampshire:  With all eyes on Wisconsin this past week, overlooked has been the conservative policy changes that are moving ahead in New Hampshire," by Stephen Moore, The Wall Street Journal, February 25, 2011 ---
    http://online.wsj.com/article/SB10001424052748704150604576166452052715900.html?mod=djemEditorialPage_t

    With all eyes on Wisconsin this past week, overlooked has been the conservative policy changes that are moving ahead in New Hampshire. In recent days the New Hampshire House, where the GOP controls nearly three-quarters of the 400 seats, passed a bill to repeal the state cap-and-trade law that imposes a tax on energy use and a bill to make New Hampshire a right-to-work state.

    Democratic Gov. John Lynch has vowed to veto both bills, but my sources in Concord say there's a chance that the vetoes could be overridden. Meanwhile, Republicans are also set to pass a spending reduction bill with the kinds of public sector pension reforms that have incited protests from the labor unions in the Midwest.

    New Hampshire has always been the island of liberty and low taxes surrounded by a sea of Northeastern-style socialism. It's the only state in the region without an income tax or statewide sales tax, and per-capita spending is about half of what's found in New York and New Jersey. Republicans won huge majorities in both houses in November after turning blue in 2008 and voting for President Obama.

    If New Hampshire becomes a right-to-work state, it would be the only New England state that does not force workers to join a union and pay dues. The bill passed by 221-131 but still lacks the two-thirds majority that's needed for a veto override. House Deputy Speaker Pamela Tucker said that becoming a right-to-work state "would help us become a haven for employers seeking a pro-business environment." She added: "Freedom is a core New Hampshire belief, and freedom of association and choice is a fundamental right of every New Hampshire citizen."

    In 2008, New Hampshire joined something called the Regional Greenhouse Gas Initiative, a region-wide cap-and-trade system for state utilities. So far, it's resulted in about $27 million in higher electric costs for consumers, and the environmental benefits have been dubious. "It does nothing to reduce greenhouse gases because jobs and businesses just move to other states," says Corey Lewandowski, the New Hampshire director of Americans for Prosperity. His group is working to make New Hampshire the first state in the nation to repeal an existing global warming law. The repeal bill passed with a two-thirds majority, and the state Senate is expected to follow suit with the necessary margin to override a veto.

    Jensen Comment
    In spite of now being labeled a conservative Yankee state, New Hampshire is surprisingly liberal on many issues. It has had a succession of senators and representatives that it sent to Washington DC prior to the 2008 election. Governors have be Democrats for decades. And New Hampshire is not only one of the few states sanctifying gay marriage, the Republican-controlled legislature just turn down an effort to repeal the gay marriage law.

    More notably, New Hampshire is one of the least friendly states to private sector corporate businesses in terms of business taxes and fees.


    Medicare is the real killer. According to Eugene Steuerle of the Urban Institute, an average couple retiring last year can look forward to consuming Medicare benefits with a present value of $343,000, having paid Medicare taxes with a present value of $109,000.
    Holman W. Jenkins, Jr.  

    "Let's Begin Obama's 'Conversation' on Entitlements:  A couple retiring last year paid $109,000 into Medicare but can expect $343,000 back from the system," by Holman W. Jenkins, Jr., The Wall Street Journal, February 26, 2011 ---
    http://online.wsj.com/article/SB10001424052748703408604576164172865528158.html

    Nobody should be surprised that public-sector workers in Wisconsin and elsewhere are fighting to preserve every penny of their promised benefits.

    Nobody should be surprised that state governors—and it doesn't matter which party—are trying to trim those privileges and benefits.

    Nobody should be surprised by anything.

    News reporters may be naïve, and some of the protesters may pretend to be. But this fight was penciled in long ago, when politicians and union leaders made the strategic decision to negotiate benefits without negotiating for the funding to make good on them. The mock shock and horror is all the more laughable given that events in Wisconsin are a perfect microcosm of the battle that every sentient American knows, and has known for a generation, awaits Medicare and Social Security.

    In keeping with the theatrics of naïveté, President Obama now calls for "beginning a conversation on entitlements." One wonders what it was, then, that G.W. Bush began at the 2004 Republican convention, or what thinkers and activist groups that have been pushing visions of entitlement reform for decades have been doing.

    Has the president not heard of the private sector's pioneering work on "defined contributions"? Or Bill Clinton's landmark Medicare commission in 1999? One might as well wonder what pain is coming to those Obama followers who have yet to suspect their thoughtful liberal might be a visionless apparatchik.

    Don't doubt that Mr. Obama's real impulse, like that of most Democrats, is to let things ride and then simply, amid a crisis, start slashing benefits for the "rich" while also raising taxes on "the rich." Unspoken has been a Democratic assumption that an aging electorate, in a crisis, would be willing to tax itself to the hilt to prop up an unreformed or barely reformed Social Security and Medicare.

    Even if this assumption were electorally sound, economics won't oblige in the crisis that's coming. The necessary tax hikes would kill any hope of growth. The economy would continue its free fall without root-and-branch entitlement cuts all the more painful for having been delayed.

    Let's lay down a couple of markers for "the conversation" Mr. Obama pretends he wants to have. The transition to a new system, in which workers save for their own retirement consumption, will have to be financed—that is, we'll have to borrow to settle the claims of those who are retired or nearing retirement and can't be left in the lurch.

    Medicare is the real killer. According to Eugene Steuerle of the Urban Institute, an average couple retiring last year can look forward to consuming Medicare benefits with a present value of $343,000, having paid Medicare taxes with a present value of $109,000.

    And don't let that figure get your hopes up, because even that $109,000 is not available today. That money was spent long ago. The government's trust funds are a fraud. Indeed, by some large amount, society missed out over many decades on domestic savings and investment that would have taken place had workers not been relying on unfunded government promises to support them in retirement.

    The flip side of this depressing consideration, though, is a happier one. Moving toward a system of real savings, in which payroll taxes would flow into some version of personal accounts controlled by the worker, would bring a big improvement to incentives. We could expect a sizeable growth dividend to help finance the transition.

    By "finance the transition," of course, we mean today's workers having to reach into their own pockets twice, paying for their own retirement while also making up for the saving their parents and grandparents didn't do. When people talk about generational injustice, this is what they mean. But the pain can be lightened and spread more evenly with borrowing. Here's where we should not be afraid of debt. The bond market can be trusted to distinguish between good debt and bad debt—between borrowing to fix the system and borrowing to prop it up.

    Continued in article

    Bob Jensen's threads on entitlements are at
    http://faculty.trinity.edu/rjensen/Entitlements.htm


    "The Next Repeal Target Kathleen Sebelius has some ObamaCare regrets," The Wall Street Journal, February 10, 2011 ---
    http://online.wsj.com/article/SB10001424052748704364004576132222496871828.html?mod=djemEditorialPage_t

    No one should expect much real health-care progress for the next two years, but at least President Obama is now making concessions to the political mood, however minor. The White House is suddenly trying to pacify the critics it used to claim were partisans, or industry shills, or arguing in bad faith.

    The latest penitent is Kathleen Sebelius, who has finally admitted that there are severe fiscal problems with a new entitlement for long-term care that was included in ObamaCare. Speaking Tuesday at the Kaiser Family Foundation, the Health and Human Services Secretary defended the new government insurance program, known by the acronym Class. But she also said that "The law, while the structure in the statute wasn't perfect, provided ample flexibility to make sure that Class is successful. . . . We at HHS are committed to using that authority to making sure that both the program meets people's needs while remaining fiscally sound."

    In other words, Ms. Sebelius plans to use her administrative powers to rewrite the Class program so it doesn't follow Congressional orders and bankrupt itself by design. She even made a promise that her rewrite will be so complete that "no taxpayer dollars will be used to pay for Class benefits," period.

    That would certainly be a first in entitlement history, which is why President Obama's own deficit commission recommended the "reform or repeal" of Class. It said the program will "require large general revenue transfers or else collapse under its own weight," while Senate Budget Chairman Kent Conrad has called Class "a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of."

    The main reason Democratic liberals insisted on passing Class is because it will crowd out private insurance for long-term care like home health aides or nursing homes. But they also used it to rig the bill's budget math to make it appear to reduce the deficit.

    The program will start collecting premiums up front in 2012 but won't pay out any cash benefits until five years later. The $70 billion or so accumulated during that lead time will finance other parts of ObamaCare, and then the Class program is scheduled to go broke sometime between 2020 and 2025 in part because the money can't be spent twice.

    Continued in article


    "The Repeal Vote An historic repudiation of an entitlement that is only 10 months old," The Wall Street Journal, January 20, 2011 ---
    http://online.wsj.com/article/SB10001424052748704590704576091973130244618.html?mod=djemEditorialPage_t

    Democrats are deriding last night's House vote to repeal ObamaCare as "symbolic," and it was, but that is not the same as meaningless. The stunning political reality is that a new entitlement that was supposed to be a landmark of liberal governance has been repudiated by a majority of one chamber of Congress only 10 months after it passed. This sort of thing never happens.

    More House Members—245 in total—voted to rescind the new entitlement than the 219 Democrats who voted to create it last March. That partisan majority narrowly prevailed over all 178 Republicans and some 38 Democrats. The three Democrats who favored repeal yesterday confirmed the bipartisan opposition to the kind of vast new social program that historically has been built on a national bipartisan consensus.

    Republicans across the country campaigned on repeal last year, and yesterday's vote showed refreshing respect for the often invoked, rarely consulted American people. Meanwhile, six additional states have asked to join the momentous constitutional challenge to ObamaCare in Florida, bringing the total to 26, plus Virginia's separate suit. A majority of states resisting this mandate is another "symbolic" threshold.

    It's also telling that even many Democrats are now bowing to the public mood, conceding that the law needs fixing even if they oppose outright repeal. No less than President Obama declared that "I'm willing and eager to work with both Democrats and Republicans to improve the Affordable Care Act. But we can't go backward." House Minority Whip Steny Hoyer said on Tuesday that Democrats are "open to better ideas."

    These feints toward conciliation would be more convincing if Harry Reid were willing to bring the repeal bill to the Senate floor. No doubt the Majority Leader fears defections when Republicans eventually do force an up-or-down vote, especially among the many vulnerable red-state Democrats standing for re-election in 2012. The retirement of North Dakota's Kent Conrad, the self-styled deficit hawk who voted for this fiscal disaster, may be a portent.

    Various liberal sages chimed in with a prediction/hope that repeal will backfire on Republicans, usually based on outlier polls like those produced by the Kaiser Family Foundation. These are the same wise men who after Scott Brown's Massachusetts Senate upset a year ago importuned Democrats to pass the bill anyway. They claimed it would be a political winner, eventually, once voters were hooked up to subsidized coverage.

    But such spin can't overcome the reality of premium increases and other damage in the insurance market that consumers can see in their own paychecks and that will only grow. Recall that reform was sold as a way to control costs and increase consumer choice. But underlying medical costs continue to climb, carrying premiums aloft in tandem. Even a nonprofit insurer like Blue Shield of California, a reliable lobbyist for progressive causes, says it must raise rates by as much as 59%, in part to comply with ObamaCare's mandates.

    The law's central planning has also set off a wave of health-industry consolidation that is already reshaping medicine as providers try to shelter themselves from political risk. A Thompson Reuters survey released this week found that 65% of physicians believe the quality of care will deteriorate over the next five years, with only 18% thinking it will improve. Republicans could have done better in yesterday's debate by focusing more on this deterioration in choice and quality, rather than so much on the (admittedly real) harm to jobs and the federal deficit.

    The GOP does need to craft a reform alternative based on competition and market incentives that is more than a return to the status quo ante. And while "repeal and replace" can't happen as long as Mr. Obama wields veto power, yesterday's vote sent an important signal to voters that ObamaCare can't be fixed at the margins when it is so destructive at its core. Next up: defunding the law's implementation and repealing some of its more pernicious parts.

     


    "Health-Care Investment—The Hidden Crisis When the stock market values companies that make cosmetics and beer far above pharmaceutical companies, you know that incentives are out of whack," by Michael Milken, The Wall Street Journal, February 8, 2011 ---
    http://online.wsj.com/article/SB10001424052748703959104576082150097021530.html?mod=WSJ_newsreel_opinion

    Since 1820, world per-capita income has risen more than eightfold, thanks in part to the spread of democracy, open trading markets, and the rule of law. But a less-noted source of growth—improvements to health that have given us longer, more productive lives—has produced as much as half of the increase in the global economy over the past two centuries, as research by the late British economist Angus Maddison suggests. It would be logical to assume that companies whose products make us healthier would be among the most valued enterprises on the planet, but this assumption is wrong.

    Consider companies that make consumer products—things like soft drinks, detergent, cosmetics and beer. While their price-earnings ratios will vary, in today's market their average will most likely be in the neighborhood of 20. But the average P/E of the largest American pharmaceutical research companies (Abbott Labs, Bristol-Myers Squibb, Johnson & Johnson, Eli Lilly, Merck and Pfizer) was recently near 10. Investors must have concluded that pretzels and eyeliner produce faster profit growth than prescription medicines.

    Lower pharma P/E ratios are a recent phenomenon. A generation ago, drug firms regularly topped magazine lists of the most-admired companies in America, a reputation usually reflected in their stock prices. But facing the specter of regulated returns, enterprise values dropped sharply during debates about proposed health-reform legislation in 1993. When the proposals failed in Congress, valuations eventually recovered. In the last decade, pharma P/E ratios dropped again.

    Contributing to these lower valuations are patent expirations, regulatory complexity, uncertainty about litigation exposure, and high U.S. taxes on repatriated foreign income. These factors undoubtedly influenced the decision by Procter & Gamble to leave the pharmaceutical business entirely in 2009 and concentrate on consumer products.

    Procter & Gamble responded rationally to clear market signals that discouraged development of life-saving drugs. But for people whose health, and perhaps survival, will depend on these medicines—that includes you and me—the implications of the disparity in market valuations are ominous.

    We can remove some of the barriers to growth in medical research through several public-policy steps:

    • Match the inducements of other countries. Many nations offer generous tax incentives, easier recruitment of clinical-trial subjects, strong government partnerships and far less litigation. We cannot and should not stop American biopharmaceutical and medical-device manufacturers from expanding overseas operations. But we can reduce needless bureaucracy at home, implement tort reform, and restructure taxation of foreign income.

    Recognize the return on investment in federal health research. We clearly need spending restraint in Washington. But smart budgeting will factor in the economic gains that come from longer, healthier life spans and the savings from improved therapies. One 2006 study by Kevin Murphy and Robert Topel of the University of Chicago showed that life-expectancy gains since 1970 added $3.2 trillion per year to America's national wealth. A mere 1% reduction in cancer deaths would be worth $500 billion, they noted, and the present value to future generations of a full cure is a nearly incomprehensible $50 trillion—more than three times today's GDP.

    Congress doubled the budget of the National Institutes of Health (NIH) between 1998 and 2003. It was money well-spent, and we're now seeing exciting announcements from the nation's medical research centers, including 39 new cancer drugs that have been approved since 2004. In our view at the Milken Institute's FasterCures, the past year has produced the greatest progress against cancer since I first began working with the research community in the 1970s. Progress is accelerating on a range of other diseases as doctors gain traction by using rapidly evolving technology and by collaborating across disciplines.

    But the prospects for continuing this discovery bonanza are threatened. NIH funding has trended down in real terms since 2003. Current budget realities portend severe future cuts that will cause some younger medical scientists to either change careers or take their work to places like Singapore that put out the welcome mat for promising researchers. Whether continuing breakthroughs emerge from U.S. laboratories or somewhere else will profoundly affect America's role among nations in the 21st century.

    Support prevention. There's great concern with rising health-care costs, yet too often we overlook that the single best way to contain them is to keep people from getting sick in the first place. That starts with recognizing that lifestyles, not genes, are the biggest contributors to disease. Public and corporate programs aimed at even slight reductions in obesity, tobacco use and other damaging behaviors pay large social and economic dividends.

    Give the FDA adequate resources. At a recent New York conference hosted by FasterCures, Food and Drug Administration Commissioner Margaret Hamburg told me that imports of products subject to FDA inspection have increased to 20 million from six million shipments in a decade. In fact, an estimated 25% of the U.S. economy is affected by FDA oversight. And the new food-safety legislation that Congress passed in December further expands the agency's responsibilities.

    Given all this, the FDA soon won't be able to keep up with the pace of innovation in such areas as medical-device development and regenerative medicine—the use of stem cells to repair damage to tissues and organs. That will further slow the movement of effective drugs and devices from laboratory to patient.

    Continued in article

     

     

     


     

    Maxine Says:

    Let me get this straight . . . .

    We're going to be "gifted" with a health care
    plan we are forced to purchase and
    fined if we don't,

    Which purportedly covers at least
    ten million more people,
    without adding a single new doctor,
    but provides for 16,000 new IRS agents,

    written by a committee whose chairman 
    says he doesn't understand it,

    passed by a Congress that didn't read it but
    exempted themselves from it,

    and signed by a President who smokes,

    with funding administered by a treasury chief who
    didn't pay his taxes,

    for which we'll be taxed for four years before any
    benefits take effect
    ,

    by a government which has 
    already bankrupted Social Security and Medicare,

    all to be overseen by a surgeon general 
    who is obese,

    and financed by a country that's broke!!!!!

    'What the hell could
    possibly go wrong
    ?'

     



    Updates for December 31, 2010

    Why did President Obama turn down IBM's offer to, for free, to detect medical fraud?
    Video:  Did White House Snub Fraud Fighter?

    http://news.yahoo.com/video/politics-15749652/did-white-house-snub-fraud-fighter-22352314

    "ObamaCare's Incentive to Drop Insurance:  My state of Tennessee could reduce costs by over $146 million using the legislated mechanics of health reform to transfer coverage to the federal government," by Philip Bredesen, The Wall Street Journal, October 21, 2010 ---
    http://online.wsj.com/article/SB10001424052702304510704575562643804015252.html?mod=djemEditorialPage_t

    One of the principles of game theory is that you should view the game through your opponent's eyes, not just your own.

    This past spring, the Patient Protection and Affordable Care Act (President Obama's health reform) created a system of extensive federal subsidies for the purchase of health insurance through new organizations called "exchanges." The details of these subsidies were painstakingly worked out by members of my own political party to reflect their values: They decided who was to benefit from the subsidies and what was to be purchased with them. They paid a lot of attention to their own strategies, but what I believe they failed to consider properly were the possible strategies of others.

    Our federal deficit is already at unsustainable levels, and most Americans understand that we can ill afford another entitlement program that adds substantially to it. But our recent health reform has created a situation where there are strong economic incentives for employers to drop health coverage altogether. The consequence will be to drive many more people than projected—and with them, much greater cost—into the reform's federally subsidized system. This will happen because the subsidies that become available to people purchasing insurance through exchanges are extraordinarily attractive.

    In 2014, when these exchanges come into operation, a typical family of four with an annual income of $90,000 and a 45-year-old policy holder qualifies for a federal subsidy of 40% of their health-insurance cost. For that same family with an income of $50,000 (close to the median family income in America), the subsidy is 76% of the cost.

    One implication of the magnitude of these subsidies seems clear: For a person starting a business in 2014, it will be logical and responsible simply to plan from the outset never to offer health benefits. Employees, thanks to the exchanges, can easily purchase excellent, fairly priced insurance, without pre-existing condition limitations, through the exchanges. As it grows, the business can avoid a great deal of cost because the federal government will now pay much of what the business would have incurred for its share of health insurance. The small business tax credits included in health reform are limited and short-term, and the eventual penalty for not providing coverage, of $2,000 per employee, is still far less than the cost of insurance it replaces.

    For an entrepreneur wanting a lean, employee-oriented company, it's a natural position to take: "We don't provide company housing, we don't provide company cars, we don't provide company insurance. Our approach is to put your compensation in your paycheck and let you decide how to spend it."

    But while health reform may alter the landscape for small business in unexpected ways, it also opens the door to what is a potentially far larger effect on the Treasury.

    The authors of health reform primarily targeted the uninsured and those now buying expensive individual policies. But there's a very large third group that can also enter and that may have been grossly underestimated: the 170 million Americans who currently have employer-sponsored group insurance. Because of the magnitude of the new subsidies created by Congress, the economics become compelling for many employers to simply drop coverage and help their employees obtain replacement coverage through an exchange.

    Let's do a thought experiment. We'll use my own state of Tennessee and our state employees for our data. The year is 2014 and the Affordable Care Act is now in full operation. We're a large employer, with about 40,000 direct employees who participate in our health plan. In our thought experiment, let's exit the health-benefits business this year and help our employees use an exchange to purchase their own.

    First of all, we need to keep our employees financially whole. With our current plan, they contribute 20% of the total cost of their health insurance, and that contribution in 2014 will total about $86 million. If all these employees now buy their insurance through an exchange, that personal share will increase by another $38 million. We'll adjust our employees' compensation in some rough fashion so that no employee is paying more for insurance as a result of our action. Taking into account the new taxes that would be incurred, the change in employee eligibility for subsidies, and allowing for inefficiency in how we distribute this new compensation, we'll triple our budget for this to $114 million.

    Now that we've protected our employees, we'll also have to pay a federal penalty of $2,000 for each employee because we no longer offer health insurance; that's another $86 million. The total state cost is now about $200 million.

    But if we keep our existing insurance plan, our cost will be $346 million. We can reduce our annual costs by over $146 million using the legislated mechanics of health reform to transfer them to the federal government.

    That's just for our core employees. We also have 30,000 retirees under the age of 65, 128,000 employees in our local school systems, and 110,000 employees in local government, all of which presents strategies even more economically attractive than the thought experiment we just performed. Local governments will find eliminating all coverage particularly attractive, as many of them are small and will thus incur minor or no penalties; many have health plans that will not meet the minimum benefit threshold, and so they'll see a substantial and unavoidable increase in cost if they continue providing benefits under the new federal rules.

    Our thought experiment shows how the economics of dropping existing coverage is about to become very attractive to many employers, both public and private. By 2014, there will be a mini-industry of consultants knocking on employers' doors to explain the new opportunity. And in the years after 2014, the economics just keep getting better.

    The consequence of these generous subsidies will be that America's health reform may well drive many more people than projected out of employer-sponsored insurance and into the heavily subsidized federal system. Perhaps this is a miscalculation by the Congress, perhaps not. One principle of game theory is to think like your opponent; another is that there's always a larger game.

    Mr. Bredesen, a Democrat, is the governor of Tennessee and the author of "Fresh Medicine: How to Fix Reform and Build a Sustainable Health Care System," just out by Atlantic Monthly Press.

     


    "Yes, ObamaCare Still Worse Than You Thought." by Bruce Bialosky, Townhall, December 13, 2010 ---
    http://townhall.com/columnists/BruceBialosky/2010/12/13/yes,_obamacare_still_worse_than_you_thought/page/full/

    If you believe that this is going to happen, then you also believe Nancy Pelosi is the tooth fairy. Medicare reimbursements paid to doctors are scheduled to drop 30% over the next three years. Doctors already complain about low Medicare fees – and how it is just a cost shift to private insurance carriers – but it gets worse. By 2019, Medicare fees are scheduled to drop below Medicaid reimbursements, and by 2050 Medicare payments will fall to 50% of the private sector. At these rates, most doctors will undoubtedly opt out of the system, further limiting the access and quality of medical care for senior citizens. Of course, this is all predicated on the revised reimbursement rates actually getting through Congress – which hasn’t happened in any of the last ten years.

    One of the reasons the U.S. Chamber of Commerce opposes repeal is that the bill requires almost all employers to provide health insurance to even out the playing field. That is a mirage. There are penalties for not providing insurance, but they are estimated to be one-sixth of the cost of insurance. Thus, instead of more people having employer-provided insurance, there will certainly be less. The number of employees who will lose their coverage ranges from the Congressional Budget Office (CBO) calculation of 9 million to the estimate of a former CBO Director of 35 million – over 11% of the entire population! More people will be on the government rolls – which is exactly what the Democrats want to happen - as they force-feed us to a single-payer health care system.

    Here is one of the truly spiritual revelations of this plan. Subsidies will be provided to uninsured employees by the government (or their employer) based on the employee’s income. But that would be the employee’s “family income,” not his/her wages. This means that the government will require every employee receiving subsidies to provide a copy of their tax return to their employer or insurance exchange to prove the “family income.” Yes, you read it right – this act not only allows the Department of Health and Human Services to look at your tax return, but it requires insurance exchanges and employers as well.

    You will now have to attach to your tax return proof that you carry health insurance, or suffer penalties if you don’t. Your return will also indicate the amount of your subsidy, and, if God forbid you have previously been paid too much, the Feds will either seize your refund or send you a bill for the difference. It’s easy to foresee lots of money being lost in that shuffle, and lots of people receiving threatening letters from their favorite government agency – the IRS.

    As for the sanctity of marriage, there is none. Because there is already a marriage penalty built into the tax code, you would think that the people who wrote this bill would make sure to avoid the same problem. But no – this plan awards higher subsidies for two single people than one married couple. Yet again the government discourages marriage. Does anyone wonder why 40% of Americans don’t believe in marriage when Washington penalizes it in your taxes and health care?

    The treasure trove of insanity that’s contained in this legislation will ultimately appall and disgust the overwhelming majority of Americans. We clearly remember that this bill was only passed with Congressional shenanigans, bribes to wavering Senators, and the pathetic sellout of the Stupak Democrats, all of whom (except one) are now out of office. We all must work to make sure that those 159 (or 183) agencies don’t ever see a single dollar of funding, don’t ever start hiring a staff, and above all, don’t ever get the opportunity to destroy whatever sense of individuality we have left in this country.

    Note: 222 companies and unions have opted out of ObamaCare, wouldn’t you like to also?

    Continued in article


    "PolitiFiction True 'lies' about ObamaCare," The Wall Street Journal, December 23, 2010 ---
    http://online.wsj.com/article/SB10001424052748703886904576031630593433102.html?mod=djemEditorialPage_t

    So the watchdog news outfit called PolitiFact has decided that its "lie of the year" is the phrase "a government takeover of health care." Ordinarily, lies need verbs and we'd leave the media criticism to others, but the White House has decided that PolitiFact's writ should be heard across the land and those words forever banished to describe ObamaCare.

    "We have concluded it is inaccurate to call the plan a government takeover," the editors of PolitiFact announce portentously. "'Government takeover' conjures a European approach where the government owns the hospitals and the doctors are public employees," whereas ObamaCare "is, at its heart, a system that relies on private companies and the free market." PolitiFact makes it sound as if ObamaCare were drawn up by President Friedrich Hayek, with amendments from House Speaker Ayn Rand.

    This purported debunking persuaded Stephanie Cutter, a special assistant to the President. If "opponents of reform haven't been shy about making claims that are at odds with the facts," she wrote on the White House blog, "one piece of misinformation always stood out: the bogus claim . . ." We'll spare you the rest.

    PolitiFact's decree is part of a larger journalistic trend that seeks to recast all political debates as matters of lies, misinformation and "facts," rather than differences of world view or principles. PolitiFact wants to define for everyone else what qualifies as a "fact," though in political debates the facts are often legitimately in dispute.

    For instance, everyone can probably agree that Medicare's 75-year unfunded liability is somewhere around $30.8 trillion. But that's different from a qualitative judgment, such as the wisdom of a new health-care entitlement that was sold politically as a way to reduce entitlement spending. But anyway, let's try to parse PolitiFact's ObamaCare reasoning.

    Evidently, it doesn't count as a government takeover unless the means of production are confiscated. "The government will not seize control of hospitals or nationalize doctors," the editors write, and while "it's true that the law does significantly increase government regulation of health insurers," they'll still be nominally private too.

    In fact—if we may use that term without PolitiFact's seal of approval—at the heart of ObamaCare is a vast expansion of federal control over how U.S. health care is financed, and thus delivered. The regulations that PolitiFact waves off are designed to convert insurers into government contractors in the business of fulfilling political demands, with enormous implications for the future of U.S. medicine. All citizens will be required to pay into this system, regardless of their individual needs or preferences. Sounds like a government takeover to us.

    PolitiFact is run by the St. Petersburg Times and has marketed itself to other news organizations on the pretense of impartiality. Like other "fact checking" enterprises, its animating conceit is that opinions are what ideologues have, when in reality PolitiFact's curators also have political views and values that influence their judgments about facts and who is right in any debate.

    In this case, they even claim that the government takeover slogan "played an important role in shaping public opinion about the health-care plan and was a significant factor in the Democrats' shellacking in the November elections." In other words, voters turned so strongly against Democrats because Republicans "lied," and not because of, oh, anything the Democrats did while they were running Congress. Is that a "fact" or a political judgment? Just asking.

    As long as the press corps is nominating "lies of the year," ours goes to the formal legislative title of ObamaCare, the Patient Protection and Affordable Care Act. For a bill that in reality will raise health costs and reduce patient choice, the name recalls Mary McCarthy's famous line about every word being a lie, including "the" and "and."


    California Healthcare Foundation: Center for Health Reporting --- http://www.centerforhealthreporting.org/


    "Not Dodging Health Care Law," by Terry W. Hartle and Steven M. Bloom, Inside Higher Ed, November 1, 2010 ---
    http://www.insidehighered.com/views/2010/11/01/hartle 

    Six months after passage of the Affordable Care Act (ACA), health care reform has finally moved off the front pages of America’s newspapers and is no longer the lead story on the nightly news. But below the surface, the controversy and political fights over the issue continue to roil.

    Evidence of that came when higher education was recently drawn into the fight. On August 12, the American Council on Education and several other higher education associations wrote to the Department of Health and Human Services and the White House Office of Health Reform to ask for guidance regarding key ACA provisions to ensure colleges and universities could continue to offer students affordable, high-quality health care plans.

    The response by the news media, spurred by interest groups following the issue, was almost immediate, and in the last few months organizations ranging from The Wall Street Journal to the College Parents of America have mischaracterized our effort as an attempt to carve out an “exemption” or “waiver” from ACA requirements. Some groups have suggested that we actually oppose efforts to enhance the quality of student health plans, while others say we’re only in it for the money.

    They couldn’t be more wrong. Read the letter for yourself.

    First, colleges are not seeking either an exemption or a waiver from the law. Historically, student health plans have operated under federal law as so-called “limited duration plans” because they provide coverage for a specific time period and are neither employer-based group plans nor plans offered on the individual market. These programs are tailored to meet the primary care needs of students as well as additional services such as mental health coverage.

    Each is priced according to the eligible campus population and provide coverage to all eligible students and their dependents, do not vary premiums based on an individual student’s health status, and typically do not impose pre-existing condition exclusions. They are particularly important for international and graduate students. In short, these plans provide coverage that is responsive to the unique needs of the student population.

    While the law specifically states that institutions may continue to offer student health plans, ACA is silent on how the law’s new requirements affect these unique plans. Federal agencies will need to write numerous regulations to implement ACA. Our letter seeks to include among them regulations that clarify how student health plans can continue operating as “limited duration plans” under a structure that incorporates reforms in the ACA -- and not, as some claim, to elude those reforms.

    Specifically, we have asked HHS to provide rules of the road on two key topics:

    We seek answers to these questions now because although many of the reforms in ACA don’t take effect until 2014, a number of institutions will soon be negotiating with insurers for new long-term contracts that will define the benefit coverage of their student health plans through 2014.

    Are we opposing efforts to enhance the quality of student health plans? Absolutely not. In fact, we are following the lead of the American College Health Association, which has a longstanding set of standards to guide colleges and universities in structuring high quality coverage for student health plans. We also believe ACA will inevitably lead to improvements in the quality of student health plans, which is important because while the majority of institutions offer health plans of high quality — some continue to lag behind and must be improved. The key for us is ensuring that the changes brought about by ACA will result in plans that are both high-quality and affordable.

    It is also wrong to characterize our efforts as an attempt to shield a major higher education profit center. The money made off these plans by colleges are modest, and revenue — if any — is returned to campus health centers or used to help maintain stability in the premiums paid by students.

    In short, student plans respond to the unique health insurance needs of undergraduate and graduate students. They provide coverage over a limited time period for students under the age of 26 whose parents are uninsured and nontraditional students who are too old to access their parents’ plans. In some instances, student plans offer better coverage than students can get under parental plans, especially if they’re going to college hundreds or thousands of miles away from their parents’ networks or parental coverage does not adequately cover out-of-network care, making it prohibitively expensive.

    Colleges and universities recognize the importance of ACA’s reforms and want high-quality health insurance options for their students. We are confident we can work with the administration on a constructive solution to ensure students have access to affordable, high-quality health coverage that is consistent with the reforms in ACA.

    Terry W. Hartle is the senior vice president and Steven M. Bloom is the assistant director of federal relations for the American Council on Education.


    "Postponing ObamaCare Second thoughts from the people who sold you reform," by The Wall Street Journal, November 26, 2010 ---
    http://online.wsj.com/article/SB10001424052702304023804575566423288466654.html

    Price controls for private premiums shouldn't cause insurance stocks to rise, so it's notable that the major insurers all gained on the ObamaCare regulations issued in the last week. The news is that the White House and HHS Secretary Kathleen Sebelius are shrinking from the logic of their own reform, at least for a while, in order to minimize the political damage when consumers lose the coverage they have now.

    The latest rule-making—a mere 308 pages—deals with a complex but important accounting concept known as a "medical loss ratio." Starting in January, insurers will have to pay out between 80% and 85% of premiums in direct clinical benefits, while facing an arbitrary cap on profits and administrative costs. Defining what counts as spending on "health care," versus everything else an insurer does, is one more channel for politics to dictate insurance practices.

    The imminent dangers are premium increases and disruption to coverage, especially in the individual market and for innovative plans that don't meet Washington's specifications. Smaller carriers won't be able to hit the targets and will fail, while the larger ones will retire some business or withdraw from states that hurt their balance sheets. Insurers are already pulling back, as shown in September by the overnight nationwide collapse of child-only policies, thanks to the imposition of ObamaCare's "consumer protections."

    But don't take our word for it. The 50 state insurance commissioners—Democrats and Republicans—spent seven months debating these rules and warned HHS in draft recommendations that "consumers will not benefit from higher medical loss ratios if the outcome is destabilized insurance markets where consumer choice is limited and the solvency of insurers is undermined."

    Those recommendations displeased liberals, and some Democrats like Jay Rockefeller of West Virginia were demanding a harsher standard in HHS's final rule. Based on Mrs. Sebelius's rhetoric, and HHS's many interventions in the state deliberations, it seemed as if she might oblige.

    Instead, she loosened the standards in important ways. States can phase in the federal rules and make other adjustments, as long as they get an HHS waiver. Maine, Iowa, South Carolina, Georgia and Florida have already applied, though they're only at the front of the line. Some types of niche insurance will get exemptions too, such as the "mini med" policies that McDonald's and other low-wage businesses offer their workers.

    The White House had to tamp down a national furor after the Journal reported that the medical loss rules would force McDonald's to drop its plans, and no doubt Mrs. Sebelius's sudden leniency is meant to mitigate further political damage as costs rise and consumer choices decline. Yet this is not some Road to Damascus moment. The dispensations last only until 2014, when the subsidies and the rest of the ObamaCare apparatus swing into place.

    The obvious goal is to shield the plan from its own unpopularity until President Obama is re-elected and it is too late to repeal or replace ObamaCare. The goal of medical loss rules is still to change current coverage in favor of the government-approved version. Democrats thought they could blame insurers for every problem flowing from HHS's ObamaCare rules, but perhaps Mrs. Sebelius now realizes that she owns the health-care system, and so her new strategy is to postpone the disruptive pain as long as possible.

     

     

     


    "ObamaCare and Voters:  Clinton and Obama told Democrats it would be popular. Whoops," The Wall Street Journal, October 30, 2010 ---
    http://online.wsj.com/article/SB10001424052702303284604575582394262243272.html?mod=djemEditorialPage_t

    Midterm elections amid a lousy economy are usually bad for the President's party, but it looks as if a neutron bomb may detonate on Democrats in 2010. And one of the major reasons that this year shifted from ordinary losses to potential catastrophe is ObamaCare. This election is a referendum on an entitlement the public never wanted and continues to hate, as evidence from around the country is showing.

    Take almost any poll at random. Even this week's New York Times-CBS poll has repeal leading among likely voters, 47% to 43%. The latest Pew-National Journal survey shows that a majority of likely voters—51%—favors repeal, including 53% of independents. The Real Clear Politics average of all polling shows support for the law at 40.9%—and opposition at 50.6%.

    The Kaiser Family Foundation—whose outlier tracking poll has consistently shown the most ObamaCare support—now reports that only 42% view the law favorably. That's a seven-point drop since September, and it happened to coincide with the start date for the "patients bill of rights," which Kaiser says is among the bill's popular parts. Voters are learning that mandates—like those that allow "children" to remain on their parents' health insurance until age 26—tend to increase costs.

    There are many other such scales-from-the-eyes moments. The New England Journal of Medicine, another outlet for ObamaCare partisans, recently conceded in a "perspective" akin to an editorial that "it seems clear that Americans today have very negative views about the general direction of the country," in large part because of the health bill.

    Speaking of the shock of recognition, there's the case of Earl Pomeroy. The nine-term North Dakota Democrat earned liberal plaudits for his numerous TV ads defending ObamaCare and his vote for it, as well as blasting Republican Rick Berg for ostensibly putting "big insurance first."

    Now Mr. Pomeroy has cut a closing-argument TV spot that begins, "I'm not Nancy Pelosi, I'm not Barack Obama." (This may be the Democratic version of "I am not a witch.") Mr. Pomeroy adds that "I know I've disappointed you with a vote here or there," and while the ad doesn't mention health care, symbolically he's given up defending it.

    Mr. Pomeroy was one of the few Democrats who bothered to run on health care at all. Another was Russ Feingold, who made ObamaCare the centerpiece of his re-election campaign. Yet the Wisconsin Senator continues to trail Republican Ron Johnson, a businessman and political novice who was motivated to enter the race because of the bill. In Washington, Dino Rossi is neck-and-neck with Patty Murray, and the final stretch of his campaign is almost exclusively about health care.

    Even voting against ObamaCare is no guarantee of safety for Democrats. The Cook Political Report notes that the 34 Democrats who bucked their party are all in "lean Republican" or "toss up" races. But the candidates who are doing best are those like Ohio's Zack Space and Massachusetts's Stephen Lynch who voted for ObamaCare last November and then flipped to vote against it this March.

    As for the eight Democrats who switched from nay to aye, they're getting hammered. Democrats may hold only one of these districts—and it's the Cleveland redoubt represented by Dennis Kucinich. Those soon to be collecting 99 weeks of jobless benefits include Betsy Markey (Colorado) and Suzanne Kosmas (Florida), both of whom have been left for dead by the national party, plus John Boccieri (Ohio) and Allen Boyd (Florida).

    In the 92 most-competitive districts that matter for controlling the House, a Wall Street Journal-NBC News poll found that 55% of voters favor the candidate who wants to repeal ObamaCare. Only 42% will vote for candidates who want to keep the law. Opposition is most intense among crucial voting blocks like independents and seniors; those who called the law "very bad" outweighed the "very goods" by 24 to 34 points.

    All this is particularly striking given that the President Obama, Bill Clinton and so many others assured the backbenchers that health care would be a political winner. Now even they have given up trying to spin that false promise, blaming voter hostility on TV ads and, er, the insurance industry that the public supposedly despises. The reality is that voters who oppose ObamaCare are far more knowledgeable about the law and its consequences than most Congressmen who voted for it.

    Republicans must do more to advance a reform alternative to ObamaCare, but no one should mistake the implications of Tuesday's vote. Whatever the results, the public is telling Congress to repeal and replace this bill before it does any more damage.

     


    "Big Insurance, Big Medicine:  ObamaCare is already driving a wave of health-care consolidation—and higher costs," The Wall Street Journal, October 26, 2010 --- http://online.wsj.com/article/SB10001424052748704300604575554293656982422.html?mod=djemEditorialPage_t

    ObamaCare's once and future harms have been well chronicled, but the major effects so far are less obvious and arguably more important: A wave of consolidation is washing over the health markets, and the result is going to be higher costs.

    The turn toward consolidation among insurance companies is not new, and neither is it among doctors, hospitals and other providers. Yet the health bill has accelerated these trends, as all sides race to anticipate and manage political risk and regulatory uncertainty. This dynamic is leading to much larger hospital systems and physician groups, and fewer insurers dominated by a handful of national conglomerates. ObamaCare was sold using the language of choice and competition, but it is actually reducing both.

    The first surge will come among the 1,200 insurers doing business in the U.S., given that a major goal of ObamaCare is to convert these companies into de facto public utilities. Those regulations are now being written—and once they're up and running some medium-sized carriers will collapse under the new mandates and higher overhead. State insurance commissioners warned the Administration this month that "improper or overly strident application . . . could threaten the solvency of insurers or significantly reduce competition in some insurance markets." They also implied that bankruptcies are likely.

    With these headwinds, investors and Wall Street analysts are now predicting a lost decade for health insurance stocks. But it may be more accurate to say that there will be a lot of losers and some very big winners. Mergers and acquisitions will increase dramatically once companies get a better look at the regulation and figure out the valuation of M&A targets. Larger carriers will swallow smaller ones quietly before they fail.

    Both publicly traded and nonprofit insurers have been heading in this direction for years, as in any industry where there are returns to scale. Size is also important in a low-margin business in which capital is costly and political clout vital. But scale is far more central now, because ObamaCare standardizes benefits. Once insurers lose the freedom to design their own products, they'll essentially be selling commodities, and survival will depend on enrollment volume and market share.

    The same thing will happen to stand-alone and community hospitals—always a precarious business. Nearly a third of U.S. hospitals are currently operating in the red and will get steamrolled by ObamaCare, and many of them will be annexed by national chains and larger local systems.

    This trend got a preview two weeks ago when Mercy Health Partners announced that it was seeking buyers for three Catholic hospitals in northeast Pennsylvania. CEO Kevin Cook told local media that ObamaCare was "absolutely" a factor in the decision to sell, only to backtrack once his comments were used in campaign ads against House Democrats Paul Kanjorski and Chris Carney, who voted for the bill.

    Though it received little attention over a year of debate, ObamaCare actively promotes provider consolidation. Writing this summer in the Annals of Internal Medicine, Nancy-Ann DeParle and other White House health advisers argued that "The economic forces put in motion by the Act are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups."

    Ask and ye shall receive. Across the country, providers are building giant hospital systems and much tighter doctor alliances like multispecialty groups to get out ahead of a concept known as "accountable care organizations," or ACOs. To modernize the delivery of medical services, ACOs would encourage doctors to work in teams to use resources more efficiently, streamline treatment and improve quality. The model is the Mayo Clinic and other large integrated systems.

    At the moment ACOs are only a gleam in some bureaucrat's eye, and no one has a clue how they'll operate in practice until the government releases a working regulatory definition next year. Yet the percussive effects are already being felt across medicine.

    Hospitals are now on a buying spree of private physician practices in the rush to build something that will qualify as an ACO. Some 65% of doctors who changed jobs in 2009 moved into a hospital-owned practice, while 49% of doctors out of residency were hired by hospitals, according to the Medical Group Management Association. In its 2010 census, the American College of Cardiology reports that nearly 40% of private cardiology groups are currently integrating with hospitals or merging with other practices.

    Doctors are selling because complying with the ever-growing list of mandates has become more cumbersome; and while staff physicians on salary do gain predictability, they also lose the autonomy of independent practice. The other problem is price controls in Medicare, which are about 20% below private payments for doctors and 30% lower for hospitals. Hospitals are also scooping up practices to lock in referral sources and make up for ObamaCare's Medicare cuts. As it is, two-thirds of hospitals lose money today on Medicare inpatient services, according to Medicare.

    ACOs are also driving consolidation among hospitals. Anecdotally, Marquette General Hospital and Bell Hospital formed a strategic ACO partnership in July that will dominate Michigan's upper peninsula. In Omaha, Methodist Health System and the Nebraska Medical Center recently followed suit. Similar alliances are underway in Detroit, Baltimore, Chicago, greater Boston, Roanoke and southwest Virginia—even Youngstown, Ohio.

    The accountable care movement could do some good if it spreads best practices. But no one should entertain the illusion that it will reduce costs perforce and "bend the curve." In fact, the most concrete effect of this wave of consolidation may be to increase private health spending significantly.

    Unlike Medicare and Medicaid, private reimbursement rates are determined by negotiations, often highly antagonistic. Insurers always attribute premium increases to the underlying cost of care, while doctors and hospitals always argue that there isn't enough competition among health plans. Both claims are "true," some of the time—but it depends on which side has more market power.

    Continued in article


    "How Medicare Killed the Family Doctor:  Low government payment rates became the private-sector benchmark, resulting in fragmented care," by Richard M. Hannon, The Wall Street Journal, November 8, 2010 ---
    http://online.wsj.com/article/SB10001424052748704353504575596140752021042.html?mod=djemEditorialPage_t

    I work for a health-insurance company, and my brother is a primary-care physician. As he tells it, my industry is responsible for the death of his. Insurance companies, he argues, have killed primary care by grinding down reimbursement and compelling doctors to see more and more patients just to make a living.

    I sympathize with my brother, because I know that doctors' business with insurers isn't always easy. I'm also aware of the market's price sensitivity—and reimbursement paid to doctors comes from premiums paid by customers. Insurers must keep costs down.

    Remember Marcus Welby, M.D.? He defined the family doctor on TV in the 1970s, exemplifying the four Cs: caring, competent, confidant and counselor. In the mid-'60s, I remember my father-in-law, a real-life Dr. Welby, telling me the exciting news that the federal government was going to start paying him to see seniors—patients who before he had seen for the proverbial chicken (or nothing at all). That fabulous deal was Medicare.

    Medicare introduced a whole new dynamic in the delivery of health care. Gone were the days when physicians were paid based on the value of their services. With payment coming directly from Medicare and the federal government, patients who used to pay the bill themselves no longer cared about the cost of services.

    Eventually, that disconnect (and subsequent program expansions) resulted in significant strain on the federal budget. In 1966, the House Ways and Means Committee estimated that by 1990 the Medicare budget would quadruple to $12 billion from $3 billion. In fact, by 1990 it was $107 billion.

    To fix the cost problem, Medicare in 1992 began using the "resource based relative value system" (RBRVS), a way of evaluating doctors based on factors such as education, effort and specialized training. But the system didn't consider factors such as outcomes, quality of service, severity or demand.

    Today most insurance companies use the Medicare RBRVS because it is perceived as objective. As a result of RBRVS, specialists—especially those who perform a lot of procedures—do extremely well. Primary-care doctors do not.

    The primary-care doctor has become a piece-rate worker focused on the volume of patients seen every day. As Medicare and insurers focused on trimming the costs of the most common procedures, the income and job satisfaction of primary-care doctors eroded.

    So these doctors left, sold or changed their practices. New health-care service models, such as the concierge practice and the Patient-Centered Medical Home, drew doctors away from the standard service models that most patients rely on for coverage.

    All of these factors have contributed to a fragmented, expensive health system with most of the remaining doctors focused on reactive instead of preventive care.

    The solution to the problem is making primary-care physicians the captains of the ship. They must have the time and financial resources necessary to take care of their patients, tailoring care to patients' specific conditions and needs. And they need the data to track their patients' results, so they can guide patient progress. They will then be able to slow (and sometimes reverse) their patients' illnesses, keeping them out of hospital emergency rooms and specialists' offices. The end result: reduced costs and improved quality of care.

    So who really killed primary care? The idea that a centrally planned system with the right formulas and lots of data could replace the art of practicing medicine; that the human dynamics of market demand and the patient-physician relationship could be ignored. Politicians and mathematicians in ivory towers have placed primary care last in line for respect, resources and prestige—and we all paid an enormous price.

    Mr. Hannon is senior vice president of marketing and provider affairs for Blue Cross Blue Shield of Arizona.


    "Physician Shortage Will Hit Sooner and Be Worse Than Expected, Medical Group Predicts," by Katherine Mangan, Chronicle of Higher Education, November 7, 2010 --- http://chronicle.com/article/Physician-Shortage-Will-Hit/125297/

    The passage of national health-reform legislation means that the projected shortage of physicians will hit sooner and be far worse than medical-education experts were predicting two years ago, according to the Association of American Medical Colleges, which is holding its annual meeting here this week.

    The legislation approved in March is expected to make 32 million more Americans eligible for health coverage and add millions more people to the Medicare rolls. In addition, patients are getting older and sicker, with the over-65 set expected to grow by 36 percent by 2010, according to the U.S. Census Bureau.

    The bottom line, according to the medical colleges' association, is that the nation could face a deficit of about 91,000 doctors in 10 years, and 63,000 by 2015. Those projections are far worse than the shortage the association predicted two years ago, of 39,600 physicians by 2015.

    The association supported the legislation and applauded the expansion of health-care coverage to millions more Americans. But it said it came with a price.

    "This admirable increase in access to care will likely stress an already overburdened health-care system at the same time aging baby boomers will need it most," said Deborah E. Powell, chair of the association and an associate vice president at the University of Minnesota Medical School.

    While primary-care shortages get the most attention, patients could have to wait longer and travel farther to see surgeons and other specialists who are likely to be in short supply.

    The predictions come despite the fact that medical schools have been expanding their class sizes, and new schools have opened in recent years. While the focus of the AAMC is on the allopathic schools it accredits, osteopathic medical schools have been growing rapidly, and a large proportion of their graduates pursue careers in primary care. (Allopathic schools award M.D.'s and osteopathic schools award D.O.'s)

    Among the latest predictions that Scott Shipman, a senior researcher in the association's Center for Workforce Studies, outlined on Sunday are the following:

    Darrell G. Kirch, the association's president, said that medical education has to change, and that educators can't be paralyzed by the "political whiplash" many may be feeling as the result of changing tides of health reform.

    "Too often, we compete with each other to offer the most narrow subspecialties while at the same time we're not meeting the basic needs of people who are living right outside the doors of our medical centers," he said.

    "Insurance coverage has expanded," Dr. Kirch added, "but day to day, we still work with financial incentives that focus more on the total volume of complicated sick care we provide than on well care."

    One conference participant noted that community physicians will be busier keeping up with the growing number of insured people and may balk at taking on the added role of training the next generation of doctors.

    "I'm afraid that fewer physicians will be willing to have medical students in their offices slowing them down," said David M. Krol, senior program officer for the Robert Wood Johnson Foundation, a major supporter of health-care research.

     



     

    Updates on September 30, 2010

    Americans stubbornly resist this landmark legislation in part because virtually every major claim about its benefits is turning out to be false—and people recoil when misled.
    Karl Rove, The Wall Street Journal, September 30, 2010 ---
    http://online.wsj.com/article/SB10001424052748704116004575522073624475054.html?mod=djemEditorialPage_t


    Is Medicare a "Medicare is a good example of a government program that is highly efficient?"

    -----Original Message-----
    From: AECM, Accounting Education using Computers and Multimedia [mailto:AECM@LISTSERV.LOYOLA.EDU] On Behalf Of Peters, James M Sent: Thursday, September 23, 2010 10:37 AM

    To: AECM@LISTSERV.LOYOLA.EDU,
    Subject: Re: accounting basics

    I think it is time to push back against all this anti-government rhetoric that just isn't based on observed evidence. Whether goverments work best or markets work best is a function of the task to be performed and the nature of the product. Governments have proven they can provide better health insurance and health care than the private sector. Medicare is a good example of a goverment program that is highly efficient and spends 97% of your tax dollars on health care while private sector firms spend only 70% to 75% of your premium dollars on health care. Some firms reach 80%, but they are the exception. Government run hospitals in the US are now rated as among the best, if not the best in the nation. The Veterans Hospitals have better records of treatment success and lower costs that the vast majority of private hospitals.

    Market advocates seem to forget free market theory. Free markets only work when certain, rather restrictive conditions are met. Among the most frequently violated are equal power and knowledge among all market participants. Even Adam Smith in the Wealth of Nations advocated a strong role for governments in keeping markets free. When conditions are right, markets work brilliantly. However, (a rhetorical question) how many market in the industrialize world really meet the conditions of truly free markets? My answer is very few.

    Governments do some things much better than markets. The key is recognizing the market conditions that lead to government advantage and letting governments handle those areas. Auditing is a prime candidate for government intervention because of no auditor can truly be objective when they are being paid by the client. The markets cannot function properly in auditing because the true customer, the general public, isn't a party to the transaction. Audits aren't just for the current owners, they are for perpsective owners as well, which means the general public. The general public needs to be represented at the table when auditors are hired.

    The other key is to recognize that governments fail when people fail to be informed voters. All governments, like all markets, are not made equal. Some work better than others. In democracies, the effectiveness of the government is a function of the involvement and knowledge of the electorate. Thus, we are all responsible for our own government's success and failures. The fact that America seems to have a disfunctional government right now is that we have a disfunctional electorate that seems to enjoy mindless shouting matches over informed policy dialog. Other nations don't suffer from this disease.

    Let's all join John Stewart in Washington DC for the "Return Sanity to America" rally. It is a start to building a government that can live up to its potential.

    Jim

    September 23, 2010 reply from Bob Jensen

    Hi Jim,

    If this is your idea of "observed evidence" then I've no hope for you in the academy. For one thing a good academic would be more precise about definitions like “better health care.” For example, some other nations come out “better” in infant mortality because they throw away very premature small babies and don’t count them into survival rates. What does “better” mean in terms of who invents the latest and greatest medications to fight cancer?

    Medicare, for example, is one of the least-efficient government programs that arguably has the worst internal accounting controls of all other government programs except, possibly, the defense program. An "efficient" program would have stellar internal controls preventing fraud and error.

    President Obama repeatedly asserts that "Medicare and Medicaid are largest deficit drivers" ---
    http://www.politifact.com/truth-o-meter/statements/2009/jun/25/barack-obama/obama-says-medicare-and-medicaid-are-largest-defic/

    And Medicare is not a very good example of "government" efficiency since the private sector delivers virtually all the medical services. The Medicare service providers are notoriously inefficient by prescribing billions of dollars in unneeded services, medications, and even non-existent medical equipment.

    I don't care to continue on in the AECM with debates over extreme political dogma since this is truly outside what subscribers expect from the AECM. They wanted to learn more about the PwC re-branding and the future of auditing/assurance services. I doubt that they want to hear a rant about joining a Glenn Beck-bashing by Jon Stewart in Washington DC. Most of us do not support the extremes of Beck or Stewart and certainly do not want the AECM to be a rallying call for either extreme. That is not in the mission of the AECM.

    Also I see no need to censor the other subscribers of the AECM if they happen to disagree with Jim Peterson’s political dogma. Even if I were a Glenn Beck supporter (which I’m not) I would not urge AECM subscribers to join me in Beck’s big Washington DC rally (where you would never find me).

    It’s a free country, and I suspect you will be among the Glenn Beck bashers at Jon Stewart’s rally for liberals. But I don’t think you should plead with AECM subscribers to join you in this political burning of Beck’s book.

    Bob Jensen


    "Cash-Poor Governments Ditching Public Hospitals," by Suzanne Satalite, The Wall Street Journal, August 29 , 2010 ---
    http://online.wsj.com/article/SB10001424052748703618504575459823259071294.html?mod=ITP_pageone_2

    Faced with mounting debt and looming costs from the new federal health-care law, many local governments are leaving the hospital business, shedding public facilities that can be the caregiver of last resort.

    Officials in Lauderdale County, Ala., this spring opted to transfer their 91-year-old Eliza Coffee Memorial Hospital and other properties to a for-profit company after struggling to satisfy an angry bond insurer.

    "We were next to knocking on bankruptcy's door,'' said Rhea Fulmer, a Lauderdale County commissioner who approved the deal with RegionalCare Hospital Partners, of Brentwood, Tenn, but with trepidation. She said the county had no guarantee the company would improve care in the decades to come. "Time will tell.''

    Clinton County, Ohio, in May sold its hospital to the same company. Officials in Kenai Peninsula Borough, Alaska, are weighing a joint venture with a for-profit company, similar to one the same company made with Bannock County, Idaho. And Prince George's County, Md., is seeking a buyer for its medical complex.

    More than a fifth of the nation's 5,000 hospitals are owned by governments and many are drowning in debt caused by rising health-care costs, a spike in uninsured patients, cuts in Medicare and Medicaid and payments on construction bonds sold in fatter times. Because most public hospitals tend to be solo operations, they don't enjoy the economies of scale, or more generous insurance contracts, which bolster revenue at many larger nonprofit and for-profit systems.

    Local officials also predict an expensive future as new requirements—for technology, quality accounting and care coordination—start under the overhaul, which became law in March.

    Moody's Investors Service said in April that many standalone hospitals won't have the resources to invest in information technology or manage bundled payments well. Many nonprofits have bad credit ratings and in a tight credit market cannot borrow money, either. Meantime, the federal government is expected to cut aid to hospitals.

    "We've been hit by that whiplash recently, with industries closing down and the number of insured growing less," said J.D. Mosteller, the attorney for Barnwell County, S.C., which is considering selling its hospital.

    The county has raised property taxes in recent years to bolster the hospital, which spends more than $1 million just to pay emergency-room physicians, he said. "We're a county government. We're not set up to run a nursing home or hospital.''

    Experience WSJ professionalEditors' Deep Dive: Hospitals Fight Rising CostsDOW JONES NEWS SERVICE Hospitals Work to Lower ReadmissionsCrain's New York Business Soaring Cancer-Care Costs Strain BudgetsThe Atlanta Journal - Constitution Health-Care Facilities Offer Check-In KiosksAccess thousands of business sources not available on the free web. Learn MoreSales and mergers of public hospitals are hard to quantify; the country had 16 fewer government-owned hospitals in 2008 than 2003, says the American Hospital Association, the result of sales, closings or transfers.

    Health-care consultants and financial analysts say the pace of all hospital sales is picking up at a rate not seen since the 1990s, the dawn of managed care. James Burgdorfer, a partner with investment banker Juniper Advisory LLC in Chicago, said most public systems would end in the next two decades because the industry has become too complex for local politicians. "By the nature of their small size, their independence and their political entanglements, they are poorly equipped to survive,'' Mr. Burgdorfer said.

    During the five-year period that ended Dec. 31, 2009, $52 billion was used to fund hospital mergers and acquisitions of all types, says Irving Levin Associates of Norwalk, Conn., which tracks health-care deals. This amount exceeds by 140% the total amount of capital committed to fund hospital deals announced in the prior five-year period.

    In the first half of 2010, there were 25 deals involving 53 hospitals that were bought or merged, for a total of $3.1 billion, according to Levin Associates. If deals continue apace, it would be the busiest time since 2007, when there were 58 deals involving 149 hospitals totaling $9.3 billion.

    Public and nonprofit hospitals—the latter of which represent three-fifths of all U.S. hospitals and are sometimes affiliated with a religious denomination—can be appealing targets for private operators, which are betting that the new federal law will eventually yield more paying, insured customers.

    Chip Kahn, president and CEO of the Federation of American Hospitals, a trade group for chains that own nearly 1,000 for-profit hospitals, said his industry tends to run operations more efficiently, while adding capital.

    Most sales include stipulations that the companies keep services, he said. "You've got to provide the array of services that the community expects," he said. "Otherwise you're not going to get the consumers using them.''

    Still, skeptics worry that in the hunt for healthy returns, the for-profits will kill expensive programs and close hospitals with poor revenue. Residents in many towns have fretted over the blow to their civic pride and the loss of their history.

    The nation's public hospitals rose in different ways. Some were built with philanthropic donations and were sick houses for society's poorest. Many in the west and south rose through loans and grants made possibly by the Hill-Burton Act of 1946. In exchange, public hospitals provide a large amount of free and reduced-priced care. Some are academic medical centers. Many suburban and rural public hospitals provide care to all members of the community, rich and poor.

    Continued in article


    "Big Foot on Campus Why colleges want a waiver from ObamaCare," The Wall Street Journal, August 26, 2010 ---
    http://online.wsj.com/article/SB10001424052748703632304575451710632099560.html#articleTabs%3Darticle

    In the movie "Animal House," the hilariously loathsome Dean Wormer announces a pointless campus crackdown with the classic line, "The time has come for someone to put his foot down. And that foot is me." Democrats seem to have had a similar inspiration and targeted student health insurance in ObamaCare.

    Along comes word that the bill "could make it impossible for colleges and universities to continue to offer student health plans." That's how the American Council on Education and a dozen other higher-ed lobbies put it in a recent letter to the Obama Administration, warning that the insurance coverage they offer may get junked by ObamaCare's decrees.

    Between 4.5 million to 5.5 million students annually are insured by short-term plans sponsored by their schools, which are tailored to upperclassman who have aged out of their parents' coverage or to international and graduate students. These plans are very low cost because the benefits are designed for generally healthy young people and often organized around campus health services and academic medical centers.

    All of which means these plans aren't likely to qualify under ObamaCare's "minimal essential coverage" rules that mandate rich benefit packages, even if colleges have the flexibility to make exceptions for special needs. And given that insurance must now be sold anytime to everyone, colleges may be required to continue to cover students after they've graduated—leaving this type of coverage unaffordable.

    It doesn't help that the regulations governing student health plans are as carelessly written as the rest of the bill, and the uncertainty is holding up insurance contracts and plan design for the coming academic year. Not surprisingly, the colleges are asking federal regulators for a blanket ObamaCare waiver. (Can everyone else apply too?)

    All of this is no accident. The liberals who wrote the bill despise these campus health plans because they think every plan in the country should be designed in Washington and have been calling for a regulatory crackdown for years. Other Democrats probably had no clue about these rules, even as they voted for a bill that was so large and convoluted that no one could truly understand it. Either way, count this as another of ObamaCare's really futile and stupid gestures, with many more to come.


    "The Future of Our Health Care System," by Bruce Bialosky, Townhall, August 30, 2010 ---
    http://townhall.com/columnists/BruceBialosky/2010/08/30/the_future_of_our_health_care_system

    Michael D. Tanner of the Cato Institute has just written a pamphlet entitled Bad Medicine. It’s a comprehensive analysis of the Patient Protection and Affordable Care Act (ObamaCare). When you read it, you quickly begin to wonder where the health care system in this country might be headed. One company has already staked out its vision, and just might be establishing the model that all of us will be using in the years ahead.

    Les Bider was seeking a new opportunity. He had worked his way up to serving as Chairman and CEO of Warner Chappell, the music publishing end of the record business. The company was sold in 2003, but Bider stayed on through 2005 to run operations for the new owners. After leaving Warner, he kept busy with charitable interests and his family until January, 2008, when he decided he again wanted to do something professionally. But he wanted the right thing because his desire to get involved professionally was more a want than a need.

    Within a month, he happened upon PinnacleCare. Bider put his money where his mouth was by investing in the company before he started working with them. Then after some thoughtful analysis and a series of meetings, he decided that he wanted to jump in and became the CEO.

    PinnacleCare confronts the complexity of today’s health care system on behalf of its members. The three major aspects of the program that it provides for its members are 1) Simplification of the ever-more-complex health care system, 2) High-level analysis of their personal health, and 3) Notification of the most up-to-date tests and procedures to maintain good health.

    The program does this by providing objective third-party advice. They focus on wellness and health care episodic events. If you have a health problem, the company informs you of the best place to get care by analyzing the quality of available health care providers and determining the physician best suited to meet your specific needs. They do what the industry has been missing for years – evaluate the performance of hospitals and doctors. This is where they clearly separate themselves from their competitors, who function more as a referral service without any substantial evaluation.

    They start by computerizing your records, and then having a third-party doctor analyze your complete health picture. Depending upon the findings, along with personal factors such as age and family history, tests or procedures are identified that may help maintain or improve your health. In effect, they provide a manager responsible for creating a comprehensive health care program tailored to you.

    PinnacleCare then adds a wide-ranging set of services, including travel medical insurance, travel intelligence reports, medical evacuation services (in case you have to get treatment at a critical care center), medical intelligence reports that evaluate doctors, locations of medical centers of excellence and their specialties, along with access to medical advisory boards.

    This service does not come cheaply and not all of these services are included in their most basic program. Their basic program for the first year, when the initial analysis is done, costs $5,000 per couple. The second year, the price drops to $2,500. Costs for more comprehensive packages go up from there. Yet they have already enrolled 3,000 members, 90% of whom are American. They have not fully adapted their program to handle changes in the health care system imposed by ObamaCare, but they will make adjustments as they feel it necessary.

    Mr. Bider told me that for now, his company would not be going after a larger market by creating a more affordable product. But he does believe that as the company becomes more successful, an entrepreneur will eventually come in and create a similar, but less expensive service. The need for individuals to manage their own health, combined with an ever more complicated health care system and increasingly sophisticated medical procedures, will compel people to do more than just visit their primary care physician for an annual checkup.

    The Obama administration wants to take ever greater control over our health care system and create an equality of results for all Americans. As they attempt to dictate our health care options, people will fight back by enlisting companies like PinnacleCare to put them back in charge of their own fate. It has been said many times that “if you don’t have your health, you ain’t got nothing.” Your choice may come down to a faceless bureaucrat or companies like PinnacleCare. Mr. Bider is betting you make the same choice he has made.

     


    "ObamaCare's Hotel California The state moves to impose price controls you can never leave," The Wall Street Journal, September 28, 2010 ---
    http://online.wsj.com/article/SB10001424052748703556604575502160531647630.html?mod=djemEditorialPage_t

    California, the novelist Wallace Stegner famously wrote, is like the rest of America, only more so—meaning that wherever the country is headed, the Golden State is probably there already. So the state's ObamaCare advance planning deserves closer scrutiny, given that it mirrors the regulatory and ideological model that the White House favors for everyone else.

    In a matter of days, California will set a precedent for the future of the U.S. individual and small-business insurance markets via ObamaCare's "exchanges," where people will purchase coverage at heavily subsidized rates. The exchanges don't start up until 2014, but the states were given wide bureaucratic latitude in how they're run, and Sacramento is using this flexibility to convert them into a pretext for imposing de facto price controls on the insurance industry.

    That may be what Democrats had in mind when they passed the bill, but it's particularly unfortunate because in principle exchanges could be a useful reform. States could sponsor transparent, neutral clearinghouses that compare costs and benefits among plans, encouraging insurers to compete to offer the products that consumers find most valuable. An exchange could operate much like travel websites such as Expedia.com, and a good one along those lines started in Utah last year.

    California looked further east for inspiration—to Massachusetts, which has the only other exchange in the country. Known as the connector, it's the centerpiece of the ObamaCare beta test that Mitt Romney passed in 2006 and is now the power center of the state's public utility-style insurance regulation. In the daisy chain of "expertise" that is the health policy world, California's regulations were shaped by Jon Kingsdale, a devout White House ally who used to run the Massachusetts connector and is now a consultant.

    The most dangerous precedent in the California plan is known as "selective contracting." Under ObamaCare, all benefits will be mandated and standardized at the federal level, so all individual and small business plans will be essentially identical except at the margins. Those margins include their brand names, the hospital-doctor networks they've set up, the size of their book of business as pricing leverage and so forth.

    In theory, then, all plans that meet ObamaCare's minimum standards should be allowed onto the exchanges. But in California, a five-member board of political appointees will pick winners and losers. If an insurer wants entrée to the pool of subsidized individuals and businesses with fewer than 50 employees—and of course all of them do—they'll have to genuflect to whatever dictates this board happens to decree.

    Selective contracting will allow the state to "negotiate" more favorable terms, the preferred euphemism for industrial policy. The result in practice will be submarket price controls. As a condition of admittance insurers will also have to justify their premium levels and rate changes over time. Plans will still be allowed to sell outside the exchange, but in practice almost all consumers will gravitate to the exchange because of the subsidies.

    This is clearly the template the Obama Administration favors. Heath and Human Services Secretary Kathleen Sebelius recently warned the insurance industry that there would be "zero tolerance" for political misbehavior or "unreasonable" premium increases, which means anything Ms. Sebelius deems too expensive. To run the HHS exchange department, Ms. Sebelius has tapped Joel Ario, formerly the Pennsylvania insurance commissioner and a caustic industry opponent. Mr. Ario was last heard demanding that Keystone State insurers "cleanse"—that is, lower—their premiums as a kind of pre-ObamaCare indulgence for purported sins.

    The California plan passed the legislature in August with the support of soon-to-depart Governor Arnold Schwarzenegger, who will sign them before the end of the month. The overwhelming sentiment among the authors we spoke with is that the brute force of limiting the number of plans will lower costs. "The only way to drive price, to drive value, is the power to say no," as one of them told us.

    In other words, less competition is the best way to drive down costs. The irony is that the California insurance market today functions reasonably well because consumers have plenty of choices. By historical accident—the political left that dominates Sacramento is preoccupied with single payer and has killed incremental proposals—state regulatory authority is divided between two state agencies, one loaded with mandates, and the other loosely regulated. Naturally, the second group has climbed to 91% of the small-business market and 48% of the individual one.

    In April, the lame-duck Mr. Schwarzenegger cheered on this process, claiming that "California always leads the way, we all know that . . . California is the incubator state. It provides the ideas and the hard work. It all starts right here." Alas, he's right.

    Updates on August 31, 2010

    "Go To the Back of the CLASS," by Ed Feulner, Townhall, August 17, 2010 ---
    http://townhall.com/columnists/EdFeulner/2010/08/18/go_to_the_back_of_the_class

    In Washington, politicians often give their bills clever names designed more to obscure than to reveal.

    Consider the CLASS Act. It sounds like yet another federal attempt to meddle in local schools. Instead, it stands for “Community Living Assistance Services and Support.”

    CLASS was a little-noticed part of the massive Obamacare bill that the president signed in March. It’s supposed to provide affordable long-term care insurance to American workers. In reality, it creates another entitlement likely to increase our exploding federal deficit.

    Starting next year CLASS is scheduled to begin enrolling people and collecting premiums. If CLASS was a normal insurance program, it would invest these premiums to build reserves. These reserves would later be tapped to provide benefits for those individuals in need of long-term care services.

    But CLASS doesn’t work that way.

    Similar to Social Security, all premiums that CLASS collects will be spent immediately. Its trust fund will be filled with government IOUs. Since participants need to pay five years of premiums before they’re eligible to collect any benefits, a sizeable amount of short-term revenue will be raised from CLASS. This aspect was especially useful when lawmakers were trying to find tricks to reduce the projected cost of Obamacare. By including the revenues from CLASS, politicians were able to pretend they’d reduced the cost of the bill by $70 billion.

    But even Uncle Sam can’t spend your money twice. It’s impossible to spend the money today on government programs and invest the money to fund eventual benefits.

    Eventually 2017 will arrive. That’s when CLASS starts paying benefits. It’s difficult to predict how soon after that the program would dive into the red and pay out more in benefits than it collects in premiums. Actuaries at the Centers for Medicare & Medicaid Services estimate it could be as soon as 2025.

    Continued in a

    "Say NO to Government Subsidies For Frivolous Litigation," by Lisa A. Ricard, Townhall, October 6, 2010 ---
    http://townhall.com/columnists/LisaARickard/2010/10/05/say_no_to_government_subsidies_for_frivolous_litigation

    Taxes are a major topic of debate in Washington right now. Faced with a massive federal deficit, some politicians have proposed raising taxes on individuals and businesses, despite the obvious negative effects of tax increases on economic growth and job creation. Yet at the same time, some in Washington are actually considering the creation of a new special interest tax break that will hurt economic growth, increase the deficit and fuel increased civil litigation.

    The plaintiffs' bar and its allies in Congress and the administration are pushing for the adoption of a nearly $1.6 billion tax deduction for trial lawyers who take contingency fee cases. This proposed deduction would essentially provide a U.S. government subsidy to plaintiffs' lawyers to increase the number of frivolous lawsuits.

    For several years, the plaintiffs' bar has been attempting to push this proposed tax break through Congress. With Congress so far unwilling to act, plaintiffs' lawyers have decided on a new approach and are now aggressively lobbying the Treasury Department to bypass Congress and create the deduction through administrative action.

    The tax deduction would impose direct costs on the federal government and American taxpayers. According to the Congressional Budget Office, this trial lawyer subsidy would cost nearly $1.6 billion over ten years, all during a time of record federal deficits.

    But these direct costs represent just a fraction of the proposal's potential damage. The contingency fee tax break would, in effect, subsidize ever more costly, frivolous litigation against American businesses. By some estimates, the tax deduction could subsidize as much as 40 percent of the initial plaintiffs' expenses for certain cases. With the federal government paying for such a large percentage of the up-front costs of lawsuits, plaintiffs' lawyers will be emboldened to take on the most speculative and frivolous litigation.

    And in these troubled economic times, the last thing America needs is more frivolous lawsuits. As a percentage of gross domestic product, the United States spends more than twice as much on litigation as any other industrialized nation, a cost that reached $254.7 billion in 2008 according to a report by Towers Perrin.

    Continued in article

     


    "How Seniors Will Pay for ObamaCare In many areas, Medicare Advantage enrollees will lose about one-third of their health insurance benefits. The cuts will finance new subsidies for younger people," by John Goodman, The Wall Street Journal, September 23, 2010 ---
    http://online.wsj.com/article/SB10001424052748704129204575505804034634066.html?mod=djemEditorialPage_t

    Today marks the six-month anniversary of the enactment of the Patient Protection and Affordable Care Act, widely known as ObamaCare. It is a day when the first significant round of benefits kicks in, and the Obama administration is taking every opportunity to tout them to the American public.

    Insurers, we are being told, will no longer be able to impose annual limits or lifetime caps on benefits, and they will face a higher standard before than can drop anyone's coverage. Children will be guaranteed access to insurance, regardless of health condition. And there is more to come in the future.

    Yet the administration is strangely silent about who will bear the cost of these benefits. Search the government's own health-reform website and you'll get the idea that the whole thing is one big free lunch.

    The reality is that the cost of ObamaCare will be quite high for some people. By 2017, thousands of people in Dallas, Houston and San Antonio will be paying more than $5,000 a year in lost health-care benefits to make ObamaCare possible, according to a study published this month by Robert Book at the Heritage Foundation and James Capretta at the Ethics and Public Policy Center. For some New York City dwellers, the figure will exceed $6,000 a year. Unfortunate residents of Ascension, La., will pay more than $9,000 in lost benefits.

    Who are these people? Are they the rich and the comfortable—the folks presidential candidate Barack Obama told us could afford to pay for health reform? Are they people who have excessively profited during a recession that's caused hardships for so many? Are they the ones who gained the most from the Bush tax cuts?

    None of the above. According to the Book/Capretta study, the people getting hit with these very expensive tabs live in predominately low-income households. They are disproportionately minorities. They have trouble paying their own medical bills.

    These are the enrollees in Medicare Advantage plans, health plans operated by private insurers (Cigna, Aetna, United Health, etc.) that provide extra benefits to the elderly and the disabled on top of standard Medicare coverage. The price they will pay for health reform will be a double whammy: less spending on Medicare coupled with reduced subsidies for their Medicare Advantage plans. In many areas, Medicare Advantage enrollees will lose about one-third or more of their health-insurance benefits.

    Despite its popularity, conventional Medicare is actually a lousy health-insurance plan. It doesn't cover most drugs and it leaves beneficiaries exposed to thousands of dollars in potential out-of-pocket expenses. To protect themselves, most seniors purchase additional coverage known as "Medigap" insurance (either from an employer or purchased directly) and buy drug coverage (Medicare Part D) as well.

    Many low-income seniors, however, have trouble paying three premiums to three plans, and all too often they find a decent Medigap plan unaffordable. For these retirees (about one in every four Medicare beneficiaries) Medicare Advantage plans have been a godsend. They have been able to enroll in comprehensive health plans that resemble the coverage many nonseniors have—often with no extra premium.

    The hostility of the White House and many congressional Democrats toward these health plans is hard to explain. Ostensibly, they do everything President Obama says he wants to accomplish with health reform. They provide subsidized coverage to low- and moderate-income people who could otherwise not afford it. They have no pre-existing condition limitations, and some plans actually specialize in attracting and caring for patients with multiple illnesses. They provide an annual choice of plans.

    On measures of quality and efficiency, they also score well. According to a study published in June by America's Health Insurance Plans (a trade group that represents Medicare Advantage insurers):

    • Medicare Advantage enrollees had 33% more doctor visits (presumably representing more primary care), yet experienced 18% fewer hospital days and 10% fewer hospital admissions than conventional Medicare patients.

    • They had 27% fewer emergency-room visits, 13% fewer avoidable admissions, and 42% fewer readmissions.

    Other studies report similarly impressive results.

    This is not to say that the Medicare Advantage programs could not be improved. Right now, almost all the enrollees are in HMOs. Very few have a health savings account plan. And there is no practical way for the chronically ill to manage their own budgets. By contrast, the Medicaid disabled—as part of pilot programs that have been in force for a decade—can hire and fire the people who provide them with services, and use any money they save to purchase other medical care.

    Some complain that the government has been paying Medicare Advantage plans about 13% more than what would have been spent under conventional Medicare. This is partly explained by the influence of members of Congress who represent rural areas that would not otherwise be able to support these plans. In any event, these "overpayments" allow members to get about $825 in extra benefits each year, including lower out-of-pocket payments and better coverage for drugs, preventive care, and chronic disease care.

    According to a report published in April by the administration's own Medicare Office of the Actuary, about 7.4 million people who would have been enrolled in Medicare Advantage plans in 2017 will lose their coverage completely. Those who are able to retain their coverage will lose significant benefits. These cuts are financing lavish subsidies for health insurance for young people at about the same income level as the seniors who are being penalized.

    To those economic libertarians who view this as an entitlement wash, don't be misled. Many of the seniors losing their health plans will enroll in taxpayer-funded Medicaid, in addition to Medicare. The rest will be on the steps of Capitol Hill in the near future asking to have their benefits reinstated.

    Mr. Goodman is president, CEO and a fellow at the National Center for Policy Analysis.

     

     


    Updates on July 29, 2010

    Video:  Steve Wynn Takes On Washington  --- http://www.infowars.com/steve-wynn-takes-on-washington/

    "The Bitter Fruit of Obamacare." Floyd and Mary Beth Brown, Townhall, July 16, 2010 ---
    http://townhall.com/columnists/FloydandMaryBethBrown/2010/07/16/the_bitter_fruit_of_obamacare

    Get ready for your life to change. The so-called benefits of ObamaCare don't start until 2014, but the tax increases, misallocated resources and federal regulations start now.

    Speaker Nancy Pelosi famously said the night of ObamCare's passage, "We have to pass the bill so that you can find out what is in it ." The emerging picture is frightening.

    ObamaCare dramatically alters the already-overregulated health insurance market. The federal government will now manage your health care decisions. The law creates a maze of mandates, federal directives, price controls, tax increases and subsidies.

    We all begin paying ObamaCare taxes this year. The law includes at last count at least 19 new taxes. As Americans begin to reap the personal financial burden of Obamacare, the movement to repeal it is mounting.

    Individuals must pay an annual penalty of $695, or up to 2.5 percent of their annual income, if they don't purchase an approved health insurance plan. Penalties on families include an annual penalty of $347 per child, up to $2,250 per family, if parents don't purchase an approved policy.

    Most of us have heard about the penalties on employers. Business owners must buy a government -approved health plan or pay a penalty of $2,000 per employee if they have 50 employees or more.

    Investors get whacked hard. ObamaCare imposes a 3.8 percent tax on investment income for individuals making $200,000 or more and on families making $250,000 or more. The investment tax is not indexed for inflation, so as time passes more people will be expected to pay. Seniors on fixed incomes and pensioners with IRAs and 401(k) plans will be hit hard.

    The so-called "Tax on 'Cadillac' health plans" imposes a 40 percent tax on health care plans valued at $10,200 for individuals and $27,500 for families.

    Medicare taxes are climbing up, too. The bill requires single people earning $200,000 or more and couples earning $250,000 or more to pay an additional 0.9 percent in Medicare taxes.

    Thinking about downsizing or buying a new home? There are new taxes on home sales tacked on the bill. ObamaCare imposes a 3.8 percent tax on home sales and other real estate transactions. Almost every homeowner qualifies as "rich" for one day, the day they sell their house.

    Taxes on medical devices will also be going up to 2.9 percent under ObamaCare.

    And we can't forget the new 10 percent tax on tanning.

    ObamaCare empowers the IRS for enforcement. The IRS is hiring 16,500 new enforcement officials. The IRS will confiscate tax refunds, place liens on property and seek jail time if healthcare penalties and taxes are not paid.

    Continued in article


    "National Health Service: It's Coming to America," by Cal Thomas, Townhall, July 28, 2010 ---
    http://townhall.com/columnists/CalThomas/2010/07/29/national_health_service_its_coming_to_america

    Senate Majority Leader Harry Reid told a group of liberal activists meeting in Las Vegas they shouldn't worry about not getting the single-payer provision in the new health care law. "We're going to have a public option," Reid said. "It's just a question of when."

    Remember the objections conservatives and many Republicans raised during the debate about government-run health care and the danger of eliminating private health insurance, despite its many flaws? Recall that Britain's National Health Service (NHS) was frequently cited as an example of where the U.S. health system might be headed: coverage for all, but with lower quality, long waits for major surgery and denial of care when the government decides the procedure is not "cost effective".

    Anyone who believes a U.S. health care system based on the NHS model can somehow fare better than Britain's had better consider this recent headline and story from London's Sunday Telegraph: "Axe Falls on NHS Services; Hip operations, cataract surgery and IVF rationed; Cancer care, maternity, pediatric services at risk."

    Rationing? Oh yes, and it is something the unconfirmed, recess-appointed U.S. health care czar, Donald Berwick, strongly favors.

    British government leaders had promised to protect frontline services. The Obama administration also made similar promises in order to win enough support from members of Congress, most of whom never read the bill before they voted for it.

    Here's what America can look forward to if it follows the NHS model, according to an investigation by the Sunday Telegraph: "Plans to cut hundreds of thousands of pounds from budgets for the terminally ill, with dying cancer patients to be told to manage their own symptoms if their condition worsens at evenings or weekends." Never has "take two aspirin and call me in the morning" sounded more callous.

    Nursing homes for the elderly would be closed, the number of hospital beds for the mentally ill reduced and general practitioners would be discouraged from sending patients to hospitals. Accident and emergency department services would also be cut.

    Thousands of jobs would be lost at NHS hospitals, reports the Telegraph, "including 500 staff to go at a trust where cancer patients recently suffered delays in diagnosis and treatment because of staff shortages." Katherine Murphy of the Patients Association called the cuts "astonishingly brutal." She expressed particular concern at attempts to ration (that word again) hip and knee operations. "These are not unusual procedures," she said. "This is a really blatant attempt to save money by leaving people in pain.

    What do politicians care about that? In Britain, as in America, top officials (including Berwick who has lifetime health coverage given to him by the Institute for Health Care Improvement) will always have access to the best care, even while they decide the rest of us cannot.

    This paragraph in the Telegraph story should send chills down the spine of every American: "Doctors across the country have already been told that their patients can have the operations only if they are given 'prior approval' by the Primary Care Trust, with each authorization made on a 'case by case' basis."

    When cost, rather than the value of life becomes supreme, rationing will inevitably lead to other cost-cutting policies. And yes, despite protestations from those who favored Obamacare that "death panels" would not be part of the equation, you can count on them. They will, of course, be called something else. We wouldn't want to disturb any remaining moral sensibilities we might have.

    Continued in article


     

    Updates on July 17, 2010

    "The Coming Obamacare Deficits," by David Gratzer, Townhall, July 15, 2010 ---
    http://townhall.com/columnists/DavidGratzer/2010/07/15/the_coming_obamacare_deficits

    On a quiet Friday afternoon this summer, the central justification for President Obama’s health-care overhaul died a quiet death. On that day, a bipartisan coalition in Congress reversed the scheduled Medicare cuts to physician payments, ensuring that, over the next decade, the White House’s reforms will cost many billions more than advertised. After over a year of debate and lofty rhetoric, the reality is this: the president’s goal of “bending” the health-care cost curve has unraveled in just a few months.

    The president and his supporters argued that we need ObamaCare in order to tame the federal budget deficit. When he signed the bill into law, the president touted the importance of the legislation in reducing long-term deficits. Democrats cited Congressional Budget Office scoring showing that the health legislation would reduce the deficit over ten years to the tune of roughly $130 billion. But that was back in March.

    In May, the CBO released its quantitative analysis showing that discretionary spending not accounted for in the previous scores would cost $115 billion. The CBO director himself expressed significant doubts about potential deficit reduction. Speaking to the Institute of Medicine, he said: “Rising health costs will put tremendous pressure on the federal budget during the next few decades and beyond. In CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.”

    That brings us to the quiet Friday afternoon of June 25. By cancelling scheduled Medicare cuts, the president and his Congressional allies have made the fiscal problem even worse: Not only do those fiscal problems remain, but White House reforms meant to address them will push net federal-government health expenditures further into the red. Any notion of fiscal balance has been lost.

    Yet cancelling these scheduled Medicare cuts is nothing new. Time and again, Republican and Democratic leaderships in Congress have haphazardly voted to undo scheduled cuts.

    Congress reversed planned Medicare physician cuts in 1999—and 2004, 2005, 2006, and 2008. In fact, since 1997, when members of both parties agreed to automatic cuts if spending rose faster than population and economic growth, the program has been cut just once, in 2002. Maybe it’s the pressure of the doctors’ lobby. Maybe it’s the seniors’ lobby. Maybe it’s both.

    And this Democratic Congress has been no better. In fact, just months after passing Obama’s health-reform legislation, Democrats vigorously and successfully pushed to postpone the Medicare cut until November (they had previously voted to delay it from April to June 2010).

    More worrisome is this: in liberal circles, it’s popular to argue that Congressional efforts to control Medicare costs under the Sustainable Growth Rate (SGR) formula have been overly successful. James R. Horney and Paul N. Van de Water make exactly this point in a publication for the liberal Center on Budget and Policy Priorities. They write: “Even though Congress did not allow the full cuts required under the SGR formula to take effect, it has still cut the physician reimbursement rate substantially – at its current level, the reimbursement rate in 2010 will be 17 percent below the rate for 2001, adjusted for inflation.” Picking up on this point, Paul Krugman recently argued that Medicare has been historically very successful at reigning in costs. But praising Medicare cost containment in a time of heavy health-care cost inflation is like praising Lehman Brothers for making good investments in Latin America when the market for subprime mortgages was imploding.

    Let’s put this in perspective: health inflation was 3.4 percent last year, just over double the basic inflation rate. Tellingly, the worst cost increases were experienced by Medicare (costs were up 8.6 percent), and Medicaid (9.9 percent).

    Unfortunately, the White House and Congress squandered a great opportunity to bend the cost curve downwards, opting instead for the status quo. The quiet congressional vote in June shows how far the administration has strayed from its reform rhetoric. If we are ever to reign in health care spending, we need leaders who will make tough choices and tough cuts. Their rhetoric must become reality.

     


    "What Difference Has RomneyCare Made?" by John C. Goodman, Townhall, July 9, 2011 ---
    http://townhall.com/columnists/johncgoodman/2011/07/09/what_difference_has_romneycare_made

    . . .

    On paper, it looks as though the state has made major progress in insuring the uninsured. From 6.4% of the population in 2006, the uninsured hover around 2% today. However, one study found that nearly all of the newly insured are either on Medicaid, in a state-subsidized plan or in an employer subsidized plan. Only 7% of the newly insured, or about 30,000 people, are directly paying their own way. It’s relatively easy to get people to sign up for insurance when coverage is free or almost free. And it’s not very expensive if you pay for the subsidies using money you would have spent anyway on free care for those who can’t pay their medical bills.

    But aside from moving money from one bucket to another, have any real problems been solved? The evidence isn’t positive.

    There are three major problems in health care all over the world: cost, quality and access. Since nothing in the Massachusetts reform addressed the problems of rising costs and less than adequate quality, those problems have remained more or less unchanged. What about access to care? Surely, newly insured people have more options in the medical marketplace.

    The trouble is that almost all of the newly insured are in health plans that pay doctors and hospitals a lot less than what private insurance pays. Like other places around the country, Massachusetts Medicaid (called MassHealth) pays providers so little that patients often turn to hospital emergency rooms and community health centers for their care when they can’t find doctors who will see them. People in the newly subsidized private insurance plans aren’t faring much better because these plans pay only slightly more than what Medicaid pays.

    The only solid analysis of what has actually happened to patients at this point is a study by Sharon Long and Paul Masi published in the journal Health Affairs. According to the study:

    • There has been no significant change in the number of Massachusetts patients seeking care in hospital emergency rooms since the reform was implemented, and there has actually been an increase in emergency room use by people with incomes below 300% of the poverty level.

    • There has been an increase in doctor visits but no change in visits to specialists and an actual decrease in “medical tests, treatment and follow up care,” which I assume is care for the chronically ill.

    • There has been no change in the percent of the population reporting a failure to “get needed care for any reason within the past 12 months” and remarkably that includes one-third of those with incomes below 300% of the poverty level.

    The problem with counting up doctor visits is that a visit is not always a visit. Nationally, in the state children’s health insurance program (CHIP) doctors have responded to an increase in the demand for their services by scheduling more appointments, but spending less time with patients. Also, you would think that the Massachusetts reform would shift health care resources from the general population to those with less income. But there is no evidence that has happened. On measures of access, the gap between the poor plus the near poor and everyone else appears not to have changed at all!

    Ask yourself why you care whether other people have health insurance? The most likely reason is that you want people to have access to health care. But lack of access to care is a huge problem in Massachusetts right now. As I previously reported more than half of all family doctors and more than half of all internists are not accepting new patients. The wait is more than a month before a new patient is able to see a family doctor, and the wait to see an internist averages 48 days. The average wait in Boston to see a family doctor is more than two months.

    What I am now reporting will be different than what you may have read in the newspapers or at other health blogs. MIT Professor Jon Gruber calls Massachusetts an unqualified success, citing some of the very same studies I am citing. But since Gruber was one of the architects of the Massachusetts health reform, this is like a student grading his own exam.

    What about elevating the Massachusetts reforms to the national level in the form of ObamaCare? As I have previously reported, ObamaCare is likely to result in less access to care for our most vulnerable populations: the disabled and the elderly on Medicare, the poor on Medicaid and the near poor in newly subsidized private insurance. But that is only the beginning.

    ObamaCare threatens a federal takeover of the practice of medicine. It threatens to cost millions of people their jobs. It threatens to cause a wasteful restructuring of American industry in a way that will make us less efficient and less competitive in the international marketplace. It will cause millions to lose their employer sponsored insurance. And it threatens to create health plans with perverse incentives to underprovide care to the patients most in need of the miracles of modern medical science.

    ObamaCare will be anything but benign.


    "The Massachusetts Health-Care 'Train Wreck':  The future of ObamaCare is unfolding here: runaway spending, price controls, even limits on care and medical licensing," by Joseph Rago, The Wall Street Journal, July 7, 2010 ---
    http://online.wsj.com/article/SB10001424052748704324304575306861120760580.html?mod=djemEditorialPage_t .

    President Obama said earlier this year that the health-care bill that Congress passed three months ago is "essentially identical" to the Massachusetts universal coverage plan that then-Gov. Mitt Romney signed into law in 2006. No one but Mr. Romney disagrees.

    As events are now unfolding, the Massachusetts plan couldn't be a more damning indictment of ObamaCare. The state's universal health-care prototype is growing more dysfunctional by the day, which is the inevitable result of a health system dominated by politics.

    In the first good news in months, a state appeals board has reversed some of the price controls on the insurance industry that Gov. Deval Patrick imposed earlier this year. Late last month, the panel ruled that the action had no legal basis and ignored "economic realties."

    In April, Mr. Patrick's insurance commissioner had rejected 235 of 274 premium increases state insurers had submitted for approval for individuals and small businesses. The carriers said these increases were necessary to cover their expected claims over the coming year, as underlying state health costs continue to rise at 8% annually. By inventing an arbitrary rate cap, the administration was in effect ordering the carriers to sell their products at a loss.

    Mr. Patrick has promised to appeal the panel's decision and find some other reason to cap rates. Yet a raft of internal documents recently leaked to the press shows this squeeze play was opposed even within his own administration.

    In an April message to his staff, Robert Dynan, a career insurance commissioner responsible for ensuring the solvency of state carriers, wrote that his superiors "implemented artificial price caps on HMO rates. The rates, by design, have no actuarial support. This action was taken against my objections and without including me in the conversation."

    Mr. Dynan added that "The current course . . . has the potential for catastrophic consequences including irreversible damage to our non-profit health care system" and that "there most likely will be a train wreck (or perhaps several train wrecks)."

    Sure enough, the five major state insurers have so far collectively lost $116 million due to the rate cap. Three of them are now under administrative oversight because of concerns about their financial viability. Perhaps Mr. Patrick felt he could be so reckless because health-care demagoguery is the strategy for his fall re-election bid against a former insurance CEO.

    The deeper problem is that price controls seem to be the only way the political class can salvage a program that was supposed to reduce spending and manifestly has not. Massachusetts now has the highest average premiums in the nation.

    In a new paper, Stanford economists John Cogan and Dan Kessler and Glenn Hubbard of Columbia find that the Massachusetts plan increased private employer-sponsored premiums by about 6%. Another study released last week by the state found that the number of people gaming the "individual mandate"—buying insurance only when they are about to incur major medical costs, then dumping coverage—has quadrupled since 2006. State regulators estimate that this amounts to a de facto 1% tax on insurance premiums for everyone else in the individual market and recommend a limited enrollment period to discourage such abuses. (This will be illegal under ObamaCare.)

    Liberals write off such consequences as unimportant under the revisionist history that the plan was never meant to reduce costs but only to cover the uninsured. Yet Mr. Romney wrote in these pages shortly after his plan became law that every resident "will soon have affordable health insurance and the costs of health care will be reduced."

    One junior senator from Illinois agreed. In a February 2006 interview on NBC, Mr. Obama praised the "bold initiative" in Massachusetts, arguing that it would "reduce costs and expand coverage." A Romney spokesman said at the time that "It's gratifying that national figures from both sides of the aisle recognize the potential of this plan to transform our health-care system."

    An entitlement sold as a way to reduce costs was bound to fundamentally change the system. The larger question—for Massachusetts, and now for the nation—is whether that was really the plan all along.

    "If you're going to do health-care cost containment, it has to be stealth," said Jon Kingsdale, speaking at a conference sponsored by the New Republic magazine last October. "It has to be unsuspected by any of the key players to actually have an effect." Mr. Kingsdale is the former director of the Massachusetts "connector," the beta version of ObamaCare's insurance "exchanges," and is now widely expected to serve as an ObamaCare regulator.

    He went on to explain that universal coverage was "fundamentally a political strategy question"—a way of finding a "significant systematic way of pushing back on the health-care system and saying, 'No, you have to do with less.' And that's the challenge, how to do it. It's like we're waiting for a chain reaction but there's no catalyst, there's nothing to start it."

    In other words, health reform was a classic bait and switch: Sell a virtually unrepealable entitlement on utterly unrealistic premises and then the political class will eventually be forced to control spending. The likes of Mr. Kingsdale would say cost control is only a matter of technocratic judgement, but the raw dirigisme of Mr. Patrick's price controls is a better indicator of what happens when health care is in the custody of elected officials rather than a market.

    Naturally, Mr. Patrick wants to export the rate review beyond the insurers to hospitals, physician groups and specialty providers—presumably to set medical prices as well as insurance prices. Last month, his administration also announced it would use the existing state "determination of need" process to restrict the diffusion of expensive medical technologies like MRI machines and linear accelerator radiation therapy.

    Meanwhile, Richard Moore, a state senator from Uxbridge and an architect of the 2006 plan, has introduced a new bill that will make physician participation in government health programs a condition of medical licensure. This would essentially convert all Massachusetts doctors into public employees.

    All of this is merely a prelude to far more aggressive restructuring of the state's health-care markets—and a preview of what awaits the rest of the country.

     


    Who Pays for ObamaCare? What Donald Berwick and Joe the Plumber both understand," The Wall Street Journal, July 12, 2010 ---
    http://online.wsj.com/article/SB10001424052748704075604575356930951157948.html#mod=djemEditorialPage_t

    Among Donald Berwick's greatest rhetorical hits is this one: "any health-care funding plan that is just, equitable, civilized and humane must—must—redistribute wealth from the richer among us to the poorer and less fortunate." Count that as one more reason that President Obama made Dr. Berwick a recess appointee to run Medicare and Medicaid rather than have this philosophy debated in the Senate.

    We are also learning that "spreading the wealth," as Mr. Obama famously told Joe the Plumber in 2008, is the silent intellectual and political foundation of ObamaCare. We say silent because Democrats never admitted this while the bill was moving through Congress.

    But only days after the bill passed, Senate Finance Chairman Max Baucus exulted that it would result in "a leveling" of the "maldistribution of income in America," adding that "The wealthy are getting way, way too wealthy, and the middle-income class is left behind." David Leonhardt of the New York Times, who channels White House budget director Peter Orszag, also cheered after the bill passed that ObamaCare is "the federal government's biggest attack on economic inequality" in generations.

    An April analysis by Patrick Fleenor and Gerald Prante of the Tax Foundation reveals how right they are. ObamaCare's new "health-care funding plan" will shift some $104 billion in 2016 to Americans in the bottom half of the income distribution from those in the top half. The wealth transfer will be even larger in future years. While every income group sees a direct or indirect tax increase, everyone below the 50th income percentile comes out a net beneficiary.

    At least at the start, Americans in the 50th through 80th income percentiles—or those earning between $99,000 to $158,000—are nearly beneficiaries too, if not for the taxes on insurers, drug makers and other businesses that will be passed on to everyone as higher health costs. This group will eventually get soaked even more—probably through a value-added tax—once ObamaCare's costs explode. But at the beginning the biggest losers are the upper middle class, especially the top 10% of income earners, mainly because a 3.8% Medicare "payroll" tax surcharge will now apply to investment income. ObamaCare, in short, is almost certainly the largest wealth transfer in American history.

    Distributional analyses like the Tax Foundation's are usually staples in any Beltway policy debate, especially when Republicans want to cut taxes. Yet aside from this or that provision, none of the outfits that usually report for this duty—the Tax Policy Center of the Brookings Institution and Urban Institute, the Center for Budget and Policy Priorities—have attempted to estimate the full incidence of ObamaCare's taxes and subsidies.

    In part this may be because ObamaCare is such a complex rewrite of health, tax, welfare and labor laws. But it's also embarrassing to liberals that much of ObamaCare's redistribution will merely move income to the lower middle class from the upper middle class, and the President habitually promises that people earning under $200,000 will be exempt from his tax increases. We now know they won't be.

    With his vast new powers over what government spends, Dr. Berwick will be well situated to equalize outcomes even more, and he certainly seems inclined to do so. The most charitable reading of his redistribution remarks, delivered in a 2008 London speech, is that any health insurance system will involve some degree of redistribution to the "less fortunate," that is, to the sick from the healthy.

    Yet Dr. Berwick made those comments in the context of a larger, and bitter, indictment of the U.S. health system, even though the huge public programs he will run already account for about half of all national health spending. From his point of view this isn't enough. And his main stance was that individual clinical choices must be subordinated to government central planning to serve his view of social justice and health care guaranteed by the state.

    The great irony is that this sort of enforced egalitarianism imposes higher taxes and other policies that reduce the total stock of wealth and leave less for Dr. Berwick to redistribute. Economic growth has been by far the most important factor in improving health and longevity, especially for those whom Dr. Berwick calls "the poorer and less fortunate."

    Americans have learned the hard way over the past two years that this Administration believes in wealth redistribution first, economic growth second. Or as Dr. Berwick also put it in his wealth-redistribution speech, it is crucial not to have to rely on "the darkness of private enterprise."

     

    Updates on June 29, 2010

    "Health Costs: Sharing the Pain:  Companies will require employees to pay more for their health care as costs rise in the near term, says a new study," by Alix Stuart, CFO.com, June 16, 2010 --- http://www.cfo.com/article.cfm/14505426/c_14505581?f=home_todayinfinance

    Companies are shifting more responsibility for the rising costs of health care to employees, according to a recent study by PricewaterhouseCoopers. More than 40% of the 700 companies surveyed intend to increase employee contributions for health-insurance coverage, while an equivalent number plan to increase medical cost-sharing, including higher deductibles and copayments, at the point of care. Meanwhile, the ranks of those offering health benefits for retirees are shrinking, with a 40% drop among those subsidizing coverage after age 65.

    That's a level of cost-sharing that is going to "cause more employees to think about how they use [medical] services," says Michael Thompson, a principal in PwC's human-resource services group.

    Average per-patient medical costs are projected to rise 9.5% in 2010 and 9% in 2011, according to separate research from PwC's Health Research Institute. Those estimates are the net results of a variety of significant trends that are pushing costs both up and down. As for health-care reform, the changes that will take place in 2011 will have a minor effect on costs, according to the research (the biggest changes don't start until 2014).

    Instead, the main driver of increased costs next year is declining Medicare reimbursements from the government to hospitals, the result of estimated overreimbursements in previous years, says Thompson. Reimbursements are slated to drop by a total of 0.35% next year for this reason and because of a mandate in the Patient Protection and Affordable Care Act to undershoot the inflation rate rather than keep pace with it. That means hospitals will seek to make up the difference from privately funded patients, including those on employer-sponsored insurance plans. "There's always some cost shifting, but this is going to be extraordinary," says Thompson.

    Meanwhile, the short-term effects of some generally positive trends are also inflating costs. For one, more physicians and hospitals are consolidating practices. The number of physicians involved in mergers or acquisitions in 2009 was nearly twice that of 2008, according to PwC stats, and is on track to hit a record in 2010. Such consolidations initially give the larger groups more bargaining power with hospitals and insurers, increasing costs, but over time should lead to greater efficiencies and lower costs. PwC also expects hospitals' investment in digitizing medical records to peak in 2011, again adding to short-term costs but likely reducing long-term ones.

    As a result, employers are requiring more out-of-pocket cash from employees. One version of that: higher deductibles. In 2011, for the first time, the majority of employees will face a $400 or more deductible. That's up sharply from 2009, when the most common plan had no deductible. For some services, companies are also looking to shift from flat-fee co-pays to percentage-based co-insurance, where the employee shares proportionately in the cost of care (see chart below). Some 53% of employers are using 20% or more co-insurance for most services in their PPO plans now, up from 40% in 2009.

    The one bright spot is that some $26 billion worth of prescription drugs, including Lipitor, are going off-patent and will be available in cheaper, generic forms in 2011. The number of people extending coverage through COBRA is also likely to come down in 2011 as fewer layoffs occur, reducing company health-care costs by about half a percentage point on average.

    Continued in article


    "The Bad News About ObamaCare Keeps Piling Up:  It's now obvious that many millions will lose the coverage they have," The Wall Street Journal, June 17, 2010 --- http://online.wsj.com/article/SB10001424052748704198004575310773636609374.html?mod=djemEditorialPage_t

    In his brilliant exposition of why sweeping policy changes often have unintended consequences, the late sociologist Robert K. Merton wrote that leaders get things wrong when their "paramount concern with the foreseen immediate consequences excludes the consideration of further or other consequences" of their proposals. This leads policy makers to assert things that are false, wishing them to be true.

    Which brings us to President Obama's many claims about his health-care reform. Take his oft-expressed statement that if you like the coverage you have, you can keep it. That sounds good—but perverse incentives in his new law will cause most Americans to lose their existing insurance.

    This was brought home to me when I asked the CEO of a major restaurant chain about health reform's effect on his company, which now spends $25 million a year on employee health insurance. That will jump to at least $90 million a year once the new law is phased in. It will be cheaper, he told me, for the company to dump its coverage and pay a fine—$2,000 for each full-time worker—and make sure that no part-time employee accidentally worked 31 hours and thereby incurred the fine.

    This reality is settling in at businesses across America. A Midwestern contractor told me he pays $588,000 for health insurance for 70 employees, contributing up to $8,400 a year for a family's coverage. If he stops providing health insurance, he'll pay $2,000 per employee in fines, and the first 40 employees are exempt from fines altogether.

    It's also dawning on employees that they will lose their coverage. Some will blame management; many more will blame those who wrote this terrible legislation.

    Employees who lose coverage get to select a policy from a government-sponsored insurance marketplace called the "exchange." This will be subsidized by taxpayers. Depending on his income, a worker will have to pay between 8% and 9.8% of the cost.

    But there are a few hitches. Employers now pay for employee health plans with pre-tax dollars, but workers who buy into one on the exchange pay with after-tax dollars. Families making less than $30,000 and individuals making less than $15,000 a year will be dumped into Medicaid, widely viewed as second-class health care.

    Either Mr. Obama was stunningly blind to these perverse effects when he promised people could keep their coverage, or he felt that admitting his plan would collapse employer-provided health coverage could keep it from passing. Either way—self-deception or deliberate deceit—health reform is going to turn out far differently than was promised. And because more workers will be dumped into subsidized coverage, taxpayers are likely to pay much more than the $1 trillion-plus price tag claimed by ObamaCare advocates for its first 10 years.

    Health-care plans that existed before the new law are "grandfathered" with regard to some of its provisions. The rules released Monday spell out how little these plans can change without losing their protected status.

    Health plans would no longer be grandfathered if a business changes insurance companies (a common practice when employers shop for lower prices), raises deductibles more than 5%, drops any existing benefits, or even increases co-pays by as little as $5.

    More Obama Spill Address Gets Low Marks Complying with these new rules would raise costs for companies who provide coverage, reduce competition among health insurance companies, and discourage efforts to make employees more price conscious. The Obama administration itself estimates that these draft rules could cost up to 80% of small employers and 64% of large employers their grandfathered status. This translates to between 87 million and 115 million Americans losing their current coverage. Companies and insurers promise a hardy fight on the proposed regulations, but repeal of the provisions that authorized them are the only guarantee of their defeat.

    ObamaCare generates more bad news every month. On top of sluggish job creation, burgeoning deficits, out-of-control spending, and a miserable response to the Gulf oil leak, the Obama presidency may be reaching a tipping point. His competence is being called into question and his credibility undermined. Either one is bad for any president. Both can be politically lethal.


    "A Snow Job on Seniors," by Grace-Marie Turner, Townhall, June 22, 2010 --- 
    http://townhall.com/columnists/Grace-MarieTurner/2010/06/22/a_snow_job_on_seniors

    The White House and its allies have just begun a multi-million dollar public relations effort – funded in large part by taxpayers – to try to convince senior citizens that ObamaCare is good for them. But this attempted snow job obscures the harmful impact the new law will have on seniors.

    The White House isn’t telling seniors about ObamaCare’s $575 billion in cuts to Medicare that will make it harder and harder for them to find a doctor. Or that all seniors with a Medicare Part D prescription plan will be facing higher premiums in the coming years, according to the non-partisan Congressional Budget Office (CBO).

    The White House instead is spending taxpayer dollars to tell seniors about the $250 rebate check coming to those fully exposed to the Part D “doughnut hole.” What they neglect to mention is that fewer than one in ten people on Medicare actually will be receiving the checks.

    And the White House neglects to mention other ways seniors will be hurt by ObamaCare’s cuts. The president repeatedly pledged that, “If you like your plan, you will be able to keep it,” but experts in his own administration say otherwise. According to Medicare’s actuary, more than seven million seniors with Medicare Advantage plans will lose their current coverage because of cuts to these plans. And those who still have Medicare Advantage plans will have “less generous benefit packages” because of the cuts.

    Not surprisingly, cuts in Medicare will impact seniors’ access to care. Medicare’s actuaries estimate that about 15 percent of doctors and hospitals will become unprofitable because of ObamaCare, “possibly jeopardizing access to care for Medicare beneficiaries.”

    Meanwhile, the White House is trying to fool seniors into believing that these cuts will strengthen Medicare by extending its solvency. But many of the “savings” taken out of Medicare are spent elsewhere, leading the CBO to conclude that ObamaCare “would not enhance the ability of the government to pay for future Medicare benefits.”

    Congressional leaders could have avoided the current fight over the 21 percent cut in payments to doctors caring for Medicare patients by including the payment fix in their health overhaul bill. Instead, ObamaCare did nothing to help doctors, and now the cuts threaten seniors’ access to care as more doctors refuse to accept Medicare patients.

    Given ObamaCare’s harmful impact upon seniors, some might be surprised to know that the powerful seniors’ lobby AARP supported ObamaCare’s passage and aggressively lobbied for it. But while seniors are harmed by ObamaCare, the AARP – a multibillion-dollar special interest organization – did quite well.

    In fact, the AARP’s array of sweetheart deals would make even make Sen. Ben Nelson, father of the “Cornhusker Kickback,” and Sen. Mary Landrieu, mother of the “Louisiana Purchase,” blush with envy.

    A few examples: Last year, the AARP received $427 million in royalty fees for selling “Medigap” policies to seniors – more than it received from membership dues, grant revenues, and private contributions combined. Yet thanks to its own special deal, the AARP is exempted from the $60 billion tax ObamaCare imposes on insurance plans.

    Though the White House boasts that ObamaCare prohibits insurance companies from excluding coverage based upon pre-existing conditions, AARP is also exempted from this requirement. Thus, AARP and others selling Medigap policies can and will continue to impose coverage waiting periods on seniors.

    And while ObamaCare limits insurance executives’ compensation to $500,000 a year, AARP is conveniently exempted from the requirement. As a result, AARP can pay its CEO more than $1 million a year, just as it has in the past.

    Continued in article


    Updates on June 10, 2010

    "New Report From Carnegie Foundation Recommends Changes in Medical Education," by Katherine Mangan, Chronicle of Higher Education, June 8, 2010 ---
    http://chronicle.com/article/New-Report-From-Carnegie/65809/?sid=at&utm_source=at&utm_medium=en 


    "College Groups Share Health Care Worries With White House," Inside Higher Ed, June 3, 2010 ---
    http://www.insidehighered.com/news/2010/06/03/qt#229052

    Supporters of student health insurance plans who saw provisions of the Patient Protection and Affordable Care Act threatening the plans were reassured Wednesday in a meeting with President Obama’s chief health care deputy. Representatives of the American College Health Association, the National Association of College and University Business Officers, College and University Professional Association for Human Resources and the six presidential higher education associations met Wednesday with Nancy-Ann DeParle, director of the White House Office of Health Reform, to share their concerns. They worry that student plans -- currently defined as "limited duration," a category that exempts the plans from being part of the individual market -- would under the new law become too expensive for colleges and universities to offer.

    One person in the room for the meeting, Steven Bloom, assistant director of government and public affairs at the American Council on Education, said that DeParle assured the group that the absence of language making clear that the plans could continue to operate just as they do today was "not intentional." The Obama administration has emphasized that "if you like the insurance you have, you get to keep it," Bloom said, "and they view student insurance as part of that.... It's just fallen through the cracks."

    College health advocates first met with Congressional aides last fall to discuss this same concern, but language supporting student health insurance plans never made it into the final bill. Now that the bill has been passed and legislation is all but frozen on Capitol Hill, Bloom and his peers expect that a fix will come through regulations


    "Will Self-insured Companies Bear the Brunt of Rising Healthcare Costs?" CFOZone via Going Concern, June 1, 2010 ---
    http://goingconcern.com/2010/06/will-self-insured-companies-bear-the-brunt-of-rising-healthcare-costs/

    The employer-sponsored health care system provides health insurance to more than 60 million people–but it does not exist in a vacuum. Employers are often reminded of this fact when their health care costs go up each year. Factored into that cost increase are premiums employers pay to hospitals to help those institutions provide care to the uninsured.

    Two years ago the actuarial firm Milliman put a price tag on this cost-shifting: employers pay an additional $1,115 more for a family of four’s health insurance to make up for this loss. That totals about $88 billion annually.


    This cost-shifting is once again becoming an issue as the federal government looks to provide insurance to people who cannot otherwise get it because they are considered high-risk.

    States have for years created high-risk pools to separate the people with especially high health care costs from the rest of the population. Normally these folks can’t get insurance. The high risk pool absorbs some of the cost to insurers.

    Now the federal government is getting in on the action, in large part to address the issue that insurers regularly refuse to issue insurance to some people or they do so at rates that are prohibitively high.

    A new analysis on so-called high risk insurance pools that the federal government will set up as soon as July as a result of health reform makes the point that the money allotted will run out much sooner than originally thought. Instead of covering as many as 7 million people who could qualify there will likely be enough money to cover about 200,000 annually. This is not surprising. The need is always greater; the funds always inadequate.

    So what does this all mean for employers?

    It appears one step removed. But, as employers know, the health care system is fragmented yet, in the end, someone – either the federal government or employers – ends up paying the cost. In the analysis, published by the Center for Studying Health System Change, the authors point out that states with high risk pools currently do not assess self-insured employer plans.

    Under the federal law this will change. Employers will face an assessment. One possibility is that the assessment will have to go up in order to increase the amount of money in the pot. The other of course is to limit who can get access to the high risk pools.

    It remains to be seen what kind of conflict this issue will provoke. Like many other aspects of the new health care reform, it has the potential to fade away or to metastasize into something problematic.

    But one thing remains likely: costs will continue to go up. The question is who will pay for these costs? If these assessments are any sign, it will be insurers and self-insured employers.


    "Your Health Care Costs, Going Higher," by Carrie Lukas, Townhall, June 1, 2010 ---
    http://townhall.com/columnists/CarrieLukas/2010/06/01/your_health_care_costs,_going_higher 

    How much will the new health care law cost? That was a matter of particular dispute during the debate of the Patient Protection and Affordability Act. The bill's authors monkeyed around with the numbers, delaying some benefits, creating new revenue raisers, and pushing off known, needed reforms, so that the Congressional Budget Office (CBO) could come up with a score below the $900 billion target.

    Only the most naïve failed to recognize that those numbers were meaningless: Ultimately, they would have no relationship to how much the legislation would add to taxpayers' burdens and bloat the federal budget. CBO has since been revising its estimates upward: Another $115 billion for additional administrative costs associated with the new law. In addition, Congress now struggles to pass a change to the Medicare reimbursement rates, which will cost $23 billion just to patch the problem over for two years.

    Taxpayers must be warned that these are just the first of many upward revisions by CBO. As Congressman Paul Ryan pointed out during the health care debate, the CBO score was based on ten years of increased taxes and Medicare cuts, and only six years of benefits. Former CBO Director Douglas Holtz-Eakin just released his own analysis of the law and found that, far from reducing the deficit as the President and Congressional proponents promised, the law will add more than $500 billion to the deficit during the first ten years and another $1.4 trillion in the decade after that.

    Yet the program's cost for taxpayers are just a small part of the costs that will be borne by American citizens. Speaker Pelosi explained that only when the bill passed would Americans know what's in it, and she was right. Since the bill became law it's consequences for businesses and the medical system is becoming more obvious. Several large companies reported that they would suffer multi-million dollar losses due to the law's new taxes. Companies are also noting the incentives created by the law to drop insurance coverage for their employees. As Holtz-Eakin wrote: “Caterpillar recently noted that it could save 70 percent on health care costs by dropping coverage and paying the penalties; AT&T's $2.4 billion cost of coverage would drop to just $600 million for penalties.” Altogether, Holtz-Eakin estimates that as many as 35 million Americans could lose their employer-sponsored health insurance.

    So much for being able to keep your insurance. Americans are also learning how other provisions will drive up insurance costs. This year, “children” up to the age of twenty-six will become eligible for their parents' health insurance policy. Analysts estimate that this change will increase the cost of all family policies by about one percent.

    One percent itself isn't a big deal, but it's a reminder of the relationship between mandated benefits and price. The federal government will soon foist numerous new mandates upon insurance companies: free preventive care services, an end to benefit caps, limits on price differentials for those with pre-existing conditions, and many more to come. Far from freebies, these are expensive benefits and their costs will be spread around the insured population, driving premium prices up.

    The law also gives government new powers to dictate how much insurance companies operate. As a result, insurance companies will have to find new ways to make ends meet, such as by reducing payments to doctors. And those doctors will also find ways to trim back costs, by consolidating practices to reduce overhead and taking on fewer patients.

    Americans need not wait for the federal law to fully take effect to understand what's in store. They can also look to Massachusetts, where a similar health care law is already in force. Health care policy expert Grace Marie Turner recently reviewed the problems that plague Massachusetts. Health care costs for a family of four in the Bay State are the highest in the nation, with per capita health care spending 27% higher than the rest of the nation. The increased demand for medical services has created a shortage of doctors, making it difficult to get an appointment and creating long wait times. Ironically this has led to increased use of emergency rooms, a problem that greater insurance coverage was supposed to solve. Insurance companies need to raise rates to cover additional expenses, but the Governor is threatening to cap rate hikes, which will leave private insurers operating at a loss. How long is that sustainable?

    The debate about how much this new health care law will cost Americans is far from over. Undoubtedly, as more of the law is implemented, we will learn more about its many hidden costs and consequences. But one thing is for sure, this new law will cost more, and like much, much more than the law's proponents promised.

     


    "ObamaCare vs. Small Business:  Why the National Federation of Independent Business supports the constitutional challenge to the health-insurance mandate," by Dan Danner, The Wall Street Journal, May 27, 2010 ---
    http://online.wsj.com/article/SB10001424052748704113504575264802756326086.html?mod=djemEditorialPage_t

    For decades small business owners have been telling anyone who would listen that they need health-care reforms that lower costs. But President Obama and his allies in Congress pushed through a law that will dramatically raise health-care costs and increase the overall cost of doing business. What's more, the federal mandate requiring that nearly all U.S. residents carry health insurance by 2014 seriously threatens our basic constitutional rights and individual freedoms.

    This is why the National Federation of Independent Business (NFIB), on behalf of small business owners nationwide, has joined the lawsuit with 20 states mounting a constitutional challenge to this devastating new health-care law.

    This law is death by a thousand cuts for small business owners. According to the Congressional Budget Office (CBO), the overhaul will cost about $115 billion more than first projected, bringing the total to more than $1 trillion. Small businesses will also now have to deal with an onslaught of new taxes and burdensome paperwork.

    Supporters say the law will significantly help small businesses, focusing on the much-talked about small business tax credit. But the reality is that the tax credit is complex and very limited because firms qualify based on number of employees and average wages. The credit, which is only available for a maximum of six years, puts small business owners through a series of complicated "tests" to determine if they qualify and how much they will receive. Fewer than one-third of small businesses even pass the first three (of four) tests to qualify: have 25 employees or less, provide health insurance, and pay 50% of the cost of that insurance.

    More importantly, the credit is temporary, but health-care cost increases are permanent. When the credit ends, small businesses will be left paying full price. They'll also be forced to deal with all sorts of new taxes, fees and mandates buried in this 2,000-page law.

    One of these new taxes is a so-called health insurance fee. It's a massive $8 billion tax (that escalates to $14.3 billion by 2018) on insurance companies based on their market share. This tax will be paid almost exclusively by small businesses and individuals because the law specifically excludes self-insured plans, the plans that most big businesses and labor unions offer, from having to pay the tax.

    While the health insurance fee was designed to "go after" large health-insurance companies, the reality is that insurers aren't simply going to absorb this new tax; it will be passed on to customers. Specifically, it will be passed on to the plans that 87% of small businesses and individuals buy. A study by the Federal Policy Group published last October found that the amount of taxes passed on to the typical family of four could be $500 or more per year.

    Adding insult to injury, the law also requires all businesses to issue IRS 1099 forms to document every business-to-business transaction of $600 or more. To someone who's never run a business, this may sound like nothing. But Congress hopes to raise $17 billion in added tax revenues and fees from this new mandate. That's hardly nothing.

    The burden of raising that expected revenue falls again on the backs of small business owners who already suffer under unmanageable federal paperwork burdens. What's worse, this new reporting requirement has absolutely nothing to do with health-care reform. It was included to help pay for the nearly trillion-dollar price tag of the bill. Why should small business owners have to pay for a bill that causes them so much harm? They shouldn't, which is why NFIB is fighting against this law in court.

    We also believe the health-care law is unconstitutional. The centerpiece of this law is an individual mandate requiring virtually all Americans to purchase health insurance or pay a fine. We strongly believe that the Commerce Clause of the Constitution does not give Congress the power to force individuals to purchase a private product or face a fine. Requiring individuals to purchase something simply because they are alive is unprecedented. The military draft is the only exception to this, and Congress's authority to enact the draft is provided for in the Constitution, unlike this mandate.

    The individual mandate imposes unique burdens on those small business people, including many NFIB members, who are sole proprietors and the least able to afford it. These independent men and women rarely can afford to distinguish between their own "personal" resources and those of their business. The mandate will now force them to spend money on insurance they may not want, rather than using those funds to run and grow their businesses.

    If this law is not overturned, then all citizens should be prepared for the long arm of the federal government to reach even further into how we choose to live our lives, spend our money and pursue our own definitions of happiness.

    Health-care reform is too important to be based on an unconstitutional mandate. Small businesses need the judicial system—if necessary, the U.S. Supreme Court—to overturn this law to protect them from having to pay for a statute that causes them more harm than good and ultimately infringes on all Americans' personal freedoms.

    Mr. Danner is president and CEO of the National Federation of Independent Business (NFIB), a nonprofit, nonpartisan organization that works to promote and protect the rights of small businesses to own, operate and grow their businesses.

    Jensen Comment
    It's so sad that with resounding control of both the House and the Senate that the Democratic Party could not legislate a national healthcare plan. What they got is a version that destructs small business and employment opportunities without constraining medical costs and an entitlements economic disaster. Oh Canada! How great it would be if the U.S. had a pay-as-you go health care system.


    "Fiscal Fraud of Obamacare Snowballing Already," by Terry Jeffrey, Townhall, June 2, 2010 ---
    http://townhall.com/columnists/TerryJeffrey/2010/06/02/fiscal_fraud_of_obamacare_snowballing_already

    Remember the health care issue? Well, the fiscal consequences of the socialized medicine scheme enacted by President Barack Obama and Congress just two months ago are already beginning to snowball.

    Democratic Rep. Henry Waxman of California, the chairman of the House Committee on Energy and Commerce, was one of the key architects and advocates of Obamacare. He was back on the House floor on Friday delivering an urgent plea to fellow Democrats that inadvertently -- or, perhaps, unavoidably -- revealed the fraudulent nature of our new national health care regime.

    It was supposed to save the taxpayers money, remember?

    "This legislation will lower costs for families and for businesses and for the federal government, reducing our deficit by over $1 trillion in the next two decades," Obama said when he signed the bill.

    On Friday, Waxman declared that the sky is about to fall on the Medicare system. He went to the House floor to "urge" his colleagues to vote for a bill that includes $102 billion in new federal spending and would add $54 billion to the national debt over the next 10 years -- $25 billion of it in the few months remaining in this fiscal year.

    Why did Waxman believe this new borrowing-and-spending was necessary?

    "It's absolutely critical to do this if we are going to keep doctors in Medicare and keep the promise to Medicare beneficiaries that they will have access to physicians' services," said Waxman. "This provision will provide a moderate increase in physicians' fees, 2.2 percent for the rest of the year. If we don't act, doctors' fees will be cut by 21 percent from where they are today. This would be unconscionable."

    It would not merely be unconscionable. If the 21-percent cut in Medicare fees for doctors -- that, in fact, legally took effect on June 1 -- is allowed to stand, many doctors in this country will simply stop seeing Medicare patients. They will not be able to afford it. The cost to them of serving their patients will exceed what they are paid. Their profit margin will be swept away.

    To make precisely this point, 12 national surgeons' associations -- including the American Association of Neurological Surgeons, the American Association of Orthopedic Surgeons and the American Academy of Otolaryngology-Head and Neck Surgery -- sent House Speaker Nancy Pelosi a letter last Wednesday warning her what would happen if Medicare doctors' fees are slashed as they are scheduled to be under current law.

    "These continued payment cuts, rising practice costs and a lack of certainty going forward, make it difficult, if not impossible, for already financially challenged surgical practices to continue to treat Medicare patients," the surgeons' associations told Pelosi.

    The letter pointed the speaker toward the results of a survey of more than 13,000 physicians done in February by the Surgical Coalition, a group of more than 20 medical associations. The survey asked these doctors what they would do if Medicare fees were slashed by the scheduled 21.2 percent.

    Twenty-nine percent said they would opt out of the Medicare system entirely. Almost 69 percent said they would limit the number of appointments they would take from Medicare patients, 45.8 percent said they would start referring complex Medicare patients to other physicians, 45.3 percent said they would stop providing certain services, 43.8 percent said they would defer purchasing new medical equipment and 42.7 percent said they would cut their staff.

    Continued in article


    "ObamaCare's Ever-Rising Price Tag:  Voters will understand plenty about the hidden costs of the law by November,"  by Karl Rove, The Wall Street Journal, June 3, 2010 ---
    http://online.wsj.com/article/SB10001424052748703561604575282482320389198.html?mod=djemEditorialPage_t

    White House Senior Adviser David Axelrod argued earlier this year that health-care reform would become more popular after it passed, boosting Democrats in the midterm elections. "We have to go out and sell it," he told the National Journal, adding in an interview in Newsweek that "people [will] see the benefits that accrue to them."

    That's not quite how it has worked out. ObamaCare is becoming more, not less, unpopular. The Rasmussen poll reported the week after health reform's passage in March that 55% of likely voters supported its repeal while 42% did not. A Rasmussen poll last month showed that 56% backed repeal; 39% did not.

    Some may argue that President Obama has been able to extol the legislation's supposed virtues only sporadically, instead having to confront other challenges from the Gulf oil spill to foreign policy controversies. But the real problem is ObamaCare's substantive defects, some only now coming to light. Consider the April 22 analysis by Medicare's chief actuary, Richard Foster, which blasted to smithereens many of Mr. Obama's claims for the bill.

    For starters, Mr. Foster estimated Americans would pay $120 billion in fines for not having adequate insurance coverage and that 14 million people would lose their coverage as rising costs led companies to dump it. Those effects are not in keeping with Mr. Obama's promises that if people liked the health insurance they had they could keep it, and that the reforms would provide universal coverage.

    Finding it hard to cover costs under the bill's formulas, according to Mr. Foster's analysis, doctors would refuse new patients and one out of every six hospitals and nursing homes could start operating in the red. And while Medicaid would cover 16 million more people, there might not be enough doctors to treat them.

    Because of new taxes, Mr. Foster rightly claimed that sick people would face "high drug and device prices" and everyone would pay higher premiums—again, exactly the opposite of what Mr. Obama said.

    Then in May, the Congressional Budget Office updated its cost projections. It found that the new health legislation would cost $115 billion more than estimated when it was enacted.

    That's not the end of the bad news. October will see the first round of Medicare cuts. Up to half of seniors will lose their Medicare Advantage coverage (a program that allows seniors to receive additional services through a private health plan), or at least some of their benefits under this program. Watch for the administration to try to keep companies from notifying their customers of benefit cuts or premium increases before the election. Meanwhile, the Daily Caller website reported yesterday that the administration has missed deadlines for issuing four sets of regulations specified by the bill and lacks a master time-line for the other required regulations.

    Drug and medical device companies are already making provisions for the new taxes that kick in next year. This means less investment in plants and equipment and smaller R&D budgets. Big layoffs, especially in the pharmaceutical industry, will result as companies confront this expensive new reality.

    All of this represents a great political challenge to the administration and the Democratic Party this fall. Doctors, nurses and hospital workers impacted by health-care reform's adverse effects will speak more often to more people and with greater passion and credibility than will the president and his allies. So too will the millions of people who work for insurance companies, drug companies, device manufacturers and other health-care providers.

    More Complete Coverage: Health-Care Overhaul Then there are employers and their workers. According to a survey by Towers Watson, a human resources consulting firm, 88% of companies plan to pass on increased health-care benefit costs to employees, 74% plan to reduce benefits, and up to 12% will drop all coverage for employees. Retirees won't fare well either: 43% of employers that now provide retiree medical benefits are likely to reduce or eliminate them thanks to the new health legislation.

    Employers will not wait until the last moment to spring changes on their workers. They understand it is in their best interest to fully educate employees about the ramifications of the new health-care bill. Many have already begun helping employees understand why companies are being forced to make inevitable changes.

    The health-care concerns of millions of Americans will ripple through the electorate before November. When joined with other voter concerns on jobs, spending and deficits, these ripples are likely to create what analysts call a "wave" election, which will wash away effective Democratic control of Congress.

    Mr. Rove, the former senior adviser and deputy chief of staff to President George W. Bush, is the author of "Courage and Consequence" (Threshold Editions, 2010).


    Updates on May 27, 2010

    "Goodbye, Employer-Sponsored Insurance:  Companies are discovering that it's cheaper to pay fines to the government than to cover workers," by John C. Goodman, The Wall Street Journal, May 21, 2010 ---
    http://online.wsj.com/article/SB10001424052748703880304575236602943319816.html?mod=djemEditorialPage_t

    Millions of American workers could discover that they no longer have employer-provided health insurance as ObamaCare is phased in. That's because employers are quickly discovering that it may be cheaper to pay fines to the government than to insure workers.

    AT&T, Caterpillar, John Deere and Verizon have all made internal calculations, according the House Energy and Commerce Committee, to determine how much could be saved by a) dropping their employer-provided insurance, b) paying a fine of $2,000 per employee, and c) leaving their employees with the option of buying highly-subsidized insurance in the newly created health-insurance exchange.

    AT&T, for example, paid $2.4 billion last year to cover medical costs for its 283,000 active employees. If the company dropped its health plan and paid an annual penalty for each uninsured worker, the fines would total almost $600 million. But that would leave AT&T with a tidy profit of $1.8 billion.

    Economists say employee benefits ultimately substitute for cash wages, which means that AT&T employees would get higher take-home pay. But considering that they will be required by federal law to buy their own insurance in an exchange, will they be net winners or losers? That depends on their incomes.

    A Congressional Budget Office (CBO) analysis of the House version of ObamaCare, which is close to what actually passed in March, assumed a $15,000 premium for family coverage in 2016. Yet the only subsidy available for employer-provided coverage is the same one as under current law: the ability to pay with pretax dollars. For a $30,000-a-year worker paying no federal income tax, the only tax subsidy is the payroll tax avoided on the employer's premiums. That subsidy is only worth about $2,811 a year.

    If this same worker goes to the health-insurance exchange, however, the federal government will pay almost all the premiums, plus reimburse the employee for most out-of-pocket costs. All told, the CBO estimates the total subsidy would be about $19,400—almost $17,000 more than the subsidy for employer-provided insurance.

    In general, anyone with a family income of $80,000 or less will get a bigger subsidy in the exchange than the tax subsidy available at work.

    But will the insurance in the exchange be as good? In Massachusetts, people who get subsidized insurance from an exchange are in health plans that pay providers Medicaid rates plus 10%. That's less than what Medicare pays, and a lot less than the rates paid by private plans. Since the state did nothing to expand the number of doctors as it cut its uninsured rate in half, people in plans with low reimbursement rates are being pushed to the rear of the waiting lines.

    The Massachusetts experience will only be amplified in other parts of the country. The CBO estimates there will be 32 million newly insured under ObamaCare. Studies by think tanks like Rand and the Urban Institute show that insured people consume twice as much health care as the uninsured. So all other things being equal, 32 million people will suddenly be doubling their use of health-care resources. In a state such as Texas, where one out of every four working age adults is currently uninsured, the rationing problem will be monumental.

    Even if health plans in the exchange are identical to health plans at work, the subsidies available can only be described as bizarre. In general, the more you make, the greater the subsidy at work and the lower the subsidy in the exchange. People earning more than $100,000 get no subsidy in the exchange. But employer premiums avoid federal and state income taxes as well as payroll taxes, which means government is paying almost half the cost of the insurance. That implies that the best way to maximize employee subsidies is to completely reorganize the economic structure of firms.

    Take a hotel with maids, waitresses, busboys and custodians all earning $10 or $15 an hour. These employees can qualify for completely free Medicaid coverage or highly subsidized insurance in the exchange.

    So the ideal arrangement is for the hotel to fire the lower-paid employees—simply cutting their plans is not an option since federal law requires nondiscrimination in offering health benefits—and contract for their labor from firms that employ them but pay fines instead of providing health insurance. The hotel could then provide health insurance for all the remaining, higher-paid employees.

    Ultimately, we could see a complete restructuring of American industry, with firms dissolving and emerging based on government subsidies.

    A much better approach was proposed by Sen. John McCain in the last presidential election. The principle behind that plan is enshrined in the legislation sponsored by Sens. Tom Coburn (R., Okla.) and Richard Burr (R., N.C.), and Reps. Paul Ryan (R., Wis.) and Devin Nunes (R., Calif). This approach would replace the current subsidies with a system that gives every family, regardless of income, the same number of dollars of tax relief for health insurance.

    Under this approach, all insurance would be subsidized the same way, regardless of where it is purchased. All taxpayers would be subsidized the same way, regardless of how they obtain their insurance. Unlike the president's scheme, it makes sense both in terms of equity and economics.

    Mr. Goodman is the president and CEO of the National Center for Policy Analysis.

     

     

     


    Updates on May 20, 2010

    "Congressional Budget Office:  : Health Care Bill Will Cost $115 Billion More Than Previously Assessed," by Jake Tapper, ABC News, May 12, 2010 ---
    http://blogs.abcnews.com/politicalpunch/2010/05/cbo-health-care-bill-will-cost-115-billion-more-than-previously-assessed.html

    The director of the Congressional Budget Office said Tuesday that the health care reform legislation would cost, over the next ten years, $115 billion more than previously thought, bringing the total cost to more than $1 trillion.

    The revised figure is due to estimated costs to federal agencies to implement the new health care reform bill – such as administrative expenses for the Internal Revenue Services and the Department of Health and Human Services -- and the costs for a "variety of grant and other program spending for which specified funding levels for one or more years are provided in the act."

    CBO had originally estimated that the health care reform bill would result in a net reduction in federal deficits of $143 billion from 2010-2019; this revised number would eliminate most of that savings.

    In a statement, House Minority Leader John Boehner, R-Ohio, said that the new CBO analysis "provides ample cause for alarm. This comes just weeks after the Obama administration itself released an analysis confirming that the new law actually increases Americans’ health care costs. The American people wanted one thing above all from health care reform: lower costs, which Washington Democrats promised, but they did not deliver. These revelations widen the serious credibility gap President Obama is facing."

    Office of Management and Budget spokesman Kenneth Baer said in response that the health care law "will reduce the deficit by more than $100 billion in the first decade, and that will not change unless Congress acts to change it. If these authorizations are funded, they must be offset somewhere else in the discretionary budget. The President has called for a non-security discretionary spending freeze, and he will enforce that with his veto pen."

    Baer also pointed a reporter to comments made by OMB director Peter Orszag on his blog in March in which the budget director says that Congress has the power to pay for the $115 billion costs with cuts elsewhere, or not act on those budget authorizations in the bill at all.

    Fuzzy CBO Accounting Tricks
    "ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---
    http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

    This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.

    EXPRESS:

    The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.

    The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.

    The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.

    Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.

    LOCAL:

    For future reference (or possibly to roll up and beat myself over the head with in my dotage) I have filed away a copy the latest analysis (pdf) of health-care reform from the Congressional Budget Office. By 2019, it says, the bills passed by the House and Senate will have cut the number of uninsured Americans by thirty-two million, raised the percentage of people with some form of health-care coverage from eighty-three per cent to ninety-four per cent, and reduced the federal deficit by a cumulative $143 billion. If all of these predictions turn out to be accurate, ObamaCare will go down as one of the most successful and least costly government initiatives in history. At no net cost to the taxpayer, it will have filled a gaping hole in the social safety net and solved a problem that has frustrated policymakers for decades.

    Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.

    The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.

    The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”

    Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.

    My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.

    Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.

    Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)

    If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”

    So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.

    The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.

    Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)

    In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.

    Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.

    The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.

    The C.B.O.’s analysis can’t be dismissed out of hand, but it is surely a best-case scenario. Again, I come back to where I started: the scale of the subsidies on offer for low and moderately priced workers. If economics has anything to say as a subject, it is that you can’t offer people or firms large financial rewards for doing something—in this case, dropping their group coverage—and not expect them to do it in large numbers. On this issue, I find myself in agreement with Tyler Cowen and other conservative economists. Over time, the “firewall” between the existing system of employer-provided group insurance and taxpayer-subsidized individual insurance is likely to break down, with more and more workers being shunted over to the public teat.

    At that point, if it comes, politicians of both parties will be back close to where they began: searching for health-care reform that provides adequate coverage for all at a cost the country can afford. What would such a system look like? That is a topic for another post, but I don’t think it would look much like Romney-ObamaCare.  

    Read more: http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html#ixzz0jrFSFK3j


    "Is the Cure Worse than the Disease? A month after passage, ObamaCare is already failing," by Peter Suderman, Reason Magazine, May 14, 2010 ---
    http://reason.com/archives/2010/05/14/the-cure-is-worse-than-the-dis

    A little more than a month after the passage of the Patient Protection and Affordable Care Act, President Obama's trillion-dollar overhaul of the nation's health care system, the administration has already begun to tout its successes. On his weekly radio address, the president argued that it was already providing Americans with "real benefits," while Health and Human Services Secretary Kathleen Sebelius released a four-page memo laying out the "significant progress" she claims her department has already made in implementing the law. "Over the coming weeks, our team across government will continue to work diligently to produce the regulations and guidance necessary to implement this landmark new law," she concludes.

    The prospect of adding new regulations to the books may be what passes for excitement in Washington these days, but it's hardly a ringing endorsement. So while ObamaCare might qualify as victory for Washington's army of bureaucrats and rulemakers, for the rest of us, there isn't much to cheer.

    Since the law's passage, the news about it has been been unrelentingly bad. With each passing it day, it looks more likely that costs will go up, businesses will face new bureaucratic burdens, and many individuals will lose their current health care plans—just as the law's critics predicted before its passage.

    Already, businesses small and large are warning of the ill effects of the law's changes to the tax code. In order to generate the nearly $1 trillion necessary to pay for the law, its authors scoured the tax code looking to squeeze out more money whereever possible. And sure enough, within a few days of its passage, a handful of big companies took tax write downs in response to changes in the tax treatment of an existing drug subsidy. An estimate by Credit Suisse puts the total damage across the economy at around $4.5 billionwith $1 billion coming from AT&T alone.

    The change involved the tax treatment of a subsidy that never should have existed, but it suggests the extent to which America's health care system is already reliant on government meddling, and how costly expanding the government's role in the system can be. And, perhaps more importantly, a planned investigation into the write-downs revealed that many big corporations are considering dropping their health care coverage and dumping employees onto the public dole.

    When Rep. Henry Waxman (D-Calif.) heard about the write-downs, he called a hearing with AT&T and other companies claiming big hits. But soon after the subpoenaed corporate documents were turned in, the hearing was canceled. Why? Likely because, as Fortune magazine reported, the documents showed that the companies were considering dropping coverage for many employees—directly contradicting one of the president's key promises, that, under ObamaCare, "if you like your health care plan, you can keep your health care plan." Even with penalties in place for employers who decline to provide health insurance, documents showed that Caterpillar could reduce its health care costs by as much as 70 percent and AT&T could save as much as $1.8 billion by shifting their employees into public programs.

    Small businesses, meanwhile, have discovered that their tax preparation costs just went way up. The PPACA will require small business owners and the self-employed to fill out 1099s for every company they do more than $600 worth of business with. That means any freelancer who buys a mid-range laptop from Best Buy will technically be required to fill out a 1099, no matter if the retailer is an indifferent chain giant. As with the drug subsidy modification, the idea is to beef up compliance and raise additional revenue—about $17 billion worth.

    Yet if it works, it will drive up compliance costs—how many home-based freelancers are likely to generate a docket of 1099s, complete with tax identification numbers, for big corporate suppliers all by themselves? And if, as seems likely, the requirement is widely ignored, it will have the exact opposite of its intended effect, pushing more and more taxable transactions into illegal, unrecorded territory.

    At the same time, cost projections continue to spiral upwards. The Congressional Budget Office now reports that the law will require an additional $115 billion in previously unreported (and yet unpaid-for) discretionary spending. Medicare's actuary has reported that total medical spending in the U.S. will actually go up and that crucial cuts to Medicare—cuts being used to pay for the law's new entitlement spending—aren't likely to happen, but that Medicare benefits are likely to be reduced. And in Massachusetts, the state whose 2006 health care overhaul served as the model for ObamaCare, insurers have gone to war with the governor, and the state treasurer is warning that the program could drive the state into bankruptcy.

    Thanks to the pace of modern medical progress, it's no longer true that, as Jean Baptiste Moliere quipped in 1673, "nearly all men die of their medicines, not their diseases." But when it comes to health care, it may be that governments die of their reforms.

     


    "ObamaCare's Phony Medicaid 'Deal' The new health law unconstitutionally coerces the states," by Professor Richard J. Epstein, The Wall Street Journal, May 10, 2010 ---
    http://online.wsj.com/article/SB10001424052748704446704575206380880867088.html?mod=djemEditorialPage_t

    The attorneys general of 13 states recently filed a lawsuit in federal court challenging the constitutionality of the Medicaid portions of the new health law. Given the dismal track record states and individuals have had challenging New Deal social programs, many pundits have concluded their suit will be dismissed out of hand. I wouldn't be so sure.

    The new health law gives states frontline responsibility for setting up an untried system of "exchanges" through which individuals will purchase health-care insurance. States receive partial federal support for running the exchanges up to 2015, after which they run them at their own considerable but uncertain expense. States can opt out of organizing these exchanges—but only if they extend Medicaid coverage to more of their residents, including all uninsured persons whose incomes are 133% to 200% of the poverty level.

    This program is highly coercive and it raises a constitutional problem of the first magnitude.

    ObamaCare's defenders say there is no problem—since no state has to participate in Medicaid at all, they're free to walk away entirely from the ObamaCare deal. But this too is a fake option.

    Suppose a thief takes your family portrait worth $100 to you and then makes a take-it-or-leave it offer to sell it back to you for $50. You prefer the picture to the money. He prefers the money to the picture. Does that make the thief's offer a win/win? Of course not. It is ransom.

    And thus the ObamaCare deal: States may leave Medicaid but the Medicaid taxes their citizens pay will support the program in other states. The state's option to leave Medicaid would be real only if the federal government refunded its citizens' Medicaid taxes or paid them into the state treasury.

    There is one big obstacle to state success in the courts. In Frothingham v. Mellon (1923), a citizen of Massachusetts and the state itself challenged the use of federal tax dollars for infant and maternal health under the 1921 Maternity Act. Their argument was that the payments to individual people were not expenditures for the "general welfare of the United States," which, properly understood, only covered standard public goods like national defense.

    But the Supreme Court there mistakenly held that neither the individual citizen nor the state had standing to challenge the program—on the peculiar ground that any potential constitutional violation that hurt everyone could be challenged by no one. That ruling put Massachusetts (like states today) in an impossible bind. A principled decision not to accept the federal funds meant that its citizens' tax dollars simply would go to mothers and infants in other states.

    Fortunately, the obstacle that the Supreme Court raised to a state's standing to sue has already been breached. In Massachusetts v. EPA—the notorious 2007 decision allowing the EPA to treat carbon dioxide as a pollutant—the Supreme Court recognized that the state had standing to sue to protect its own coastline from the supposed ravages of excess CO2. The Supreme Court should likewise also recognize a state's standing to sue when the federal government seeks to command its resources to serve federal objectives. In New York v. United States (1992), the Court prevented the U.S. from forcing states to take title to nuclear waste. It can surely prevent the federal government from mandating massive expenditures of scarce state resources.

    Under the Constitution the states are not wards of the federal government. Clever federal tax and spending statutes must not be allowed to reduce states to a servile status that allows the federal government to force massive wealth shifts among them.

    The federal government should be told either to refund to the states their citizens' Medicaid tax dollars when they pull out of the program or to drop the new mandates to expand Medicaid coverage as the price the states must pay to escape ObamaCare-created duties.

    Mr. Epstein is a professor of law at the University of Chicago and a senior fellow at the Hoover Institution.

     


    Updates on May 10, 2010

    A galaxy is composed of gas and dust and stars—billions upon billions of stars.
    Carl Sagan, Cosmos, chapter 1, page 3[27]

    Changes to the tax code’s section 6041:  The IRS Will Soon Be Buried in a new "galaxy" of 1099 Forms
    I apologize for the wording of this blog that may offend some readers
    I forward it only because it will affect accountancy, especially tax accountants and their clients
    "Another Pelosi Easter egg in ObamaCare: IRS mandate on business," by Ed Morrissey, Hot Air, April 29, 1010 ---
    http://hotair.com/archives/2010/04/29/another-pelosi-easter-egg-in-obamacare-irs-mandate-on-business/

    That means any time a business pays any one entity $600 or more in a year, they will have to create a 1099 to file with the IRS. That means that the businesses have to get all of the tax information for every vendor, provide separate accounting for every payee, and then send the forms to both the IRS and the payees at the end of every year — as the payees do the same with their vendors, and so on. Edwards puts the scope in context:

    Do any of you know if this will also apply to foreign subsidiaries that mostly buy goods and services in their home countries.
    What about domestic company purchases products from foreign vendors such as Canadian or Indonesian vendors?

    Also if your university pays $1,200 to British Airways for your visit to the European Accounting Association annual meetings will your university have to file a British Airways 1099 form? Will a similar 1099 have to be filed for the European hotel that does not even have a U.S. tax ID number?

    The purpose of this legislation might extend well beyond the intent to collect Federal taxes. It could become a massive database on international vendors and workers.

     

     


     

     


    Updates on April 29, 2010

    Journal of Accountancy e-Alert on April 22, 2010

    > > FASB Issues Health Care Proposals

    April 16, 2010

    FASB issued two exposure drafts that would change accounting for health care organizations. One proposal would require that the measurement of charity care for disclosure purposes by health care providers be based on the direct and indirect costs of providing the charity care. The second proposal is aimed at how organizations account for medical malpractice and similar liabilities and related insurance payouts.

    Jensen Comment
    There are some potential cost accounting research projects here regarding cost accounting in health care facilities.

    Health care facility cost accounting may become an even greater priority for the FASB since the government intends to regulate health insurance premiums in the private sector. Price regulations make cost accounting an important, if not the most important, input into price regulation.

    Bob Jensen’s threads on cost and managerial accounting ---
    http://faculty.trinity.edu/rjensen/theory01.htm#ManagementAccounting


    "Senate Bill Sets a Plan to Regulate Premiums," by Robert Pear, The New York Times, April 20, 2010 ---
    http://www.nytimes.com/2010/04/21/health/policy/21health.html?hpw

    Fearing that health insurance premiums may shoot up in the next few years, Senate Democrats laid a foundation on Tuesday for federal regulation of rates, four weeks after President Obama signed a law intended to rein in soaring health costs.

    After a hearing on the issue, the chairman of the Senate health committee, Tom Harkin, Democrat of Iowa, said he intended to move this year on legislation that would “provide an important check on unjustified premiums.”

    Mr. Harkin praised a bill introduced by Senator Dianne Feinstein, Democrat of California, that would give the secretary of health and human services the power to review premiums and block “any rate increase found to be unreasonable.” Under the bill, the federal government could regulate rates in states where state officials did not have “sufficient authority and capability” to do so.

    The White House offered a similar proposal in the weeks leading up to approval of the health care legislation last month. But it was omitted from the final measure, in part for procedural reasons.

    Reviving the proposal on Tuesday, Mr. Harkin said: “Rate review authority is needed to protect consumers from insurance companies’ jacking up premiums simply because they can. Protections must be in place to ensure that companies do not take advantage of current market conditions before health reform fundamentally changes the way they do business in 2014.”

    “Currently,” Mr. Harkin said, “about 22 states in the individual market and 27 states in the small group market do not require a review of premiums before they go into effect — and perhaps even more. This is a gaping hole in our regulatory system, and it is unacceptable.”

    Under the new health care law, starting in 2014, most Americans will be required to have insurance. Insurers will have to offer coverage to all applicants and cannot charge higher premiums because of a person’s medical condition or history.

    Michael T. McRaith, director of the Illinois Department of Insurance, told Congress on Tuesday, “There is a distinct possibility that less responsible companies will raise rates to price out people who are sick or might become sick between now and 2014.”

    Mr. McRaith said he and the governor of Illinois, Pat Quinn, a Democrat, “unequivocally support state-based insurance regulation,” because local officials understand local markets.

    He endorsed Mrs. Feinstein’s bill, saying it would “provide an impetus” for states to regulate premiums if they did not already do so.

    Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group for insurers, said Congress should let the new law work before piling on additional requirements.

    Congress, she said, has largely ignored the cause of rising premiums: the explosive growth of medical costs and the power of hospitals and other health care providers to dictate prices.

    Ms. Ignagni said the law imposed new requirements, taxes and fees on health plans, which could further drive up costs.

    Senator Lamar Alexander of Tennessee, the No. 3 Republican in the Senate, said: “Health insurance companies’ profits for one year equal about two days of health care spending in the United States. So even if we were to take away all the profits of the so-called greedy insurance companies, that would still leave 363 days a year when health care costs are expanding at a rate our country cannot afford.”

    Grace-Marie Turner, president of the Galen Institute, a research center that advocates free-market health policies, said the Democrats’ proposal was unlikely to succeed in lowering insurance costs.

    “Capping premiums without recognizing the forces that are driving up costs would be like tightening the lid on a pressure cooker while the heat is being turned up,” Mrs. Turner said.

    Mrs. Feinstein said her bill would close what she described as “an enormous loophole” in the new law. And she said health insurance should be regulated like a public utility.

    “Water and power are essential for life,” Mrs. Feinstein said. “So they are heavily regulated, and rate increases must be approved. Health insurance is also vital for life. It too should be strictly regulated so that people can afford this basic need.”

    Mr. Harkin interrupted the hearing to note that one of the nation’s largest insurers, UnitedHealth Group, had just reported that its first-quarter earnings had increased 21 percent, to $1.19 billion, surpassing Wall Street expectations.

    Some securities analysts say they doubt that insurers can sustain such gains after major provisions of the new law take effect.


    Price Controls on Insurance Rates Are Not Enough Since Price Allowances Must Cover Costs
    "What Megatrends in Health Care Mean for the U.S. Agenda," by George C. Halverson, Harvard Business Review Blog, April 21, 2010 ---
    http://blogs.hbr.org/cs/2010/04/cs_-_what_the_megatrends_mean.html?cm_mmc=npv-_-DAILY_ALERT-_-AWEBER-_-DATE

    The megatrends in global health care selected by the Harvard Business Review highlight a stark reality: Health care is changing rapidly and — unless we do the right things and do them well, care will become entirely unaffordable.

    In the United States, the new law to reform health insurance is a huge step forward in the struggle to improve the quality of care and bring its cost under control. But that universal coverage bill is just the first step. It opens the door to the next two levels of reform. We need to significantly improve care and we need to significantly moderate the increase in the cost of care. Frankly, we need three agendas to ensure that we keep moving down the path to better and more affordable care.

    Agenda One: Provide Universal Coverage

    We are the only industrialized country in the world that doesn't cover all of its citizens. The reform law doesn't get us all the way there, but it will go a long way toward fixing that problem.

    It's very hard to improve care of people until they have insurance and the bill moves us nicely in that direction.

    If we very carefully and skillfully build and implement the new insurance market exchanges mandated by the law, they will give Americans much better choices. People should be able to use the exchanges to choose care systems and teams that will double their chances of surviving cancer, triple their chances of surviving strokes, and quadruple their chances of surviving major heart surgery.

    Agenda Two: Provide Better and Safer Care

    American health care is plagued by major performance problems. Consider the following facts:

    Clearly, we need to make care vastly better and a lot safer. We can do that just by focusing in a very practical way on a few things. For starters, we need to target a major reduction in infection deaths and we need to mandate team based care for patients with multiple medical conditions.

    Agenda Three: Make Care Much More Affordable

    We spend twice as much as any other country in the world for basically the same care. We also obviously need to fix that.

    We need to do a couple of very basic and practical things to slow or even stop the growth of new cases of diabetes or heart disease. We know what those few basic things are. We just need to make them a priority.

    For example walking 30 minutes a day five days a week cuts the new cases of diabetes by half. Medicare would be saved financially if half as many people became diabetic. Walking also can cut the number of strokes and kidney failures and can improve the survival rates of people with several kinds of cancer.

    We also need to make a couple of changes in our food intake. Saturated fats for example, should be labeled and avoided. Lives will be saved.

    To make care affordable for the next decade, we also will need to understand why we spend twice as much for each unit of care compared to other industrialized countries. Unit prices for hospital days, CT scans, prescription drugs, and basic medical procedures all cost two or three times as much per item as they do in France, Germany, Canada, and the Netherlands. Health care costs in the U.S. would drop from 17.3% of the GDP to under 12% if we paid Canadian or Dutch prices.

    Why are unit costs of care so much higher in America? No one knows. It has never been studied. What we do know is that American caregivers could not survive economically with European or Canadian fee levels. So we obviously can't just cut fees. As a macro-economic issue, we do need to recognize that fees drive costs and that higher fees are the number one cost difference between the U.S. and every other country. We don't need to reduce fees — but we will have absolutely no hope of ever getting to more affordable care in the U.S. if we don't find a way to constrain future increases in fee levels.

    What do you think the megatrends in global health care mean for the United States? What do you think should be the immediate priorities for improving the health of Americans, improving the quality of care in the U.S., and lowering its cost?

    George C. Halvorson is chairman and chief executive officer of Kaiser Permanente, the nation's largest nonprofit health plan and hospital system. He is also the author of Health Care Will Not Reform Itself.

     


    The Writedowns Revisited:  Commerce Secretary Gary Locke owes CEOs an apology

    Rep. Waxman has since canceled those hearings with much less dudgeon or media fanfare, and the report from his own staffers explains his retreat. "The companies acted properly and in accordance with accounting standards in submitting filings to the SEC in March and April," they write. "These one-time charges were required by applicable accounting rules." This may stand as the first time in history that Mr. Waxman has admitted a mistake.
    Scroll Down for Update on April 29

    Ketz Me If You Can
    Another One from That Ketz Guy (this time questioning the reasoning of our Secretary of Commerce)
    "Does Gary Locke Support Accounting Lies?" by: J. Edward Ketz, SmartPros, April 2010 ---
    http://accounting.smartpros.com/x69221.xml 

    I just don't understand the current administration. You would think that after the last decade of financial thievery and accounting mischief, the Obama administration would not tolerate a return to such prevarications. But if one listens to his Secretary of Commerce Gary Locke, that might not be the case.

    Mr. Locke wrote an op-ed (“Don’t Believe the Writedown Hype”) that appeared in the Wall Street Journal April 1, 2010.  At least the date of publication was appropriate.

    He repeats the political dogma that the recently passed healthcare act will reduce the number of uninsured, it will invest $5 billion in a reinsurance program, it contains a number of reforms that will slow the rate of increase in health care costs, and it creates a board that will restrain Medicare costs.  Locke then asserts that these changes will benefit corporations as well as individuals.

    While I believe these assertions exaggerate the benefits of the bill and ignore its dysfunctional components, for the sake of argument, let’s assume that Gary Locke is correct.  So what?  Any cost reductions will be accounted for in the future when the business enterprise actually enjoys cost reductions.  Accountants don’t dream of fewer expenses and then book them.  We wait for history to prove their validity and to correct any errors.

    Locke then criticizes commentators for focusing on a “minor” provision in the legislation that increases health-care costs.  He then asserts without proof that the actual impact will be “quite modest.”  What puffery!

    What motivated this discussion was various 8-Ks issued by corporate America.  On March 24, AT&T informed investors that it would take a charge of about $1 billion.  Specifically, it stated:

    Included among the major provisions of the law is a change in the tax treatment of the Medicare Part D subsidy.  AT&T… intends to take a non-cash charge of approximately $1 billion in the first quarter of 2010 to reflect the impact of this change.  As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company.

    I find it interesting that Locke calls this a “minor” provision but AT&T calls it “major” because it involves an expense of $1 billion.  I guess it depends on one’s perspective.  To AT&T’s investors, $1 billion is probably significant as it reduces quarterly earnings by one-third.  But to the government which creates budget deficits of trillions of dollars per year, maybe $1 billion is immaterial.

    I would think that the administration would applaud the honesty by AT&T’s managers.  FAS 106 specifies the accounting for other postemployment benefits (OPEBs), including their tax effects.  As this legislation removes a tax subsidy from corporations (I’ll leave it to others to debate the merits of this part of the bill), the firms do indeed incur higher healthcare costs.  And these costs are immediate and persistent.  (There also is interaction with FAS 109, accounting for deferred taxes, but that need not concern us.)

    The investment community needs honesty and I hope the administration does too.  Accordingly, Mr. Locke should not be so critical of the immediate recognition of additional costs by corporations which are real and immediate and should be recognized in income statements.  And he should not be pushy for the recognition of cost reductions until they materialize—if they in fact materialize.

    Other companies are also issuing 8-Ks and announcing similar writedowns:  Caterpillar, $100 million; Deere, $150 million; and Boeing, $150 million.   Some estimate that when all is said and done, such writedowns will amount to $15 billion or so.  Additionally, some corporations are doubtless considering whether to reduce the OPEBs they offer employees.  I would not characterize these effects as “quite modest.”

    On March 26, Henry Waxman announced that he would require corporate executives to appear before his committee on April 21 to determine whether they are playing politics through these 8-Ks.  Unless Mr. Locke supports accounting lies, he too should make an appearance and explain to Mr. Waxman how investors and creditors appreciate more honesty and transparency in the accounting reports.  Of course, it is possible that some members of Congress would prefer accounting shenanigans if they don’t reveal some of the costs of the recently passed legislation.

    Gary Locke admonishes readers to “look past the hype and the overheated rhetoric.”  I suggest he read his own sentence.  I also suggest he include investors and creditors in the business community, for without their capital, the business of America ceases to operate.  As Commerce Secretary, he should applaud the recent 8-Ks that managers are releasing.  The information is invaluable to investors and creditors.

    Rep. Waxman has since canceled those hearings with much less dudgeon or media fanfare, and the report from his own staffers explains his retreat. "The companies acted properly and in accordance with accounting standards in submitting filings to the SEC in March and April," they write. "These one-time charges were required by applicable accounting rules." This may stand as the first time in history that Mr. Waxman has admitted a mistake.
    "The Writedowns Revisited: Gary Locke owes CEOs an apology," The Wall Street Journal, April 29, 2010 ---
    http://online.wsj.com/article/SB10001424052748704423504575212422971814134.html#mod=djemEditorialPage_t

    Another day, another never-mind ObamaCare moment. Earlier this week, House Democrats concluded that the deluge of corporate writedowns—amounting to about $3.4 billion so far—were in fact the result of ObamaCare, not the nefarious CEO conspiracy that the White House repeatedly cited when it was embarrassed soon after the bill's passage.

    Commerce Secretary Gary Locke rushed to attack AT&T, Verizon, Caterpillar and many others reporting losses from a tax increase on retiree drug benefits as "premature and irresponsible." He later took to these pages to denounce those who noticed these writedowns as "disingenuous" and peddling "overheated rhetoric."

    Meanwhile, House baron Henry Waxman vowed to summon the offending executives to his committee because their actions "appear to conflict with independent analyses, which show the new law will expand coverage and bring down costs."

    Mr. Waxman has since canceled those hearings with much less dudgeon or media fanfare, and the report from his own staffers explains his retreat. "The companies acted properly and in accordance with accounting standards in submitting filings to the SEC in March and April," they write. "These one-time charges were required by applicable accounting rules." This may stand as the first time in history that Mr. Waxman has admitted a mistake.

    The larger question is what motivated the White House to unleash this assault. Democrats were amply warned about the destructive consequences of these tax changes, and if they really thought these companies were acting out of political motives, then they didn't understand what was in their own bill. Or at least that's one possibility.

    More likely is that they did know and were simply trying to intimidate business and mislead the public in the early days of what was supposed to be the rapturous response to ObamaCare's passage. Instead, the public has turned even more negative on the bill as Americans discover that it won't control costs but will raise insurance premiums and taxes. No wonder Democrats want to change the subject to immigration and Goldman Sachs.

    Bob Jensen's threads on health care are at
    http://faculty.trinity.edu/rjensen/health.htm

     


    Updates for April 20, 2010




    Medical Malpractice Lottery for Lawyers or Criminals or Both

    Hi Jagdish,

    Of course there are mistakes by physicians, hospitals, and drug companies all over the world, mistakes that fall under the heading of medical "malpractice" even when there are no criminal infractions.

    To my knowledge the United States is the only nation, however, that turned medical malpractice into a legal lottery for lawyers or criminals or both.
     

    1. How Canada and Europe Take Lawyers and Many Criminals Out of Medical Malpractice Settlements
    http://news.injuryboard.com/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890

     

    2. How Texas Greatly Reduced Malpractice Insurance Costs
    USA Today reported on July 31, 2009, Page 10A, (using OECD data for 2008) that health care costs in Canada were $3,505 per capita. Before any Obamacare legislation for health care the per capita cost of health care in the United States was $6,567. In large measure this due to the cost physicians, nurses, ambulance services, and hospitals must pay for malpractice insurance. Thousands of gynecologists in the United States dropped the obstetrics part of their practices because of the enormous price of malpractice insurance. Many hospitals dropped obstetrics services for the same reason.
     

    In 2003 Texas voters passed a constitutional amendment that puts tight caps on punitive damages, thereby almost eliminating the lawyer and criminal legal lottery in Texas --- http://www.nytimes.com/2007/10/05/us/05doctors.html?_r=1
    The tremendous impact was that gynecologists thereafter added back their former obstetrics medical services that were dropped because of unaffordable malpractice insurance for obstetrics. Neurosurgeons and other physicians who were turning away Medicare patients once again opened their doors to Medicare patients.
     

    My wife's wonderful gynecologist and close friend in San Antonio was one of those surgeons who dropped obstetrics services when malpractice insurance costs went through the ceiling. After the Texas constitutional amendment was passed and malpractice insurance subsequently became affordable she once again added obstetrics to her medical services practice.

    Before Texas capped punitive damages, while we were still living in San Antonio, my wife had two of her 15 spine surgeries performed by a surgeon from the South Texas Spinal Clinic. When it came time for next surgery her surgeon turned her away saying that the South Texas Spinal Clinic no longer accepted any Medicare patients (Erika was then covered under Medicare Disability Insurance that took over for Workers Comp Insurance). Purportedly the soaring costs, especially malpractice insurance, made complicated Medicare surgeries at the South Texas Spinal Clinic big money losers  in for spinal surgeons. We had to go to Boston to find Erika a high quality spine surgeon who accepted her as a Medicare patient.

    Out of curiosity in November 2009,  I phoned the  South Texas Spinal Clinic and discovered it once again is accepting Medicare patients even though Erika has no intention of returning to that clinic. Ostensibly a major factor in deciding to once again take on Medicare patients is the decline in malpractice insurance costs due largely to a change in the Texas Constitution. Interestingly, decreases in malpractice insurance costs have been a major factor in increasing competition for physician specialists in Texas:

     

    Four years after Texas voters approved a constitutional amendment limiting awards in medical malpractice lawsuits, doctors are responding as supporters predicted, arriving from all parts of the country to swell the ranks of specialists at Texas hospitals and bring professional health care to some long-underserved rural areas. “It was hard to believe at first; we thought it was a spike,” said Dr. Donald W. Patrick, executive director of the medical board and a neurosurgeon and lawyer. But Dr. Patrick said the trend — licenses up 18 percent since 2003, when the damage caps were enacted — has held, with an even sharper jump of 30 percent in the last fiscal year, compared with the year before.
    Ralph Blumenthal, "More Doctors in Texas After Malpractice Caps," The New York Times, October 5, 2007 --- http://www.nytimes.com/2007/10/05/us/05doctors.html

     

    3. The Veterans Administration and Military Services recruited tens of thousands of physicians by promising them that they will not only be the highest paid employees of the government but that they will not have to pay for expensive malpractice insurance or settlement claims. Taxpayers pick up those costs.

     

    4. The legal lottery for lawyers and criminals in the United States
    Here's and example.:  

    On January 26, 2012 CBS News had a segment on the latest scheme in Florida and elsewhere where all participants in an "accident" are fraudsters. The states most vulnerable to these latest schemes are the 12 "no-fault" insurance states. These fake accident scams have exploded in this down economy.

     

    Since there are so many fake medical clinics in Florida, many of these so-called "rear-enders" are reported in Florida. Florida is also the most troublesome state in the U.S. for filing millions of phony disability claims that give recipients at any age Social Security monthly payments for life plus Medicare coverage for life even if the faker is young such as 23 years of age and a long expectation of life. The phony medical clinics of course get a big cut of the pot. Some of the worst abusers of this fraud are Cuban immigrants in south Florida, but there are tens of millions of other perfectly healthy people in the United States who are now drawing lifetime Social Security benefit checks plus Medicare medical insurance coverage originally intended for retirees over age 65. The road to economic hell is paved with good intentions!

     

    This is an an example of a fake auto accident scam that does not even require a lawsuit in a no-fault insurance state"

    1. All the fraudsters are recruited up front for small amounts of cash
    2. Two cheap cars are damaged slightly
    3. The cars are parked on an isolated road in such a manner that it looks line one car hit the back end of the other car
    4. The "accident" is phoned into the police
    5. Before the police arrive five fraudsters with picture IDs enter the front car
    6. Five more enter the rear car
    7. The police arrive and write up an accident report
    8. The next day all 10 people are examined by a fraudulent medical clinic that organized the scheme and supposedly finds soft tissue spinal damage in each passenger
    9. Insurance laws demand immediate payment to each passenger --- amounts vary by state with $10,000 in Florida to $50,000 in New York
    10. Nobody has to sue anybody for causing the accident
    11. Most of the money is raked off by the fraudulent medical clinic that organized and carried out the scheme, including recruiting of the passengers

     

    There are of course variations in car accident scams, but these are often more dangerous and may entail lengthy litigation.

     

    CBS News, January 26, 2012 ---
    http://www.cbsnews.com/8301-18563_162-57367081/scammers-cash-in-on-car-accidents
     

    "Scammers cash in on car 'accidents'"  --- Watch the video!

    (CBS News)

    In this tough economy, one type of insurance fraud is more popular than ever. It involves scam artists who stage car crashes in order to cash in. CBS News chief investigative correspondent Armen Keteyian shows us how it works.

    In Tampa, Florida, security cameras outside a business captured an accident: an SUV "slammed" into a car.

    But rewind the tape and you see the car was actually driven into the middle of the street. The driver got out, a collision, and then five people climbed into the damaged vehicle.

    The passengers later claimed they were injured, to rip off their car insurance company. Instead, they were arrested and convicted of "staging" a car accident.

    Ron Poindexter is the Florida director for the National Insurance Crime Bureau, a not-for-profit agency funded by the insurance industry to investigate fraud.

    "It's a big problem nationally," he said. "In Florida it's a huge, growing problem that's out of control."

    Today 12 states have what's known as no-fault auto insurance. That means no matter who's at fault, everyone involved in a car accident is entitled to insurance money if they're hurt. In Florida, it's up to $10,000 per person; in New York, it's $50,000 -- payouts so big, it's set the stage for massive fraud and scammers like this man, who asked we conceal his identity.

    "First of all you gotta recruit people," said the former scammer. "You have to look around for people who wanna do car accidents. And then you have to ask them if they wanna be the hitter or the one [who's] hit [by the] car in front."

     

    "The hitter or the one that's getting hit," asked Keteyian.

    "Yeah," he said.

    Here's how it works: It's run by organizers who own bogus medical clinics. They in turn hire recruiters who find people willing to stage accidents for money.

    The people involved are then taken to the bogus clinics. An undercover video, shot by Florida State investigators, shows what typically happens next. Here, an investigator posing as an accident "victim" was told to sign one insurance form after another for medical treatment he'll never receive. He was then paid $700 in cash for faking the accident and an injury.

    "It's easy money like that. And it's a lot of money," said the former scammer.

    "Is it always the same thing, is it a back problem?" asked Keteyian.

    Continued in article

     

    Also see http://www.cbsnews.com/stories/2003/06/07/eveningnews/main557495.shtml

     

    5. On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
    "The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/  

    What is hypocritical is that most families only want to keep Granny alive only when Medicare will pay. The instant Granny's estate will have to bear the cost these hypocrites instantly agree to pull Granny off life support.

    What is really sad is the way Republicans are standing in the way of making rational cost-benefit decisions about dying by exploiting the "Kill Granny" political strategy aimed at killing a government option in health care reform.
    See the "Kill Granny" strategy at --- www.defendyourhealthcare.us

     

     

    Tax Provisions
    "A Summary of the Financial Reporting and Disclosure Implications of the Health Care Reform Legislation," Deloitte Heads Up, IAS Plus, April 9, 2010 --- http://www.iasplus.com/usa/headsup/headsup1004healthcare.pdf

    Just the Facts!
    "How the health care bill will impact individuals, businesses," AccountingWeb, March 23, 2010 ---
    http://www.accountingweb.com/topic/tax/how-health-care-bill-will-impact-individuals-businesses

    "Tax Provisions of Health Care Reform Legislation Covered in Briefing by CCH," SmartPros, March 22, 2010 ---
    http://accounting.smartpros.com/x69050.xml


    Also read the CCH Special Tax Briefing on health care reform:
    http://tax.cchgroup.com/Legislation/Final-Healthcare-Reform-03-10.pdf 

    Health-Care Taxes Put Spotlight on Tax-Exempt Municipal Bonds
    The latest wrinkle in the muni-verse: the health-care reform legislation
     signed by President Barack Obama on Mar. 23. One widely discussed feature of the bill is a new Medicare tax that levies 3.8% on wages and other kinds of income, starting in 2013. The tax would not apply to interest on tax-exempt bonds and other forms of unearned income, such as any gain from the sale of a principal residence, that are excluded from gross income under the U.S. income tax code, according to a footnote in the Joint Committee on Taxation's Technical Explanation of the revenue provisions of the Reconciliation Act of 2010. That may seem like a no-brainer, but R.J. Gallo, senior portfolio manager for muni bonds at Federated Investors in Pittsburgh, says he's received calls from a few brokers asking whether munis would be exempt from the additional tax.
    David Bogoslaw, “
    Health-Care Taxes Put Spotlight on Munis," Business Week, March 23. 2010 ---
    http://www.businessweek.com/investor/content/mar2010/pi20100323_076507.htm?link_position=link1

    "ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---
    http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

    "The Massachusetts Insurance Blackout:  Insurers go on strike after Deval Patrick imposes price controls," The Wall Street Journal, April 9, 2010 ---
    http://online.wsj.com/article/SB10001424052702304198004575171782805022028.html#mod=djemEditorialPage_t

    This week it became impossible in Massachusetts for small businesses and individuals to buy health-care coverage after Governor Deval Patrick imposed price controls on premiums. Read on, because under ObamaCare this kind of political showdown will soon be coming to an insurance market near you.

    The Massachusetts small-group market that serves about 800,000 residents shut down after Mr. Patrick kicked off his re-election campaign by presumptively rejecting about 90% of the premium increases the state's insurers had asked regulators to approve. Health costs have run off the rails since former GOP Governor Mitt Romney and Beacon Hill passed universal coverage in 2006, and Mr. Patrick now claims price controls are the sensible response to this ostensibly industry greed.

    Yet all of the major Massachusetts insurers are nonprofits. Three of largest four—Blue Cross Blue Shield, Tufts Health Plan and Fallon Community Health—posted operating losses in 2009. In an emergency suit heard in Boston superior court yesterday, they argued that the arbitrary rate cap will result in another $100 million in collective losses this year and make it impossible to pay the anticipated cost of claims. It may even threaten the near-term solvency of some companies. So until the matter is resolved, the insurers have simply stopped selling new policies.

    A court decision is expected by Monday, but state officials have demanded that the insurers—under the threat of fines and other regulatory punishments—resume offering quotes by today and to revert to year-old base premiums. Let that one sink in: Mr. Patrick has made the health insurance business so painful the government actually has to order private companies to sell their products (albeit at sub-market costs).

    One irony is that Mr. Patrick's own Attorney General and his insurance regulators have concluded—to their apparent surprise—that the reason Massachusetts premiums are the highest in the nation is the underlying cost of health care, not the supposed industry abuses that Mr. Patrick and his political mentor President Obama like to cite.

    On top of that, like ObamaCare, integral to the Massachusetts overhaul are mandates that require insurers to cover anyone who applies regardless of health status or pre-existing conditions and to charge everyone about the same rates. This allows people to wait until they're about to incur major medical expenses before buying insurance and transfer the costs to everyone else. This week Blue Cross Blue Shield reported a big uptick in short-term customers who ran up costs more than four times the average, only to drop the coverage within three months.

    Last July, Charlie Baker detailed similar gaming at Harvard Pilgrim, the health plan he used to run. Between April 2008 and March 2009, about 40% of its new enrollees stayed with it for fewer than five months and on average incurred costs about 600% higher than the company would have otherwise expected.

    Mr. Baker is almost certain to be Mr. Patrick's GOP opponent in the fall election. The Governor's lurch toward price controls is obviously part of a bid to tar the former CEO as an industry villain. David Plouffe, the architect of Mr. Obama's Presidential campaign, has signed on as a Patrick 2010 consultant. These kinds of collisions between politics and health care are going to occur constantly across the country as ObamaCare kicks in.

    "What Difference Has RomneyCare Made?" by John C. Goodman, Townhall, July 9, 2011 ---
    http://townhall.com/columnists/johncgoodman/2011/07/09/what_difference_has_romneycare_made

    . . .

    On paper, it looks as though the state has made major progress in insuring the uninsured. From 6.4% of the population in 2006, the uninsured hover around 2% today. However, one study found that nearly all of the newly insured are either on Medicaid, in a state-subsidized plan or in an employer subsidized plan. Only 7% of the newly insured, or about 30,000 people, are directly paying their own way. It’s relatively easy to get people to sign up for insurance when coverage is free or almost free. And it’s not very expensive if you pay for the subsidies using money you would have spent anyway on free care for those who can’t pay their medical bills.

    But aside from moving money from one bucket to another, have any real problems been solved? The evidence isn’t positive.

    There are three major problems in health care all over the world: cost, quality and access. Since nothing in the Massachusetts reform addressed the problems of rising costs and less than adequate quality, those problems have remained more or less unchanged. What about access to care? Surely, newly insured people have more options in the medical marketplace.

    The trouble is that almost all of the newly insured are in health plans that pay doctors and hospitals a lot less than what private insurance pays. Like other places around the country, Massachusetts Medicaid (called MassHealth) pays providers so little that patients often turn to hospital emergency rooms and community health centers for their care when they can’t find doctors who will see them. People in the newly subsidized private insurance plans aren’t faring much better because these plans pay only slightly more than what Medicaid pays.

    The only solid analysis of what has actually happened to patients at this point is a study by Sharon Long and Paul Masi published in the journal Health Affairs. According to the study:

    • There has been no significant change in the number of Massachusetts patients seeking care in hospital emergency rooms since the reform was implemented, and there has actually been an increase in emergency room use by people with incomes below 300% of the poverty level.

    • There has been an increase in doctor visits but no change in visits to specialists and an actual decrease in “medical tests, treatment and follow up care,” which I assume is care for the chronically ill.

    • There has been no change in the percent of the population reporting a failure to “get needed care for any reason within the past 12 months” and remarkably that includes one-third of those with incomes below 300% of the poverty level.

    The problem with counting up doctor visits is that a visit is not always a visit. Nationally, in the state children’s health insurance program (CHIP) doctors have responded to an increase in the demand for their services by scheduling more appointments, but spending less time with patients. Also, you would think that the Massachusetts reform would shift health care resources from the general population to those with less income. But there is no evidence that has happened. On measures of access, the gap between the poor plus the near poor and everyone else appears not to have changed at all!

    Ask yourself why you care whether other people have health insurance? The most likely reason is that you want people to have access to health care. But lack of access to care is a huge problem in Massachusetts right now. As I previously reported more than half of all family doctors and more than half of all internists are not accepting new patients. The wait is more than a month before a new patient is able to see a family doctor, and the wait to see an internist averages 48 days. The average wait in Boston to see a family doctor is more than two months.

    What I am now reporting will be different than what you may have read in the newspapers or at other health blogs. MIT Professor Jon Gruber calls Massachusetts an unqualified success, citing some of the very same studies I am citing. But since Gruber was one of the architects of the Massachusetts health reform, this is like a student grading his own exam.

    What about elevating the Massachusetts reforms to the national level in the form of ObamaCare? As I have previously reported, ObamaCare is likely to result in less access to care for our most vulnerable populations: the disabled and the elderly on Medicare, the poor on Medicaid and the near poor in newly subsidized private insurance. But that is only the beginning.

    ObamaCare threatens a federal takeover of the practice of medicine. It threatens to cost millions of people their jobs. It threatens to cause a wasteful restructuring of American industry in a way that will make us less efficient and less competitive in the international marketplace. It will cause millions to lose their employer sponsored insurance. And it threatens to create health plans with perverse incentives to underprovide care to the patients most in need of the miracles of modern medical science.

    ObamaCare will be anything but benign.


    A Teaching Case from the Commerce Secretary of the United States

    From The Wall Street Journal Accounting Weekly Review on April 9, 2010

    Don't Believe the Writedown Hype
    by: Gary Locke
    Apr 01, 2010
    Click here to view the full article on WSJ.com

    TOPICS: Advanced Financial Accounting, Income Tax, Medicare, Tax Deferrals

    SUMMARY: Mr. Locke is the commerce secretary of the United States. In this opinion page piece, he expresses support for the recently-passed health care reform act as being "focused on three goals: protecting Americans' choice of doctors and health plans, assuring quality and affordable health care for all Americans, and reducing costs for families and businesses...[Mr. Locke notes that], in recent days, critics have seized on a minor provision in the law to suggest it's already increasing health-care costs for businesses. [He argues that] a fair reading of this provision suggests that its actual impact is quite modest, and far outweighed by the benefits for large businesses..." stemming from the three benefits described above. Mr. Locke focuses on large businesses because those are the firms reporting charges to write off deferred tax assets in the first quarter of 2010 stemming from a change instituted in the new law. The change eliminates deductibility of prescription drug benefits provided to retirees if those benefits have been subsidized by the federal government. "When the Medicare Part D prescription drug bill passed in 2003, businesses were given a double subsidy to help cover the cost of providing prescription drug coverage to their retirees. The government picked up 28% of the cost of their retiree prescription drug plans, and businesses were allowed to both exclude that 28% subsidy from their income and at the same time deduct that subsidy from their income for tax purposes... [The WSJ] reported...that while one company calculated a $100 million hit to its first-quarter earnings, its actual cost after taxes and subsidies, beginning in 2013, was closer to $7 million a year, or less than 1% of its profits last year." That final reference is to AT&T's write-off of deferred tax assets as described in the related article.

    CLASSROOM APPLICATION: The article is useful to discuss accounting for income taxes, deferred tax assets, the lack of time value of money consideration in accounting for income taxes, and the impact of a change in estimate, particularly on quarterly reporting.

    QUESTIONS: 
    1. (Introductory) What is a deferred tax asset? When is such an asset recorded? When is its value reduced by an allowance?

    2. (Introductory) What health care cost deduction resulted in companies such as AT&T, Caterpillar, Inc., 3M Co. and others recording deferred tax assets? Explain your understanding of this particular example of a deferred tax asset.

    3. (Introductory) What change in law was enacted with the health care reform, which required the companies to write off these deferred tax assets?

    4. (Advanced) Why must companies record the entire amount of the write-off of deferred tax assets in one quarter? In your answer, cite authoritative accounting literature contained in the FASB codification which establishes these requirements.

    5. (Advanced) Do you think that the amount of the Q1 2010 write-offs accurately measures potential cost increases to U.S. businesses stemming from the health care reform legislation? Support your answer.

    Reviewed By: Judy Beckman, University of Rhode Island

    RELATED ARTICLES: 
    AT&T Joins in Health Charges
    by David Reilly, Ellen E. Schultz and Ron Winslow
    Mar 27, 2010
    Page: A1

    "Don't Believe the Writedown Hype," by Gary Locke, The Wall Street Journal, April 1, 2010 ---
    http://www.wsjsmartkit.com/wsj_redirect.asp?key=AC20100408-00&mod=djem_jiewr_AC_domainid

    President Obama began his campaign to reform the American health-care system focused on three goals: protecting Americans' choice of doctors and health plans, assuring quality and affordable health care for all Americans, and reducing costs for families and businesses.

    The new comprehensive health-care legislation meets these goals, and will significantly benefit American businesses by slowing and eventually reversing the tide of crippling premium increases washing over our nation's employers.

    These cost savings are real. They will grow over time. And they will make U.S. businesses more competitive.

    First, by drastically cutting the number of uninsured, this law reduces the hidden tax of about $1,000 for family coverage that those with insurance pay to cover the cost of the uninsured who rely on emergency rooms for care.

    Second, the law invests $5 billion in a new reinsurance program for early retirees starting this year. For employers paying for their retirees between ages 55-64, this provision will directly reduce family premiums by as much as $1,200.

    Third, the new law contains numerous reforms that a 2009 study by the Business Roundtable—an association of CEOs of leading U.S. companies—says will help slow the growth rate of health costs over time.

    It places a fee on insurance companies' most expensive plans that independent experts agree will put downward pressure on the long-term growth of health costs.

    It empowers an Independent Payment Advisory Board to keep Medicare cost growth in check and promote payment and health delivery system reforms. And it realigns incentives to reward medical providers for the value, not the volume, of their care.

    Based on the midrange estimates of the nonpartisan Congressional Budget Office (CBO), the present value benefit of the premium reductions from these reforms over the next three decades is in excess of $200 billion.

    Add these system-wide reforms with measures like the $40 billion in tax credits that will be available to about four million small businesses over the next decade to help cover the cost of employee health coverage, and what you have is a law that is unquestionably pro-business and pro-jobs.

    However, in recent days, critics have seized on a minor provision in the law to suggest it's already increasing health-care costs for businesses. A fair reading of this provision suggests that its actual impact is quite modest, and far outweighed by the benefits for large businesses outlined above.

    Let's explain how this started. When the Medicare Part D prescription drug bill passed in 2003, businesses were given a double subsidy to help cover the cost of providing prescription drug coverage to their retirees. The government picked up 28% of the cost of their retiree prescription drug plans, and businesses were allowed to both exclude that 28% subsidy from their income and at the same time deduct that subsidy from their income for tax purposes.

    In 2013, that changes. Under the new law, businesses will still get the same 28% subsidy, and it will still be tax free. They just don't get to deduct the subsidy.

    Seems reasonable, right? This is how virtually every other federal subsidy for businesses and individuals is treated by the IRS. Indeed, Donald Marron, acting CBO director for President George W. Bush, put it this way: "[A]s the Joint Committee on Taxation recently noted, that treatment is highly unusual. In my view, it's right that the recent health legislation closed that loophole."

    This change has garnered recent headlines because, to comply with accounting laws, companies affected by the provision have taken a one-time charge reflecting the loss of future tax deductions over the decades-long duration of their retiree health-care plans. Critics have seized on this accounting adjustment to suggest these costs—as much as $1 billion in one company's case—are going to place immediate and substantial cost burdens on America's businesses.

    This is disingenuous.

    The actual cash flow impact of these provisions begins in 2013, and is only a tiny fraction of the accounting charge-offs.

    This newspaper reported last Friday that while one company calculated a $100 million hit to its first-quarter earnings, its actual cost after taxes and subsidies, beginning in 2013, was closer to $7 million a year, or less than 1% of its profits last year.

    Credit Suisse's response to the tax controversy was: "don't overreact to the hit on earnings." Morgan Stanley referred to it as "noise" that would have "no impact whatsoever" on their view of this earnings cycle. And UBS projected that the impact in virtually all cases represented less than 1% of market capitalization for affected companies.

    When you look past the hype and the overheated rhetoric, the benefits of the health reforms for America's businesses large and small far outweigh the impact of this small tax provision.

    And while critics have rushed to highlight this small accounting measure, they conveniently leave out the one fact on which every serious health-care analyst agrees: The status quo was completely unsustainable for American businesses.

    The Business Roundtable study said that if current cost trends continued through 2019, the total cost of employer and employee premiums and out-of-pocket expenses would be 166% higher than it is today.

    That would either force companies to decrease or eliminate employee health-insurance benefits or subject them to back-breaking costs that would make them less competitive in the global marketplace.

    The bill President Obama signed into law last week helps avoid each of these equally unappealing options.

    I understand that in these difficult economic times, the potential for any additional expense is not welcomed by American businesses. But in the long run, the health insurance reform law promises to cut health-care costs for U.S. businesses, not expand them.

    That's good for them. That's good for their employees. That's good for America.

    Mr. Locke is the commerce secretary of the United States.

    Another One from That Ketz Guy (this time questioning the reasoning of our Secretary of Commerce)
    "Does Gary Locke Support Accounting Lies?" by: J. Edward Ketz, SmartPros, April 2010 ---
    http://accounting.smartpros.com/x69221.xml 

    I just don't understand the current administration. You would think that after the last decade of financial thievery and accounting mischief, the Obama administration would not tolerate a return to such prevarications. But if one listens to his Secretary of Commerce Gary Locke, that might not be the case.

    Mr. Locke wrote an op-ed (“Don’t Believe the Writedown Hype”) that appeared in the Wall Street Journal April 1, 2010.  At least the date of publication was appropriate.

    He repeats the political dogma that the recently passed healthcare act will reduce the number of uninsured, it will invest $5 billion in a reinsurance program, it contains a number of reforms that will slow the rate of increase in health care costs, and it creates a board that will restrain Medicare costs.  Locke then asserts that these changes will benefit corporations as well as individuals.

    While I believe these assertions exaggerate the benefits of the bill and ignore its dysfunctional components, for the sake of argument, let’s assume that Gary Locke is correct.  So what?  Any cost reductions will be accounted for in the future when the business enterprise actually enjoys cost reductions.  Accountants don’t dream of fewer expenses and then book them.  We wait for history to prove their validity and to correct any errors.

    Locke then criticizes commentators for focusing on a “minor” provision in the legislation that increases health-care costs.  He then asserts without proof that the actual impact will be “quite modest.”  What puffery!

    What motivated this discussion was various 8-Ks issued by corporate America.  On March 24, AT&T informed investors that it would take a charge of about $1 billion.  Specifically, it stated:

    Included among the major provisions of the law is a change in the tax treatment of the Medicare Part D subsidy.  AT&T… intends to take a non-cash charge of approximately $1 billion in the first quarter of 2010 to reflect the impact of this change.  As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company.

    I find it interesting that Locke calls this a “minor” provision but AT&T calls it “major” because it involves an expense of $1 billion.  I guess it depends on one’s perspective.  To AT&T’s investors, $1 billion is probably significant as it reduces quarterly earnings by one-third.  But to the government which creates budget deficits of trillions of dollars per year, maybe $1 billion is immaterial.

    I would think that the administration would applaud the honesty by AT&T’s managers.  FAS 106 specifies the accounting for other postemployment benefits (OPEBs), including their tax effects.  As this legislation removes a tax subsidy from corporations (I’ll leave it to others to debate the merits of this part of the bill), the firms do indeed incur higher healthcare costs.  And these costs are immediate and persistent.  (There also is interaction with FAS 109, accounting for deferred taxes, but that need not concern us.)

    The investment community needs honesty and I hope the administration does too.  Accordingly, Mr. Locke should not be so critical of the immediate recognition of additional costs by corporations which are real and immediate and should be recognized in income statements.  And he should not be pushy for the recognition of cost reductions until they materialize—if they in fact materialize.

    Other companies are also issuing 8-Ks and announcing similar writedowns:  Caterpillar, $100 million; Deere, $150 million; and Boeing, $150 million.   Some estimate that when all is said and done, such writedowns will amount to $15 billion or so.  Additionally, some corporations are doubtless considering whether to reduce the OPEBs they offer employees.  I would not characterize these effects as “quite modest.”

    On March 26, Henry Waxman announced that he would require corporate executives to appear before his committee on April 21 to determine whether they are playing politics through these 8-Ks.  Unless Mr. Locke supports accounting lies, he too should make an appearance and explain to Mr. Waxman how investors and creditors appreciate more honesty and transparency in the accounting reports.  Of course, it is possible that some members of Congress would prefer accounting shenanigans if they don’t reveal some of the costs of the recently passed legislation.

    Gary Locke admonishes readers to “look past the hype and the overheated rhetoric.”  I suggest he read his own sentence.  I also suggest he include investors and creditors in the business community, for without their capital, the business of America ceases to operate.  As Commerce Secretary, he should applaud the recent 8-Ks that managers are releasing.  The information is invaluable to investors and creditors.

    Bob Jensen's threads on health care are at
    http://faculty.trinity.edu/rjensen/health.htm


    Updates for April 8, 2010

    "Unneeded, riskier spinal fusion surgery on rise Surgery has higher risk of stroke, not much evidence of benefit, study says," by Carla K. Johnson, MSNBC, April 6, 2010 --- http://www.msnbc.msn.com/id/36197896/ns/health-health_care/

    A study of Medicare patients shows that costlier, more complex spinal fusion surgeries are on the rise — and sometimes done unnecessarily — for a common lower back condition caused by aging and arthritis.

    What's more alarming is that the findings suggest these more challenging operations are riskier, leading to more complications and even deaths.

    "This is exactly what the health care debate has been dancing around," said Dr. Eugene Carragee of Stanford University Medical Center.

    "You have one kind of operation that could cost $20,000 and another that could cost $80,000 and there's not good evidence the expensive one is being used appropriately in the majority of cases," Carragee said.

    Add to that the expense for patients whose problems after surgery send them back to the hospital or to a nursing home and "that's not a trivial amount of money" for Medicare, said Carragee. He wrote an accompanying editorial in the Journal of the American Medical Association where the federally funded study appears Wednesday.

    The cost to Medicare, just for the hospital charges for the three types of back surgery reviewed is about $1.65 billion a year, according to the researchers.

    All the patients in the study had stenosis in their lower backs, a painful squeezing in the spine that's most common in people over 50. The researchers compared the risks for three different types of surgery for the condition: decompression, simple fusion and complex fusion.

    "All operations aren't the same and some seem to be associated with higher complication rates than others," said lead author Dr. Richard Deyo of Oregon Health and Science University in Portland. "It's not necessarily true that the more aggressive surgery is better, at least in terms of safety."

    There's little agreement about the best way to treat chronic lower back pain, and much depends on what's causing the pain.

    Alternatives to complicated surgery Patients should ask their doctors about alternatives to complicated operations, Deyo said. Could steroid injections and physical therapy be tried? Would a simple decompression procedure be as helpful as a spinal fusion and with less risk?

    In a decompression procedure, the simplest method in the Medicare study, a surgeon cuts away part of the bone that's painfully pressing on nerves. It can cost about $30,000 in hospital and surgeon fees.

    For a fusion, a surgeon binds two or more vertebrae together using a bone graft, with or without plates and screws. The researchers defined a complex fusion as one involving three or more vertebrae or more than one side of the spine. Fusions cost $60,000 to $90,000.

    The researchers analyzed data on more than 32,000 Medicare patients who had one of the three types of surgeries in 2007.

    Higher death rates About 5 in 100 patients who had simple or complex fusions suffered major complications such as stroke compared to 2 in 100 with decompressions. The risk of death within 30 days after surgery was different too: 6 in 1,000 for complex fusions compared with 5 in 1,000 for simple fusions and 3 in 1,000 for decompressions.

    The study didn't address how successful the various types of surgeries were at relieving pain.

    More than half the patients who had complex fusions had a simple stenosis, which usually calls for decompression alone. They did not have the curvature of the spine or a slipped vertebra — additional conditions that might suggest a fusion is needed. There's not much evidence for doing a complex fusion for a person with simple stenosis, Carragee and other experts said.

    "It certainly looks like there's more complex surgery being done than we have very good evidence to support," Carragee said.

    Allegations of kickbacks Rates of complex fusions in Medicare patients rose 15-fold from 2002 to 2007, while decompressions and simple fusions declined, the study found. Although the overall procedure rate fell, hospital charges grew 40 percent.

    Aggressive marketing of devices used in complex fusions is likely playing a role in the increase, Deyo said. The marketing includes ads in medical journals and lectures by surgeons on the payroll of device manufacturers.

    Allegations of kickbacks to spine surgeons for using products and questionable financial arrangements to doctors as consultants have plagued the multibillion-dollar industry. One company, Medtronic Inc., reached a $40 million settlement with the U.S. Justice Department in a whistleblower case that included allegations the company paid doctors to use its spine surgery products. The company denied any wrongdoing.

    Jensen Comment
    Although I don't dispute the findings of the above study, there certainly are exceptions. The prognosis was that my wife would die unless she had some of her spinal fusions, especially surgery Number 8 when she was so bent forward that she was crushing her abdominal organs. She now has metal bracing on her spine from her neck to her hips ---
    http://faculty.trinity.edu/rjensen/Erika2007.htm

    Note that I’m not in favor of repealing the recent legislation. But I am in favor of adding a public option so long as taxation and insurance premiums are added to fully cover the annual costs of health insurance. And let's stop the BS on the left and on the right side of this debate.

    Fuzzy CBO Accounting Tricks
    "ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 26, 2010 ---
    http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

    This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.

    EXPRESS:

    The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.

    The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.

    The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.

    Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.

    LOCAL:

    For future reference (or possibly to roll up and beat myself over the head with in my dotage) I have filed away a copy the latest analysis (pdf) of health-care reform from the Congressional Budget Office. By 2019, it says, the bills passed by the House and Senate will have cut the number of uninsured Americans by thirty-two million, raised the percentage of people with some form of health-care coverage from eighty-three per cent to ninety-four per cent, and reduced the federal deficit by a cumulative $143 billion. If all of these predictions turn out to be accurate, ObamaCare will go down as one of the most successful and least costly government initiatives in history. At no net cost to the taxpayer, it will have filled a gaping hole in the social safety net and solved a problem that has frustrated policymakers for decades.

    Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.

    The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.

    The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”

    Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.

    My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.

    Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.

    Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)

    If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”

    So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.

    The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.

    Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)

    In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.

    Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.

    The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.

    The C.B.O.’s analysis can’t be dismissed out of hand, but it is surely a best-case scenario. Again, I come back to where I started: the scale of the subsidies on offer for low and moderately priced workers. If economics has anything to say as a subject, it is that you can’t offer people or firms large financial rewards for doing something—in this case, dropping their group coverage—and not expect them to do it in large numbers. On this issue, I find myself in agreement with Tyler Cowen and other conservative economists. Over time, the “firewall” between the existing system of employer-provided group insurance and taxpayer-subsidized individual insurance is likely to break down, with more and more workers being shunted over to the public teat.

    At that point, if it comes, politicians of both parties will be back close to where they began: searching for health-care reform that provides adequate coverage for all at a cost the country can afford. What would such a system look like? That is a topic for another post, but I don’t think it would look much like Romney-ObamaCare.  

    Read more: http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html#ixzz0jrFSFK3j

    "Signed, sealed, delivered," The Economist, March 27, 2010, Page 31 ---
    http://www.economist.com/world/united-states/displaystory.cfm?story_id=15769767

    "SignThe first big idea that he stresses is the creation of a new agency to spearhead innovation and scale up any of the many pilot schemes contained in the bills that manage to reform delivery or payment systems. It is true that the reform effort began with earnest intent to “bend the cost curve”. Alas, explains Mark McClellan of the Brookings Institution, the most meaningful proposals have since been watered down or delayed.

    The second lever of change that Mr Orszag says is underappreciated is an excise tax introduced on the most expensive (or “Cadillac”) insurance plans. Most economists like this idea, as it is likely to discourage excessive consumption of health care. Unfortunately, because of political pressure from labour unions and other groups, the Cadillac tax has been diluted, and delayed until 2018. Sceptics wonder if a future Congress will really implement this tax when the time comes. Mr Orszag is right that, if implemented, this provision will represent an important lever of cost control. But it’s a big “if”.

    The third and strongest argument Mr Orszag makes is for the potential of an independent payment-advisory board on Medicare spending. Under the new law this group is to make recommendations to Congress on how to reduce the rate of growth in spending per head in Medicare if that expenditure exceeds a target figure.

    Sceptics abound. Yes, the approach succeeded when used by the Pentagon to decide which military bases to shut down. But an earlier version of this idea, known as MedPAC, flopped because Congress simply ignored even worthy ideas that proved politically inconvenient. And the new law carves out a ten-year exemption for hospitals—appalling, when one considers that runaway costs and misaligned incentives in hospitals lie at the very heart of the cost problem. But Mr Orszag believes this approach will help in two ways: it insulates tough decisions from politics, and it encourages ongoing reform rather than one-shot heroics. Critics say that is a lot of faith to put in a weakened body.

    All this points to the only certain thing about Obamacare: that this is just another episode in the long saga of health reform. Indeed, by adding tens of millions of people to an unreformed and unsustainably expensive health system, this reform makes it all the more urgent to tackle the question of cost.

    On that, at least, left and right seem to agree. Paul Krugman, an economics professor at Princeton and a liberal booster of reform, wrote on the eve of the votes: “There is, as always, a tunnel at the end of the tunnel: we’ll spend years if not decades fixing this thing.” Robert Moffit of the Heritage Foundation, a conservative think-tank opposed to the effort, agrees, albeit in darker terms: “This marks the beginning of the next phase of this hundred years war.”

     

     

    "Health Care for CPAs," by Bruce Bialosky, Townhall, April 5, 2010 ---
    http://townhall.com/columnists/BruceBialosky/2010/04/05/health_care_for_cpas

    Let’s start with Obama’s big lie. It is absolutely indisputable that taxes are being raised on people whose income is below the magical figure of $250,000. The way it’s done is by reducing the medical-expense deduction. Currently, you’re allowed to deduct out-of-pocket medical expenses that exceed 7.5% of your income, but the new law changes that to 10%. This means if your income is $100,000, and you paid $10,000 in hospital bills, you will lose a $2,500 deduction and probably pay about $700 in additional taxes. In a country in which only 12% of health care expenses are paid by the individuals who actually receive the services, this increase will just encourage more people to shift those costs to third-party payers.

    Then there is the familiar political trick; i.e., claiming that your taxes are not being raised, but at the same time increasing taxes on companies that sell things to you. Of course, those companies just pass the cost along to you. Under this “reform,” new fees and taxes are being imposed upon three medical industry groups: health insurers, medical device manufacturers, and pharmaceutical companies. The insidious objective here is not just to hide the real cost of this new plan, but to encourage exasperated Americans – who ultimately have to pay these rising costs – to view government-run health care more favorably.

    What the bill mandates is utterly surreal. For example, there is a $2 billion annual tax imposed on medical device companies through 2017, increasing to $3 billion thereafter. Each of these firms must report their sales to the Treasury, who will then apportion the $2 billion tax amongst the various companies. Since no one knows exactly how many medical devices are sold in America, the companies haven’t the slightest clue what their cost per device will be. Let’s say 10 million are sold in the first year – that would mean a fee of $200 per device. But what if sales are driven down because of these higher costs (not to mention the real possibility that some of the companies will go out of business because of these huge new fees)? What if only 7 million devices were sold in the second year? The tax per device would now be $285. That would not only drive up the price of devices again, but – more importantly – it will profoundly discourage product innovation and investment because no one would be able to anticipate their gross production costs.

    The elimination of one specific deduction has recently received a lot of media coverage. Companies that provided a prescription drug benefit to their retired employees were until now able to deduct 28% of the cost. It is estimated that this exemption saved taxpayers about $544 per person compared to the price of Medicare Part D for the same drug benefit. Now Congress has told corporations that you can pay the benefit, but you cannot deduct the costs, which is why all these large companies are taking massive loss write-offs. How long will it be before the companies stop providing this benefit? Believe me – when this happens, there will be a further outcry from the Left; the demagogues will point fingers at private industry; and, again the argument will be made for a totally government-run health system.

    There’s also a new requirement that companies with 50 employees provide health insurance. What happens to the employer who has 48, then 49 employees? They have to decide whether to expand and be harnessed with the new costs and administrative requirements, or stop the growth of their company. Talk about a job-killing provision.

    Nancy Pelosi stated that this bill would create 4 million new jobs – 400,000 in the first year alone. It’s pretty clear that these jobs will all be the new government employees necessary to oversee these mandates, and administrative employees needed by businesses to comply. Not one productive job will be created, but thousands – maybe tens of thousands – will be lost or shipped overseas. The people of India are already salivating. If you thought our health care system hindered our international competitiveness before, just wait until Health Care Reform is fully implemented.

    The only saving grace is that the bill takes on a favorite constituency of the Democrats – Hollywood. The bill adds a 10% tax on tanning salons. No doubt, that should balance the budget.

     


    "Don Fanucci's Health-Care Lesson: Don Fanucci would understand," The Wall Street Journal, April 1, 2010 ---
    http://online.wsj.com/article/SB10001424052702304370304575152052412426936.html

    An expansion in government power has a way of creating its own captured interests, and ObamaCare is proving to be no exception. Whatever its views before the law passed, the health-care industry is now mobilizing en masse to become its biggest public advocate.

    America's Health Insurance Plans, the insurance industry trade group, confirmed this week that it will participate in Enroll America, a new nonprofit founded by liberal activist Ron Pollack and his health-care pressure group, Families USA. Mr. Pollack describes the program as a 50-state effort to fully and quickly vest every American in ObamaCare's many programs, subsidies and benefits. He's confidently promising to raise "tens of millions of dollars per year," presumably from AHIP's members, as well as from the drug and hospital industries.

    For industry players, this is political protection money against Democrats who, thanks to ObamaCare, will now have the power to effectively set insurance rates. Like the Italian grocer who had to hire Don Fanucci's nephew in Godfather II, AHIP CEO Karen Ignagni is hoping this and other offerings will deter Democrats from making an example of her members. Good luck.

    The insurance industry acquiesced to multiple and expensive new ObamaCare regulations in the belief the "individual mandate" will create healthy new customers to cover the costs. But Democrats watered down the mandate's tax penalty, so millions of those customers may wait to buy insurance until they are already sick. Mrs. Ignagni needs Mr. Pollack to help lure Americans to her members' doors.

    All of which illustrates why it is so hard to repeal entitlements. As Nobel economist Gary Becker noted in our March 27 Weekend Interview, entitlements create their own political barricade of interest groups that grow to depend on them. So, like AARP, the health industry will now become an arm of the government (and the Democratic Party), with a self-interest in defending ObamaCare. Powerful government always benefits the powerful, which is something to remember when you hear from Enroll America.

     


    "What You Get With Free Health Care," by Janice Shaw Crouse, Townhall, March 29, 2010 ---
    http://townhall.com/columnists/JaniceShawCrouse/2010/03/29/what_you_get_with_free_health_care

    One of the prime arguments used to sell ObamaCare was that it would reverse the financial crisis and save the country a gazillion dollars — with benefits beginning in its first year. Sadly, somebody’s arm got twisted to produce Congressional Budget Office (CBO) figures — nicely timed for the House vote — to supposedly back up the Democrats’ arguments. Nobody seemed to understand that the CBO figures were just estimates. Yet, as they say, the devil is in the details. The CBO details clearly indicate that having the government’s role expanded to provide universal coverage will significantly increase costs, as well as premiums and taxes. Worse, the CBO notes that most of the current costs of the U.S. world-class health care are from providing new, cutting-edge treatments and ever-expanding medical technologies. They add, “Given the central role of medical technology in cost growth, reducing or slowing spending over the long term would probably require decreasing the pace of adopting new treatments and procedures or limiting the breadth of their application.”

    How’s that for dispelling the claims that quality will remain high, rationing won’t happen, and technology will continue to expand while costs go down? The real life record of government control is a long way from matching the soaring rhetoric that has dominated the media coverage of the health care debate. Further, in those countries where massive government intervention has replaced free market enterprise, the reality is far short of the utopian promises and the policies that have been spun out so recklessly and misleadingly. Price controls, inevitably, limit innovation. If that happens to medical research and technological advancement, the results will be disastrous.

    Continued in article

     


    Updates on March 30, 2010

    In the media we are now being bombarded with all the benefits of the new health care plan for young and old and poor. What is never mentioned is that over a hundred million people getting new or expanded coverage are paying zero for it (except possibly in having less chance for a job in small and medium sized businesses). In Canada virtually all people getting universal health care insurance are paying something for their coverage. In the United States we've avoided such taxes by putting the bill on our badly overburdened Chinese credit cards.

    Americans at all levels of income should have to agree to much higher taxes
    The average Canadian family spends more money on taxes than on necessities of life such as food, clothing, and housing, according to a study from The Fraser Institute, an independent research organization with offices across Canada. The Canadian Consumer Tax Index, 2007, shows that even though the income of the average Canadian family has increased significantly since 1961, their total tax bill has increased at a much higher rate.

    The Fraser Institute, April 16, 2007 --- http://www.newswire.ca/en/releases/archive/April2007/16/c5234.html
    In 2007 tax revenue in Canada per capita was $12,820  from OECD tables ---
    http://stats.oecd.org/Index.aspx?DataSetCode=CSP2009

    Instead We Have a Job Killer in Action
    Meanwhile, John DiStaso of the New Hampshire Union Leader reported this week that ObamaCare could cost the Granite State's major ski resorts as much as $1 million in fines, because they hire large numbers of seasonal workers without offering health benefits. "The choices are pretty clear, either increase prices or cut costs, which could mean hiring fewer workers next winter," he wrote.

    "The ObamaCare Writedowns," The Wall Street Journal, March 27, 2010 ---
    http://online.wsj.com/article/SB20001424052748704100604575146002445136066.html#mod=todays_us_opinion 
    Jensen Comment
    I may be justice that small businesses have to pay more for the health insurance of seasonal employees, but the net result will be much more unemployment and lower opportunity for teens to find seasonal employment. Are we forcing idleness on teens willing to work part-time and seasonal jobs? How much will this hurt their quest for working to help support their advanced training and education?


    "'Basically an Optimist'—Still The Nobel economist says the health-care bill will cause serious damage, but that the American people can be trusted to vote for limited government in November," by Peter Robinson, The Wall Street Journal, March 27, 2010 ---
    http://online.wsj.com/article/SB10001424052748704094104575144011906222520.html?mod=WSJ_newsreel_opinion

    "No, no. Not at all."

    So says Gary Becker when asked if the financial collapse, the worst recession in a quarter of a century, and the rise of an administration intent on expanding the federal government have prompted him to reconsider his commitment to free markets.

    Mr. Becker is a founder, along with his friend and teacher the late Milton Friedman, of the Chicago school of economics. More than four decades after winning the John Bates Clark Medal and almost two after winning the Nobel Prize, the 79-year-old occupies an unusual position for a man who has spent his entire professional life in the intensely competitive field of economics: He has nothing left to prove. Which makes it all the more impressive that he works as hard as an associate professor trying to earn tenure. He publishes regularly, carries a full-time teaching load at the University of Chicago (he's in his 32nd year), and engages in a running argument with his friend Judge Richard Posner on the "Becker-Posner Blog," one of the best-read Web sites on economics and the law.

    When his teaching schedule permits, Mr. Becker visits the Hoover Institution, the think tank at Stanford where he has been a fellow since 1988. The day he and I meet in his Hoover office, Mr. Becker has already attended a meeting with former Treasury Secretary Hank Paulson and spent several hours touring Apple headquarters down the road in Cupertino with his wife, Guity Nashat, a historian of the Middle East, and their grandson. "I guess you'd call our grandson a computer whiz," he explains proudly. "He's just 14, but he has already sold a couple of apps."

    View Full Image

    Zina Saunders I begin with the obvious question. "The health-care legislation? It's a bad bill," Mr. Becker replies. "Health care in the United States is pretty good, but it does have a number of weaknesses. This bill doesn't address them. It adds taxation and regulation. It's going to increase health costs—not contain them."

    Drafting a good bill would have been easy, he continues. Health savings accounts could have been expanded. Consumers could have been permitted to purchase insurance across state lines, which would have increased competition among insurers. The tax deductibility of health-care spending could have been extended from employers to individuals, giving the same tax treatment to all consumers. And incentives could have been put in place to prompt consumers to pay a larger portion of their health-care costs out of their own pockets.

    "Here in the United States," Mr. Becker says, "we spend about 17% of our GDP on health care, but out-of-pocket expenses make up only about 12% of total health-care spending. In Switzerland, where they spend only 11% of GDP on health care, their out-of-pocket expenses equal about 31% of total spending. The difference between 12% and 31% is huge. Once people begin spending substantial sums from their own pockets, they become willing to shop around. Ordinary market incentives begin to operate. A good bill would have encouraged that."

    Despite the damage this new legislation appears certain to cause, Mr. Becker believes we're probably stuck with it. "Repealing this bill will be very, very difficult," he says. "Once you've got a piece of legislation in place, interest groups grow up around it. Look at Medicare and Medicaid. Originally, the American Medical Association opposed Medicare and Medicaid. Then the AMA came to see them as a source of demand for physicians' services. Today the AMA supports Medicare and Medicaid as staunchly as anyone. Something like that will happen with this new legislation."

    Bad legislation, maintained by self-seeking interest groups. Back in 1982, I remind Mr. Becker, the economist Mancur Olson published a book, "The Rise and Decline of Nations," predicting just that trend. Over time, Olson argued, interest groups would form to press for policies that would almost invariably prove protectionist, redistributive or antitechnological. Policies, in a word, that would inhibit economic growth. Yet since the benefits of such policies would accrue directly to interest groups while the costs would be spread across the entire population, very little opposition to such self-seeking would ever develop. Interest groups—and bad policies—would proliferate, and the nation would stagnate.

    Olson may have sketched his portrait during the 1980s, but doesn't it display a remarkable likeness to the United States today? Mr. Becker thinks for a moment, swiveling toward the window. Then he swivels back. "Not necessarily," he replies.

    "The idea that interest groups can derive specific, concentrated benefits from the political system—yes, that's a very important insight," he says. "But you can have competing interest groups. Look at the automobile industry. The domestic manufacturers in Detroit want protectionist policies. But the auto importers want free trade. So they fight it out. Now sometimes in these fights the dark forces prevail, and sometimes the forces of light prevail. But if you have competing interest groups you don't end up with a systematic bias toward bad policy."

    Mr. Becker places his hands behind his head. Once again, he reflects, then smiles wryly. "Of course that doesn't mean there isn't any systematic bias toward bad policy," he says. "There's one bias that we're up against all the time: Markets are hard to appreciate."

    Capitalism has produced the highest standard of living in history, and yet markets are hard to appreciate? Mr. Becker explains: "People tend to impute good motives to government. And if you assume that government officials are well meaning, then you also tend to assume that government officials always act on behalf of the greater good. People understand that entrepreneurs and investors by contrast just try to make money, not act on behalf of the greater good. And they have trouble seeing how this pursuit of profits can lift the general standard of living. The idea is too counterintuitive. So we're always up against a kind of in-built suspicion of markets. There's always a temptation to believe that markets succeed by looting the unfortunate."

    As he speaks, Mr. Becker appears utterly at ease. He wears loose-fitting clothes and slouches comfortably in his chair. His hair, wispy and white, sets off his most striking feature—penetrating eyes so dark they seem nearly black. Yet those dark eyes display not foreboding, but contentment. He does not have the air of a man contemplating national decline.

    I read aloud from an article by historian Victor Davis Hanson that had appeared in the morning newspaper. "[W]e are in revolutionary times," Mr. Hanson argues, "in which the government will grow to assume everything from energy to student loans." Next I read from a column by economist Thomas Sowell. "With the passage of the legislation allowing the federal government to take control of the medical system," Mr. Sowell asserts, "a major turning point has been reached in the dismantling of the values and institutions of America."

    "They're very eloquent," Mr. Becker replies, his equanimity undisturbed. "And maybe they're right. But I'm not that pessimistic." The temptation to view markets with suspicion, he explains, is just that: a temptation. Although voters might succumb to the temptation temporarily, over time they know better.

    "One of the points Secretary Paulson made earlier today was how outraged—how unexpectedly outraged—the American people became when the government bailed out the banks. This belief in individual responsibility—the belief that people ought to be free to make their own decisions, but should then bear the consequences of those decisions—this remains very powerful. The American people don't want an expansion of government. They want more of what Reagan provided. They want limited government and economic growth. I expect them to say so in the elections this November."

    Even if ordinary Americans still want limited government, I ask, what about those who dominate the press and universities? What about the molders of received opinion who claim that the financial crisis marked the demise of capitalism, rendering the Chicago school irrelevant?

    "During the financial crisis," he replies, "the government and markets—or rather, some aspects of markets—both failed."

    The Federal Reserve, Mr. Becker explains, kept interest rates too low for too long. Freddie Mac and Fannie Mae made the mistake of participating in the market for subprime instruments. And as the crisis developed, regulators failed to respond. "The Fed and the Treasury didn't see the crisis coming until very late. The SEC didn't see it at all," he says.

    "The markets made mistakes, too. And some of us who study the markets made mistakes. Some of my colleagues at Chicago probably overestimated the ability of the Fed to smooth disruptions. I didn't write much about the Fed, but if I had I would probably have overestimated the Fed myself. As the banks developed new instruments, economists paid too little attention to the systemic risks—the risks the instruments posed for the whole financial system—as opposed to the risks they posed for individual institutions.

    "I learned from Milton Friedman that from time to time there are going to be financial problems, so I wasn't surprised that we had a financial crisis. But I was surprised that the financial crisis spilled over into the real economy. I hadn't expected the crisis to become that bad. That was my mistake."

    Once again, Mr. Becker reflects. "So, yes, we economists made mistakes. But has the experience of the past few years invalidated the finding that markets remain the most efficient means for producing economic growth? Not in any way.

    "Look at growth in developed countries since the Second World War," he continues. "Even after you take into account the various recessions, including this one, you still end up with a good record. So even if a recession as bad as this one were the price of free markets—and I don't believe that's the correct way of looking at it, because government actions contributed so greatly to the current problem—but even if a bad recession were the price, you'd still decide it was worth paying.

    "Or look at developing countries," he says. "China, India, Brazil. A billion people have been lifted out of poverty since 1990 because their countries moved toward more market-based economies—a billion people. Nobody's arguing for taking that back."

    My last question involves a little story. Not long before Milton Friedman's death in 2006, I tell Mr. Becker, I had a conversation with Friedman. He had just reviewed the growth of spending that was then taking place under the Bush administration, and he was not happy. After a pause during the Reagan years, Friedman had explained, government spending had once again begun to rise. "The challenge for my generation," Friedman had told me, "was to provide an intellectual defense of liberty." Then Friedman had looked at me. "The challenge for your generation is to keep it."

    What was the prospect, I asked Mr. Becker, that this generation would indeed keep its liberty? "It could go either way," he replies. "Milton was right about that."

    Mr. Becker recites some figures. For years, federal spending remained level at about 20% of GDP. Now federal spending has risen to 25% of GDP. On current projections, federal spending would soon rise to 28%. "That concerns me," Mr. Becker says. "It concerns me a great deal.

    "But when Milton was starting out," he continues, "people really believed a state-run economy was the most efficient way of promoting growth. Today nobody believes that, except maybe in North Korea. You go to China, India, Brazil, Argentina, Mexico, even Western Europe. Most of the economists under 50 have a free-market orientation. Now, there are differences of emphasis and opinion among them. But they're oriented toward the markets. That's a very, very important intellectual victory. Will this victory have an effect on policy? Yes. It already has. And in years to come, I believe it will have an even greater impact."

    The sky outside his window has begun to darken. Mr. Becker stands, places some papers into his briefcase, then puts on a tweed jacket and cap. "When I think of my children and grandchildren," he says, "yes, they'll have to fight. Liberty can't be had on the cheap. But it's not a hopeless fight. It's not a hopeless fight by any means. I remain basically an optimist."

    Bob Jensen's threads on entitlements are at
    http://faculty.trinity.edu/rjensen/entitlements.htm


    "Health Care Reform Insights From Harvard Business School Faculty," by HBS Faculty Members, Harvard Business Review Blog, March 25, 2010 ---
    http://blogs.hbr.org/cs/2010/03/health_care_reform_insights_fr.html?cm_mmc=npv-_-DAILY_ALERT-_-AWEBER-_-DATE

    In the wake of the passage of sweeping health care reform legislation by the U.S. Congress, the political battle over the bill seems destined to continue. But what do Harvard Business School faculty experts, whose research applies a management lens to health care policy and delivery, think about the bill's content? And what are the next steps for improving patient care and containing costs?

    Richard Bohmer Physician and Professor of Management Practice at Harvard Business School. Author of Designing Care: Aligning the Nature and Management of Health Care.

    Insurance reform is a necessary but not sufficient component of U.S. health care reform. We need to think very hard as well about the optimal way of caring for a particular type of patient and then how to pay for that optimal way. For me, the optimal way is the function of a science: What is possible in terms of drugs, technology, devices, information technology, and personnel; then secondarily, consider the current regulations in place and the payment models.

    There is an important set of discussions to be had around how we actually organize care, with all sorts of managerial and strategic decisions to be made at a policy and national level. Yet at ground zero, lots of interesting experiments are underway, with professionals trying different ways of configuring and managing services. On that list I include experiments with disease management programs, substituting nurse practitioners for physicians in certain circumstances, the in-store clinic model for treatment of simple diseases, and experiments with IT to enable precise electronic communication between patients and doctors so that real medical discussions can be had at a distance.

    At the national level we don't hear much about these innovations; yet they present an equally important set of issues. We need to make a distinction between debating how it will be paid for and what the "it" is that is paid for.

    Several factors are pushing us to change how we deliver care. Perhaps the most important of these is changing expectations. Patients are used to good service from other industries, and they expect higher performance than they see in the health care sector. They obviously worry a lot about whether their insurance will cover the medical services they need, but they are also concerned about the care they get — how accurate, reliable, and fail-safe it is, as well as how responsive and convenient. Employers expect better outcomes, and of course they and patients want fewer errors and fewer patients harmed by care that was intended to cure their disease. Finally, all health care's constituents expect better value.

    As for innovation, our prevailing model has been that knowledge flows into medical and nursing practice from funded external research. In this model it is the role of provider organizations to bring knowledge published in the medical and nursing literatures to bear on individual patients by selecting the right therapies and the right way of implementing those therapies — a one-way flow of knowledge from the research community to the delivery community to each individual patient.

    However, routine practice is itself a fertile source of innovations in care, in both what to do and how to do it. Medical knowledge and how to operationalize it can be learned through taking care of patients, and delivery organizations create knowledge for themselves. This is knowledge flow not from bench-side-to-bedside, but from bedside-to-bedside. New insights derived from practice can be brought to bear for the benefit of each subsequent patient.

    Given the increased expectations of performance, we now need to design care by asking nitty-gritty design questions such as: How is care going to be delivered? Who will do what, when, where, and how? How will they hand over tasks and decision rights and accountability to the next person who will do what, when, where, and how? And how does technology support these decisions?

    Hence, a lot of health care reform is a management problem. It can't be solved by policymakers acting at a distance. That is why we should help doctors understand the managerial issues related to their clinical practice. My involvement with the MD/MBA program at Harvard Business School is part of that belief. A not-for-profit institution deserves to be as well managed as a for-profit institution. In terms of health care delivery, the absence of a profit motive doesn't mean that people should tolerate poorly designed processes and symptoms, especially when organizational performance is a necessary component of realizing the best clinical outcomes for individual patients.

    Adapted from the 11/23/09 HBS Working Knowledge article,"Management's Role in Reforming Health Care."

    Bob Jensen's threads on health care --- http://faculty.trinity.edu/rjensen/health.htm


    "ObamaCare Day One:  Companies are already warning about higher health-care costs," The Wall Street Journal, March 25, 2010 ---
    http://online.wsj.com/article/SB10001424052748703312504575141642402986422.html?mod=djemEditorialPage_t

    Democrats dragged themselves over the health-care finish line in part by repeating that voters would like the plan once it passed. Let's see what they think when they learn their insurance costs will jump right away.

    Even before President Obama signed the bill on Tuesday, Caterpillar said it would cost the company at least $100 million more in the first year alone. Medical device maker Medtronic warned that new taxes on its products could force it to lay off a thousand workers. Now Verizon joins the roll of businesses staring at adverse consequences.

    In an email titled "President Obama Signs Health Care Legislation" sent to all employees Tuesday night, the telecom giant warned that "we expect that Verizon's costs will increase in the short term." While executive vice president for human resources Marc Reed wrote that "it is difficult at this point to gauge the precise impact of this legislation," and that ObamaCare does reflect some of the company's policy priorities, the message to workers was clear: Expect changes for the worse to your health benefits as the direct result of this bill, and maybe as soon as this year.

    Mr. Reed specifically cited a change in the tax treatment of retiree health benefits. When Congress created the Medicare prescription drug benefit in 2003, it included a modest tax subsidy to encourage employers to keep drug plans for retirees, rather than dumping them on the government. The Employee Benefit Research Institute says this exclusion—equal to 28% of the cost of a drug plan—will run taxpayers $665 per person next year, while the same Medicare coverage would cost $1,209.

    In a $5.4 billion revenue grab, Democrats decided that this $665 fillip should be subject to the ordinary corporate income tax of 35%. Most consulting firms and independent analysts say the higher costs will induce some companies to drop drug coverage, which could affect about five million retirees and 3,500 businesses. Verizon and other large corporations warned about this outcome.

    U.S. accounting laws also require businesses to immediately restate their earnings in light of the higher tax burden on their long-term retiree health liabilities. This will have a big effect on their 2010 earnings.

    While the drug tax subsidy is for retirees, companies consider their benefit costs as a total package. The new bill might cause some to drop retiree coverage altogether. Others may be bound by labor contracts to retirees, but then they will find other ways to cut costs. This means raising costs or reducing coverage for other employees. So much for Mr. Obama's claim that if you like your coverage, you can keep it—even at Fortune 500 companies.

    In its employee note, Verizon also warned about the 40% tax on high-end health plans, though that won't take effect until 2018. "Many of the plans that Verizon offers to employees and retirees are projected to have costs above the threshold in the legislation and will be subject to the 40 percent excise tax." These costs will start to show up soon, and, as we repeatedly argued, the tax is unlikely to drive down costs. The tax burden will simply be spread to all workers—the result of the White House's too-clever decision to tax insurers, rather than individuals.

    A Verizon spokesman said the company is merely addressing employee questions about ObamaCare, not making a political statement. But these and many other changes were enabled by the support of the Business Roundtable that counts Verizon as a member. Verizon CEO Ivan Seidenberg's health-reform ideas are 180 degrees from Mr. Obama's, but Verizon's shareholders and 900,000 employees and retirees will still pay the price.

    Businesses around the country are making the same calculations as Verizon and no doubt sending out similar messages. It's only a small measure of the destruction that will be churned out by the rewrite of health, tax, labor and welfare laws that is ObamaCare, and only the vanguard of much worse to come.

     


    There are lies and then their are damn lies
    "Pelosi Claims Health Care Reform to Save $1.3 Trillion; No Mention in CBO Estimate," by Matt Cover, CNS News, March 26, 2010 ---
    http://www.cnsnews.com/news/article/63373

    House Speaker Nancy Pelosi (D-Calif.) said that the health care reform package the House passed on March 21 would ultimately save the country $1.3 trillion over the next 20 years. That claim, however, was not made by the Congressional Budget Office (CBO) in its cost estimate of the bill.

    Pelosi, speaking to reporters at her weekly Capitol Hill press conference on Thursday, said that one of the most important reasons for passing the legislation was that it would save the government so much money.

    “[O]ne of the main reasons to do the bill was that it saves the taxpayers $1.3 trillion — $1.3 trillion — over the life of the bill and the 10 years beyond,” she said.

    However, no such figure appears in the Congressional Budget Office’s estimate of the package President Obama signed into law Tuesday.

    According to a CBO letter sent to Pelosi on March 20, the day before that House passed the bill, the health reform bill and an accompanying package of amendments is expected to reduce the deficit by $143 billion over the 2010-2019 time period.

    For the following decade, the CBO does not attempt to quantify the bill’s possible effects on the budget because, as it says, there are simply too many unknown factors for any estimate to be accurate.

    “CBO has developed a rough outlook for the decade following the 2010–2019 period by grouping the elements of the legislation into broad categories and (together with JCT) assessing the rate at which the budgetary impact of each of those broad categories is likely to increase over time,” the report says.

    The CBO did give a broad range that the package might reduce the deficit, saying that if Congress did not modify the law over the next 20 years, it could reduce the deficit “during that decade in a broad range between one quarter percent and one-half percent of gross domestic product (GDP).”

    The CBO said that any estimates beyond 20 years were unreasonable, and declined to give any in their letter to Pelosi.

    “CBO has not extrapolated estimates further into the future because the uncertainties surrounding them are magnified even more.”

    While some press accounts attributed Pelosi’s figure to internal calculations based on the CBO’s 20-year projections, CNSNews.com could not confirm this despite repeated requests to the Speaker’s office asking to name the source of the figure.

    In addition, in a March 19 letter to Rep. Paul Ryan (R-Wisc.) the CBO explained that the health care bill will begin adding to the deficit the moment congressional Democrats change the payment system Medicare uses to pay doctors.

    Known as the “Doc Fix,” the change was removed from earlier versions of the bill in order to make it appear deficit- friendly. However, if Democrats go ahead with the changes as expected, the CBO explained that the deficit will rise by nearly $60 billion.

    "CBO estimates that enacting H.R. 3961 [Doc Fix], by itself, would cost about $208 billion over the 2010–2019 period," the CBO informed Ryan. "CBO estimates that enacting H.R. 3961 together with those two bills [health care and a companion package of amendments] would add $59 billion to budget deficits over the 2010–2019 period."

     


    Just the Facts!
    "A Summary of the Financial Reporting and Disclosure Implications of the Health Care Reform Legislation," Deloitte Heads Up, IAS Plus, April 9, 2010 --- http://www.iasplus.com/usa/headsup/headsup1004healthcare.pdf

    "How the health care bill will impact individuals, businesses," AccountingWeb, March 23, 2010 ---
    http://www.accountingweb.com/topic/tax/how-health-care-bill-will-impact-individuals-businesses

    "Tax Provisions of Health Care Reform Legislation Covered in Briefing by CCH," SmartPros, March 22, 2010 ---
    http://accounting.smartpros.com/x69050.xml


    Also read the CCH Special Tax Briefing on health care reform:
    http://tax.cchgroup.com/Legislation/Final-Healthcare-Reform-03-10.pdf 

    Health-Care Taxes Put Spotlight on Tax-Exempt Municipal Bonds
    The latest wrinkle in the muni-verse: the health-care reform legislation
     signed by President Barack Obama on Mar. 23. One widely discussed feature of the bill is a new Medicare tax that levies 3.8% on wages and other kinds of income, starting in 2013. The tax would not apply to interest on tax-exempt bonds and other forms of unearned income, such as any gain from the sale of a principal residence, that are excluded from gross income under the U.S. income tax code, according to a footnote in the Joint Committee on Taxation's Technical Explanation of the revenue provisions of the Reconciliation Act of 2010. That may seem like a no-brainer, but R.J. Gallo, senior portfolio manager for muni bonds at Federated Investors in Pittsburgh, says he's received calls from a few brokers asking whether munis would be exempt from the additional tax.
    David Bogoslaw, “
    Health-Care Taxes Put Spotlight on Munis," Business Week, March 23. 2010 ---
    http://www.businessweek.com/investor/content/mar2010/pi20100323_076507.htm?link_position=link1

    "AT&T plans $1 billion write-down tied to health law : Telecom giant joins Caterpillar and Deere in outlining expense," by Jeffrey Bartash, The Wall Street Journal, March 26, 2010 ---
    http://www.marketwatch.com/story/att-sees-1-billion-write-down-tied-to-health-law-2010-03-26?dist=afterbell 

    Among its many changes, the new health-care law eliminated a tax deduction that companies used to cut the cost of drug-benefit programs for retired workers. President Obama signed the massive health-care overhaul into law earlier this week in a big victory for ruling Democrats.

    News Hub: Health Costs for CompaniesThe health reform bill eliminated a subsidy for companies that operated as a double deduction. Companies such as John Deere and Caterpillar will face new costs up to $150 million, Ellen Schultz reports. Yet companies that still offer retiree drug benefits, mostly older industrial concerns or those with unionized employees, say the end of the deduction could force them to alter their benefit plans. In other words, they might curtail or even cancel them.

    "As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health care benefits offered by the company," AT&T said in a filing with the government on Friday.

    An AT&T spokesman declined to comment further on the filing.

    Earlier this week, Verizon Communications /quotes/comstock/13*!vz/quotes/nls/vz (VZ 30.37, +0.06, +0.20%) sent a letter to employees suggesting that changes to their health-care plans could be afoot. AT&T and Verizon are the two largest phone companies in the U.S. and include a substantial number of unionized workers.

    Several million retirees are estimated to receive drug benefits from a few thousand companies. If those retirees were shifted to the federal Medicare program, the government would to pick up the expense. Whether savings from elimination of the subsidy would offset those higher Medicare costs is unclear.

    Under the old law, companies received a federal subsidy worth up $1,330 per retiree if they provided former workers with drug-care benefits. At the same time, however, companies could deduct the value of the subsidy from their taxable income. See blog on whether the new health care law already is hurting business

    White House spokesman Robert Gibbs on Thursday said the government merely eliminated a tax loophole that effectively allowed a company to benefit twice from one law.

    The AT&T announcement is sure to cause a ripple in Washington. Republicans have already assailed the administration for what they say are excessive costs saddled on business by the health-care law. The issue is sure to be part of their campaign against Democrats in the fall elections.

    Democrats say the health-care law will become more popular over time and they point out that it also includes substantial new subsidies for business.

    "There's $10 billion in health-care reform for support for businesses with early retirees," Gibbs said.

     


    A Job Killer
    "Medicare Changes Draw Flak:  Big Employers Say Eliminating Drug-Coverage Subsidy Would Cost Them Millions," by Neil King, Jr. and Dana Matioli, The Wall Street Journal, March 20, 2010 ---
    http://online.wsj.com/article/SB20001424052748704534904575132040480997852.html#mod=todays_us_page_one

    Heavy-equipment maker Caterpillar Inc. issued an 11th-hour salvo against the Democrats' health-care plan, saying the bill's Medicare adjustments and insurance mandates would increase the company's costs by $100 million in the first year.

    The blast, conveyed in a letter to House Democratic and Republican leaders ahead of an expected Sunday vote on the legislation, highlights how big employers are split on the issue.

    Caterpillar, which has been held up as an exemplar of U.S. competitiveness by President Barack Obama, said the envisioned overhaul of the health-care system could increase its health-care costs by 20% in the first year, mainly because the initiative would eliminate subsidies for companies that cover drug benefits for their retirees. Most of that would be reflected in a non-cash charge to earnings.

    That change would hurt a lot of older manufacturers with large numbers of retirees who are still covered by company medical plans. Many of the companies are locked into contracts under which they must continue to pay retiree drug benefits, or are reluctant to drop them out of loyalty to their workers.

    Caterpillar, which pays to insure more than 150,000 employees, retirees and their dependants, said it could "ill-afford cost increases that place us at a disadvantage versus our global competitors."

    Representatives of other large companies say they share Caterpillar's unease, not only on the drug provision but on the overall direction of the administration's health-care plan. Big companies, already burdened with skyrockeing insurance costs, are mainly worried that the bill will eventually fail to contain long-term increases in health costs.

    Other big employers, notably Wal-Mart Stores Inc., have come out prominently in support of the Democratic health-care legislation.

    Caterpillar's main objection pertains to the plan to recoup about $4.5 billion over six years by eliminating a federal subsidy that encouraged companies to keep offering retiree drug benefits after the government extended Medicare coverage for drugs to seniors in 2003.

    Unless companies drop those benefits, they will lose the subsidies and face sharply higher costs for every retiree they cover. If the current bill becomes law, hundreds of companies would also have to register steep one-off losses in future earnings, which for many could tally in the hundreds of millions of dollars.

    "We are disappointed that efforts at reform have not addressed the cost concerns we've raised throughout the year," said the letter, which was sent to Democratic House Speaker Nancy Pelosi and GOP House Minority Leader John Boehner.

    A Caterpillar spokeswoman said the Peoria, Ill., company hasn't decided if it will continue its seniors' drug coverage. The company projected last year in its annual report that it expected to receive $370 million in prescription-drug subsidies under the Medicare Part D program between 2009 and 2018.

    In talks with lawmakers and the Obama administration, companies have said any revenue gains for the government could prove illusory if companies all decide to shed retiree drug coverage, thus pushing people into Medicare Part D. Paying the subsidy costs the government roughly $600 per person, while covering the retirees themselves would cost it about $1,900 each, according to various estimates.

    AK Steel Corp., which still offers employees pensions and retiree health care, estimated its costs would rise by millions of dollars under the pending bill.

    Alan McCoy, spokesman for the Ohio-based steel maker, said AK remains neutral about the bill but that it expects to pay more for its retiree coverage.

    "Does it have us panicked? No. Are watching it carefully? Yes," he said. "We are not in hand-to-hand combat on the Hill."

    Joe Bartolacci, chief executive of Matthews International Corp., a maker of caskets and product branding materials with 2,500 U.S. workers, said he likely will have to scale back the quality of his health-insurance offerings if the bill passes because he expects his health costs to rise.

    He is especially worried about a provision with the legislation that will extend how long children are allowed to stay on a parent's plan.

    The National Association of Manufacturers, a lobbying group, has opposed the Democrats' plan for months, contending that it will drastically increase its members' health-care costs.

    The NAM said specific provisions would hurt manufacturers, including an excise tax on health-insurance plans, new industry-specific fees to pay for changes to the health-care system and the repeal of the Medicare Part D subsidy.

    "While we oppose this legislation," the group said in a letter sent to House leaders Friday, "we will continue to advocate for reforms that lower costs and improve care but do not put undue burdens on those who keep our country growing and competitive in a global marketplace."


    "Will Obamacare Really Ease the Debt Crisis?" by Michael Medved, Townhall, March 24, 2010 ---
    http://townhall.com/columnists/MichaelMedved/2010/03/24/will_obamacare_really_ease_the_debt_crisis

    If you’re deeply, dangerously in debt, how can it make sense to take on an extravagant new long-term commitment, even if you claim you’ve cut back other expenses to “pay for it?” That’s the underlying question about Obamacare that jubilant Democrats refuse to acknowledge.

    Opponents of the sweeping health-care overhaul spent most of their time challenging the feeble arguments that allowed the administration to manipulate figures from the Congressional Budget Office to suggest that their reforms actually reduced the deficit. With a dubious combination of complicated new taxes and severe Medicare cutbacks, the president insisted that the costly new program (running to at least $950 billion over ten years) would be paid for – and more. The Democrats claimed that Obamacare would reduce red ink by an average of some $20 billion a year over the next decade --- in other words, trimming the current devastating deficit by as much 1.6%! These sunny (and silly) calculations led speaker Pelosi to enthuse: “The real question isn’t how we can afford to do it. The real question is how can we afford not to do it?”

    In other words, the president and his supporters assert that they’ve discovered nearly a trillion dollars in fresh savings from spending reductions and new revenue sources. In their logic, that makes their $950 billion health reform eminently affordable.

    But this logic ignores the underlying budgetary crisis. Even if all of the promised cost savings and tax increases yielded all the money the Democrats predicted (a hugely improbable outcome), and even if they didn’t spend nearly all the additional cash on a new entitlement, they’d still make a relatively small dent in the deficit. If they applied all the “new” money to balancing the books and spent not a cent on new programs, they’d still reduce the predicted deficits for the next decade by less than 10% -- keeping the big government spend-a-thon on its record-shattering, bankruptcy-threatening path (with deficits remaining at their best more than double the worst red-ink under President Bush).

    Meanwhile, none of the lemming-like partisans who marched with the President over the fiscal cliff ever bothered to acknowledge that finding spending cuts and tax hikes to finance Obamacare makes it vastly harder – a trillion dollars harder, in fact – to find more new sources to pay down the debt or to shore up Medicare. The accepted figure on Medicare’s unfunded commitments amounts to an almost unimaginable 38 trillion dollars. With that looming train wreck, one would think that any dollars that cost-cutters could wring out of the collapsing program would go to protecting the system’s overall viability, not to new commitments.

    A sense of perspective gives the lie to the ludicrous claim that Obamacare counts as “affordable” reform, or some sort of miraculous budgetary bargain. Even those who believe in the messianic powers of Mr. Obama can’t suggest a logical basis for an expensive new program helping to trim deficits. Insuring 30 million more Americans isn’t free. New spending of $950 billion (at the absolute minimum) hardly counts as affordable in any sense of the word when the overall budget remains unsustainably unbalanced. The gimmicks, rosy projections, and benefit cuts placed on the table to sell Obamacare will make it all the harder (if not impossible) to find future sources of saving and revenue to keep the government’s rickety finances from cataclysmic and nation-threatening implosion.

     


    Updates on March 18, 2010

    Wow! Bring it on.
    "Premiums Will Decrease 3000% So You Should Get A Raise When H'care Is Passed"
    Barach Obama --- http://www.youtube.com/watch?v=lUd-slJc-GY&feature=player_embedded

    "Durbin Implies Obama Not ‘Telling the Truth’ about Health Care Premiums," by Melannie Hunter-Omar, CNS News, March 10, 2010 ---
    http://www.cnsnews.com/news/article/62587

    Senate Majority Whip Dick Durbin (D-Ill.) on Wednesday contradicted President Barack Obama on whether the health care reform bill will lead to a decrease in health care premiums.

    Durbin claimed that rates would go up, while the president said the rates would go down.

    “Anyone who would stand before you and say well, if you pass health care reform, next year's health care premiums are going down, I don't think is telling the truth. I think it is likely they would go up, but what we are trying to do is slow the rate of increase,” Durbin said, speaking on the Senate floor.

    Compare Durbin’s remarks to what President Barack Obama said during a speech at Arcadia University in Glenside, Pa., on Monday.

    “Our cost-cutting measures mirror most of the proposals in the current Senate bill, which reduces most people’s premiums and brings down our deficit by up to $1 trillion over the next decade because we’re spending our health care dollars more wisely,” the president said.

    “Those aren’t my numbers. Those aren’t my numbers --they are the savings determined by the Congressional Budget Office, which is the nonpartisan, independent referee of Congress for what things cost,” Obama added.

    But as CNSNews.com reported, the Congressional Budget Office’s analysis of the final Senate health care bill indicates that it would impose a mandatory $15,000 annual fee on middle-class families that earn greater than 400 percent annually of the federal poverty level. That means $88,200 for a family of four.

    Among the five basic facts that the CBO analysis cites about the bill is that “Your family insurance plan – if your employer drops your coverage and you are forced to buy it on your own – will cost about $15,000 per year when the legislation is in full force in 2016.”

    Continued in article


    But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy.
    Nancy Pelosi, Speaker of the House of Representatives

    "Pelosi's Pig in a Poke ," by James Tarango, The Wall Street Journal "Best of the Web" email newsletter, March 10, 2010

     Speaker Nancy Pelosi turned up yesterday at the Washington conference of the National Association of Counties, and she engaged in a little cheerleading for ObamaCare:

    You've heard about the controversies within the bill, the process about the bill, one or the other. But I don't know if you have heard that it is legislation for the future, not just about health care for America, but about a healthier America, where preventive care is not something that you have to pay a deductible for or out of pocket. Prevention, prevention, prevention--it's about diet, not diabetes. It's going to be very, very exciting.

    But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy.

    Yes, reader, she really said, "We have to pass the bill so that you can find out what is in it." If you don't believe us, ask YouTube. And Pelosi is not alone in equating knowledge of the bill's contents to enactment of it. Consider the lead paragraph of this Associated Press dispatch about Sen. Blanche Lincoln of Arkansas, who cast the deciding vote allowing passage of the Senate's version of ObamaCare;

    A moderate Democrat insisted Tuesday she remained opposed to pushing a health care bill through the Senate with a simple majority vote, despite saying she wanted to see what was in the legislation.


    "Obamacare: Cooked Books You Can Believe In," by Deeroy Murdock, National Review, March 11, 2010 ---
    http://article.nationalreview.com/427508/obamacare-cooked-books-you-can-believe-in/deroy-murdock?page=1

    The non-partisan Congressional Budget Office likewise warned last December 23 that Obamacare’s putative savings “would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs. . . . To describe the full amount of [Hospital Insurance] trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position.”

    Consequently, Sen. Jeff Sessions (R., Ala.) predicts: “Taxpayers will be left holding billions in debt bonds to the Medicare Trust Fund that must be repaid.”

    The Senate’s Obamacare bill would take $52 billion in anticipated Social Security revenues and divert them to offset Obamacare’s overall net cost. But wait: Those who have been promised future Social Security payments expect that $52 billion to be available to prevent their pension checks from bouncing. These $104 billion in political pledges cost only $52 billion.

    This bill also includes something called Community Living Services and Support. This “CLASS Act” would offer long-term-care insurance with premiums invoiced immediately, but with benefits commencing in 2016. In the interim, the CBO expects a $72 billion surplus to accumulate. Congressional Democrats already have dedicated that sum to counterbalance and thus lower Obamacare’s perceived cost. But the Treasury needs that same $72 billion to finance the CLASS Act’s medical services. So, which is it?

    Senate Budget Committee Chairman Kent Conrad (D., N.D.) described this scam in the Washington Post as “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”

    Continued in article


    "Obama's Misleading Assault on the Insurance Industry:  The president knows better than his demagoguery suggests," by John E. Calfee, The Wall Street Journal, March 12, 2010 --- http://online.wsj.com/article/SB10001424052748703625304575115540074840182.html

    Despite the president's repeated attempts to defend his health reforms, ObamaCare remains deeply unpopular—in the past four months the Rasmussen poll consistently suggests 52% to 58% of Americans are opposed to it. Now President Obama is trying to change the debate by attacking insurance companies. His populist rhetoric is misleading, and his own words show he knows as much.

    One of the chief complaints about health insurers is that they refuse to provide insurance to everyone at the same price, regardless of an individual's pre-existing medical conditions. On Monday, talking to a friendly town-hall audience at Arcadia University, Mr. Obama was blunt: "Every year, the problem gets worse. Every year, insurance companies deny more people coverage because they've got pre-existing conditions."

    Yet President Obama himself has acknowledged more than once that insurers don't really have a choice.

    In his Feb. 3 town-hall meeting in Nashua, N.H., he said: "You can't [demand] insurance companies . . . take somebody who's sick, who's got a pre-existing condition, if you don't have everybody covered, or at least almost everybody covered. And the reason, if you think about it, is simple. If you had a situation where not everybody was covered but an insurance company had to take you because you were sick, what everybody would do is they'd just wait till they got sick and then they'd go buy insurance. Right? And so the potential would be there to game the system."

    In his Jan. 20 ABC News interview, Mr. Obama noted that if insurance firms accepted all applicants, premiums would skyrocket, an insurance mandate would be necessary, and massive taxpayer subsidies would follow. The president obviously knows it makes no sense to blame insurance companies for paying attention to pre-existing conditions when taking on new customers.

    Mr. Obama, Health and Human Services (HHS) Secretary Kathleen Sebelius, and their Democratic allies have also hammered the insurance industry for making huge profits at the cost of patients' finances and health. Their complaints picked up especially after WellPoint subsidiary Anthem announced last month that it would raise individual insurance premiums up to 39% for some California customers.

    The Democrats' attack is misplaced. Fortune 500 data show that of the 43 industries that actually made a profit in 2009, health insurance ranked 35th, with profits of only 2.2% of revenues.

    More fundamentally, premium increases are driven not by profits but by costs, as WellPoint has made abundantly clear in California. When HHS issued "Insurance Companies Prosper, Families Suffer," its Feb. 18 report on firms that implemented "excessive" premium increases, plenty of nonprofit firms (such as Blue Cross/Blue Shield of Michigan, Regency Blue Cross/Blue Shield of Oregon, and Blue Cross/Blue Shield of Rhode Island) made the list.

    But rather than argue over accounting data—which never show that profits amount to a significant portion of health-care costs anyway—let's listen to what the marketplace is telling us. If health insurance is so lucrative, why aren't giant companies jumping in?

    MetLife has chosen to invest billions of dollars of free cash not in the health-insurance business but in a risky acquisition of the international life insurance business of beleaguered conglomerate AIG. And what about firms like Microsoft, General Election, Google and Wal-Mart? They know how to enter new markets and make a profit. Why aren't they selling health plans?

    Those who know best are persuaded that far from being easy, making money selling health insurance is tough. It is no wonder Warren Buffett told CNBC on March 1 that health insurance is one part of the vast insurance market in which he has avoided investing.

    Mr. Obama's third theme is that health insurance needs more regulation. Borrowing from legislation introduced by California Sen. Dianne Feinstein (who wants for-profit insurance firms to disappear), the president's own reform plan, announced on Feb. 22, included a federal Medical Insurance Rate Authority to review insurance premiums and prevent unreasonable increases.

    Federal regulation of health insurance premiums makes little sense. Most states already have the power to review and reduce premiums. It hasn't done them much good. Massachusetts, which already has the essence of ObamaCare—no restrictions on pre-existing conditions, an individual mandate, and huge taxpayer subsidies—has the highest premiums in the nation.

    The Bay State has the power to cut premiums, but it hasn't figured out how to do that without cutting health care itself. Oregon has had much the same experience, as have others. State insurance regulators quickly pointed out that Mr. Obama's proposal for a federal rate authority wouldn't work and would complicate their essential task of making sure that insurance firms have sufficient funds to cover future health care costs.

    A proper debate over how to deal with both the insured and the uninsured, including those with significant pre-existing medical conditions, is extremely important. It involves difficult problems of regulation, incentives and costs. The president's populist foray against health insurers is a reckless diversion from that broader debate.

    He and his reform allies should explain to the public the real dilemma. Health insurers operate in a market in which party one (the patient) is told by party two (the doctor) what products and services to consume, while party three (the insurance firm) pays the bill, and more often than not, party four (the employer) bears the financial risk of cost overruns. That's a tough business environment in which to make money without offending someone.

     

     

    Updates on March 8, 2010

    Video:  Saturday Night Live Takes on "Extremely Unpopular" Healthcare Plan ---
    http://www.huffingtonpost.com/2010/03/07/snl-takes-on-deeply-unpop_n_489002.html

    "What a Disaster Looks Like:  ObamaCare will have been a colossal waste of time—if we're lucky," by Peggy Noonan, The Wall Street Journal, March 4, 2010 --- http://online.wsj.com/article/SB10001424052748704187204575101742162779612.html?mod=djemEditorialPage_t

    All this contributes to a second problem, which is a growing credibility gap. In his speech Wednesday, demanding an "up or down" vote, the president seemed convinced and committed—but nothing he said sounded true. His bill will "bring down the cost of health care for millions," it is "fully paid for," it will lower the long term deficit by a trillion dollars.

    Does anyone believe this? Does anyone who knows the ways of government, the compulsions of Congress, and how history has played out in the past, believe this? Even a little? Rep. Bart Stupak said Thursday that he and several of his fellow Democrats won't vote for the Senate version of the bill because it says right there on page 2,069 that the federal government would directly subsidize abortions. The bill's proponents say this isn't so. It would be a relief to have a president who could weigh in believably and make clear what his own bill says. But he seems to devote more words to obscuring than clarifying.

    Continued in article


    "Paul Ryan v. the President:  The Republican dissects ObamaCare's real costs. Democrats stay mute," The Wall Street Journal, March 4, 2010 ---
    http://online.wsj.com/article/SB10001424052748704548604575097602436388116.html?mod=djemEditorialPage_t

    'Every argument has been made. Everything that there is to say about health care has been said, and just about everybody has said it," President Obama declared yesterday as he urged Democrats to steamroll his plan through Congress. What hasn't been heard, however, is even a shred of White House honesty about the true costs of ObamaCare, or its fiscal consequences.

    Nearby, we reprint Wisconsin Republican Paul Ryan's remarks at the health summit last week, which methodically dismantle the falsehoods—there is no other way of putting it—that Mr. Obama has used to sell "reform" and repeated again yesterday. No one in the political class has even tried to refute Mr. Ryan's arguments, though he made them directly to the President and his allies, no doubt because they are irrefutable. If Democrats are willing to ignore overwhelming public opposition to ObamaCare and pass it anyway, then what's a trifling dispute over a couple of trillion dollars?

    At his press conference yesterday, Mr. Obama claimed that "my proposal would bring down the cost of health care for millions—families, businesses and the federal government." He said it is "fully paid for" and "brings down our deficit by up to $1 trillion over the next two decades." Never before has a vast new entitlement been sold on the basis of fiscal responsibility, and one reason ObamaCare is so unpopular is that Americans understand the contradiction between untold new government subsidies and claims of spending restraint. They know a Big Con when they hear one.

    Mr. Obama's fiscal assertions are possible only because of the fraudulent accounting and budget gimmicks that Democrats spent months calibrating. Readers can find the gory details in Mr. Ryan's pre-emptive rebuttal nearby, though one of the most egregious deceptions is that the bill counts 10 years of taxes but only six years of spending.

    The real cost over a decade is about $2.3 trillion on paper, Mr. Ryan estimates, and even that is a lowball estimate considering how many people will flood to "free" health care and how many businesses will be induced to drop coverage. Mr. Obama claimed yesterday that the plan will cost "about $100 billion per year," but in fact the costs ramp up each year the program exists. The far more likely deficits are $460 billion over the first 10 years, and $1.4 trillion over the next 10.

    What Mr. Ryan calls "probably the most cynical gimmick" deserves special attention, which is known in Washington as the "doc fix." Next month Medicare physician payments are scheduled to be cut by 22% and deeper thereafter, though Congress is sure to postpone the reductions as it always does. Failing to account for this inevitability takes nearly a quarter-trillion dollars off the ObamaCare books and by itself wipes out the "savings" that the White House continues to take credit for.

    Some in the liberal cheering section now claim that this Medicare ruse isn't Mr. Obama's problem because it was first promised by Republicans and Bill Clinton in 1997. But then why did Democrats include the "doc fix" in all early versions of the bill to buy the support of the American Medical Association, only to dump this pricey item later when hiding it would make it easier to fake-reduce the deficit?

    The President was (miraculously) struck dumb by Mr. Ryan's critique, and in his response drifted off into an irrelevant tangent about Medicare Advantage, while California Democrat Xavier Becerra claimed "you essentially said you can't trust the Congressional Budget Office." But Mr. Ryan was careful to note that he didn't doubt the professionalism of CBO, only the truthfulness of the Democratic gimmicks that the budget gnomes are asked to score.

    Yesterday Mr. Obama again invoked the "nonpartisan, independent" authority of CBO, which misses the reality that if you feed the agency phony premises, you are going to get phony results at the other end.

    The President also claimed the reason his plan is in trouble, and the reason Democrats must abuse the Senate's rules to ram this plan into law, is that "many Republicans in Congress just have a fundamental disagreement over whether we should have more or less oversight of insurance companies." So most of Mr. Obama's first year in office has been paralyzed over nothing more than minor regulatory hair-splitting. This is so preposterous that the President can't possibly believe it.

    Congress's spring break begins on March 29, and Democratic leaders plan on jamming this monster through Congress before then. Americans have to hope that enough rank-and-file Democrats aren't as deaf to fiscal honesty as this President.


    "Tinker, Tailor, Soldier, ObamaCare: Is the White House playing a double game with House Democrats?"
    Editors, The Wall Street Journal, March 7, 2010 ---
    http://online.wsj.com/article/SB10001424052748703915204575103424147119264.html#mod=djemEditorialPage_t

    House Democrats are suspicious of each other, none of them trust their Senate counterparts, and vice versa, and a Soviet mole has infiltrated the highest levels of British intelligence. Sorry, that last part is from a John le Carré thriller, though it might take a novelist to do justice to the ObamaCare-induced paranoia that now engulfs Congress—not to mention the double game that the White House may well be running.

    Last week President Obama sanctioned "reconciliation," a complex tactic that would jam ObamaCare into law on sheer power politics. But what if this gambit is really a false-flag operation, meant to lure House Democrats into voting for a bill that they would otherwise oppose? That's the question many rank-and-file Members are now asking themselves, and they're right to be worried.

    The cleanest option for Democrats would be for the House to pass the Senate's Christmas Eve bill word for word, thereby bypassing a Senate filibuster under the normal rules and forwarding ObamaCare directly to the Rose Garden signing ceremony. But Speaker Nancy Pelosi has repeatedly said the votes simply don't exist for the Senate bill as is.

    Liberals don't think the middle-class insurance subsidies are large enough. Big Labor hates the "Cadillac tax" on high-cost health coverage because extremely generous benefits typically come out of collective bargaining. The pro-life Democrats led by Michigan's Bart Stupak can't abide federal funding for abortion. Everyone detests the enveloping corruption, such as the Nebraska Medicaid bribe for Ben Nelson, which has become so politically toxic that the opponents now include Ben Nelson.

    Thus the convoluted scheme the White House has mapped out. The House would first pass the Senate bill, and then pass a reconciliation bill that addresses these objections—in effect converting the process into a makeshift and unprecedented vehicle for amendments. Mrs. Pelosi can't rope in the 216 votes she needs without an iron-clad promise of another round of Senate action.

    Iron-clad promise—or double-cross? After all, the White House would much prefer the Senate bill, because by its lights the cost-control programs are tougher than what the House prefers. And from a political perspective, a bill that can be signed immediately and that the press will portray as an historic achievement is far better than the drawn-out and gory battle that would be reconciliation. Republican Senators will have many procedural knives at their disposal, and the process will force Democrats to cast further votes and spend more months debating a deeply unpopular bill.

    In other words, perhaps Mr. Obama has embraced this reconciliation two-step only to renege as soon as the House gives him what he wants. While some House Democrats would be furious, they'd soon be defending the Senate bill by necessity against the GOP. The moderates who vote for it might be collateral damage, but the White House has already concluded that this is the price of building its cradle-to-grave entitlement citadel.

    Mr. Obama's closing arguments are lending credence to rank-and-file fears that they're getting played. Democrats are telling reporters that Mr. Obama has been telling them in private meetings that his Presidency, and the party's claim to any achievement, rests on passing a bill. With barely any mention of substance, the right bill is any bill, by any political means necessary.

    The White House also announced that it now wants the House to pass the Senate bill by March 18, before Mr. Obama departs for a foreign tour in the Pacific. But this barely leaves any time for the Congressional Budget Office to score Mr. Obama's reconciliation fixes. Then there's House Majority Leader Steny Hoyer's far-fetched suggestion to Mr. Stupak and the antiabortion bloc that Democrats can take care of their concerns in a third bill, which everyone knows will fail in the Senate if it even comes to the floor.

    In this wilderness of political mirrors, anything is possible. Spooked Democrats shouldn't be surprised if they wind up being double-crossed for the ostensibly greater good of Mr. Obama's legacy.


    "Hoosiers and Health Savings Accounts:  An Indiana experiment that is reducing costs for the state and its employees," by Mitch Daniels, The Wall Street Journal, February 28, 2010 --- http://online.wsj.com/article/SB10001424052748704231304575091600470293066.html

    As Washington prepares to revisit the subject of health-care reform, perhaps some fresh experience from Middle America would be of value.

    When I was elected governor of Indiana five years ago, I asked that a consumer-directed health insurance option, or Health Savings Account (HSA), be added to the conventional plans then available to state employees. I thought this additional choice might work well for at least a few of my co-workers, and in the first year some 4% of us signed up for it.

    In Indiana's HSA, the state deposits $2,750 per year into an account controlled by the employee, out of which he pays all his health bills. Indiana covers the premium for the plan. The intent is that participants will become more cost-conscious and careful about overpayment or overutilization.

    Unused funds in the account—to date some $30 million or about $2,000 per employee and growing fast—are the worker's permanent property. For the very small number of employees (about 6% last year) who use their entire account balance, the state shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected.

    The HSA option has proven highly popular. This year, over 70% of our 30,000 Indiana state workers chose it, by far the highest in public-sector America. Due to the rejection of these plans by government unions, the average use of HSAs in the public sector across the country is just 2%.

    What we, and independent health-care experts at Mercer Consulting, have found is that individually owned and directed health-care coverage has a startlingly positive effect on costs for both employees and the state. What follows is a summary of our experience:

    State employees enrolled in the consumer-driven plan will save more than $8 million in 2010 compared to their coworkers in the old-fashioned preferred provider organization (PPO) alternative. In the second straight year in which we've been forced to skip salary increases, workers switching to the HSA are adding thousands of dollars to their take-home pay. (Even if an employee had health issues and incurred the maximum out-of-pocket expenses, he would still be hundreds of dollars ahead.) HSA customers seem highly satisfied; only 3% have opted to switch back to the PPO.

    The state is saving, too. In a time of severe budgetary stress, Indiana will save at least $20 million in 2010 because of our high HSA enrollment. Mercer calculates the state's total costs are being reduced by 11% solely due to the HSA option.

    Most important, we are seeing significant changes in behavior, and consequently lower total costs. In 2009, for example, state workers with the HSA visited emergency rooms and physicians 67% less frequently than co-workers with traditional health care. They were much more likely to use generic drugs than those enrolled in the conventional plan, resulting in an average lower cost per prescription of $18. They were admitted to hospitals less than half as frequently as their colleagues. Differences in health status between the groups account for part of this disparity, but consumer decision-making is, we've found, also a major factor.

    Overall, participants in our new plan ran up only $65 in cost for every $100 incurred by their associates under the old coverage. Are HSA participants denying themselves needed care in order to save money? The answer, as far as the state of Indiana and Mercer Consulting can find, is no. There is no evidence HSA members are any less likely to defer needed care or common-sense preventive measures such as routine physicals or mammograms.

    It turns out that, when someone is spending his own money alone for routine expenses, he is far more likely to ask the questions he would ask if purchasing any other good or service: "Is there a generic version of that drug?" "Didn't I take that same test just recently?" "Where can I get the colonoscopy at the best price?"

    By contrast, the prevalent model of health plans in this country in effect signals individuals they can buy health care on someone else's credit card. A fast-food meal costs most Americans more out of pocket than a visit to the doctor. What seems free will always be overconsumed, compared to the choices a normal consumer would make. Hence our plan's immense savings.

    The Indiana experience confirms what common sense already tells us: A system built on "cost-plus" reimbursement (i.e., the more a physician does, the more he or she gets paid) coupled with "free" to the purchaser consumption, is a machine perfectly designed to overconsume and overspend. It will never be controlled by top-down balloon-squeezing by insurance companies or the government. There will be no meaningful cost control until we are all cost controllers in our own right.

    Americans can make sound, thrifty decisions about their own health. If national policy trusted and encouraged them to do so, our skyrocketing health-care costs would decelerate.

    Mr. Daniels, a Republican, is governor of Indiana.

     


    "Oba-Kabuki: A Box-Office Bomb," by Michelle Malkin, Townhall, February 26, 2010 ---
    http://townhall.com/columnists/MichelleMalkin/2010/02/26/oba-kabuki_a_box-office_bomb

    The Oba-Kabuki health care show at Blair House kicked off with a big lie on Thursday morning -- and it all went downhill from there. The taxpayer-funded infomercial backfired by exposing the president's thin skin, the Democrats' naked disingenuousness and the ruling majority's allergies to political and policy realities.

    Responding to Sen. Lamar Alexander's opening call for Democrats to renounce parliamentary tactics designed to limit debate, circumvent filibusters and lower the threshold for passage of health care reform to a simple 51-vote majority, Senate Majority Leader Harry Reid sputtered indignantly: "No one's talking about reconciliation!" Everybody and their mother has been invoking the "R" word on Capitol Hill, starting with Reid.

    In a letter on Feb. 16, four Democratic senators pushed Reid to adopt the procedure, normally reserved for budget matters. A few days later, White House Press Secretary Robert Gibbs discussed the option. Then Reid himself talked up reconciliation on a Nevada public affairs show as an option to ram the government health care takeover through in the next 60 days.

    According to The Hill, Reid said that "congressional Democrats would likely opt for a procedural tactic in the Senate allowing the upper chamber to make final changes to its health care bill with only a simple majority of senators, instead of the 60 it takes to normally end a filibuster." A few days after that, Reid snapped that Republicans "should stop crying" about the abrogation of Senate minority rights, since the GOP had used the reconciliation process in the past.

    So, the cleanest, most ethical holier-than-thou Congress ever is now defending the unprecedented adoption of ram-down rules for a radical, multitrillion-dollar program to usurp one-seventh of the economy on the grounds of "two wrongs make it right"? Hope and change, baby.

    For his part, President Obama responded with one part pique and two parts diffidence. After the summit lunch break, Republicans pushed the reconciliation issue again in the face of the Democrats' refusal to disavow the short-circuiting of the deliberative process. "The American people," an annoyed Obama asserted, "are not all that interested in procedures inside the Senate." Oh, really? A new USA Today/Gallup poll reports that 52 percent of Americans oppose using the procedural maneuver to pass the health care bill in the Senate.

    The survey also showed that Americans oppose Demcare-style health care "reform" by 49 percent to 42 percent -- with those "strongly" opposed outnumbering those "strongly" in favor by 23 percent to 11 percent. Obama's best and brightest team of Chicago strategists, new-media gurus and communications specialists still hasn't figured it out: Voters are as fed up with the corrupt process in Washington as they are with the White House's overreaching policies. It's both, stupid.

    When he wasn't cutting off Republicans who stuck to budget specifics and cited legislative page numbers and language instead of treacly, sob-story anecdotes involving dentures and gallstones, Obama was filibustering the talk-a-thon away by invoking his daughters, rambling on about auto insurance and sniping at former GOP presidential rival John McCain. "We're not campaigning anymore," lectured the perpetual campaigner-in-chief.

    After ostentatiously disputing the GOP's claims that health care premiums would rise under his plan, Obama walked it back. Confronted with more GOP pushback on the failure of Demcare to control costs, Obama told GOP Rep. Paul Ryan that he'd rather not "get bogged down in numbers." Not numbers that he couldn't cook on the spot without staff consultation, anyway.

    Obama and the Democrats labored mightily to create the illusion of almost-there bipartisanship by repeatedly telling disagreeing Republicans that "we don't disagree" and "there's not a lot of difference" between us. But the dogs weren't riding the ponies in this show.

    This was a set-up from the start. The "we're so close" mantra is the rhetorical wedge the White House will use to blame Republicans for fatal obstructionism, while whitewashing festering opposition from both pro-life Democrats who oppose the government funding of abortion services still in the plan and left-wing progressives in the House who are clinging to a full, unadulterated public option.

    While Republicans came off well, the six-hour blowhard-fest was a monumental waste of time. Obamacare Theater tied up GOP energy and resources as the White House readies its "Plan B" (expanding government health care coverage, just at a slower pace) and Democratic leaders prep their reconciliation ram-down for early next week. This Washington box-office bomb is a prelude to much bigger legislative horrors still to come. Don't you love farce?

    "More Boor Than Cure The summit persuaded nobody. It probably wasn't meant to," by Peggy Noonan, The Wall Street Journal, February 26, 2010 ---
    http://online.wsj.com/article/SB10001424052748704479404575087902935784456.html

    Boy, that didn't work.

    Nothing in the health-care summit promised greater progress or movement. Positions started out hardened, and likely ended so. Good faith and generosity did not flourish. Some people said some smart things. The Republicans seemed fortified not with Ovaltine but, in some cases, Espresso. No normal human watching the debate could determine with complete confidence who was being forthcoming about the meaning of this facet of the Senate bill or that subclause in Section D. And so the viewers probably judged things along party lines. "You can't trust politicians." "At least Democrats care."

    It's already de rigueur to say no normal humans were watching, but on a snowy day on the Eastern Seaboard, with a maturing population, in a nation of TV watchers, and on a subject that for a year has aroused passions, plenty of normal people would have been watching.

    Which is not, I think, good news for the president. Mr. Obama will not have helped himself by his manner. The summit highlighted, even showcased, something unappealing and unhelpful there, a tendency to attempt to show dominance and command by patronizing, even subtly bullying, even trimming. All people in public life have moments like this—most people do, in whatever walk—but you're not supposed to have them when you're trying to sway minds, reach out and build support.

    Which left me doubting that was what he was actually trying to do.

    The way the meeting was arranged, the president was the teacher, the lecturer. Arrayed before him were the bright if occasionally unruly students. He was keen to establish that it was his meeting—he decides who speaks next and who should wrap up, he decides what is and is not "a legitimate point." He was Mr. President, they were John and Lamar. He wielded a shiny pen like an anchorman eager to show depth and ease. He even said, "There was an imbalance in the opening statements because—I'm the president." Yowza. Grace shows strength, accommodation shows security. This showed—well, not strength. When Rep. Eric Cantor attempted to make a sharp point, the president took the camera off him by calling for his aides and conferring with them as Mr. Cantor spoke.

    The president has entered a boorish phase.

    This is not a good sign for his program, but tells us something about his likely next step.

    The president opened his remarks saying he is concerned about deficits, and then turned to standard, heart-rending anecdotes about the sick and uninsured. If we do nothing, he said, costs will only get worse; moving now is not reckless but prudent. He put the congressmen on the defensive: We in government have the best health care in the world, why can't everyone else? His mother's last days were consumed by arguing with insurance companies. He cleverly brought up past statements by the Republicans present in which they criticized and called for change in the U.S. health care system. The past year of debate has descended into "a very ideological battle" in which "Politics wound up . . . trumping common sense." But there's still time to reason together. Let's focus on what we agree on.

    One thing about Mr. Obama is that he is in many ways an unusually true-to-form political figure. Nothing forces him off his subject. Opposition doesn't deflect him. He also, as he demonstrated in the 2008 debates, likes to speak long to take the oxygen out of the room, to tire his opponents and leave them having to decide which of his many statements to address first.

    After he spoke, the great question was: Would the Republicans come alive? Would they make coherent arguments? The choice of Sen. Lamar Alexander as the first GOP spokesman was smart. In a folksy, easygoing manner he told the president the American people do not support his bill. We think we have good ideas to reduce health care costs, he said. He offered a heart-rending anecdote of his own. He said we have to put the current bills on the shelf and start new, "with a clean sheet." He outlined issues of potential agreement. When Mr. Obama spoke, the Republicans looked at him. When Mr. Alexander spoke, the president watched, stony-faced, and took notes.

    Mr. Alexander acknowledged what I've called the Comprehensiveness Blight, the tendency of Congress to put together thousand-page omnibus bills that the public refuses to back because they don't trust Congress not to hide self-serving mischief within them. Mr. Alexander called for smaller, shorter, clearer bills that tackle discrete problems. At this point the president was wearing a face that was no doubt meant to look thoughtful, but actually looked hostile.

    It is hard in politics to control the face.

    Mr. Alexander ended by asking the president to renounce the idea of banging his bill through the Senate with 51 votes. "It's not appropriate" to rewrite the rules of 17% of the US economy through what is called "reconciliation." Don't go "jamming it through." "Let's start over."

    Mr. Alexander was a good GOP spokesman because there is a certain credibility to his bipartisan approach. When I asked him a few days before the summit if Washington was broken, he was keen to speak of working successfully with Democrats on energy and education. "There's plenty of opportunities to get results," he said, and he seemed to mean it.

    Speaker Nancy Pelosi was fascinating, though not because of what she said. She has high energy, an air of pleasure in her life, and always looks like a lady, putting in the time and effort it takes for a busy woman to be chic and attractive. She is like someone who walks into politics each day as if she wants to physically adorn it. This I take to be a patriotic act. Her remarks were dull and witless. Nothing she said was the fruit of fresh thought. She offered cornball, off-point clichés about the kitchen table: "We don't have time to start over!" "I've seen grown men cry." It was a speech that could have been given at a Democratic party fund-raiser, and no doubt has been. What runs her and keeps her from embarrassment is the lovely, unquestioned conviction that she is right and that's that. There are politicians whose strengths come from their limits. Her limit is that she cannot, ever, see truth on the other side. The steel of her certitude becomes her strength. It allows her to squash opponents legislatively like little bugs.

    It was interesting that while Sen. Alexander spoke to the room and not the cameras, she spoke to the cameras and not the room.

    Which seemed to say it all.

    The whole point of the summit, I believe, was for the Democrats, to win whatever support remains for the bill they will attempt to ram home in the Congress, and for the Republicans to prove they are not the party of "no" but a party of serious ideas and intentions.

    It was a talking-point festival. Nobody moved the needle. The Democrats emoted, making appeals to the sentiment. The Republicans analyzed, sometimes indignantly, but their statements often seemed disconnected, as if their plans lack a framework that coheres.

    At odds with his party's health-care style was the president, who has the certitude but not the passions of an ideologue.

    What the meeting made clear is what the Democrats are going to do—not step back and save the moderates of their party but attempt to bully a bill through the Congress.

     

     

     

    Updates February 23, 2010

    "ObamaCare at Ramming Speed The White House shows it has no interest in compromise," The Wall Street Journal, February 23, 2010 ---
    http://online.wsj.com/article/SB10001424052748704454304575081391789004352.html?mod=djemEditorialPage_t

    A mere three days before President Obama's supposedly bipartisan health-care summit, the White House yesterday released a new blueprint that Democrats say they will ram through Congress with or without Republican support. So after election defeats in Virginia, New Jersey and even Massachusetts, and amid overwhelming public opposition, Democrats have decided to give the voters what they don't want anyway.

    Ah, the glory of "progressive" governance and democratic consent.

    "The President's Proposal," as the 11-page White House document is headlined, is in one sense a notable achievement: It manages to take the worst of both the House and Senate bills and combine them into something more destructive. It includes more taxes, more subsidies and even less cost control than the Senate bill. And it purports to fix the special-interest favors in the Senate bill not by eliminating them—but by expanding them to everyone.

    The bill's one new inspiration is a powerful federal board that would regulate premiums in the individual insurance market. In all 50 states, insurers are already required to justify premium increases to insurance commissioners, who generally have the power to give a regulatory go-ahead, or not. But their primary concern is actuarial soundness and capital standards, making sure that companies have enough cash to pay claims.

    The White House wants to create another layer of review that will be able to reject any rate increase that is "unreasonable or unjustified." Any insurer deemed guilty of such an infraction by this new bureaucracy "must lower premiums, provide rebates, or take other actions to make premiums affordable." In other words, de facto price controls.

    Insurance premiums are rising too fast; therefore, premium increases should be illegal. Q.E.D. The result of this rate-setting board will be less competition in the individual market, as insurers flee expensive states or regions, or even a cascade of bankruptcies if premiums are frozen and the cost of the care they are expected to cover continues to rise. For all the Dickensian outrage about profiteering by WellPoint and other companies, insurance is a low-margin business even for health care, and at least 85 cents of the average premium dollar, usually more, is devoted to actual health services.

    Price controls are always the first resort of national health care—i.e., Medicare's administered prices for doctors and hospitals. This new White House gambit is merely a preview of ObamaCare's inevitable planned medical economy, which will reduce choice and quality.

    The coercive flavor that animates this exercise is best captured in the section that purports to accept the Senate's "grandfather clause" allowing people who like their current health plan to keep it. Except that "The President's Proposal adds certain consumer protections to these 'grandfathered' plans. Within months of legislation being enacted, it requires plans . . . prohibits . . . mandates . . . requires . . . the President's Proposal adds new protections that prohibit . . . ban . . . and prohibit . . . The President's Proposal requires . . ." After all of these dictates, no "grandfathered" plan will exist.

    Meanwhile, the new White House plan further vitiates the remnants of cost-control that remained in the House and Senate bills. Now the highly vaunted excise tax on high-cost insurance plans won't kick in until 2018, whereas it would have started in 2013 in the Senate bill, and this tax will only apply to coverage that costs more than $27,500.

    Very few plans ever reach that threshold, and sure enough, this is the same $60 billion deal the White House cut in December with union leaders who have negotiated very costly benefits. Now it is extended to all to avoid the taint of political favoritism.

    While the White House claims to eliminate the "Cornhusker Kickback," the Medicaid bribe that bought Nebraska Senator Ben Nelson's vote, political appearances are deceiving. As with the union payoff, what the White House really does is broaden the same to all states, with all new Medicaid spending through 2017 and 90% after 2020 transferred to the federal balance sheet. Governors will love this ruse, but national taxpayers will pay more.

    And more again, because the White House has adopted the House's firehose insurance subsidies. People earning up to 400% of the poverty line—or about $96,000 for a family of four in 2016—will qualify for government help, and, naturally, this new entitlement is designed to expand over time.

    The Administration also claims to have discarded the House's 5.4-percentage-point surtax on joint-filers earning more than $1 million a year, but it sneaks it back in by expanding the Senate's expansion of the 2.9% Medicare payroll tax to joint income about $250,000. The White House would now apply that tax for the first time to income from "interest, dividends, annuities, royalties and rents," details to come.

    *** The larger political message of this new proposal is that Mr. Obama and Democrats have no intention of compromising on an incremental reform, or of listening to Republican, or any other, ideas on health care. They want what they want, and they're going to play by Chicago Rules and try to dragoon it into law on a narrow partisan vote via Congressional rules that have never been used for such a major change in national policy. If you want to know why Democratic Washington is "ungovernable," this is it.

     


    Updates on February 15, 2010

    "Ten GOP Health Ideas for Obama:  We don't need to study lawsuit reform for one minute longer," The Wall Street Journal, February 10, 2010 ---
    http://online.wsj.com/article/SB10001424052748704820904575055190217079952.html?mod=djemEditorialPage_t

    ''If you have a better idea, show it to me."
    That was President Barack Obama's challenge two weeks ago to House Republicans regarding health-care reform. He has since called for a bipartisan forum, not to start over on health reform but to "move forward" on the "best ideas that are out there."

    Having the ability to obtain and manage more health dollars in Health Savings Accounts is a start. A good model for self-management is the Cash and Counseling program for the homebound disabled under Medicaid. Individuals in this program are able to manage their own budgets and hire and fire the people who provide them with custodial services and medical care. Satisfaction rates approach 100%, according to the Robert Wood Johnson Foundation. We should also encourage health plans to specialize in managing chronic diseases instead of demanding that every plan must be all things to all people. For example, special-needs plans in Medicare Advantage actively compete to enroll and cover the sickest Medicare beneficiaries, and stay in business by meeting their needs. This is the alternative to forcing insurers to take high-cost patients for cut-rate premiums, which guarantees that these patients will be unwanted.
     

    The solutions presented here can be the foundation for a patient-centered system. Let's hope the president has the courage to embrace them.

     

    "Another Obama Tax Hike:  The Senate health-care bill would raise effective marginal tax rates on lower and middle-income singles and families up to 41%," by Douglas Holtz-Eakin and Alex Brill, The Wall Street Journal, February 3, 2010 ---
    http://online.wsj.com/article/SB10001424052748704259304575043302815479426.html?mod=djemEditorialPage_t 

    The stunning victory of Scott Brown in Massachusetts may prove to be a game-changer for the President's health-care "reform" agenda. This is good news for the ability of lower-income families lacking insurance to climb up the ladder of American prosperity. His associated rhetoric notwithstanding, the President's policies in the stimulus bill and health-care debate increase current barriers to the American dream. These legislative efforts (we use the Senate health-care bill for illustration) raise to shocking levels the effective marginal tax rates (EMTR) on lower and middle-income singles and families--with the government taking up to 41% of each additional dollar.

    The mechanics are simple. The effective marginal tax rate is the answer to the question: "If I earn $1 more, how much less than $1 do I get to save or spend?" If you can keep that full dollar for your disposal, the effective marginal tax rate is zero. If earning another dollar does not raise your disposable income by even a penny, the effective marginal tax rate is 100 percent.

    Obviously, neither extreme is realistic. But exactly where federal policies come down in between has dramatic implications for the ability of families to rise from the ranks of the poor, or to ascend toward the upper end of the middle class. This mobility is the heart of the American dream that has made the United States a beacon of economic light for centuries. Equal opportunity to achieve that dream – not equal paychecks or equal government handouts – is the real-world litmus test for fairness in government policy.

    Consider, then, the figure below constructed for a two-earner family with two school-age children, one of whom is in college. The solid line shows the EMTR based on income tax law prior to the health-care bill (it excludes the impact of the payroll taxes). The dashed line displays the damaging increases in the EMTR assuming the health insurance premium subsidies contained in the Senate health-care bill and insurance cost estimates provided by the Kaiser Family Foundation. As a family's income rises above 133% of poverty, Medicaid eligibility will be eliminated but a family that does not receive health insurance from their employer will receive a subsidy to purchase health insurance in the "exchange." In turn, however, as their efforts yield higher income, subsidies are clawed back or effectively taxed away. The current law policies show that there are already some lower income families facing EMTRs above those in the middle class. But the barrier to success imposed by health-care reform is even more striking. According to the Congressional Budget Office, about 20 million people would receive a subsidy to purchase insurance through an exchange and thus face a higher EMTR.

    How can a family be expected to get ahead when taking an extra shift, finding a way for a second parent to work, or investing in night school courses to qualify for a raise means handing the government as much as 41% of the additional income earned? Parents already juggle the tough trade-off between working more to build their family's future and spending time at home with their children. The bigger the EMTR, the tougher that tradeoff becomes.

    How could this happen? In part, it may reveal ignorance about the long-term impacts class warfare-based programs. For decades, both parties have employed refundable tax credits (i.e., disguised spending programs) as a way of providing benefits to low-income families while appearing to favor low taxes and small government. The class-conscious left has insisted that these benefits be "targeted" – i.e., that they disproportionately help those lower-income families that pay no taxes and be phased-out for the tax-paying middle class. The result fit their agenda of wealth redistribution. The right, eager to achieve any tax cuts they could muster, accepted the income limitations as the price of getting any tax relief. With progressives' hell-bent effort to soak the rich, the outlook for the poor and middle class quietly and steadily deteriorated to the condition we find it today.

    Every "phase-out" of a tax credit or subsidy program is an EMTR in disguise. The cumulative impact is a cruel twist on "targeting," as families are anchored near the bottom of the income distribution by layers of fiscal cement. Ignorance is a dangerous animal in the hands of tax policymakers.

    A second possibility is subtle paternalism toward the poor. Unlike the rich who are presumed to know what they want (which progressives are dead set on thwarting), it may be that poorer Americans are presumed to need guidance on how to live their lives (or a "nudge" in the parlance of the faddish behavioralists in the Obama Administration). They need to be told that it is a good idea to work, take care of your children, go to college and have health insurance, hence a tax credit for every virtue.

    In the end it does not matter how we got here. Taxes interfere with the basic rewards for work, thrift, and saving. Excessive EMTRs damage these incentives, discourage the taxed, and threaten to rob America of a vitality that is its signature.

    This year marks a crucial time in the future of tax policy. The tax laws enacted in 2001 and 2003 will sunset, along with the recent tax credits included in the so-called stimulus bill. As Congress thinks about the future, we hope it puts full weight on the importance of a tax code that supports the ability of the poor and middle-class to achieve their dreams.

    The Massachusetts special election sends the strong message that voters want Washington to scale back its interference in their lives. Re-thinking the policies that get in the way of their pursuit of success is a good place to start.

    Jensen Comment
    If we are going to have expanded healthcare coverage, I see nothing wrong with making recipients pay graduated to their level of income. Even the poor should make sacrifices for their expanded healthcare coverage. And the middle class should pay much more.

    February 8, 2010 message from a friend in Germany

    Hello Bob and Erika,

    as it is Super Bowl Sunday I am sitting here reminiscing about my time in the US, and, of course, thinking about the people that I met. So I’m sending you an email as I am waiting for the Super Bowl to come on in about an hour. Once again they will show the big game on German TV. I have to take the rest of my vacation time from last year until the end of March of this year, so I decided to take tomorrow off to get rid of some of the vacation time (I have done this almost every year since I came back from the US, and two years ago I was even so lucky to be in the US for the Patriots-Giants Super Bowl, the greatest Super Bowl I have seen). So I am still quite busy at work, and still enjoy what I do very much. Since I am in an energy-related field, I am so to speak ‘part of’ this huge ‘push’ (for lack of a better word) that is going on towards renewable energy right now. Even though superconducting power cables are not a renewable energy source but rather one form of transmitting energy , there is a lot of interest in the technology right now. Taking a day off tomorrow turned out to be a good choice, as all public transportation workers in the city of . . .  will be on strike, so I would have had to take the car to get to work.

    I hope you are doing well in the mountains of New Hampshire, which I assume didn’t get hammered by the snowstorm the last few days, but are covered in snow anyway. I am reading Bob’s emails with great interest, especially regarding the banking situation and the health insurance situation. These are also two significant issues over here (you could actually argue that the strike tomorrow has a little to do with the bank bailout, see below….).

    The new German government is trying to reform our health care system. Medical care in Germany is probably among the best in the world, and costs are quite high (so I guess it’s quite similar to the US in these manners…). We have this system of public option insurance, which covers ~ 80% of the population, and private insurance, which covers almost everyone else (except for the few percent that fall through the cracks). In any case, the underlying idea of the system is not so bad, but the administration is so complex that a) only the Germans could come up with it and b) only the Germans can run it without going nuts. What is interesting is that Germany is one of only a few countries in Europe that has this private insurance option, most have only the public option (or so I read in an article recently, I am not the expert on health insurance). The public option insurance had to curtail what they reimburse quite a bit in recent years to cut costs, so more and more people try to get into private insurance. This, however, is not so easy: You have to earn a certain amount of money, and the insurance companies can deny coverage or exclude certain pre-existing conditions. (I have pre-existing conditions, so for me private insurance would be almost useless, as they would exclude these conditions, or rack up my premiums, or both). Plus, my wife (while she is not working, when she is working she will be covered herself again, and have to pay the premium (percentage of income))) and kid are covered with no additional premium in the public option, so it is always a safe bet, despite the fact that it may not pay for all the treatments the private insurance pays for (they generally pay for everything that is medically necessary though, even quite complex and costly procedures). So in any case, if you are interested I can tell you a bit more about health insurance in Germany. (There is actually another similarity between Germany and the US: With Germany being the biggest economy in Europe, medication costs a lot more here than in neighboring countries (or so I’ve read), which to me seems similar to the US/Canada medication cost issue).

    As I said before, there will be a strike here in . . .  tomorrow as the greedy public works employees (part of which are the transportation workers) show little solidarity to all the poor bankers bailed out by government funds. Since German governments (state and federal) had to fund the solidarity fund for starving bankers to keep them from bankruptcy and local governments have lower tax receipts due to the economic crisis, there is very little money for pay raises for public works employees, which, of course, should be happy to have a job and be able to collect a paycheck. (But thanks to the banks and the great work the bankers do, they all have jobs (except for the ones that got laid off, of course, but hey, if we laid off some bankers or let their banks go belly up, more people doing real work would be sure to get laid off too, because it’s a trickle-down economy, as we all know)). Collecting a paycheck is obviously something the greedy workers couldn’t do if it wasn’t for banks having money (and handing it out via ATMs, and central banks printing as much of it as is necessary, or maybe even more), which goes to show that there is a true lack of solidarity from the general public towards the poor starving bankers bailed out by government funds.

    So the poor bankers will have a hard time driving their BMWs and Mercedes to work tomorrow, as the roads will be clogged up by the cheap and smelly cars of people that would otherwise take public transportation to work (I assume that everyone that can take the day off will do so, just like I do. People were actually advised to take the day off if they can). Maybe I should check the newspaper again to make sure there isn’t an impromptu bank holiday tomorrow, after all, when bankers do so much good for us year-round they shouldn’t have to suffer through such a rough commute to work because of some greedy workers going on strike.

    In any case, I would normally ride my bike to work if it wasn’t for this rather rough winter, which for me is the latest piece of evidence that global warming is maybe not all it’s cracked up to be. It’s pretty reasonable to assume that human activity has an influence on climate, obviously, but when almost every seasonal forecast is dead wrong, it’s hard to se how the source can be believed to be correct in forecasts over many decades. In any case, I hope to be able to live to see, and wouldn’t be surprised if indeed it gets warmer, but I wouldn’t be shocked if it gets colder or stays the same either). Nonetheless, energy efficiency and renewable energy development is a reasonable thing to shoot for anyway, whether there is global warming or not…
     http://network.nationalpost.com/np/blogs/fpcomment/archive/2010/01/17/lawrence-solomon-bbc-drops-top-ipcc-source-for-climate-change-data.aspx 

    So the Hadley center in Britain predicted a winter with mild temperatures, but this may end up being the coldest winter in central-northern Europe in 30 years. We’ve had snow on the ground since mid-December, and the 15 day forecast right now has not a single day with a daytime high above freezing… (nonetheless, every now and then we have a day that is slightly above freezing, which usually leads to some melting of the snow and ice on the ground, and subsequently even more treacherous road conditions). The local governments were woefully unprepared for this winter, which is certainly not surprising when you are being told to expect a milder than normal winter. The road crews didn’t clear the roads properly in mid-December (probably assuming, like everyone else, including me, that this was going to melt rather quickly), and so we’ve had a mess on the ground ever since. I haven’t ridden my bike in 8 weeks now.

    I am still traveling to Norway quite a bit, and I thoroughly enjoy these trips. I also travel to the US, but only maybe once or twice a year; I was in Tucson last June. I really enjoy these trips also, I am quite lucky that I get to go on business trips to the US as I really enjoy spending time there. Business trips to places you’d like to visit anyway are not such a bad thing. (Of course, at work I am trying to not let on that I enjoy business trips, but I think they have me figured out anyway…. Luckily my wife puts up with it too). Whenever I travel to the US, I wonder how my life would be had I stayed there six years ago. In any case, now I am a happily married man with a house and a kid, which you can see in the attached pictures.

    Second Message on February 15, 2010 from my friend in Germany

    Hi Bob,

    the longer I am living in Germany again the stranger Germans seem to me. In any case, to understand the German attitude to health insurance I think it is important to bear in mind Bismarck's social legislation ( http://en.wikipedia.org/wiki/Otto_von_Bismarck#Bismarck.27s_social_legislation )
    and the German mind in general. Germans are a rather risk-averse bunch that believes that things are likely to get worse rather than better.

    I have recently come across a few articles on health insurance in Germany that essentially say that the private insurance is facing problems, or rather private insurance is jacking up the rates for two reasons: Private insurers pay more for the same services than the public insurance option (except for their basic tariffs) does: there is a so-called multiplier which says what you can charge for a given procedure when charged to private insurance. I have seen the factor of 2.3 used, but the way doctors can charge for their services in Germany is rather difficult to grasp for me so this factor of 2.3 may or may not be the multiple of what a public option insured person is charged. The higher pay for the same services is one of the reasons privately insured people have shorter waiting times in doctor's offices.

    The second reason for higher rates seems to be that privately insured patients do not care how much a procedure costs, as soon as they are above the co-pay limit (often there is a co-pay limit of a few hundred euros or so a year, above that there is no co-payment anymore for privately insured people). (There is an upper limit on how much a doctor can spend on average for publicly insured people, but I am not sure how much of a deterrent this is for a doctor to prescribe what is necessary).

    In any case, recently it has been argued that the medical doctors are now charging private insurance patients more to make up for what they do not get from the publicly insured people.

    So the issue of public health insurance in Germany remains an interesting one, and, as everywhere else, rates are likely to rise.....

    Regards,
    XXXXX

    Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance
    Note that pre-existing conditions drive up the private insurance rates for individuals.
    Private insurance often leads to preferential treatment from physicians and hospitals.
    My friend also tells me that having private insurance is somewhat of a status symbol in Germany.

    Basic introduction

    Health insurance is obligatory for everyone residing in Germany who is employed full-time by a company. The company pays half of the insurance contributions, the other half comes out of the employee's salary. The employee's half usually totals around 10% of their gross salary. When starting work with a company usually the employee won't have to worry too much about how the system works. The company will automatically sign them up with an insurance company and the contributions automatically deducted from the salary. Sometimes the employee may be asked if they have a preferred insurance company. It is recommended to simply go with one of the big names, like "AOK" or "TKK". They are all pretty similar.

    Health insurance has been obligatory for everybody in Germany, including the self-employed, since 2007. Medical treatment can be hugely expensive.

    There are two types of health insurance in Germany. These are the "public" and "private" systems. This system often causes considerable confusion. Full details are given below.

    Public Health insurance

    If you are employed in Germany and you are earning less than the threshold ( Versicherungspflichtgrenze) of EUR 48,600.- gross per year (EUR 4,050 gross per month), you are automatically and compulsorily insured in a public health insurance scheme. This is also true for students at a state or state-approved university in Germany and certainly for interns too. This also means that your employer does not have the option of accepting an expat insurance scheme (see below). You are only exempt from mandatory public health insurance as an employee working in Germany if you are seconded ( German: "entsendet") by a company which has its HQ in a member state of the EEA (= European Economic Area; including all of the EU plus Iceland, Liechtenstein and Norway) or in certain contracting states (among them being Canada and Quebec, PR China, Israel, Japan and the USA; for the complete list please check with DVKA.de). "Secondment" exists if the employee goes abroad for work purposes on instructions from his/her employer and the work is time-limited in advance, inter alia because of the particularity of employment or by contract. Unfortunately I found no definition of the maximum acceptable "time-limit". The compulsory membership in German public health insurance while working here is protected by European Regulation No. EEC 1408/71, among others. It is furthermore laid out in the German SGB (=Sozialgesetzbuch), 5th book, § 257

    All in all, what this means is: if you are employed by a German company or any other foreign company in Germany and you earn less than EUR 4,050 gross salary per month, you are a mandatory member of the public German health insurance system. You pay half plus 0.9% and your employer pays roughly half of the insurance premium too. As of 2009, the premium has been standardised for all public health insurance companies at 15.5% of gross salary up to the threshold
    ( Beitragsbemessungsgrenze) of EUR 44,100. This will drop to 14.9% from July 2009. Although they more or less offer the same services, it's still worth comparing.

    Public health insurance is great, however, if you earn only a small amount (because you get a lot of insurance for a low sum of money) or if you are married and have a spouse and children with you - because they are covered by the public health insurance too (this may change in the near future, though, according to the latest political plans). But beware: since a lot of services from the public health insurance system have been downgraded or cancelled in recent years, you might want to consider getting additional private insurance to cover some services like 1- or 2-bed rooms in hospital, Chefarzt-Betreuung (operation and treatment by the head doctor of the hospital) or full dental services/replacement etc. Even then you might still have to pay some extra if you have a very complicated illness and you try to get the most-respected expert in Germany to treat you, because in these cases treatment is only covered up to a certain limit. If you want to be sure about having enough funds in the event of severe illness to get the best possible treatment, other insurance types (Dread Disease offered by Canada Life or Scandia for instance) are a possibility.

    Private Health Insurance

    Now if you are earning more than the threshold of EUR 4,050 gross salary per month, you can elect to leave the public health insurance and get a private health insurance while employed in Germany. Here the comparison between different offers is a bit more complicated and you may want to get the advice of a professional advisor or broker. I have seen some attempts to compare different quotations from different private health insurances, but you cannot just take one quote with the price XYZ and another one with ABC to be paid per month and say that the cheaper one is the better choice - it may vary strongly regarding the insured coverage. The best way to start a comparison is to ask private insurers to send you a quotation "Analog GKV", meaning with the same coverage as the public health insurance. Then you can compare the insurance quotations on an even footing. You can also lower your premium by using "excess options (Selbstbeteiligung)". This means that you are willing to pay for instance the first 300.- EUR every year out of your own pocket and you will receive reimbursement only for the costs in excess of that 300.- EUR. Since most of the private insurances offer to repay you 1 or 2 monthly premiums after one year of not having using the insurance at all, you should add this repayment amount to the excess-option-amount agreed in your contract and then you know at what medical cost per year it makes economical sense to hand in all invoices to the insurer during any given year. The highest excess option I know of is 2.400.- EUR per year; standard is between 300 and 750 EUR per year. If you take a very high excess option, you will achieve a similar coverage like with most expat health insurances: you are covered for all serious medical problems, but you will pay for all prescriptions and ordinary consultations of a doctor out of pocket. So, a Private Health insurance can be much lower in monthly premium than a Public health insurance while providing you with more and better coverage. Still: if you are married with children and your spouse does not earn any income here in Germany, public insurance covering all family members with your own premium can be the better deal. And if you want to have a better coverage than Public Insurance offers, you can always get an add-on insurance from private insurance companies, where you cover certain medical issues that you deem to be important for you.

    Use of Foreign Health Insurance

    One of the main questions I have seen on TT is the question Hutcho asked me too: can I use a private insurance from abroad, which is cheaper than German insurance even though it may not cover all that German private insurance offers? For instance Expathealthcare, Bupa etc. The answer I finally got from the official side is, amazingly, YES! Apparently you can... My source for this valuable information is a Ms. LÖWER at the DVKA, the "Deutsche Verbindungsstelle Krankenkasse - Ausland", a federal institution. But this of course applies only if you are above the magic threshold of monthly income stated above, i.e. would be eligible for Private Health insurance according to German laws and regulations. Hence theoretically you could ask your employer to accept a BUPA or MediCare policy - even as a German employee, if I understand this regulation correctly.

    However: a) foreign insurance is most certainly not certified according to § 257, 2a and hence your employer has no obligation to pay a share of the insurance costs, as he is required to do if you select a licensed German private health insurance. He may nonetheless decide to do so. But some tax issues would inevitably arise for the employer if he does. b) According to German law/regulations you will also need an additional "long-term care insurance". For this you will need to pick a German insurance because to my knowledge no foreign insurance is qualified or certified for this insurance. This insurance is required by law; you cannot avoid it.

    Now remains one important question: why are foreign health insurances so much less expensive than German health insurances? Of course there are differences in the coverage that cause a different computation of risk for the insurance company to be asked to pay out of the insurance coverage. But what makes a German insurance also so much more expensive is that they build up a capital stock for the insured early on in order to make sure that health costs do not explode in old age. This is something the expat insurances seem not to do if you look at the increase of premiums for people aged 30 to people aged 50. Therefore, if you plan to stay in Germany for a longer period of time, it might be wise to pay the higher premium on the German insurance in order to keep costs stable in later years.

    Moreover, you should be aware that expat health insurance schemes have limitations on cover for chronic conditions. Such policies are designed to cover treatment of medical conditions that respond quickly to treatment (acute conditions). Medical insurance is not intended to cover you against the cost of recurrent, continuing or long-term treatment of chronic medical conditions since these treatments become a series of predictable, rather than unexpected, events. See the following link for further information and for examples:
    AXA PPP - chronic conditions

    Health insurance for freelancers

    Health insurance is usually arranged through a person's employer, who also contributes to the scheme. The self-employed, on the other hand, are responsible for arranging their own private insurance. Since 2007, even the self-employed are legally obliged to have health insurance cover. They can choose between private health insurance schemes offered by German providers and the expat schemes outlined above. Advice from an independent agent is recommended. Health insurance costs are usually tax deductible; an insurance agent or financial advisor will be able to advise you on this.

    Summary

    It is now up to each individual to check the services offered by foreign insurance companies with regard to his/her needs and security requirements and then decide which is the overall best option. As it is, an employer can not force you to legally use a German private health insurance at all. But the computer system may not be able to handle having no employer-share of health insurance or other such administration problems... And you should make sure to pick an insurance company that has a good track record in actually paying you the money if you need to get expensive treatment or hospitalization. Otherwise even a fortnight in a German hospital with surgery can easily run up a bill of tens of thousands of euros. And finally you need to decide if you plan to stay in Germany only for a short period of time or for several years or maybe the rest of your life: in the later cases, the German insurance will give you a good deal on the long run.

    Conclusion

    Even though this will of course sound somewhat selfish considering my own profession, if you can opt out of the public insurance system the best advice is to take an independent broker to help you understand your options and to guide you through the legal jungle here in Germany.

    Good luck to all of you,
    Patrick Ott

    AEFM insurance and finance

     

     


    Updates on February 1, 2010

    Hey, Ben (Nelson): can you hear us now?
    Nebraska billboards after Scott Brown's victory in Mass.


    Health Care Moving in the Right Left Direction (with a chance of reconciliation passage with 51 Senate votes and the public option) ---
    http://www.thenation.com/blogs/jstreet/522420/health_care_moving_in_the_right_direction


    Updates on January 26, 2010

    "Obama Sternly Warns Congress: Don't Just Jam Health Care Through Against the People's Will," Huffington Post, January 20, 2010 ---
    http://www.huffingtonpost.com/2010/01/20/obama-to-dems-dont-jam-th_n_430134.html

    "What Massachusetts Got Right," by Robert Scheer, The Nation, January 20, 2010 ---
    http://www.thenation.com/doc/20100201/scheer

    Of course, the public is right. In the midst of the worst economic crisis in seventy years, why waste enormous political capital battling to pass a healthcare plan that is modeled on a proven failure in Massachusetts, as voters there clearly registered? Meanwhile, the president has dropped the ball in the effort to make bankers act responsibly by forcing them to forego outrageous bonuses and help homeowners stay in their homes. Again quoting the message of that Wall Street Journal/NBC poll: "The president's focus on health care amid heightened job concerns could be hurting his ratings. At the one-year mark of his presidency, 35 percent of Americans said they were 'quite or extremely' confident he had the right priorities to improve the economy, down from 46 percent at midyear." The Journal noted that a majority disapproved of the government's response to the financial crisis, adding, "The related problem for Mr. Obama is the public's lingering anger about the bailouts of 2008 and 2009, which helped boost bank profits even as unemployment grew--a toxic political problem."

    What Massachusetts Got Wrong
    "The Massachusetts Insurance Blackout:  Insurers go on strike after Deval Patrick imposes price controls," The Wall Street Journal, April 9, 2010 ---
    http://online.wsj.com/article/SB10001424052702304198004575171782805022028.html#mod=djemEditorialPage_t

    This week it became impossible in Massachusetts for small businesses and individuals to buy health-care coverage after Governor Deval Patrick imposed price controls on premiums. Read on, because under ObamaCare this kind of political showdown will soon be coming to an insurance market near you.

    The Massachusetts small-group market that serves about 800,000 residents shut down after Mr. Patrick kicked off his re-election campaign by presumptively rejecting about 90% of the premium increases the state's insurers had asked regulators to approve. Health costs have run off the rails since former GOP Governor Mitt Romney and Beacon Hill passed universal coverage in 2006, and Mr. Patrick now claims price controls are the sensible response to this ostensibly industry greed.

    Yet all of the major Massachusetts insurers are nonprofits. Three of largest four—Blue Cross Blue Shield, Tufts Health Plan and Fallon Community Health—posted operating losses in 2009. In an emergency suit heard in Boston superior court yesterday, they argued that the arbitrary rate cap will result in another $100 million in collective losses this year and make it impossible to pay the anticipated cost of claims. It may even threaten the near-term solvency of some companies. So until the matter is resolved, the insurers have simply stopped selling new policies.

    A court decision is expected by Monday, but state officials have demanded that the insurers—under the threat of fines and other regulatory punishments—resume offering quotes by today and to revert to year-old base premiums. Let that one sink in: Mr. Patrick has made the health insurance business so painful the government actually has to order private companies to sell their products (albeit at sub-market costs).

    One irony is that Mr. Patrick's own Attorney General and his insurance regulators have concluded—to their apparent surprise—that the reason Massachusetts premiums are the highest in the nation is the underlying cost of health care, not the supposed industry abuses that Mr. Patrick and his political mentor President Obama like to cite.

    On top of that, like ObamaCare, integral to the Massachusetts overhaul are mandates that require insurers to cover anyone who applies regardless of health status or pre-existing conditions and to charge everyone about the same rates. This allows people to wait until they're about to incur major medical expenses before buying insurance and transfer the costs to everyone else. This week Blue Cross Blue Shield reported a big uptick in short-term customers who ran up costs more than four times the average, only to drop the coverage within three months.

    Last July, Charlie Baker detailed similar gaming at Harvard Pilgrim, the health plan he used to run. Between April 2008 and March 2009, about 40% of its new enrollees stayed with it for fewer than five months and on average incurred costs about 600% higher than the company would have otherwise expected.

    Mr. Baker is almost certain to be Mr. Patrick's GOP opponent in the fall election. The Governor's lurch toward price controls is obviously part of a bid to tar the former CEO as an industry villain. David Plouffe, the architect of Mr. Obama's Presidential campaign, has signed on as a Patrick 2010 consultant. These kinds of collisions between politics and health care are going to occur constantly across the country as ObamaCare kicks in.

     


    "Why Public Support for Health Care Overhaul Faltered," SmartPros, January 21, 2010 ---
    http://accounting.smartpros.com/x68593.xml

    As a candidate, Barack Obama promised to pass a health care plan with important benefits for average Americans. For the typical family, costs would go down by as much as $2,500 annually. Adults wouldn't be required to buy insurance. No one but the wealthy would face higher taxes.

    A year later, however, the health care proposals in Congress lack many of those easy-to-sell benefits, which became victims of the lengthy process of trying to win over wavering lawmakers, appeasing powerful special-interest groups and addressing concerns about the heavily burdened Treasury.

    "There's nothing in it the average person could understand about why your costs would be lower," said Robert Blendon, a professor of health policy at Harvard's School of Public Health. "They don't even have good illustrations about how it would be cheaper. They did not find a way to save money for people with job-based insurance."

    Today, the legislation is in serious trouble, lacking a crucial 60th vote in the Senate after Republican Scott Brown was elected to the Massachusetts seat once held by the late Edward Kennedy, a Democrat.

    Certainly, attacks by the Republicans - as well as the Democrats' inability to articulate the benefits of the legislation clearly - are partly responsible for the measure's lack of popularity. So are crucial policy decisions that Democratic leaders made as they struggled to push the legislation through, according to experts of different ideological persuasions.

    "Health reform is a really hard thing to do," said Jonathan Oberlander, an associate professor of social medicine at the University of North Carolina-Chapel Hill. "They did a lot right, strategically. But you can do everything right and still fail in health reform."

    Here are some of the policy choices that experts say have hurt the bill's chances:

    WHAT'S IN IT FOR ME?

    For the majority of voters who get insurance through their employers, the downsides have become increasingly tangible while the promised benefits - lower costs among them - have seemed more nebulous. One reason: Democrats didn't want to be so tough on health care providers that they'd fight the legislation.

    "The Democrats succeeded in doing reform without goring anyone's ox and the public has seen that for what it is: They are not substantially bringing costs down in the foreseeable time horizon," said Joel Cantor, the director of the Rutgers University Center for State Health Policy in New Brunswick, N.J.

    To be sure, the Senate Democrats crafted a "Cadillac tax" on the highest-cost insurance plans for people with employer coverage. That was deemed necessary to help slow the growth of health care costs and to help finance the plan. It means that some people with coverage could end up worse off, however.

    Lawmakers incorporated tax credits to help small businesses afford coverage, but most of the bills' provisions are targeted at the more than 30 million Americans who lack coverage and the 17 million who buy insurance in the individual market. The bills would bar insurers from rejecting individuals with health problems and would guarantee that policies couldn't be canceled if enrollees got sick. However, such promises seem hypothetical for many people who already have jobs and insurance, the very constituency the Democrats need to succeed.

    MEDICARE

    The Democrats would finance a big chunk of the bill by slowing the growth of Medicare spending, which is probably inevitable, given the sheer size of the program.

    In doing so, however, they've opened themselves up to charges that seniors would pay the price.

    Democrats and the AARP, the powerful seniors' lobby, argue that the legislation wouldn't hurt older Americans and in fact would help them by lowering costs for prescription drugs and making other improvements. They also say that payment cuts to private Medicare Advantage plans are good policy because the plans cost more than traditional Medicare does.

    Certainly, there are no easy ways to finance such a massive revamp.

    "The choices are to take it out of existing health programs, increase taxes or reduce other spending," said Gail Wilensky, who ran Medicare and Medicaid under President George H.W. Bush and is now a senior fellow at Project HOPE, an international health education foundation. "Those are three really unattractive options."

    The Medicare reductions, however, have become targets for attack ads aired by opponents such as the 60 Plus Association, a conservative advocacy group, and America's Health Insurance Plans, the industry's major trade group.

    The proposed reductions "made it easy to scare seniors" and are "responsible in significant measure for the opposition" to the bill, Oberlander said.

    TAXES

    The discussion of various taxes has confused and alarmed people, experts said.

    To pay for a plan that's estimated to cost at least $900 billion over a decade, Democratic lawmakers, at various times, have considered levies, fines or penalties on high earners, medical-device makers, tanning salons, elective plastic surgery, drug companies, expensive health coverage, sugary sodas, people who refuse to get insurance and companies that don't provide coverage.

    Many of the taxes have been dropped or scaled back. Others have been designed to pressure the health care system to operate more efficiently. However, the list of levies has fueled concerns that Americans, struggling with a severe economic slump, would have to pony up more for the taxman.

    "The final bill will not have all those taxes in it," Blendon said, "but people hear about the tax on insurers, the tax on pharmaceuticals, the income tax - and they can't segregate it in their minds."

    "People don't like taxes," said Leslie Norwalk, who was the acting administrator of the Centers for Medicare and Medicaid Services during the administration of President George W. Bush. "The electorate is trying to decide what it thinks about this health care stuff, sees the economy is in trouble and a lot of discussion about taxes, but isn't all that unhappy about their own health care."

    DEAL-MAKING

    Putting together complicated legislation is always messy, but the health care debate has been especially prone to distractions, setbacks, reversals and deal-making.

    For months, Senate Democratic leaders searched for a compromise that would bring at least one Republican on board while trying not to lose liberal Democrats who threatened to withhold support. The fight over a government-run insurance plan took so much time and energy that other issues were eclipsed. The fracas over "death panels" during the August recess fueled a revolt against the legislation. Abortion emerged as a potent issue that nearly derailed the measure.

    "The longer the clock's running, the bigger the chance you have for something to pop up and surprise you," said Peter Harbage, a Democratic health policy consultant.

    Negotiators cut parochial deals for individual lawmakers: extra Medicaid spending for Nebraska, exemptions from Medicare Advantage cuts for parts of Florida, special help for some Montana residents with asbestos disease.

    All this helped secure the votes to get the bill through the Senate, but it bolstered the perception that the measure was pork-barrel spending aimed at helping some more than others.

    "They say, 'Look, God knows what other dirty deals they did,' " said Uwe Reinhardt, a health care economics professor at Princeton University.

     

    January 18, 2010

    Hidden in Obama's health care bill is a huge marriage penalty. Both the Senate and House bills would set up yet another federal program to provide financial incentives to subsidize marriage avoidance and illegitimate offspring.
    Phyllis Schlafly, "The Marriage Penalty in Health Care," Townhall, January 12, 2010 ---
    http://townhall.com/columnists/PhyllisSchlafly/2010/01/12/the_marriage_penalty_in_health_care

    Here is the cost in the House bill for an unmarried couple who each earn $25,000 a year (total: $50,000). When they both buy health insurance (which will be mandatory), the combined premiums they pay will be capped at $3,076 a year.

    But if the couple gets married and has the same combined income of $50,000, they will pay annual premiums up to a cap of $5,160 a year. That means they have to fork over a marriage penalty of $2,084.

    Continued in article


    Dirty Rotten Strategies: How We Trick Ourselves and Others Into Solving the Wrong Problems Precisely by Ian I. Mitroff and Abraham Silvers (Stanford University Press; November 2009, 192 pages; $24.95 but Amazon sells it new for $12.95

    People and organizations are perfectly capable of making the most outrageous missteps. But, how does a person, organization, or society know that it is committing an error? And, how can we tell that when others are steering us down wrong paths?

    Dirty Rotten Strategies delves into how organizations and interest groups lure us into solving the "wrong problems" with intricate, but inaccurate, solutions. Authors Ian I. Mitroff and Abraham Silvers argue that we can never be sure if we have set our sights on the wrong problem, but there are definite signals that can alert us to this possibility.

    While explaining how to detect and avoid dirty rotten strategies, the authors put the media, healthcare, national security, academia, and organized religion under the microscope. They offer a biting critique that examines the failure of these major institutions to accurately define our most pressing problems. For example, the U.S. healthcare industry strives to be the most technologically advanced in the world, but, our cutting-edge system does not ensure top-quality care to the largest number of people.

    Readers will find that far too many institutions have enormous incentives to let us devise elaborate solutions to the wrong problems. As Thomas Pynchon said," If they can get you asking the wrong questions, then they don't have to worry about the answers."

    From a political perspective, this book shows why liberals and conservatives define problems differently, and demonstrates how each political view is incomplete without the other. Our concerns are no longer solely liberal or conservative. In fact, we can no longer trust a single group to define issues across the institutions explored in this book and beyond.

    Dirty Rotten Strategies is a bipartisan call for anyone who is ready to think outside the box to address our major concerns as a society—starting today.

     


    "The Tom DeLay Democrats So much for the President's pledge of C-Span transparency," The Wall Street Journal, January 6, 2010 ---
    http://online.wsj.com/article/SB10001424052748703436504574640293357268598.html#mod=djemEditorialPage

    Rehabilitating Tom DeLay's reputation always seemed hopeless, or so we thought—but then again, President Obama ran on hope. Against the odds Democrats are making the former GOP Majority Leader look better by comparison as they bypass the ordinary institutions of deliberative democracy in the final sprint to pass ObamaCare.

    Instead of appointing a formal conference committee to reconcile the House and Senate health bills, a handful of Democratic leaders will now negotiate in secret by themselves. Later this month, presumably white smoke will rise from the Capitol Dome, and then Nancy Pelosi, Harry Reid and the college of Democratic cardinals will unveil their miracle. The new bill will then be rushed through both chambers with little public scrutiny or even the chance for the Members to understand what they're passing.

    Evading conference has become standard operating procedure in this Congress, though you might think they'd allow for the more open and thoughtful process on what Mr. Obama has called "the most important piece of social legislation since the Social Security Act passed in the 1930s and the most important reform of our health-care system since Medicare passed in the 1960s."

    This black-ops mission ought to be a particular embarrassment for Mr. Obama, given that he campaigned on transparent government. At a January 2008 debate he said that a health-care overhaul would not be negotiated "behind closed doors, but bringing all parties together, and broadcasting those negotiations on C-Span so the American people can see what the choices are."

    The C-Span pledge became a signature of his political pitch. During a riff at the San Francisco Chronicle about "accountability," he added that "I would not underestimate the degree to which shame is a healthy emotion and that you can shame Congress into doing the right thing if people know what's going on."

    Apparently this Congress knows no shame. In a recent letter to Congressional leaders, C-Span president Brian Lamb committed his network to airing "all important negotiations," which if allowed would give "the public full access, through television, to legislation that will affect the lives of every single American." No word yet from the White House.

    At a press conference in December, even Mrs. Pelosi said that "we would like to see a full conference." One reason she mentioned was that "there is a great deal of work involved in reviewing a bill and seeing what all the ramifications are of it," though her real motive at the time was that a conference seemed like a chance to drag the bill closer to the House version.

    With public support collapsing, however, Democrats now think the right bill is any bill—and soon. Democrats know that a conference forces the majority party to cast votes on awkward motions and would give the Republicans who have been shut out for months a chance to participate. This sunlight, and the resulting public attention, might scare off wavering Democrats and defeat the bill. Ethics rules the Democrats passed in 2007 also make it harder to "airdrop" into conference reports the extra bribes they will no doubt add to grease the way for final passage.

    Democrats howled at the strong-arm tactics Mr. DeLay used to pass Medicare drug coverage in 2003, and so did we. But they've managed to create an even more destructive bill, and their tactics are that much worse. We can't even begin to imagine the uproar if the Republicans had tried to privatize Social Security with such contempt for the democratic process and public opinion.

    Democratic leaders in Congress have apparently shunned a request from C-SPAN CEO Brian Lamb to open up the health care negotiations process to their cameras and therefore to the American people. Emerging from yet another closed door meeting on health care, House Speaker Nancy Pelosi (D-Calif.) denied at a press conference that Democrats had in any way been secretive in their negotiations, asserting that they have been perfectly transparent throughout the legislative process. “There has never been a more open process for any legislation,” Pelosi actually said with a straight face.
    Connie Hair, "Pelosi’s Iron Curtain Surrounds Health Care," Human Events, January 6, 2010 ---
    http://www.humanevents.com/article.php?id=35086

     


    "Should the Government Use Its Monopsony Power to Reduce the Price of Drugs?"
    by Richard Posner with a reply from Nobel Laureate Gary Becker
    The Becker-Posner Blog, December 27, 2009 --- Click Here
    http://uchicagolaw.typepad.com/beckerposner/2009/12/should-the-government-use-its-monopsony-power-to-reduce-the-price-of-drugs-posner.html


    "Congressional Budget Office Says Dems Are Using Accounting Trick To Claim Medicare 'Savings'," by Megan McArdle, Business Insider, December 23, 2009 --- http://www.businessinsider.com/congressional-budget-office-says-dems-are-using-accounting-trick-to-claim-healthcare-savings-2009-12

    "This bill will strengthen Medicare and extend the life of the program." -
    President Barack Obama, after the Senate health care bill secured 60 votes.

    It's from the Wonk Room blog at the Center for American Progress, and as you can see, it puts this claim up there front and central. As you can see from the quote above, it's not just an error made by one pundit. As I recall, the claim was made more than once during the Senate debate, and of course, by our president in selling the bill. The graphic was very widely distributed.

    Unfortunately, the CBO finally got around to ruling on this question, and no, this is not actually going to fix the Medicare budget problem; it's an artifact of the way the government accounting is done.

    The explanation is a little complicated, and I'm not sure how many of you want to go through it, but I'll try my hand at a reasonably succinct explanation. Basically, Medicare, like Social Security, has a "trust fund" (actually, more than one), which is supposed to fund it until the trust fund is exhausted in 2019. The "trust fund" does not exist in any meaningful sense, because its "assets" consist of claims on the general fund, i.e. all the rest of the tax money. As Medicare goes into deficit, it trades in those assets to cover its funding gap, which means the general fund has to find the money to pay off the special bonds by either raising taxes, cutting other spending, or borrowing more money. After the trust fund is exhausted, the general fund has to find the money to pay for the Medicare deficit by either . . . raising taxes, cutting other spending, or borrowing more money. The difference to taxpayers is nil.

    Technically, when you cut Medicare spending, that money shows up as an increase in the Medicare trust fund, rather than some other possible accounting entry. But the effect on the unified budget is the same: the money saved by cutting Medicare is spent on other stuff. Whether Medicare is "calling bonds" or "demanding money to cover its deficit", we still have to find exactly as much money to pay for Medicare as we did before. Which is a lot of money. One of the reasons the projected deficits for the rest of the decade are so big is that the cost of Medicare is outstripping the revenue raised by its payroll tax, and so we have to shovel in more and more money from the general fund.

    You can dedicate that money to paying for Medicare--but then you have to introduce a corresponding future liability on the general fund, in the amount of the Medicare savings. That would mean that this bill would increase the deficit by hundreds of billions of dollars, rather than reducing it.

    Or as the CBO says:

    The key point is that the savings to the HI trust fund under the PPACA would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs. Trust fund accounting shows the magnitude of the savings within the trust fund, and those savings indeed improve the solvency of that fund; however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits. To describe the full amount of HI trust fund savings as both improving the government's ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government's fiscal position.

    It's a little disappointing, really. At the rate that Democratic politicians were generating ever-more-spectacular budget savings from the same old set of health care proposals, I had expected our looming fiscal problems to be permanently resolved by this time next week.

    From TheAtlantic - shaping the national debate on the most critical issues of our times, from politics, business, and the economy, to technology, arts, and culture.


    My Hero John Stossel on Health Care --- http://www.foxbusiness.com/on-air/stossel/


    "A Low, Dishonest Decade: The press and politicians were asleep at the switch.," The Wall Street Journal, December 22, 2009 ---
    http://online.wsj.com/article/SB10001424052748703478704574612013922050326.html?mod=djemEditorialPage

    Stock-market indices are not much good as yardsticks of social progress, but as another low, dishonest decade expires let us note that, on 2000s first day of trading, the Dow Jones Industrial Average closed at 11357 while the Nasdaq Composite Index stood at 4131, both substantially higher than where they are today. The Nasdaq went on to hit 5000 before collapsing with the dot-com bubble, the first great Wall Street disaster of this unhappy decade. The Dow got north of 14000 before the real-estate bubble imploded.

    And it was supposed to have been such an awesome time, too! Back in the late '90s, in the crescendo of the Internet boom, pundit and publicist alike assured us that the future was to be a democratized, prosperous place. Hierarchies would collapse, they told us; the individual was to be empowered; freed-up markets were to be the common man's best buddy.

    Such clever hopes they were. As a reasonable anticipation of what was to come they meant nothing. But they served to unify the decade's disasters, many of which came to us festooned with the flags of this bogus idealism.

    Before "Enron" became synonymous with shattered 401(k)s and man-made electrical shortages, the public knew it as a champion of electricity deregulation—a freedom fighter! It was supposed to be that most exalted of corporate creatures, a "market maker"; its "capacity for revolution" was hymned by management theorists; and its TV commercials depicted its operations as an extension of humanity's quest for emancipation.

    Similarly, both Bank of America and Citibank, before being recognized as "too big to fail," had populist histories of which their admirers made much. Citibank's long struggle against the Glass-Steagall Act was even supposed to be evidence of its hostility to banking's aristocratic culture, an amusing image to recollect when reading about the $100 million pay reportedly pocketed by one Citi trader in 2008.

    The Jack Abramoff lobbying scandal showed us the same dynamics at work in Washington. Here was an apparent believer in markets, working to keep garment factories in Saipan humming without federal interference and saluted for it in an op-ed in the Saipan Tribune as "Our freedom fighter in D.C."

    But the preposterous populism is only one part of the equation; just as important was our failure to see through the ruse, to understand how our country was being disfigured.

    Ensuring that the public failed to get it was the common theme of at least three of the decade's signature foul-ups: the hyping of various Internet stock issues by Wall Street analysts, the accounting scandals of 2002, and the triple-A ratings given to mortgage-backed securities.

    The grand, overarching theme of the Bush administration—the big idea that informed so many of its sordid episodes—was the same anti-supervisory impulse applied to the public sector: regulators sabotaged and their agencies turned over to the regulated.

    The public was left to read the headlines and ponder the unthinkable: Could our leaders really have pushed us into an unnecessary war? Is the republic really dividing itself into an immensely wealthy class of Wall Street bonus-winners and everybody else? And surely nobody outside of the movies really has the political clout to write themselves a $700 billion bailout.

    What made the oughts so awful, above all, was the failure of our critical faculties. The problem was not so much that newspapers were dying, to mention one of the lesser catastrophes of these awful times, but that newspapers failed to do their job in the first place, to scrutinize the myths of the day in a way that might have prevented catastrophes like the financial crisis or the Iraq war.

    The folly went beyond the media, though. Recently I came across a 2005 pamphlet written by historian Rick Perlstein berating the big thinkers of the Democratic Party for their poll-driven failure to stick to their party's historic theme of economic populism. I was struck by the evidence Mr. Perlstein adduced in the course of his argument. As he tells the story, leading Democratic pollsters found plenty of evidence that the American public distrusts corporate power; and yet they regularly advised Democrats to steer in the opposite direction, to distance themselves from what one pollster called "outdated appeals to class grievances and attacks upon corporate perfidy."

    This was not a party that was well-prepared for the job of iconoclasm that has befallen it. And as the new bunch muddle onward—bailing out the large banks but (still) not subjecting them to new regulatory oversight, passing a health-care reform that seems (among other, better things) to guarantee private insurers eternal profits—one fears they are merely presenting their own ample backsides to an embittered electorate for kicking.

    Bob Jensen's Rotten to the Core of Government threads ---
    http://faculty.trinity.edu/rjensen/FraudRotten.htm#Lawmakers


    The sad state of governmental accounting and accountability -
    William D. Eggers is the Global Director of Deloitte's Public Sector Research Program. John O'Leary is a Research Fellow at the Ash Institute of the Harvard Kennedy School. Their new book is
    If We Can Put a Man on the Moon: Getting Big Things Done in Government (Harvard Business Press, 2009).

    "Why the Success of "Obama Care" Could Be Riskier Than Failure," by William D. Eggers and John O'Leary, Harvard Business School Blog, December 23, 2009 --- http://blogs.hbr.org/cs/2009/12/why_the_success_of_obama_care.html?cm_mmc=npv-_-DAILY_ALERT-_-AWEBER-_-DATE

    When President Obama launched his health reform effort, more than anything he wanted to avoid the mistakes of the 1993-1994 attempt at health care reform. His advisors have said repeatedly over these past months that they want something passed.

    Now it appears they will get their wish. It's certainly true that one way "Obama Care" could fail — the one everybody has been worrying about — is by never being passed into law. Another way it can fail, however, is if a poorly designed bill passes and then wreaks havoc during implementation. Indeed, this sort of design and execution failure could do greater lasting damage to the goals of health care reform than mere failure to pass a bill.

    The Obama administration, and all reform-minded public agencies and organizations, would do well to avoid some of the mistakes of 2004, when an all-Republican Congress and White House rammed through a Medicare prescription drug benefit. The messy, ill-considered implementation of what in essence was a massive giveaway program generated huge initial ill-will among seniors, the very group the benefit was designed to serve.

    Ultimately, the GOP's Medicare prescription drug reform stands as a model for achieving short-term legislative success that creates an implementation nightmare. In more general terms, those pushing for change saw official approval as the finish line rather than, more accurately, as the starting line.

    Here are some of the key risks that the 2004 Congress should have had in mind in their push to get Medicare reform done — and which should be front-of-mind for change-leaders now:

    The risk of ramming it through. The process by which Medicare Part D became legislative reality wasn't pretty. It involved low-balled cost estimates, an unprecedented all-night vote, and high-pressure tactics from Republicans to sway votes that cost Tom DeLay an ethics rebuke. With all the high-stakes political gamesmanship, any actual review of the proposed policy for "implementability" was minimal to non-existent. A related lesson as the Democrats now drive health care and other reforms through Congress: political memory rarely fades. Cut-throat tactics lead inexorably to future in-kind retribution. Public leaders must stop the vicious cycle in which avenging political battle scars trumps practical lessons learned from prior missteps of execution.

    Forgetting who you're designing the reform for. Seniors were totally confused by their new "benefit." "This whole program is so complicated that I've stayed awake thinking, 'How can a brain come up with anything like this?'" lamented a seventy-nine-year old, retired business manager. Americans do not normally lie awake pondering the design of a federal program. But the Medicare prescription drug program was something special. "I have a PhD, and it's too complicated to suit me," said a seventy-three-year old retired, chemist.

    Giving the nation's elderly voters apoplexy was not what Republicans had intended. But lawmakers had designed the legislation primarily to curry favor with other "stakeholders" — big pharmaceutical firms, health plans, employers, rural hospitals, and senior advocates such as the AARP — instead of designing it to work in the real world for the "end consumer" of the reform, i.e. everyday senior citizens.

    The number of plans the typical senior had to sort through depended on where he or she lived. In Colorado, retirees faced a choice of 55 plans from 24 companies. Residents of Pennsylvania selected from 66 plans.

    "The program is so poorly designed and is creating so much confusion that it's having a negative effect on most beneficiaries," said one pharmacist. "It's making people cynical about the whole process — the new program, the government's help."

    Unrealistic timeline and scale. "No company would ever launch countrywide a new product to 40 million people all at once," explained Kathleen Harrington, the Bush political appointee at the Centers for Medicare and Medicaid Services who led the launch of Medicare Part D. "No one would ever say that you have to get all of the platforms, all of the systems developed for this and working within six months." Nobody except Congress, who in fact tried to do this, giving scant consideration to implementation challenges and the inherent difficulty in changing a well-established system.

    The launch from hell. The computer system cobbled together to support the new benefit crashed the very first day coverage took effect. System errors slapped seniors with excessive charges or denied them their drugs altogether. Computer glitches generated calls to the telephone hotlines, which quickly became overloaded.

    While eventually the program was turned around thanks to some heroic efforts by senior federal executives, the days and weeks following the January 2006 opening of benefit enrollment were a disaster — caused primarily by a dysfunctional design process and lack of an implementation mindset.

    Lessons learned. Both Medicare Part D, as well as what we have seen of the current, huge effort toward health care reform, highlight why government has such a hard time dealing with complex problems. But the basic truth is simple: ultimately, to be successful, a health reform bill has to do two things — it has to pass through Congress, and it has to actually work in the real world.

    These two considerations often work against each other. For political reasons, artificial deadlines are introduced. To appease interest groups, regulations are altered, or goodies buried in the bill. These measures are almost always taken to secure passage, but with little (or not enough) thought given to how they might hinder implementation.

    Given the problems that arose in the comparatively simple launch of a new drug benefit to seniors, policymakers should be examining every risk inherent in implementing any serious overhaul of one-seventh of our economy. The legislative process needs to produce health care reform that can work in the real world or the backlash from a failed implementation will be furious.

    William D. Eggers is the Global Director of Deloitte's Public Sector Research Program. John O'Leary is a Research Fellow at the Ash Institute of the Harvard Kennedy School. Their new book is If We Can Put a Man on the Moon: Getting Big Things Done in Government (Harvard Business Press, 2009).

    Also see:

    David Walker --- http://en.wikipedia.org/wiki/David_M._Walker_(U.S._Comptroller_General)

    Niall Ferguson --- http://en.wikipedia.org/wiki/Niall_Ferguson

    The sad state of governmental accounting and accountability ---
    http://faculty.trinity.edu/rjensen/theory01.htm#GovernmentalAccounting

    Bob Jensen's threads on health care are at
    http://faculty.trinity.edu/rjensen/Health.htm


    "Public Policy as Public Corruption," by Michael Gerson, Townhall, December  23, 2009 ---
    http://townhall.com/columnists/MichaelGerson/2009/12/23/public_policy_as_public_corruption

    Sometimes there is a fine ethical line between legislative maneuvering and bribery. At other times, that line is crossed by a speeding, honking tractor-trailer, with outlines of shapely women on mud flaps bouncing as it rumbles past.

    Such was the case in the final hours of Senate Majority Leader Harry Reid's successful attempt to get cloture on health care reform. Sen. Ben Nelson of Nebraska, the last Democratic holdout, was offered and accepted a permanent exemption from his state's share of Medicaid expansion, amounting to $100 million over 10 years.

    Afterward, Reid was unapologetic. "You'll find," he said, "a number of states that are treated differently than other states. That's what legislating is all about."

    But legislating, presumably, is also about giving public reasons for the expenditure of public funds. Are Cornhuskers particularly sickly and fragile? Is there a malaria outbreak in Grand Island? Ebola detected in Lincoln?

    Reid didn't even attempt to offer a reason why Medicaid in Nebraska should be treated differently from, say, Medicaid across the Missouri River in Iowa. The majority leader bought a vote with someone else's money. Does this conclusion sound harsh? Listen to Sen. Lindsey Graham of South Carolina, who accused the Senate leadership and the administration of "backroom deals that amount to bribes," and "seedy Chicago politics" that "personifies the worst of Washington."

    This special deal for Nebraska raises an immediate question: Why doesn't every Democratic senator demand the same treatment for their state? Eventually, they will. After the Nelson deal was announced, Sen. Tom Harkin of Iowa enthused, "When you look at it, I thought well, God, good, it is going to be the impetus for all the states to stay at 100 percent (coverage by the federal government). So he might have done all of us a favor." In a single concession, Reid undermined the theory of Medicaid -- designed as a shared burden between states and the federal government -- and added to future federal deficits.

    Unless this little sweetener is stripped from the final bill by a House-Senate conference committee in January, leaving Nelson with a choice. He could enrage his party by blocking health reform for the sake of $100 million -- making the narrowness of his interests clear to everyone. Or he could give in -- looking not only venal but foolish.

    How did Nelson gain such leverage in the legislative process in the first place? Because many assumed that his objections to abortion coverage in the health bill were serious -- not a cover, but a conviction. Nelson, a rare pro-life Democrat, insisted in an interview he would not be a "cheap date." Republican leadership staffers in the Senate thought he might insist on language in the health care bill preventing public funds from going to insurance plans that cover abortion on demand, as Democratic Rep. Bart Stupak had done in the House.

    Instead, Nelson caved. The "compromise" he accepted allows states to prohibit the coverage of elective abortions in their own insurance exchanges. Which means that Nebraska taxpayers may not be forced to subsidize insurance plans that cover abortions in Nebraska. But they will certainly be required to subsidize such plans in California, New York and many other states.

    In the end, Nelson not only surrendered his own beliefs, he betrayed the principle of the Hyde Amendment, which since 1976 has prevented the coverage of elective abortion in federally funded insurance. Nelson not only violated his own pro-life convictions, he may force millions of Americans to violate theirs as well.

    I can respect those who are pro-life out of conviction, and those who are pro-choice out of conviction. It is more difficult to respect politicians willing to use their deepest beliefs -- and the deepest beliefs of others -- as bargaining chips.

    In a single evening, Nelson managed to undermine the logic of Medicaid, abandon three decades of protections under the Hyde Amendment and increase the public stock of cynicism. For what? For the sake of legislation that greatly expands a health entitlement without reforming the health system; that siphons hundreds of billions of dollars out of Medicare, instead of using that money to reform Medicare itself; that imposes seven taxes on Americans making less than $250,000 a year, in direct violation of a presidential pledge; that employs Enron-style accounting methods to inflate future cost savings; that pretends to tame the insurance companies while making insurance companies the largest beneficiaries of reform.

    And, yes, for $100 million. It is the cheap date equivalent of Taco Bell.

    Jensen Comment
    Actually Nelson's corruption payoff is peanuts compared to what the the most liberal of all Senators, Bernie Sanders, is quietly hauling back to Vermont.
    Bernie Sanders Home Page, December 24, 2009 --- http://sanders.senate.gov/newsroom/news/?id=4a23fdb5-abe9-4def-9a6e-314d629031b4

    Health Care Sens. Patrick Leahy and Bernie Sanders said Monday in interviews that they will vote to pass health care reform legislation before Christmas, the Vermont Press Bureau and The Burlington Free Press reported. Neither is overly enthusiastic about the final Senate bill, but last-minute additions to the proposal - increased Medicaid funding for Vermont and additional funding for community health centers - brought them on board. "If we don't do this now, when will we do it?" Sanders asked. LINK and LINK

    Health Centers For Sanders, the addition he argues could revolutionize health care across the country is a $10 billion investment in community health centers and primary care personnel. The funding would expand these health centers, which offer an array of primary and preventive care services, to an additional 10,000 communities, Sanders said. The funding will also pay off school loans for primary care doctors, dentists, nurses and other front-line medical staff who agree to work in medically underserved regions of the country, the Free Press and press bureau articles reported. LINK and LINK

    Health Centers Windham County could be home to the state's newest community health center, after Sen. Bernard Sanders, I-Vt., was able to increase the health center funding in the final version of the Senate health care bill, the Brattleboro Reformer reported. "One of the reasons I voted for the Senate bill was that we were able to get in an ammendment for $10 billion over five years to expand community health centers and the National Health Service Corps," said Sanders on Monday. LINK

    The Art of Compromise Republicans on Monday slammed provisions Democrats inserted in their far-reaching health-care overhaul bill to win over individual senators.Senate Majority Leader Harry Reid labored hard at the end of the process to keep liberals on board, and one of his biggest moves was inserting $10 billion for community health centers, a favorite cause of Sen. Sanders, a who at one point said he might vote no, The Wall Street Journal reported. "Sanders, the last liberal holdout, got $600 million in Medicaid help," ABC News reported on World News Tonight. "Even Bernie Sanders got something," Fox News reported. LINK, VIDEO and VIDEO

     

    Health Centers "You're talking about a program that benefits people in 50 states. Actually it benefits my state less than most other states because we're far advanced in the community health center. We save taxpayers' money because we keep people out of the emergency room and we give them primary health care. Now you tell me why that's such a bad deal. It has support from Republicans," Sen. Sanders told CNN. VIDEO

    Deal Sanders "was unhappy Democratic leaders dropped a public option and said this a few days ago. ‘It is not for sure that I will vote for that bill.' Suddenly his home state of Vermont got some extra help for Medicaid...But to clinch Sanders' vote, Democrats added his pet project, $10 billion for community health centers nationwide." Dana Bash concluded her report by saying  "Republicans mastered the art of backroom deal-making when they were in charge here, so this is very much bipartisan," according to CNN. VIDEO

     

    The Deal Sen. Sanders "held out for larger Medicaid payments for his state," The Washington Post claimed. "Sanders threatened to vote against the Senate bill unless it included a public plan. He relented when Reid agreed to include an additional $10 billion for community health centers," Investors Business Daily reported. A right-wing LA Times columnist said Sanders was "leveraging his socialist principles for billions in special deals." Another falsely asserted that Sanders "finagled $10 billion worth of earmarked greenbacks for the funding of community health centers in his home state." And a Fox News online commentator asserted that "Vermont got $250 million in extra federal Medicaid funding to prevent Bernie Sanders from bolting from the left." LINK and LINK


    "John Stossel, Health Care in America [ video presentations ]," Free Republic --- http://www.freerepublic.com/focus/f-news/2414704/posts
    Main Site --- http://www.foxbusiness.com/on-air/stossel/

    There are several information programs out there produced by John Stoical, that address our health care situation.  They are very good because they cover a number of important issues, help the viewer to understand basic principles, and provide sound ideas how to improve the presnt system, which the present health care plan on Capital Hill does not do.

    The first presentation I'm going to bring to your attention is a six part ABC 20/20 program that appears on YouTube.  The second will be a sixteen clip presentation on Stossel's FoxNews Business site.

    The ABC 20/20 presentation is entitled, "John Stossel - Sick in America".  It's a six part series.  I am presenting this one first, because it's a straight forward presentation, part one through six.  It aired on September 14th, 2007.  Even thought it's dated by over two years, it's a good introductory on this topic.

    Here are the links to those clips.  It's probably easier if you just click a link, view it, and use the back button, to access the next clip here.  There are some conflicting presentations over there, and I don't want you to have to wade through them trying to figure out which one is the correct next clip in the series.

    The ABC 20/20, presentation, "John Stossel - Sick in America". Segments: One, Two, Three, Four, Five, and Six

    Stossel also produced a program for FoxNews Business channel on health care.  In it he interviews people who want nationalized health care.  He challenges them and provides an alternative view based on successful programs that are out there today and working.  It's a sixteen part series, that appears near the bottom of the web page I'm linking just below.

    The presentation is provided in four banks, of four parts each.  View the first through fourth video in each bank before hitting the link on the right to the next bank of four videos  View them and repeat until you've seen all sixteen videos.  Here's that link. FoxNews Business Stossel Health Care  Remember, it's down the page...

    I would encourage folks to take a look at these presentations developed and presented by John Stossel.

    There quite good.


    Left wing activist group, MoveOn, writes a Christmas Carol ---
    http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/MoveOn-rewrites-Christmas-carol-Insurance-companies-will-let-us-die-80107322.html

    Health care's out of reach

    The cost is way too high

    And if we cannot pay

    They'll simply let us die

    Insurance sets the rules

    And caps the care we seek

    The time has come for change, you know

    It's happening this week

    Oh!

    We can't wait

    We can't wait

    We can't wait at all

    Health care now for everyone

    Listen to our call

    Rich and poor

    Young and old

    Black and red and white

    A public option for us all

    Hear our song tonight!

     


    "Senate Health Care Bill: Frequently Asked Questions:  ABC News Answers Frequently Asked Questions on the Latest Senate Heath Care Bill," by Dan Harris, ABC News, December 21, 2009 ---
    http://abcnews.go.com/WN/senate-health-care-bill-frequently-asked-questions/story?id=9395157

    If I already have health insurance, can I keep it as is?

    The short answer is: yes. There's nothing in the Senate or House bills that would cause you to lose the insurance you have right now.

    Can I keep my doctors?

    Related WATCH: Big Hurdle Cleared on Health CareObama Praises Senate for Advancing Health Care Bill WATCH: Health Care and the HolidaysAgain, yes. The bills do not change the status quo.

    If I change or lose my job, can I keep the same insurance?

    No... But the government would set up a new "insurance exchange" that you can buy into. Low and middle income people would get subsidies to buy this insurance. And you wouldn't be excluded from these exchanges if you have a pre-existing condition.

    If I'm on Medicare, will there be cuts to my benefits?

    No - your benefits will not be cut. In fact, the bill would improve your prescription drug coverage.
    Jensen Comment
    This is a shortened version of the actual ABC newscast that elaborated that Medicare benefits will probably have to be cut in future to make this legislation economically viable. The long and short of it is that Medicare at current levels just cannot be sustained.

    . . . one of the biggest problems vexing physicians: a flawed Medicare payment system that threatens to slash their fees each year. In 2010, payments would be cut by 21.5 percent for Medicare and for the military health benefits program, which bases its fees on Medicare. The defense bill Obama signed Sunday would postpone the cuts for two months but Congress must act to make a costly, permanent fix to the problem --- http://thehill.com/homenews/senate/73249-ama-endorses-senate-health-bill

    Will taxes go up?

    In some cases, yes. Some higher-wage people would pay higher payroll taxes.

    Also, insurance companies that offer the most expensive plans -- the so-called "Cadillac plans" -- will be taxed. And they may pass those taxes on to employers and employees...or cut the benefits.

    Finally, health industries - like device makers and hospitals - would pay higher taxes, too... And they may pass those costs onto you.
    Jensen Comment
    Much depends upon what you call a "tax." Households making over $88,000 might well see premiums go up if they are not getting insurance from an employer. Also employers will see premiums rise and may offset wage increases when the cost of employee benefits increase. The fact of the matter is that medical insurance companies face greatly increased costs of coverage for previously uninsured people, coverage of pre-existing conditions, greatly increased coverage of mental health, costs of marriage counseling, etc. Somebody has to pay the piper, and some of these costs will be passed along to policy holders.

    If I'm uninsured now, how soon do I get the help to buy health insurance?

    There's a big lag time. Under the House bill: 2013. And, under the Senate bill, not until 2014.
    Jensen Comment
    This is a shortened version of the actual ABC newscast that elaborated on the reasons for the delay. ABC News mentioned that the main reason for the delay is to make the Obamacare legislation look cheaper over the next 10 years. If all uninsured got immediate coverage, the cost of the legislation would skyrocket.

    When or if this bill kicks in, will coverage actually be affordable for me?

    Experts say that's an open question. Even some people who get government subsidies may not find it affordable. And in some cases if you don't buy in, you may be penalized. The bottom line is this: for most Americans, the 160 million Americans who get insurance through employers right now, you will not see much of a change from this bill. If a person is unhappy with their plan and feel like they are paying too much out of pocket -- that is unlikely to change.
    Jensen Comment
    This is a misleading answer. Since employers can pay only a $750 penalty to opt out of providing medical insurance coverage for each employee, many will avail themselves of this option, thereby forcing employees to seek out their own private medical plans. Of course many employers will not take this cheaper route, but others will take this cheaper route on the grounds that it is the only way to avoid having to lay off more workers. Low income people will probably get huge subsidies such that their coverage will be affordable. Middle income households, however, may get clobbered with premiums that are not affordable without huge sacrifices in other living costs.


    "AMA endorses Senate healthcare reform bill," by Jeffrey Young, The Hill, December 21, 2009 ---
    http://thehill.com/homenews/senate/73249-ama-endorses-senate-health-bill

    The American Medical Association endorsed the Senate's healthcare reform legislation Monday, giving Democrats the blessing of the nation's largest physician society as the bill approaches the finish line.

    The endorsement stands as a significant coup for President Barack Obama and congressional Democratic leaders, who have aggressively sought the AMA’s backing. The organization had opposed comprehensive healthcare reform bills dating back to the Truman administration.

    In addition to whatever resources the AMA can bring to help speed healthcare reform legislation toward final passage, the endorsement also offers Democrats with the symbolic support of physicians, who could help popularize the effort and would be key to a smooth implementation of the legislation in the coming years.

    The AMA also announced its support of the House version of the bill that cleared the lower chamber last month. The Senate is on track to vote on its bill on Christmas Eve.

    While the AMA does not represent all American physicians — and a number of state-based and surgical specialty groups have opposed the Senate bill — its influence in Washington is unparalleled among medical societies. Paired with the endorsement of the powerful senior citizens group AARP, the AMA's support also could help Democrats win over skeptical older voters.

    In a statement, the AMA's president-elect says the Senate legislation achieves many of the organization's goals for healthcare reform, including: extending coverage to the uninsured, prohibiting insurance companies from denying coverage based on pre-existing conditions or establishing annual or lifetime caps on benefits, and promoting preventive healthcare and wellness services.

    “All Americans deserve affordable, high-quality health coverage so they can get the medical care they need — and this bill advances many of our priority issues for achieving the vision of a health system that works for patients and physicians,” said Cecil Wilson.

    The AMA made its endorsement even though the Senate bill would not solve one of the biggest problems vexing physicians: a flawed Medicare payment system that threatens to slash their fees each year.

     


    "Senator Snowe Will Vote No," by David M. Herzenhorn, The New York Times, December 21, 2009 --- 
    http://prescriptions.blogs.nytimes.com/2009/12/20/senator-snowe-will-vote-no/

    When no other Republican was willing to work with Democrats on legislation to revamp the health care system, Senator Olympia J. Snowe of Maine stuck it out.

    Ms. Snowe was part of the bipartisan Group of Six on the Senate Finance Committee that worked for months to draft the health care bill. And even when the other two Republicans in the group, Michael B. Enzi of Wyoming and Charles E. Grassley of Iowa, dropped out, Ms. Snowe kept at it.

    She put forward numerous amendments when the Finance Committee took up the bill – not aimed at killing the bill like so many other amendments proposed by her Republican colleagues – but to improve it, especially to make insurance more affordable for families and small businesses.

    In recent weeks, Ms. Snowe has been the subject of intense efforts by the White House to win her vote. She had several one-on-one meetings personally with President Obama, including one on Saturday afternoon. But on Sunday the string finally ran out.

    In a formal statement that in some ways only confirmed the obvious, Ms. Snowe said that she would vote against ending debate on the bill, and would oppose the legislation absent major changes.

    “Having been fully immersed in this issue for this entire year and as the only Republican to vote for health reform in the Finance Committee, I deeply regret that I cannot support the pending Senate legislation as it currently stands, given my continued concerns with the measure and an artificial and arbitrary deadline of completing the bill before Christmas that is shortchanging the process on this monumental and trans-generational effort,” she said.

    Unlike the barrage of attacks unleashed on the bill by her Republican colleagues, Ms. Snowe’s criticism is particularly devastating for the Democrats. In many ways, Ms. Snowe wants to vote for the health care bill even more than some of the reluctant centrists who will provide Democrats with the pivotal votes.

    In Ms. Snowe’s view, Democrats are rushing the bill unnecessarily. In a recent interview, she warned that Congress would spend years fixing the bill if it was adopted in her current form. She recalled her days in the Maine state legislature, where legislation titled “errors and inconsistencies” would be needed to correct mistakes – in the Congress such legislation is often referred to as “technical corrections” and she said many such corrections would be need on the health measure.

    Ms. Snowe has also sent a five-page letter to the director of the Congressional Budget Office asking numerous questions about the legislation and the budget office’s cost analysis. Among her questions were inquiries about the average projected cost of insurance policies that will be available under the legislation, as well as the impact on small employers.

    Democrats have made clear that they have no intention of slowing the legislation to meet Ms. Snowe’s demands. But given her intense focus on the issue, chances are the Democrats will end up having to answer her questions, one way or another.

    Here’s the rest of Ms. Snowe’s statement:

    Having been fully immersed in this issue for this entire year and as the only Republican to vote for health reform in the Finance Committee, I deeply regret that I cannot support the pending Senate legislation as it currently stands, given my continued concerns with the measure and an artificial and arbitrary deadline of completing the bill before Christmas that is shortchanging the process on this monumental and trans-generational effort.

    “Only three weeks ago the Senate received a more than 2,000 page bill on one of the most complex issues in our history, and we have since considered fewer than two dozen amendments out of more than 450 filed. A little over 24 hours ago, the Senate received a final, nearly 400 page manager’s amendment that cannot be changed or altered, with more than 500 cross references including to other statutes and will be voted on at 1 am Monday morning. It defies logic that we are now expected to vote on the overall, final package before Christmas with no opportunity to amend it so we can adjourn for a three week recess even as the legislation will not fully go into effect until 2014, four years from now.

    I remain convinced we must work toward a responsible, common sense solution to reverse the trend of spiraling health care costs — that will cause one-in-four Americans this year to have either inadequate coverage or none at all, and threatens affordable coverage for millions more Americans in the future. As I pledged to the President in an Oval Office meeting Saturday afternoon, I couldn’t agree more that reform is an imperative, and I will continue my constructive efforts to forge effective, common sense health care reform as the process moves into a House-Senate conference.

    The reality that the status quo is unacceptable is what originally brought six of us together on the Senate Finance Committee this summer in the only bipartisan effort in any committee of the House or Senate in the so-called Group of Six, convened by Chairman Max Baucus. We met 31 times, week after week for over four months, to debate policy and not politics.

    Two months ago, when I voted for the Finance Committee bill, I said that the process moving forward shouldn’t be about vote counting, but rather crafting the right policy and that the credibility of the process would determine the credibility of the outcome. So I was troubled that when the Finance bill was melded with the measure reported by the Senate HELP committee it was without the more inclusive, collaborative process I’d participated in up to that point and instead it was done in the shadows, without transparency, just to garner the necessary 60 votes and nothing more.

    This bill has taken a dramatically different direction since the Finance Committee bill – it is now 1,200 pages longer and includes a new employer mandate that could annihilate the job growth potential that is so vital to our economic recovery. As the Small Business & Entrepreneurship Council has stated, this mandate “will only burden firms with more costs and red tape which means they will not grow, invest, or create jobs.”

    This bill also creates the CLASS Act on long term care insurance, a brand new program which the Medicare Actuary has said is projected to go into the red just five years after it begins paying out benefits. And the legislation requires a $90 billion increase in Medicare payroll taxes – a provision that was not part of the bill I voted for in Finance Committee – that predominately affects the self-employed and the very same small business owners we are counting on to create new jobs and lead us out of this recession. And that’s just to name a few of the vital issues.

    Furthermore, we still don’t have answers to some of the most fundamental questions that people will be asking at their kitchen tables. These are the critical questions relevant to peoples’ daily lives, such as, what does this mean for me? How much will my health insurance plan cost? How much will my deductible or my co-pay be? How much am I going to have to pay out of pocket? Not one single member in Congress – Republican or Democrat – can answer those questions, and that is why I wrote to the Congressional Budget Office on December 3rd requesting a complete analysis of these and other key issues as it is imperative that we have those answers before proceeding.

    Ultimately, there is absolutely no reason to be hurtling headlong to a Christmas deadline on monumental legislation affecting every American, when it doesn’t even fully go into effect until 2014. When 51 percent of the American people in a recent survey have said they do not approve of what we are doing, they understand what Congress does not — and that is, that time is not our enemy, it is our friend. Therefore, we must take a time out from this legislative game of “beat the clock”, reconvene in January – instead of taking a three week recess – and spend the time necessary to get this right. Legislation affecting more than 300 million Americans deserves better than midnight votes on a bill that cannot be further amended and that no one has had the opportunity to fully consider – and the Senate must step up to its responsibility as the world’s greatest deliberative body on behalf of the American people.


    Born at 9.1 Ounces  She Would've been thrown away in most other nations
    Cozy in her incubator, set to 81.5 degrees, heart going at 174 beats a minute as she snoozed in her red, footy pajamas, Oliviyanna Harbin-Page may be a global record-holder. Born Aug. 5 to 16-year-old Jamesha Harbin of Eight Mile after 21 to 24 weeks of gestation, Oliviyanna weighed only 259 grams, or 9.1 ounces -- possibly making her, according to the University of South Alabama Children's & Women's Hospital, the world's smallest surviving baby. She now weighs 3 pounds 2 ounces. One of three girl triplets -- the other two are identical, she is fraternal
    "Baby who may be world's smallest surviving newborn could go home soon," by Roy Hoffman, al.com, December 18, 2009 ---
    http://blog.al.com/live/2009/12/baby_who_may_be_worlds_smalles.html


     

     

     


    Say What?
    "Sam Donaldson: Passing Healthcare 'Terrible Mistake' For Democrats," by Noel Sheppard, NewsBusters, December 20, 2009 ---
    http://newsbusters.org/blogs/noel-sheppard/2009/12/20/sam-donaldson-passing-healthcare-bill-terrible-mistake

    DONALDSON: But without taking that step, a quotation that you love from Napoleon, I think, is right, also. If you start to take Vienna, take Vienna. Then worry about how to administer the city later. Actually, he took it without firing a shot the first time. But the point is -- they did. I mean, two branch marshals took the bridge and all that.

    (LAUGHTER)

    This step in passing a bill now is a first step. No, these provisions will be changed, I hope, I trust, in the years ahead, but without the first step, we're never going to have a bill which covers people and begins the process of reducing the cost.

    Isn't it fascinating how many liberal media members don't like this bill, but still want to see it get passed?

    Isn't even more fascinating how many liberal media members have faith in government to bring down healthcare costs when virtually every analysis of the bills in both chambers suggest that such expenses will indeed continue to rise?

    Is this ignorance on their part or blind faith?

    "National Organization for Women opposes Senate health bill," by Michael O'brien, The Hill, December 19, 2009 ---
    http://thehill.com/blogs/blog-briefing-room/news/73083-national-organization-for-women-opposes-senate-health-bill


    10 New Things That Make Harry Reid’s Updated Government-Run Health Care Experiment Just As Bad...
    Free Republic, December 20, 2009 --- http://www.freerepublic.com/focus/f-news/2411707/posts
     

    Posted on Sunday, December 20, 2009 11:34:46 AM by Ooh-Ah

    1.   $518.5 Billion In Tax Increases On Health Insurance, Small Businesses, And Medical Treatments.   (Senate Finance Committee Minority Staff Review Of JCT And CBO Cost Estimates, 12/19/09)

    2.      $470.7 Billion In Total Cuts To Medicare And Medicaid Would Pay For Two New Unsustainable Entitlements. (Table 5, Douglas W. Elmendorf, Letter To Senator Harry Reid, 12/19/09)

    3.      Americans Still Won't See Benefits Of This Health Care Experiment Until 2014, But They Start Paying For It In 2010. (Page 7, Douglas W. Elmendorf, Letter To Senator Harry Reid, 12/19/09)

    4.      According To Independent Actuaries In The Obama Administration, Overall National Health Spending Will Be Increased By $239 Billion.  (Richard Foster, Centers For Medicare And Medicaid Chief Actuary, “Estimated Financial Effects Of The ‘Patient Protection And Affordable Care Act Of 2009,’ As Proposed By The Senate Majority Leader On November 18, 2009,” Centers For Medicare & Medicaid Services, 12/10/09)

    5.    States Still Burdened With $26 Billion In Unfunded Mandates From Medicaid That Would Force Them To Increase Taxes. (Page 8, Douglas W. Elmendorf, Letter To Senator Harry Reid, 12/19/09)

     6.      The "Doc Fix" Provision That Would Add $250 Billion To The Deficit Is Still Not Included In The Democrats' List Price For Their Health Care Experiment. (Page 18, Douglas W. Elmendorf, Letter To Senator Harry Reid, 12/19/09)

    7.      A New Entitlement Program For Long-Term Care That One Democrat Senator Called "A Ponzi Scheme" Would Still Be Created. (Table 5, Douglas W. Elmendorf, Letter To Senator Harry Reid, 12/19/09; Shailagh Murray & Lori Montgomery, "Centrists Unsure About Reid's Public Option," The Washington Post, 10/28/09)

    8.      Taxpayer Dollars Would Fund Abortions. (Sec. 1303, H.R. 3590, Manager’s Amendment To The Amendment In The Nature Of A Substitute, "Patient Protection And Affordable Care Act," Introduced 11/18/09; Chris Frates, “NRLC Opposes Nelson Amendment,” Politico’s “Live Pulse” Blog, 12/19/09)

    9.      Gives Vast New Authority To The Office Of Personnel Management To Administer Interstate Insurance Plans Even Though CBO Determined It Won’t Lower Premiums.  (Pages 9, Douglas W. Elmendorf, Letter To Senator Harry Reid, 12/19/09)

    10.  An Even More Poweful New Medicare Commission Of Unelected Bureaucrats Would Ration Care. (Pages 16-17, Douglas W. Elmendorf, Letter To Senator Harry Reid, 12/19/09)

     


    "What's in health care proposals for 5 Americans," by Carla K. Johnson, AP News, December 2009 ---
     http://m.apnews.com/ap/db_16052/contentdetail.htm?contentguid=R7kvJBtl


    "Journal Archives The WSJ Guide to ObamaCare: A comprehensive collection of our editorials and op-eds," The Wall Street Journal, December 16, 2009 ---
    http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage


    "That Health-Care Tax Pledge: The health-care bills are loaded with taxes on families earning less than $250,000 a year," The Wall Street Journal, December 17, 2009 --- http://online.wsj.com/article/SB10001424052748704541004574599961696425696.html#mod=djemEditorialPage 

    'If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime." So spoke Barack Obama at his first address to Congress in February. We're about to find out if the President cares about that promise as much he does passing a health-care bill.

    Congressional Democrats have loaded up their health bills with provisions raising taxes on the middle-class by stacks and stacks of dimes. And Senate Democrats on Tuesday made clear they won't be bound by the President's vow; 54 voted to kill Idaho Republican Mike Crapo's amendment to strip the bill of taxes on families earning less than $250,000 and individuals earning less than $200,000.

    Those tax hits include a mandate of up to $750 a year for Americans who fail to purchase health insurance; new levies on small businesses (many of which file individual tax returns) that don't offer health care to employees; new tax penalties on health savings accounts and flexible spending accounts; and higher taxes on medical spending, including restrictions on medical itemized deductions, as well as taxes on cosmetic surgery. A Senate Finance Committee minority staff report finds that by 2019 more than 42 million individuals and families—or 25% of all tax returns under $200,000—will on average see their taxes go up because of the Senate bill. And that's after government subsidies.

    This profusion of tax hikes is central to the Democratic fiction that the Senate bill is budget neutral. And because many Senate Democrats are cool to the House proposal to fund legislation with a surtax on the "wealthy," many of these middle-tax hikes will likely remain in final legislation. Yet President Obama is embracing the bill.

    Democrats are instead trying to claim that some taxes really aren't taxes. The President in September engaged in a debate with ABC's George Stephanopoulos, with the President arguing that the individual mandate isn't a tax since it is for the good of America. Michigan Senator Debbie Stabenow says increasing the amount of medical expenses a person must accumulate before deducting them also isn't a tax because "most Americans" don't itemize. Except the millions of middle-class Americans who do. Democrats have argued their restrictions on health savings accounts simply close "tax loopholes" and therefore also aren't new taxes.

    Americans who will be paying more to the IRS can be trusted to know the difference. In April, Press Secretary Robert Gibbs was asked if the President's tax promise applied to health care. He replied: "The statement didn't come with caveats." On the evidence in December, it did.


    Give Me That Old Time Religion
    Comparison of the House and Senate Versions of Pending Obamacare Legislation on December 20, 2009
    http://www.nytimes.com/interactive/2009/11/19/us/politics/1119-plan-comparison.html#tab=0

    House Version

    Penalty: Tax equal to 2.5 percent of adjusted gross income over certain thresholds ($9,350 for individuals, $18,700 for couples).

    Exemptions: American Indians, people with religious objections and people who can show financial hardship.

    Senate version

    Includes mandate.

    Penalty: $95 a year per person in 2014; $350 in 2015; $750 or 2 percent of a household’s income, whichever is greater, in 2016 and beyond. No penalty if the cost of cheapest available plan exceeds 8 percent of household income.

    Exemptions: American Indians, people with religious objections and people who can show financial hardship.


     


    Updates on December 17, 2009

    Video Shocker
    "Health Care Shocker: Special Democratic Voting Counties Would Get Protected Medicare Benefits," Brietbart ---
    http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/


    "Get Real on Health Costs:  Obama's plan won't cut spending," by Robert J. Samuelson, Newsweek Magazine, December 21, 2009, Page 36 ---
    http://www.newsweek.com/id/226482

    We are now witnessing a determined counterattack by the Obama administration and its political allies on the matter of health costs. Many critics (including me) have argued that Obama's "reform" agenda wouldn't control rapidly rising health spending and might speed it up. The logic is simple. People with insurance use more health services than those without. If the government insures 30 million or more Americans, health spending will rise. The best policy: control spending first, then expand coverage.

    But the Obama administration insists it can insure most of the uninsured and tackle runaway health spending simultaneously. There's so much waste in today's health-care system that both goals can be pursued together, Peter Orszag, head of the Office of Management and Budget, has said.

    Two new reports by liberal advocacy groups echo that claim. The first, from the Center on Budget and Policy Priorities, contends that lower Medicare reimbursement rates to hospitals and other providers can pay for about half of the $900 billion or so government cost over a decade of expanded health benefits. Critics (again, including me) have said that Congress would put the Medicare cuts in today and might repeal some or all of them in the future. Nonsense, says the study. Congress has allowed many past reductions in Medicare reimbursements to take effect.

    Even more upbeat is a report from the Center for American Progress (CAP) Action Fund and the Commonwealth Fund arguing that savings from the bills' cost-cutting provisions have been underestimated. Some measures would push hospitals to reduce readmission rates; "bundled payments" between doctors and hospitals for some illnesses would encourage coordinated care; taxes on gold-plated insurance plans would deter overspending. Health costs would be lower than expected: Medicare "savings" would total $576 billion over a decade (about $200 billion more than estimated by the Congressional Budget Office, which mostly counted lower reimbursement rates); the federal deficit would drop up to $459 billion over a decade; and health-care "savings" for typical families would total about $2,500 by 2019.

    Who's right? Let's start with the numbers. Unfortunately, the word "savings" is used misleadingly. It doesn't mean (as is usual) actual reductions; it signifies smaller future increases. There's a big difference. In 2009, national health spending will total an estimated $2.5 trillion, or 17.7 percent of the gross domestic product. By 2019, it's projected to rise to $4.67 trillion under present policies, or 22.1 percent of GDP. With CAP's "savings," it rises a little less sharply to $4.49 trillion, or 21.3 percent of GDP, according to Harvard economist David Cutler, a coauthor of the study. Similarly, family health-insurance premiums rise from 19 percent of median family income in 2009 to 25 percent in 2019 under present policies and 23 percent with CAP's "savings."

    The point is simple: even with highly optimistic assumptions, health spending remains out of control. It absorbs more of government, business, and family budgets. Higher health spending would put pressure on future budget deficits, already projected to total about $9 trillion over the next decade. If new taxes and Medicare "savings" are real, they could be used exclusively to pay down deficits, not finance new spending.

    But many may not be real. Writing in The Wall Street Journal, Dr. Jeffrey Flier, dean of Harvard Medical School, gave the various health bills a "failing grade" and said they wouldn't "control the growth of costs or raise the quality of care." Dr. Delos Cosgrove, head of the Cleveland Clinic, was quoted in NEWSWEEK saying practically the same thing. The chief actuary of the Centers for Medicare & Medicaid Services, a federal agency, doubts the cost-saving provisions touted by CAP would save much money. He's also skeptical that Congress, facing complaints from hospitals and a squeeze on services, would allow all the Medicare reimbursement cuts to take effect.

    Health spending might spontaneously slow, but history suggests skepticism. To attack costs first would require admitting that not all good things are possible simultaneously and that the uninsured already receive much medical care. It would require genuine bipartisanship, not just a scramble for a few Republican votes. And it would require stronger measures to dismantle a fee-for-service delivery system that rewards more, not better, care. That would be a difficult but realistic approach; Obama's is wishful thinking.

    Robert Samuelson is also the author of The Great Inflation and Its Aftermath: The Past and Future of American Affluenceand Untruth: Why the Conventional Wisdom Is (Almost Always) Wrong.

     


    The Congressional Budget Office Weighs In on Accounting Disasters of Senate's Pending Healthcare Legislation
    Fact 3: The bill does not require employers to buy health insurance for their workers, and makes employers with 50 workers or more pay a fee of only $750 for each fulltime worker they do not insure if any of their workers get an insurance plan on the exchange using a federal subsidy.

    "Senate Health Care Bill Would Force Some Middle Class Families to Pay $15,200 Yearly Insurance Fee, According to CBO Analysis Tuesday, December 15, 2009," By Terence P. Jeffrey, Editor-in-Chief, CNS News, December 15, 2009 ---
    http://www.cnsnews.com/news/article/58533

    Forget the public option. Even without it, the health care bill presented in the Senate by Majority Leader Harry Reid (D.-Nev.) would make some middle-class American families pay what amounts to a $15,200 annual federally-mandated insurance fee, according to facts revealed in analyses published by the Congressional Budget Office.

    The fee would result from the facts that the bill requires individuals—but not employers—to purchase health insurance plans and that families that earn up to 400 percent of the federal poverty level would be given government subsidies to purchase insurance in government-regulated insurance exchanges while families earning more than 400 percent of the federal poverty level would be denied government subsidies.

    A family of four—two parents and two children—earning $88,200 would be at 400 percent of the poverty level this year, according to the U.S. Department of Health and Human Services. A family of four earning $88,201, therefore, would not be eligible for a federal subsidy to buy insurance under the Senate health-care bill. If the mother and father in such a family could not get employer-based health insurance—because their employers decided not to buy their workers insurance—the family would be required by law to purchase a policy with its own money that would cost an estimated $15,200 per year, according to the CBO.

    The basic facts demonstrating that this would be the case if the Senate health care bill were to become law were presented in letters that the CBO sent to Sen. Harry Reid (D.-Nev.) on November 18 and to Sen. Evan Bayh (D.-Ind.) on November 30. The letters are available on the CBO Web site.

    Here are the facts about what the Reid health care bill would mean for the finances of families that earn more than 400 percent of the poverty level and the CBO sources for those facts:

    Fact 1: The bill requires all legal U.S. residents to buy health insurance beginning in 2014.

    Fact 2: The bill provides subsidies to people making up to 400 percent of the poverty level to buy health insurance if their employer does not buy them insurance and as long as they agree to purchase a government-regulated insurance plan in the government-regulated insurance exchange.

    Source: Page 4 of a Nov. 18 CBO letter to Sen. Reid states: “The legislation would take several steps designed to increase the number of legal U.S. residents who have health insurance. Starting in 2014, the legislation would establish a requirement for such residents to obtain insurance and would in many cases impose a financial penalty on people who did not do so. The bill also would establish new insurance exchanges and would subsidize the purchase of health insurance through those exchanges for individuals and families with income between 133 percent and 400 percent of the federal poverty level (FPL).”

    Fact 3: The bill does not require employers to buy health insurance for their workers, and makes employers with 50 workers or more pay a fee of only $750 for each fulltime worker they do not insure if any of their workers get an insurance plan on the exchange using a federal subsidy.

    Fact 4: Individuals who are offered insurance by their employer cannot buy insurance with a federal subsidy in the exchange.

    Source: Page 7 of the Nov. 18 CBO letter to Sen. Reid says: “The legislation contains a number of other key provisions related to insurance coverage. Firms with more than 50 workers that did not offer coverage would have to pay a penalty of $750 for each full-time worker if any of their workers obtained subsidized coverage through the insurance exchanges; that dollar amount would be indexed. As a rule, fulltime workers who were offered coverage from their employer would not be eligible to obtain subsidies via the exchanges.”

    Fact 5: By 2016, when the new health-care system created by the bill is fully operational, the average family insurance policy sold to people buying insurance individually, rather than through an employer, will cost $15,200 per year.

    Source: Page 6 of a Nov. 30 CBO letter to Sen. Evan Bayh (D.-Ind.) says: “Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal.”

    Fact 6: According to the analysis of the CBO and Joint Tax Committee, 32 million people will buy their insurance on their own rather than through an employer in 2016 under the Senate bill, and only 18 million of those people will get federal subsidies to buy their insurance, meaning 14 million will be required by the law to buy their own health insurance and will not be given any federal subsidy to do so.

    Source: Page 24 of the Nov. 30 CBO letter to Sen. Bayh says: “Therefore, of the 32 million people who would have nongroup coverage in 2016 under the proposal (including those purchased inside and outside the exchanges), about 18 million, or 57 percent, would receive exchange subsidies.”

    Common sense analysis: The CBO may be underestimating the number of Americans that would be forced under the Senate health care bill to buy health insurance plans without any help from an employer or the government—a group that will include middle-class families who are forced by the government to pay $15,200 for a health insurance plan out of their own pockets.

    Why? The bill imposes a maximum fine of only $750 per worker on employers with more than 50 workers who do not buy insurance for their workers. Thus employers will face a choice: Pay the employer’s share of the insurance plans for their workers--including the employer's share for the typical $15,200 family insurance plan--or drop insurance for all their employees and pay a maximum fee of only a $750 per employee.

    Under the bill, the financially rational decision for employers will be to drop their health insurance plans and pay the $750 fine. This decision will be reinforced by the fact that their employees making less than 400 percent of the poverty level will only qualify for a federal insurance subsidy if the employer does not offer the worker an insurance plan.

    Left out in the cold will be workers who earn more than 400 percent of the poverty level and whose employers make the financially rational decision to drop their health insurance coverage. These workers will be required by federal law to buy health insurance, but will get no subsidy to do so. According to the estimate of the CBO, they will have to pay $15,200 for a family policy in 2016.

    In effect, the Senate health care bill will impose a new $15,200 annual tax on all American families that make over 400 percent of the poverty level and whose employers decide not to purchase health insurance for their workers after the bill takes effect.

    December 15, 2009 reply from Curtis Brown at Trinity University

    I’m no expert on health care policy, but I’m very troubled by Bob’s recent posting. As in at least one of his other recent postings, he passes along an article from a right-wing web site, adding an inflammatory subject heading that is not supported by anything in the article he forwards. Meanwhile the article itself makes claims that are unsupported by the sources that it cites. (The “facts” listed in the article are mostly correct, but the inferences from them, the headline of the article, and the really wild final sentence find no justification there at all, as far as I can determine.) (By the way, Bob lists the author of the article as “Editor-in-Chief of CBS News,” making his source sound much more mainstream than it is: that should be CNS news, not CBS news.)

    At least the article mentioned its sources, which are letters from the Congressional Budget Office to Senators Reid and Bayh. It doesn’t provide links, though, so I will. The letter to Bayh is at http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf, and the letter to Reid is at http://www.cbo.gov/ftpdocs/107xx/doc10731/Reid_letter_11_18_09.pdf. Having checked these sources, it appears to me that the article gives a wildly misleading picture of what they contain. Here are a few relevant points.

    1. Bob’s subject heading is unsupported by anything in the article he forwards. Not even the author of the article, much less the CBO, appears to say anything about “accounting disasters.”

    2. The headline of the article is extremely misleading. “According to CBO Analysis” implies that the CBO actually makes the assertion that the bill “would force some middle class families to pay [a] $15,200 yearly insurance fee.” But the CBO says nothing of the sort; this an inference the author of the article makes from pieces drawn from several different places in the letters. Let’s see whether it’s a reasonable inference.

    3. First of all, the $15,200 figure is the estimated average cost of a nongroup premium under the proposed legislation. It doesn’t follow that anyone will be forced to pay this amount, even if they have to buy their own insurance and they don’t receive a subsidy, since presumably one could buy a premium with lesser coverage for a lesser amount. (As I note below, the coverage of the average policy is predicted to be significantly better than under current law.)

    4. The CBO estimates that the cost of the average nongroup premium compared to the projected cost under current law, for the same coverage, would go down between 7 and 10 percent (letter to Bayh, p. 5).

    5. The CBO also estimates that the average policy would have significantly better coverage than would be the case under current law. Other things being equal, this would push the cost of the average nongroup premium up by 27 to 30 percent. The net change in the cost of a premium is estimated to be +10 to +13% (letter to Bayh, p. 5), and to increase by less than that for the average nongroup purchaser who is not subsidized (letter to Bayh, p. 7). But presumably getting improved coverage will be voluntary. If your employer is paying, or you’re being subsidized, you might want better coverage. On the other hand, if you are paying for your own premium, you might not want increased coverage. If you elected to keep the same coverage, and if you would be paying for your own policy regardless of whether or not the bill is passed, then your costs would apparently (on average) go down by the 7 to 10 percent I mentioned in point 4.

    6. From the points I’ve made so far, it appears as though, if you would purchase your own policy regardless of whether the law is changed or not, and you elected the same coverage either way, you would be better off under the proposed legislation. (On the other hand, if you wanted improved coverage, you could probably get substantially better coverage for a very modest increase in price.) However, what if you wouldn’t have to buy your own policy under current law, but you would need to under the proposed legislation? The article strongly implies that there will be many people who don’t currently buy their own policies but who would be forced to under the proposed legislation. Is this supported by the CBO analysis? No, quite the contrary. According to the letter to Reid, p. 9, "relative to currently projected levels, the number of people purchasing individual coverage outside the exchanges would decline by about 5 million." That’s right: the CBO estimates that you are less likely to have to buy your own nongroup policy under the proposed legislation than you are under current law. Many people who currently have to buy their own nongroup insurance will be able to buy group insurance on the “exchanges.”

    7. Forget all the above for a moment, and pretend that everything the article says is correct. How badly should I feel for the (mythical) people who will supposedly be “forced to” pay about $15,000 a year for insurance? According to the article itself, to be in this category a family of four would need an income of $88,200 or more. (Those with lower incomes will be subsidized, and those who receive subsidies and are in the nongroup market would see their costs go down by 56-59% -- letter to Bayh, p. 5.) After paying for their health insurance, they would have only about $73,000 for the rest of their expenses for the year. Even if this happened, it’s hard to see it completely ruining anyone’s life. Contrast that with the fact that the CBO says that by 2019 “the number of nonelderly people who are uninsured would be reduced by 31 million” (letter to Reid, p. 8).

    This will literally save lives. A relatively conservative estimate of the number of lives lost in 2006 due to a lack of health care coverage is 22,000 (Urban Institute, using methodology developed by the Institute of Medicine: http://www.urban.org/publications/411588.html). A Harvard Medical School study puts the number at more like 45,000 per year (http://prescriptions.blogs.nytimes.com/2009/09/17/harvard-medical-study-links-lack-of-insurance-to-45000-us-deaths-a-year/?scp=2&sq=harvard&st=cse). Providing coverage to tens of millions of additional people literally has the potential to save tens of thousands of lives a year. When worrying about whether families with incomes of $88,000 or more might have to pay a little more for insurance, a worry which doesn’t seem to be supported by the CBO analysis anyway, we should set that against the benefits that the bill would make possible.

    Curtis

    Jensen Comment
    I’ve always had highest respect for Curtis, and most of his recent points were well taken (by me). I do wish he’d asked for clarification on some matters before posting his reply (which he has done in the distant past, especially regarding a tidbit years ago on Reed College’s reasons for not participating in media ranking surveys such as US News surveys that get Trinity highest honors).

    The exact wording of the Congressional Budget Office report reads as follows: If you add 30% to what households making over $88,000 now pay for coverage (including Trinity’s contribution), the CNS tidbit seems not as far off as Curtis suggests. The taxpayer subsidies will only go to lower income families.

    The following is a quotation taken directly from the CBO report (and not the CNS tidbit) ---
    http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf

     

    That difference in unsubsidized premiums is the net effect of three changes:

     

    • Average premiums would be 27 percent to 30 percent higher because a greater amount of coverage would be obtained. In particular, the average insurance policy in this market would cover a substantially larger share of enrollees’ costs for health care (on average) and a slightly wider range of benefits. Those expansions would reflect both the minimum level of coverage (and related requirements) specified in the proposal and people’s decisions to purchase more extensive coverage in response to the structure of subsidies.

     

    • Average premiums would be 7 percent to 10 percent lower because of a net reduction in costs that insurers incurred to deliver the same amount of insurance coverage to the same group of enrollees. Most of that net reduction would stem from the changes in the rules governing the nongroup market.

     

    • Average premiums would be 7 percent to 10 percent lower because of a shift in the types of people obtaining coverage. Most of that change would stem from an influx of enrollees with below-average spending for health care, who would purchase coverage because of the new subsidies to be provided and the individual mandate to be imposed.3

     

    3 Although the effects of each factor should be multiplied rather than added in order to generate the total effect on premiums, there are also interactions among the three factors that make the sum of the individual effects roughly equal to the total effect. The ranges shown for the likely effects of each factor and for the likely overall effect on premiums were chosen to reflect the uncertainties involved in the estimates; however, the actual effects could fall outside of those ranges. 4 Because of an error, the figures for average nongroup premiums in 2016 under current law that were reported in CBO’s September 22, 2009, letter to Senator Baucus on this subject (which had been reported as being

     

    Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law.4The weighted average of the differences in those amounts equals the change of 10 percent to 13 percent in the average premium per person summarized above, but the percentage increase in the average premium per policy for family policies is larger and that for single policies is smaller because the average number of people covered per family policy is estimated to increase under the proposal. The effects on the premiums paid by some individuals and families could vary significantly from the average effects on premiums.

     

    Those figures indicate what enrollees would pay, on average, not accounting for the new federal subsidies. The majority of nongroup enrollees (about 57 percent) would receive subsidies via the new insurance exchanges, and those subsidies, on average, would cover nearly two-thirds of the total premium, CBO and JCT …

     

     

    What I really meant by “accounting disaster” in the latest health care tidbit is failing to recognize a huge tax on the middle class and failing to call it for what it is --- a huge tax. But I don’t want to elaborate more on that now.

    "Gaming Healthcare," Editorial in The Nation, December 16, 2009 --- http://www.thenation.com/doc/20100104/editors

    The promise of reform has always been that Americans can have better--and universal--healthcare at lower cost. If the public option and Medicare expansion are dropped, and if schemes to pay for the proposal with Medicare and Medicaid "cost containment" are retained, the Senate legislation will break that promise.

    Obama and key Congressional leaders appear to be more determined to get a bill, any bill, than to enact fundamental reform. The president's failure even to mention the public option when he lobbied Senate Democrats empowered Joe Lieberman and others who were angling for its elimination. And Obama's failure to use his bully pulpit was matched by Reid's compromises and missteps. When the majority leader embraced rules that require sixty votes to act--rather than challenge the rules directly or via budget reconciliation procedures that allow a simple majority--he ceded authority to insurance-industry shills like Lieberman and Ben Nelson, who then blocked reform at every turn.

    At this late yet critical stage, Congressional progressives must push back. Compromise is inevitable. The hard question is whether it opens the door to progress or closes it. In a Washington increasingly fixated on deficit reduction and entitlement cuts, a bill with neither a public option nor Medicare expansion could be disastrous.

    As a conference committee sets out to merge House and Senate bills, progressives should declare that they will not back a bill that enriches insurers while raiding the treasury and squeezing existing federal programs. They should argue more aggressively than ever for real competition--ideally in the form of a public option but at least with Medicare expansion. That, after all, is what they promised Americans in 2008.

    Continued in article

    "That Health-Care Tax Pledge: The health-care bills are loaded with taxes on families earning less than $250,000 a year," The Wall Street Journal, December 17, 2009 --- http://online.wsj.com/article/SB10001424052748704541004574599961696425696.html#mod=djemEditorialPage 

    'If your family earns less than $250,000 a year, you will not see your taxes increased a single dime. I repeat: not one single dime." So spoke Barack Obama at his first address to Congress in February. We're about to find out if the President cares about that promise as much he does passing a health-care bill.

    Congressional Democrats have loaded up their health bills with provisions raising taxes on the middle-class by stacks and stacks of dimes. And Senate Democrats on Tuesday made clear they won't be bound by the President's vow; 54 voted to kill Idaho Republican Mike Crapo's amendment to strip the bill of taxes on families earning less than $250,000 and individuals earning less than $200,000.

    Those tax hits include a mandate of up to $750 a year for Americans who fail to purchase health insurance; new levies on small businesses (many of which file individual tax returns) that don't offer health care to employees; new tax penalties on health savings accounts and flexible spending accounts; and higher taxes on medical spending, including restrictions on medical itemized deductions, as well as taxes on cosmetic surgery. A Senate Finance Committee minority staff report finds that by 2019 more than 42 million individuals and families—or 25% of all tax returns under $200,000—will on average see their taxes go up because of the Senate bill. And that's after government subsidies.

    This profusion of tax hikes is central to the Democratic fiction that the Senate bill is budget neutral. And because many Senate Democrats are cool to the House proposal to fund legislation with a surtax on the "wealthy," many of these middle-tax hikes will likely remain in final legislation. Yet President Obama is embracing the bill.

    Democrats are instead trying to claim that some taxes really aren't taxes. The President in September engaged in a debate with ABC's George Stephanopoulos, with the President arguing that the individual mandate isn't a tax since it is for the good of America. Michigan Senator Debbie Stabenow says increasing the amount of medical expenses a person must accumulate before deducting them also isn't a tax because "most Americans" don't itemize. Except the millions of middle-class Americans who do. Democrats have argued their restrictions on health savings accounts simply close "tax loopholes" and therefore also aren't new taxes.

    Americans who will be paying more to the IRS can be trusted to know the difference. In April, Press Secretary Robert Gibbs was asked if the President's tax promise applied to health care. He replied: "The statement didn't come with caveats." On the evidence in December, it did.

     

    I still stand by my original contention that President Obama and Congressional leaders are misleading the public about cost (taxes by any other name) increases in Obamacare rather than the lies about cost savings. The tidbit I should've used instead of the CNS tidbit is as follows:

    "Gaming Healthcare," Editorial in The Nation, December 16, 2009 --- http://www.thenation.com/doc/20100104/editors

    The promise of reform has always been that Americans can have better--and universal--healthcare at lower cost. If the public option and Medicare expansion are dropped, and if schemes to pay for the proposal with Medicare and Medicaid "cost containment" are retained, the Senate legislation will break that promise.

    Obama and key Congressional leaders appear to be more determined to get a bill, any bill, than to enact fundamental reform. The president's failure even to mention the public option when he lobbied Senate Democrats empowered Joe Lieberman and others who were angling for its elimination. And Obama's failure to use his bully pulpit was matched by Reid's compromises and missteps. When the majority leader embraced rules that require sixty votes to act--rather than challenge the rules directly or via budget reconciliation procedures that allow a simple majority--he ceded authority to insurance-industry shills like Lieberman and Ben Nelson, who then blocked reform at every turn.

    At this late yet critical stage, Congressional progressives must push back. Compromise is inevitable. The hard question is whether it opens the door to progress or closes it. In a Washington increasingly fixated on deficit reduction and entitlement cuts, a bill with neither a public option nor Medicare expansion could be disastrous.

    As a conference committee sets out to merge House and Senate bills, progressives should declare that they will not back a bill that enriches insurers while raiding the treasury and squeezing existing federal programs. They should argue more aggressively than ever for real competition--ideally in the form of a public option but at least with Medicare expansion. That, after all, is what they promised Americans in 2008.

    Continued in article

    In my opinion, President Obama has helped to create hysteria in Congress by insisting that legislation, even nation-destroying legislation ,be rushed at breakneck speed without our legislators or our voters understanding the complexities of the Senate and House monsters that are on the table. I’m in favor of health care reform, and I do in fact favor a national health insurance plan that absorbs the private sector insurance systems into a government national plan.

    Special interests on both sides of the table have written clauses into the House and Senate versions that legislators and voters have not had time to understand. The Congressional Budget Office, in turn, has been forced to make cost estimates based upon hurried and unrealistic assumptions.

    My last Tigertalk tidbit on Obamacare is from Howard Dean who, as Chairman of the Democratic National Committee, was very effective in helping to not only get President Obama elected but to help push the landslide victories of Democrats in both the House and the Senate in 2008 ---
    http://en.wikipedia.org/wiki/Howard_Dean

    There has been no stronger advocate of health care reform than Howard Dean, MD. He’s consistently advocated health care reform since he became the very liberal Governor of Vermont.

    On December 15, 2009 Howard Dean was given the microphone on the MSNBC Countdown (Keith Olbermann) prime time slot. Howard Dean loudly and effectively proclaimed that both the Senate and House should vote down the Obamacare monsters that are now on the table. Instead, he advocated that less rushed and more deliberate effort should be undertaken in 2010 to create a more reasoned package that does not allow special interests to dominate (or sneak into a bill) efforts by both parties of Congress to bring about health care reform that is truly reform.

    I think Howard Dean is right on in the video at http://www.msnbc.msn.com/id/3036677/#34439255
    Senator Wyden follows Dr. Dean in this video and, in my viewpoint, is entirely wrong. Dean is right on.

    Perhaps emergency legislation for basic coverage of uninsured citizens should be passed as a stop-gap such that the issue of uninsured people does not create a rush once again to legislate a nation-destroying monster.

    But we should not legislate monsters that special interests have wrought in the current House and Senate versions of Obamacare


    "Employer Health Care Mandates: Taxing Low-Income Workers to Pay for Health Care," by James Sherk and Robert A. Book, The Heritage Foundation, July 21, 2009 --- http://www.heritage.org/Research/HealthCare/wm2552.cfm

    Congressional advocates of the latest health care reform proposal claim that it will not cost ordinary Americans more--the costs will be borne by "the rich" and by employers. After all, both the House and the Senate versions require employers who do not provide health benefits to pay higher taxes.

    But the Congressional Budget Office (CBO) recently reported what economists have long known: Regardless of who is formally required to pay, the burden of these taxes and costs will ultimately fall primarily on employees through lower wages. An employer mandate does not give workers without health insurance something for nothing but rather forces them to purchase it out of their wages whether they like it or not--and no matter how low those wages are. Congressional rhetoric to the contrary, much of the burden of paying for an employer mandate will fall on ordinary Americans, and lower-income workers will be hit the hardest.

    Employer Mandates

    Both the House and Senate drafts of health care reform include so-called "employer mandates" or "pay or play" provisions. These mandates require employers to pay higher taxes if (a) they do not offer health insurance, or (b) they offer it but have employees who decline it and instead use the government system.

    The Senate version requires employers to pay $750 a year for each full-time employee without health coverage. The House version goes further, requiring most employers who do not provide health benefits (or whose employees decline it) to pay a penalty of 8 percent of their payroll. It has even been proposed that employers whose employees enroll in Medicaid may be required to pay this tax.

    The ostensible purpose of such a tax penalty is to discourage employers from dropping workers onto the taxpayer-subsidized government plan. The tax will pay a portion of the public's costs when employees use the new government system instead of employer-sponsored insurance. However, the actual result will be lower pay and job losses, especially for low-income workers.

    Costs Paid by Employees, Not Employers

    Advocates of an employer mandate claim that employers and "the rich" will bear the burden of health coverage. However, the CBO recently reported that ordinary workers--not their employers--will ultimately bear the full cost of any reforms that make health insurance more expensive for employers.[1]

    Although workers do not physically write a check for their health benefits, their employers write a smaller check to them every payday. Workers pay for health benefits through lower wages. As the CBO explains:

    Although employers directly pay most of the costs of their workers' health insurance, the available evidence indicates that active workers--as a group--ultimately bear those costs. Employers' payments for health insurance are one form of compensation, along with wages, pension contributions, and other benefits. Firms decide how much labor to employ on the basis of the total cost of compensation and choose the composition of that compensation on the basis of what their workers generally prefer. Employers who offer to pay for health insurance thus pay less in wages and other forms of compensation than they otherwise would, keeping total compensation about the same. ...

    [I]f employers who did not offer insurance were required to pay a fee, employees' wages and other forms of compensation would generally decline by the amount of that fee from what they would otherwise have been.[2]

    Employers do not have limitless funds to dole out according to their own generosity. They must pay for all benefits and wages out of revenue received from customers; therefore they must decide how many employees to hire, and what to pay, based on the total cost of having that employee (and that employee's productivity). It does not matter from the employer's point of view how compensation is divided between wages, benefits, and payroll or other taxes.

    If Congress makes health coverage more expensive for employers, or requires new payroll taxes, employers will be forced to cut wages to make up the difference. Even if the law stated (as the House bill does[3]) that employers could not cut pay directly to make up for the cost of health care, they will ultimately, somehow have to do just that.

    For example, they could give smaller raises (too small to keep pace with inflation), less frequent promotions, lower starting pay to new employees, and/or wage cuts due to "the recession" until their total costs of employing a worker had fallen by nearly the same amount as the employer mandate imposed by Congress.[4]

    No Free Lunch

    An employer mandate does not give workers without health coverage a "free lunch": They will not be able to keep their current wages and benefits and have health care added to it at their employers' expense. Instead, the proposed laws would effectively force them to purchase health insurance and therefore spend less on other goods. Some workers will prefer this arrangement, but many others will not. In essence, the Congress would be telling the poor: "If you now have to choose between food and health insurance, you no longer have that choice--from now on you have to buy the health insurance."

    Wage Cuts for Low-Income Workers

    These wage reductions will most seriously affect low-income workers. Most higher-income earners already have health benefits and so will not experience any wage cuts as long as their health insurance meets the new federal requirements.

    The employer mandate's burden would primarily fall on lower-income and less-skilled workers who do not currently have health coverage. The House version would force these workers to take the equivalent of an 8 percent pay cut--amounting to $1,600 a year for a full-time worker earning $10 an hour.

    Job Losses for Low-Income Workers

    On July 24, the federal minimum wage will rise to $7.25 an hour. Employers cannot legally take the full cost of the employer mandate penalty out of the paychecks of anyone earning close to this minimum. Thus, paying $7.25 an hour plus the health care tax will make unskilled workers even more expensive to hire. So, as the CBO points out, their employers will respond by laying them off or hiring fewer of them in the first place:

    [A] play-or-pay provision would reduce the hiring of low-wage workers, whose wages could not fall by the full cost of health insurance or a substantial play-or-pay fee if they were close to the minimum wage.[5]

    Health care reform is supposed to help vulnerable workers. But the House's approach to health care reform will cost many of them their jobs.

    Tax Increases on Ordinary Workers

    President Obama promised not to raise taxes on workers earning less than $250,000 a year, and supporters of an employer mandate claim that they will not make low- and middle-income workers bear the burden of paying for it. The focus on the surcharge on those earning over a million dollars a year reinforces this impression.

    However, low-income workers will bear much of the cost, paying higher taxes indirectly through reduced wages. The House bill imposes what is effectively an 8 percent surtax that applies only to workers who do not already have health insurance, most of whom are already in the lower-income strata and can least afford to pay higher taxes.

    James Sherk is Bradley Fellow in Labor Policy and Robert A. Book, Ph.D., is Senior Research Fellow in Health Economics in the Center for Data Analysis at The Heritage Foundation.

     


    "Testing, Testing:  The health-care bill has no master plan for curbing costs. Is that a bad thing?" by Atul Gawande, The New Yorker, December 14, 2009 ---
    http://www.newyorker.com/reporting/2009/12/14/091214fa_fact_gawande 

    At the current rate of increase, the cost of family insurance will reach twenty-seven thousand dollars or more in a decade, taking more than a fifth of every dollar that people earn. Businesses will see their health-coverage expenses rise from ten per cent of total labor costs to seventeen per cent. Health-care spending will essentially devour all our future wage increases and economic growth. State budget costs for health care will more than double, and Medicare will run out of money in just eight years. The cost problem, people have come to realize, threatens not just our prosperity but our solvency.

    So what does the reform package do about it? Turn to page 621 of the Senate version, the section entitled “Transforming the Health Care Delivery System,” and start reading. Does the bill end medicine’s destructive piecemeal payment system? Does it replace paying for quantity with paying for quality? Does it institute nationwide structural changes that curb costs and raise quality? It does not. Instead, what it offers is . . . pilot programs.

    Continued in article

    "The Problem is Cost of Care:  Understanding America's dysfunctional health care system," by Michael Munger, Reason Magazine,  December 10, 2009 --- http://reason.com/archives/2009/12/10/the-problem-is-cost-of-care

    "20 Questions About Obamacare," The Wall Street Journal, December 11, 2009 ---
    http://online.wsj.com/article/SB10001424052748703514404574587981316751944.html#mod=djemEditorialPage

    It's hard to imagine a better illustration of the panic and recklessness stringing ObamaCare along in the Senate than the putative deal that Harry Reid announced this week. The Majority Leader is claiming that a Medicare "buy-in" for people from ages 55 to 64 has overcome the liberal-moderate impasse over the "public option." But if anything, this gambit is an even faster road to government-run health care.

    The public option—an insurance program open to everyone, financed by taxpayers and run like Medicare—is intended as a veiled substitute for "single-payer" Canada-style insurance. Under the cover of "choice" and "competition," the entitlement would quickly squeeze out private insurance as people gravitated to "free" coverage and the government held down costs via price controls the way Medicare does now.

    Mr. Reid's buy-in simply cuts out the middle man. Why go to the trouble of creating a new plan like Medicare when Medicare itself is already handy? A buy-in is an old chestnut of single-payer advocate Pete Stark, and it's the political strategy liberals have tried since the Great Society: Ratchet down the enrollment age for Medicare, boost the income limits to qualify for Medicaid, and soon health care for the entire middle class becomes a taxpayer commitment.

    In the case of Medicare, this means expanding a program that is already going broke. Medicare reimburses doctors and hospitals at rates 70% to 80% below those of private insurers, which means below the actual treatment costs in many cities and regions. Providers either eat these losses—about half of U.S. hospitals are running a deficit or close to it—or they raise prices for private payers. This cost-shifting isn't dollar for dollar, but all empirical research shows that it adds tens of billions of dollars to consumer health bills, and this will accelerate if several million new patients are added to Medicare. That means higher prices for health insurance.

    Adverse selection will also be a big problem, as the people who choose to join will inevitably be higher risk or in poorer health. Mr. Reid hasn't released any details on his plan, if they even exist, but would the sub-65 uninsured who join Medicare be subsidized? If so, in what sense is this one-hand-subsidizes-the-other taxpayer self-dealing a "buy-in"? It sounds simply like a huge Medicare expansion, especially if employers decide to drop coverage for anyone older than 55.

    As for costs, how does adding new beneficiaries square with Democratic promises that they will cut Medicare spending on paper by two percentage points a year for the next two decades—just as the baby boomers retire and health costs continue to climb?

    This last-minute, back-room ploy shows again that Democrats are simply winging it as they rush to pass something—anything—that can get 60 votes by Christmas. President Obama praised the proposal as "a creative new framework," while Finance Chairman Max Baucus told the Washington Post, "If there's 60 Senators who can reach agreement, I'm for it." Now there's a model standard to use for reordering 17% of the U.S. economy.

    The latest polls show public support for the Senate plan falling into the mid-30%-range. The remaining supporters must not be paying attention.

    Jensen Comment
    Iowa Senator Chuck Grassley said that the Reid Plan was like adding more people to the Titanic when its already near submerged. Iowa's other Senator Tom Harkin buys into the Reid Plan hook, line, and Titanic sinker.


    Keith Olbermann, host of MSNBC’s “Countdown,” said Wednesday night that losing the pure public option is a “total and unmitigated defeat without a war.” “All is over,” Olbermann declared near the top of his show, channeling Winston Churchill following the 1939 Munich agreement appeasing Adolf Hitler. “Silent, mournful, abandoned, broken, health care reform recedes into the darkness,” adding that he hopes he is mistaken. “The people should know that we have passed an awful milestone in our history, when the whole equilibrium of the nation has been deranged and that the terrible words have for the time being been pronounced against those who fight against the corporate state,” he said. “Do not suppose that this is the end. This is only the beginning of the reckoning, this is only the first sip, the first foretaste of a bitter cup which will be proffered to us year by year, unless by a supreme recovery of moral health and independent vigor we arise again and take our stand for freedom.” Olbermann laid the blame on Senate Majority Leader Harry Reid for not being able to attract enough support for the public option.
    Watch the video on Politico, December 10, 2009 --- http://www.politico.com/news/stories/1209/30443.html


    "The Democrats' Assault On Seniors: Wrecking Medicare To Save Obamacare," by Hugh Hewitt, Townhall, December 10, 2009 --- Click Here

    In an interview on my radio show Wednesday, Arizona Senator Jon Kyl underscored the fact that Senate Democrats do not have the 60 votes they need to pass Obamacare, and that reports about the inevitability of Obamcare passing are part of the Democrat's strategy. (The transcript of the interview is here.) Kyl asserted that Harry Reid routinely announces, and then the MSM echoes, statements about the inevitability of the bill's passing, but then reality catches up.

    This is happening again today as the premature reports of an agreement to expand Medicare to those 55 and older are exposed as more puff talk from a disappointed and reeling left that has seen its dream of a public plan take some serious blows in the past few days. David Drucker's and Emily Pierce's report in Roll Call (subscription required) conveys the difficulty facing Reid:

     

    Democratic Senators involved in crafting what Majority Leader Harry Reid (D-Nev.) described as a “broad agreement” on health care policy appear to be at odds over both the policy proscriptions and the notion that they had even reached such a deal.

    Though Reid announced late Tuesday that negotiations among a group of 10 liberal and moderate Democratic Senators had largely resolved the intraparty standoff over the public insurance option, participants in the group said their “agreement” had been mischaracterized and that they agreed only to send the proposal to the Congressional Budget Office for a cost estimate, saying more information was necessary before making any firm decisions.

    Seniors especially have to hope that the new deal falls apart as it represents a savaging of Medicare. The Obama-Pelosi-Reid assault on Medicare has three parts now.

    First, Obamacare proposes to loot Medicare of about a half trillion dollars in benefits. Obamacare enthusiasts dismiss the devastating impacts to Medicare Advantage enrollees as necessary to rebalance the system, but the loss of benefits to those senior citizens will be huge. So too will the cutbacks for hospitals treating the elderly if the bill passes.

    Second, Medicare payroll taxes are raised in the Senate bill, but that massive flow of new revenue isn't going to secure the financial future of Medicare, but to instead pay for new entitlements, thus crowding out a source of future funding for Medicare when it hits the rocks in a very few years.

    And now, third, Democrats are proposing the expansion of the nearly insolvent Medicare program to millions of new enrollees 55 and older. This enormous mistake will not only quickly drain the program of its remaining resources, it will accelerate the trend of doctors heading into concierge practices, abandoning the low-paying Medicare patients for the much more equitable payments provided by the dwindling number of privately covered patients.

    All of the versions of Obamacare are radical assaults on seniors, but the latest version is a recipe for disaster for Medicare, and seniors know it. The seniors' political punishment of all Democrats will come in 47 weeks, but right now they have to act to alert the few Democrats on the fence that voting for this reckless scheme is political suicide.

    Continued in article

    Jensen Comment
    Even The New York Times is panning the Medicare replacement of the public option ---
    http://ace.mu.nu/archives/295735.php


    Never ending fraud in Medicare billings: 
    Unaudited overpayments, unqualified items, and criminal vendors

    One spending sinkhole can be traced to large medical-equipment suppliers, device makers, and pharmaceutical companies, which government auditors and industry veterans describe as a recalcitrant bunch. Medical manufacturers know public agencies generally pay first and ask questions later—if ever. Medicare receives 4.4 million claims daily; fewer than 3% are reviewed before being paid within the legally required 30 days.

    "A Hole in Health-Care Reform: Overbilling by medical-equipment suppliers, device makers, and drug companies has cost taxpayers billions. New legislation will do little to stem the tide," by Chad Terhune, Business Week, December 10, 2009 ---
    http://www.businessweek.com/magazine/content/09_51/b4160046945722.htm?link_position=link3 

    President Barack Obama and his Democratic allies on Capitol Hill say that a vast expansion of health coverage can be funded by squeezing out waste and fraud rather than cutting benefits. Whether that turns out to be true may help determine the success of the sweeping reform package being debated by Congress. Slashing costs is no easy task, and stopping fraud is even tougher. No less than $47 billion in Medicare spending went to dubious claims in the year ended Sept. 30, according to the U.S. Health & Human Services Dept. That's 10.7% of the $440 billion program that subsidizes care for the elderly. Medicaid, the government program for the poor, lets billions trickle away at roughly the same rate. The $10 million annual increase that Congress is allocating to fight fraud may not be enough to do the trick.

    One spending sinkhole can be traced to large medical-equipment suppliers, device makers, and pharmaceutical companies, which government auditors and industry veterans describe as a recalcitrant bunch. Medical manufacturers know public agencies generally pay first and ask questions later—if ever. Medicare receives 4.4 million claims daily; fewer than 3% are reviewed before being paid within the legally required 30 days.

    One way to get a sense of the scale of the seepage—and the challenge facing the Administration—is to look at whistleblower lawsuits filed under the federal False Claims Act. That law allows company employees to sue on behalf of the government to recover improperly claimed federal funds.

    A suit filed by William A. Thomas, a former senior sales manager at Siemens Medical Solutions USA, one of the nation's largest medical suppliers and a unit of German engineering giant Siemens (SI), offers a case study in the difficulty of containing costs. Thomas, a 15-year Siemens Medical veteran, alleges in federal court in Philadelphia that for years the company overbilled the Veterans Affairs Dept. and other government agencies by hundreds of millions of dollars for MRI and CT scan machines and other expensive equipment. These high-tech systems—used to examine everything from damaged knees to suspected cancers—cost $500,000 to $3 million apiece, sometimes more. Thomas, who retired from Siemens in 2008, claims that with no justification other than larger profits, his former employer charged its government customers far more than private-sector buyers for the same equipment.

    "Billions and billions could be saved with the right government regulation and oversight applied to health care," Thomas, 56, says in an interview. "But I think corporations will continue running circles around the federal government."

    In court filings, Siemens has denied any wrongdoing and has sought to have the Thomas suit dismissed. A company spokesman, Lance Longwell, declined to elaborate for this article, citing the litigation.

    The Thomas suit illustrates some of the vagaries of False Claims Act cases, hundreds of which are filed every year against government contractors in a range of industries. As the plaintiff, Thomas stands to pocket up to 30% of any court recovery, with the rest going to the Treasury. The Justice Dept., which can intervene in such suits to help steer them, announced last year that it will stay out of the case against Siemens for now. Yet Thomas' allegations have helped drive a parallel criminal investigation of Siemens' equipment marketing practices by the Defense Dept. and the U.S. Attorney's Office in Philadelphia.

    In April federal investigators searched for records at the headquarters of Siemens Medical in Malvern, Pa., a suburb of Philadelphia. Ed Bradley, special agent-in-charge of the Defense Criminal Investigative Service, confirmed that the investigation is continuing but declined to comment further.

    Longwell, the Siemens Medical spokesman, says the company is cooperating with criminal investigators. In March, just weeks before the search of its offices, Siemens won a new $267 million contract to provide radiology equipment to the U.S.

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    Jensen Comment
    The GAO has declared that many huge sink holes for fraud and waste are unauditable --- the Pentagon, the IRS, Medicare, and the list goes on and on. But the Congress that funds these programs is manipulated by special interest groups who do not want these audits. The new sink hole on the block is almost anything green.

    What is happening to America?

    "Taxpayers distrustful of government financial reporting," AccountingWeb, February 22, 2008 ---
    http://www.accountingweb.com/cgi-bin/item.cgi?id=104680

    The federal government is failing to meet the financial reporting needs of taxpayers, falling short of expectations, and creating a problem with trust, according to survey findings released by the Association of Government Accountants (AGA). The survey, Public Attitudes to Government Accountability and Transparency 2008, measured attitudes and opinions towards government financial management and accountability to taxpayers. The survey established an expectations gap between what taxpayers expect and what they get, finding that the public at large overwhelmingly believes that government has the obligation to report and explain how it generates and spends its money, but that that it is failing to meet expectations in any area included in the survey.

    The survey further found that taxpayers consider governments at the federal, state, and local levels to be significantly under-delivering in terms of practicing open, honest spending. Across all levels of government, those surveyed held "being open and honest in spending practices" vitally important, but felt that government performance was poor in this area. Those surveyed also considered government performance to be poor in terms of being "responsible to the public for its spending." This is compounded by perceived poor performance in providing understandable and timely financial management information.

    The survey shows:

  • The American public is most dissatisfied with government financial management information disseminated by the federal government. Seventy-two percent say that it is extremely or very important to receive this information from the federal government, but only 5 percent are extremely or very satisfied with what they receive.

     

  • Seventy-three percent of Americans believe that it is extremely or very important for the federal government to be open and honest in its spending practices, yet only 5 percent say they are meeting these expectations.

     

  • Seventy-one percent of those who receive financial management information from the government or believe it is important to receive it, say they would use the information to influence their vote.

    Relmond Van Daniker, Executive Director at AGA, said, "We commissioned this survey to shed some light on the way the public perceives those issues relating to government financial accountability and transparency that are important to our members. Nobody is pretending that the figures are a shock, but we are glad to have established a benchmark against which we can track progress in years to come."

    He continued, "AGA members working in government at all levels are in the very forefront of the fight to increase levels of government accountability and transparency. We believe that the traditional methods of communicating government financial information -- through reams of audited financial statements that have little relevance to the taxpayer -- must be supplemented by government financial reporting that expresses complex financial details in an understandable form. Our members are committed to taking these concepts forward."

    Justin Greeves, who led the team at Harris Interactive that fielded the survey for the AGA, said, "The survey results include some extremely stark, unambiguous findings. Public levels of dissatisfaction and distrust of government spending practices came through loud and clear, across every geography, demographic group, and political ideology. Worthy of special note, perhaps, is a 67 percentage point gap between what taxpayers expect from government and what they receive. These are significant findings that I hope government and the public find useful."

    This survey was conducted online within the United States by Harris Interactive on behalf of the Association of Government Accountants between January 4 and 8, 2008 among 1,652 adults aged 18 or over. Results were weighted as needed for age, sex, race/ethnicity, education, region, and household income. Propensity score weighting was also used to adjust for respondents' propensity to be online. No estimates of theoretical sampling error can be calculated.

    You can read the Survey Report, including a full methodology and associated commentary.

  • "The Government Is Wasting Your Tax Dollars! How Uncle Sam spends nearly $1 trillion of your money each year," by Ryan Grim with Joseph K. Vetter, Readers Digest, January 2008, pp. 86-99 --- http://www.rd.com/content/the-government-is-wasting-your-tax-dollars/4/

    1. Taxes:
    Cheating Shows. The Internal Revenue Service estimates that the annual net tax gap—the difference between what's owed and what's collected—is $290 billion, more than double the average yearly sum spent on the wars in Iraq and Afghanistan.

    About $59 billion of that figure results from the underreporting and underpayment of employment taxes. Our broken system of immigration is another concern, with nearly eight million undocumented workers having a less-than-stellar relationship with the IRS. Getting more of them on the books could certainly help narrow that tax gap.

    Going after the deadbeats would seem like an obvious move. Unfortunately, the IRS doesn't have the resources to adequately pursue big offenders and their high-powered tax attorneys. "The IRS is outgunned," says Walker, "especially when dealing with multinational corporations with offshore headquarters."

    Another group that costs taxpayers billions: hedge fund and private equity managers. Many of these moguls make vast "incomes" yet pay taxes on a portion of those earnings at the paltry 15 percent capital gains rate, instead of the higher income tax rate. By some estimates, this loophole costs taxpayers more than $2.5 billion a year.

    Oil companies are getting a nice deal too. The country hands them more than $2 billion a year in tax breaks. Says Walker, "Some of the sweetheart deals that were negotiated for drilling rights on public lands don't pass the straight-face test, especially given current crude oil prices." And Big Oil isn't alone. Citizens for Tax Justice estimates that corporations reap more than $123 billion a year in special tax breaks. Cut this in half and we could save about $60 billion.

    The Tab* Tax Shortfall: $290 billion (uncollected taxes) + $2.5 billion (undertaxed high rollers) + $60 billion (unwarranted tax breaks) Starting Tab: $352.5 billion

    2. Healthy Fixes.
    Medicare and Medicaid, which cover elderly and low-income patients respectively, eat up a growing portion of the federal budget. Investigations by Sen. Tom Coburn (R-OK) point to as much as $60 billion a year in fraud, waste and overpayments between the two programs. And Coburn is likely underestimating the problem.

    The U.S. spends more than $400 per person on health care administration costs and insurance -- six times more than other industrialized nations.

    That's because a 2003 Dartmouth Medical School study found that up to 30 percent of the $2 trillion spent in this country on medical care each year—including what's spent on Medicare and Medicaid—is wasted. And with the combined tab for those programs rising to some $665 billion this year, cutting costs by a conservative 15 percent could save taxpayers about $100 billion. Yet, rather than moving to trim fat, the government continues such questionable practices as paying private insurance companies that offer Medicare Advantage plans an average of 12 percent more per patient than traditional Medicare fee-for-service. Congress is trying to close this loophole, and doing so could save $15 billion per year, on average, according to the Congressional Budget Office.

    Another money-wasting bright idea was to create a giant class of middlemen: Private bureaucrats who administer the Medicare drug program are monitored by federal bureaucrats—and the public pays for both. An October report by the House Committee on Oversight and Government Reform estimated that this setup costs the government $10 billion per year in unnecessary administrative expenses and higher drug prices.

    The Tab* Wasteful Health Spending: $60 billion (fraud, waste, overpayments) + $100 billion (modest 15 percent cost reduction) + $15 billion (closing the 12 percent loophole) + $10 billion (unnecessary Medicare administrative and drug costs) Total $185 billion Running Tab: $352.5 billion +$185 billion = $537.5 billion

    3. Military Mad Money.
    You'd think it would be hard to simply lose massive amounts of money, but given the lack of transparency and accountability, it's no wonder that eight of the Department of Defense's functions, including weapons procurement, have been deemed high risk by the GAO. That means there's a high probability that money—"tens of billions," according to Walker—will go missing or be otherwise wasted.

    The DOD routinely hands out no-bid and cost-plus contracts, under which contractors get reimbursed for their costs plus a certain percentage of the contract figure. Such deals don't help hold down spending in the annual military budget of about $500 billion. That sum is roughly equal to the combined defense spending of the rest of the world's countries. It's also comparable, adjusted for inflation, with our largest Cold War-era defense budget. Maybe that's why billions of dollars are still being spent on high-cost weapons designed to counter Cold War-era threats, even though today's enemy is armed with cell phones and IEDs. (And that $500 billion doesn't include the billions to be spent this year in Iraq and Afghanistan. Those funds demand scrutiny, too, according to Sen. Amy Klobuchar, D-MN, who says, "One in six federal tax dollars sent to rebuild Iraq has been wasted.")

    Meanwhile, the Pentagon admits it simply can't account for more than $1 trillion. Little wonder, since the DOD hasn't been fully audited in years. Hoping to change that, Brian Riedl of the Heritage Foundation is pushing Congress to add audit provisions to the next defense budget.

    If wasteful spending equaling 10 percent of all spending were rooted out, that would free up some $50 billion. And if Congress cut spending on unnecessary weapons and cracked down harder on fraud, we could save tens of billions more.

    The Tab* Wasteful military spending: $100 billion (waste, fraud, unnecessary weapons) Running Tab: $537.5 billion + $100 billion = $637.5 billion

    4. Bad Seeds.
    The controversial U.S. farm subsidy program, part of which pays farmers not to grow crops, has become a giant welfare program for the rich, one that cost taxpayers nearly $20 billion last year.

    Two of the best-known offenders: Kenneth Lay, the now-deceased Enron CEO, who got $23,326 for conservation land in Missouri from 1995 to 2005, and mogul Ted Turner, who got $590,823 for farms in four states during the same period. A Cato Institute study found that in 2005, two-thirds of the subsidies went to the richest 10 percent of recipients, many of whom live in New York City. Not only do these "farmers" get money straight from the government, they also often get local tax breaks, since their property is zoned as agricultural land. The subsidies raise prices for consumers, hurt third world farmers who can't compete, and are attacked in international courts as unfair trade.

    The Tab* Wasteful farm subsidies: $20 billion Running Tab: $637.5 billion + $20 billion = $657.5 billion

    5. Capital Waste.
    While there's plenty of ongoing annual operating waste, there's also a special kind of profligacy—call it capital waste—that pops up year after year. This is shoddy spending on big-ticket items that don't pan out. While what's being bought changes from year to year, you can be sure there will always be some costly items that aren't worth what the government pays for them.

    Take this recent example: Since September 11, 2001, Congress has spent more than $4 billion to upgrade the Coast Guard's fleet. Today the service has fewer ships than it did before that money was spent, what 60 Minutes called "a fiasco that has set new standards for incompetence." Then there's the Future Imagery Architecture spy satellite program. As The New York Times recently reported, the technology flopped and the program was killed—but not before costing $4 billion. Or consider the FBI's infamous Trilogy computer upgrade: Its final stage was scrapped after a $170 million investment. Or the almost $1 billion the Federal Emergency Management Agency has wasted on unusable housing. The list goes on.

    The Tab* Wasteful Capital Spending: $30 billion Running Tab: $657.5 billion + $30 billion = $687.5 billion

    6. Fraud and Stupidity.
    Sen. Chuck Grassley (R-IA) wants the Social Security Administration to better monitor the veracity of people drawing disability payments from its $100 billion pot. By one estimate, roughly $1 billion is wasted each year in overpayments to people who work and earn more than the program's rules allow.

    The federal Food Stamp Program gets ripped off too. Studies have shown that almost 5 percent, or more than $1 billion, of the payments made to people in the $30 billion program are in excess of what they should receive.

    One person received $105,000 in excess disability payments over seven years.

    There are plenty of other examples. Senator Coburn estimates that the feds own unused properties worth $18 billion and pay out billions more annually to maintain them. Guess it's simpler for bureaucrats to keep paying for the property than to go to the trouble of selling it.

    The Tab* General Fraud and Stupidity: $2 billion (disability and food stamp overpayment) Running Tab: $687.5 billion + $2 billion = $689.5 billion

    7. Pork Sausage.
    Congress doled out $29 billion in so-called earmarks—aka funds for legislators' pet projects—in 2006, according to Citizens Against Government Waste. That's three times the amount spent in 1999. Congress loves to deride this kind of spending, but lawmakers won't hesitate to turn around and drop $500,000 on a ballpark in Billings, Montana.

    The most infamous earmark is surely the "bridge to nowhere"—a span that would have connected Ketchikan, Alaska, to nearby Gravina Island—at a cost of more than $220 million. After Hurricane Katrina struck New Orleans, Senator Coburn tried to redirect that money to repair the city's Twin Span Bridge. He failed when lawmakers on both sides of the aisle got behind the Alaska pork. (That money is now going to other projects in Alaska.) Meanwhile, this kind of spending continues at a time when our country's crumbling infrastructure—the bursting dams, exploding water pipes and collapsing bridges—could really use some investment. Cutting two-thirds of the $29 billion would be a good start.

    The Tab* Pork Barrel Spending: $20 billion Running Tab: $689.5 billion + $20 billion = $709.5 billion

    8. Welfare Kings.
    Corporate welfare is an easy thing for politicians to bark at, but it seems it's hard to bite the hand that feeds you. How else to explain why corporate welfare is on the rise? A Cato Institute report found that in 2006, corporations received $92 billion (including some in the form of those farm subsidies) to do what they do anyway—research, market and develop products. The recipients included plenty of names from the Fortune 500, among them IBM, GE, Xerox, Dow Chemical, Ford Motor Company, DuPont and Johnson & Johnson.

    The Tab* Corporate Welfare: $50 billion Running Tab: $709.5 billion + $50 billion = $759.5 billion

    9. Been There,
    Done That. The Rural Electrification Administration, created during the New Deal, was an example of government at its finest—stepping in to do something the private sector couldn't. Today, renamed the Rural Utilities Service, it's an example of a government that doesn't know how to end a program. "We established an entity to electrify rural America. Mission accomplished. But the entity's still there," says Walker. "We ought to celebrate success and get out of the business."

    In a 2007 analysis, the Heritage Foundation found that hundreds of programs overlap to accomplish just a few goals. Ending programs that have met their goals and eliminating redundant programs could comfortably save taxpayers $30 billion a year.

    The Tab* Obsolete, Redundant Programs: $30 billion Running Tab: $759.5 billion + $30 billion = $789.5 billion

    10. Living on Credit.
    Here's the capper: Years of wasteful spending have put us in such a deep hole, we must squander even more to pay the interest on that debt. In 2007, the federal government carried a debt of $9 trillion and blew $252 billion in interest. Yes, we understand the federal government needs to carry a small debt for the Federal Reserve Bank to operate. But "small" isn't how we would describe three times the nation's annual budget. We need to stop paying so much in interest (and we think cutting $194 billion is a good target). Instead we're digging ourselves deeper: Congress had to raise the federal debt limit last September from $8.965 trillion to almost $10 trillion or the country would have been at legal risk of default. If that's not a wake-up call to get spending under control, we don't know what is.

    The Tab* Interest on National Debt: $194 billion Final Tab: $789.5 billion + $194 billion = $983.5 billion

    What YOU Can Do Many believe our system is inherently broken. We think it can be fixed. As citizens and voters, we have to set a new agenda before the Presidential election. There are three things we need in order to prevent wasteful spending, according to the GAO's David Walker:

    • Incentives for people to do the right thing.

    • Transparency so we can tell if they've done the right thing.

    • Accountability if they do the wrong thing.

    Two out of three won't solve our problems.

    So how do we make it happen? Demand it of our elected officials. If they fail to listen, then we turn them out of office. With its approval rating hovering around 11 percent in some polls, Congress might just start paying attention.

    Start by writing to your Representatives. Talk to your family, friends and neighbors, and share this article. It's in everybody's interest.

    The Most Criminal Class is Writing the Laws --- http://faculty.trinity.edu/rjensen/FraudRotten.htm#Lawmakers

     

     


    Updates on December 7, 2009

    I have come to the conclusion that the real reason this gifted communicator (Obama) has become so bad at communicating is that he doesn't really believe a word that he is saying. He couldn't convey that health-care reform would be somehow cost-free because he knows it won't be. And he can't adequately convey either the imperatives or the military strategy of the war in Afghanistan because he doesn't really believe in it either. He feels colonized by mistakes of the past. He feels trapped by the hand that has been dealt him.
    Leftist Leaning Tina Brown, "Obama's Fog War," The Daily Beast ---
    http://www.thedailybeast.com/blogs-and-stories/2009-12-03/what-is-obama-talking-about/
    Jensen Comment
    And President Obama was the dealer.

    Voters are increasingly worried about unemployment, but Democratic leaders in Congress remain obsessed with passing health- care reform. Senate Majority Whip Richard Durbin was asked recently if a health-care bill would pass the Senate by the end of this month. "It must," he said. "We have to finish it." Still, many in the trenches are uneasy about the sprawling, complex bill they privately acknowledge has no bipartisan support, doesn't seriously tackle soaring costs and will increase insurance premiums. That may explain Majority Leader Harry Reid's haste—he has ordered a rare Sunday session this weekend to hurry up the debate. Public support for the bill averages only 39.2% backing in all polls compiled by Pollster.com.
    John Fund, "Why Dems Are Obsessed by Health Reform:  They believe the liberal base expects them to deliver and will punish them if they don't," The Wall Street Journal, December 4, 2009 ---
    http://online.wsj.com/article/SB10001424052748704007804574575584229775884.html#mod=djemEditorialPage

    Big Cost Rise in U.S. Premiums Is Seen in Multiple Studies
    "Blue Cross Blue Patients"  Another study predicts higher insurance prices," The Wall Street Journal, December 5, 2009 ---
    http://online.wsj.com/article/SB10001424052748704007804574574170859847850.html#mod=djemEditorialPage

    Another day, another study confirming that ObamaCare will increase the price of health insurance. The Blue Cross Blue Shield Association has found that premiums in the individual market will rise on average by 54% over the status quo, which translates into an extra $3,341 a year for families and $1,576 for singles. The White House denounced the report as a "sham" before it was even released, which shows how seriously it takes such concerns.

    The Congressional Budget Office also found this week that ObamaCare will boost premiums in the individual market by as much as 13%. But the White House called that a triumph because the higher costs will be offset by taxpayer subsidies that will be transferred to the federal balance sheet.

    The Blue Cross study is in fact more precise than CBO's because it is based on real market data, rather than modeling assumptions. The association mined the actuarial data from its six million individual or small-business policies, nearly one-eighth of those sold in the U.S.

    Continued in article


    But The New York Times Turns a Blind Eye and Sticks to the Party Line
    "No Big Cost Rise in U.S. Premiums Is Seen in Study," by Robert Pear and David M. Herszenhorn, The New York Times, November 30, 2009 ---
    http://www.nytimes.com/2009/12/01/health/policy/01health.html?hpw

    The Congressional Budget Office said Monday that the Senate health bill could significantly reduce costs for many people who buy health insurance on their own, and that it would not substantially change premiums for the vast numbers of Americans who receive coverage from large employers.

    Alex Brandon/Associated Press Senator Harry Reid, the majority leader, said the debate on health care was one of the most significant in Senate history. The eagerly awaited report, which came as the Senate began debate on the legislation, provided Democrats with ammunition against Republicans who have criticized the bill on the ground that it would raise costs for a majority of Americans.

    Centrist Democrats like Senator Evan Bayh of Indiana, whose votes are vital to President Obama’s hopes of getting the bill approved, had feared that the measure would drive up costs for people with employer-sponsored coverage. After reading the budget office report, Mr. Bayh said he was reassured on that point.

    Before taking account of federal subsidies to help people buy insurance on their own, the budget office said the bill would tend to drive up premiums. But as a result of the subsidies, it said, most people in the individual insurance market would see their costs decline, compared with the costs expected under current law. The subsidies, a main feature of the bill, would cost the government nearly $450 billion in the next 10 years and would cover nearly two-thirds of premiums for people who receive them.

    For most people who get health insurance through employers — five-sixths of the total market — the budget office concluded that there would be little change in their premiums relative to the amounts projected under current law.

    Administration officials said the report provided a lift to the bill, which embodies Mr. Obama’s top domestic priority.

    “The C.B.O. has rendered a fundamental judgment that this will reduce the deficit and reduce people’s premium costs,” said Rahm Emanuel, the White House chief of staff, who huddled with Senate Democratic leaders on Capitol Hill on Monday. “All the Republican leadership will guarantee you is the status quo.”

    But Republican senators like Charles E. Grassley of Iowa and Mitch McConnell of Kentucky, the minority leader, said the report validated their concerns. They focused on the prediction that unsubsidized premiums in the individual insurance market, less than a fifth of those with health insurance, would rise an average of 10 percent to 13 percent.

    “The analysis by the Congressional Budget Office confirms our worst fears,” Mr. Grassley said. “Millions of people who are expecting lower costs as a result of health reform will end up paying more in the form of higher premiums. For large and small employers that have been struggling for years with skyrocketing health insurance premiums, C.B.O. concludes this bill will do little, if anything, to provide relief.”

    The Senate majority leader, Harry Reid, Democrat of Nevada, said the highly partisan floor debate that opened Monday afternoon was one of the most significant in the history of the Senate. It is expected to continue for much of December, with supporters and opponents alike offering a raft of amendments as the White House and Democratic leaders seek to put together the 60-vote coalition necessary to win passage.

    Administration officials continued to reach out to lawmakers in both parties to try to build support. Senator Susan Collins, Republican of Maine, said she met Monday for 45 minutes with Nancy-Ann DeParle, director of the White House Office of Health Reform, to discuss her concerns about the legislation.

    In its report, the budget office compared estimates of premiums in 2016 under the new legislation and under current law. In either case, after seven years of inflation, premiums would be substantially higher than they are today.

    The budget office said the analysis of premiums was extremely complex, so the experience of individuals and families "could vary significantly from the average.”

    “In general,” it said, “the proposal would tend to increase premiums for people who are young and relatively healthy, and decrease premiums for those who are older and relatively unhealthy.”

    Under the legislation, it said, the average premium per person in the individual insurance market would be 10 percent to 13 percent higher than under current law. But, it said, most people in this market — 18 million of the 32 million people buying insurance on their own — would qualify for federal subsidies, which would reduce their costs well below what they would have to pay under current law.

    For people receiving subsidies, the budget office said, premiums would be 56 percent to 59 percent lower than under current law.

    Without subsidies, it said, premiums under the bill would average $5,800 a year for individuals and $15,200 a year for families buying coverage on their own. Under current law, the comparable figures would be $5,500 and $13,100.

    “This study indicates that, for most Americans, the bill will have a modestly positive impact on their premium costs,” Mr. Bayh said. “For the remainder, more will see their costs go down than up.”

    Under the bill, the budget office said, individual policies would have to provide more benefits and pay a larger share of costs than most existing policies do. In other words, it said, some people would pay more, but would also get more.

    Insurers, it said, would have to cover certain services that, in many cases, are not covered by existing policies in the individual insurance market. These include maternity care, prescription drugs, mental health services and substance abuse treatment. Moreover, it said, under the legislation, insurance would cover an average of 72 percent of medical costs for people buying insurance on their own, up from 60 percent under current law.

    The budget office said it foresaw “smaller effects on premiums for employment-based coverage.”

    In groups with 50 or fewer employees, it said, unsubsidized premiums in 2016 would average $7,800 a year for individuals and $19,200 for families — scarcely any different from the amounts expected under current law. Of the 25 million people receiving coverage from small businesses, it said, 3 million would qualify for subsidies, which would reduce their premiums by an average of 8 percent to 11 percent.

    Large employers would generally not be eligible for such assistance. Their premiums in 2016 under the bill would average $7,300 for individual coverage and $20,100 for family coverage, the report said. Under current law, the comparable figures would be $7,400 for individual coverage and $20,300 for family coverage.

    The Senate bill would impose an excise tax on high-premium health plans offered by employers. People who remain in such “Cadillac health plans” would pay higher premiums, but most people would avoid the effect of the tax by enrolling in plans with lower premiums, the budget office said.

    Jensen Comment
    If you believe this you will also believe the promises of President Obama to have won the Afghanistan war in less than two years. And then there's that ocean front property in Arizona.


    Something AARP Wants Kept Secret

    "McCain Urges Seniors to Abandon AARP," Fox News, December 3, 2009  ---
    http://www.foxnews.com/politics/2009/12/03/mccain-aarp-betrayed-senior-citizens/

    "Medicare Part D 'Reforms' Will Harm Seniors An ObamaCare change will cost taxpayers a bundle and lead to poorer drug coverage," Tom Scully, The Wall Street Journal, December 7, 2009 ---
    http://online.wsj.com/article/SB10001424052748704107104574569930258127214.html#mod=djemEditorialPage

    There is a little-noticed provision buried deep in both the House and Senate health-care reform bills that is intended to save billions of dollars—but instead will hurt millions of seniors, impose new costs on taxpayers, and charge employers millions in new taxes.

    As part of the Medicare Modernization Act in 2003, Congress created a new drug benefit—called Medicare Part D—for retirees at a cost of about $1,900 per recipient per year. Many private employers already provided drug coverage for their retirees, and the administration and Congress did not want to tempt employers into dropping their coverage. Actuaries calculated that if the government provided a subsidy of at least $800, employers would not stop covering retirees.

    The legislation created a $600 tax-free benefit (the equivalent of $800 cash for employers), and it worked. Employers continued to cover about seven million retirees who might have otherwise been dumped into Medicare Part D.

    It was a good arrangement for all involved. An $800 subsidy is cheaper than the $1,900 cost of providing drug coverage. And millions of seniors got to keep a drug benefit they were comfortable with and that in many cases was better than the benefit offered by the government.

    But now that subsidy is coming in to be clipped. This fall congressional staff, looking for a new revenue source to pay for health reform, proposed eliminating the tax deductibility of the subsidy to employers. The supposed savings were estimated by congressional staff to be as much as $5 billion over the next decade.

    It sounds smart—except that nobody asked how many employers will drop retiree drug coverage. Clearly, many will. The result is that, instead of saving money, the proposed revenue raiser will force Medicare Part D costs to skyrocket as employers drop retirees into the program.

    The careful calculation that was made in 2003 to minimize federal spending and maximize private coverage will go out the window if this provision becomes law. Any short-term cost savings that Congress gets by changing the tax provision will be overwhelmed by higher costs in the long run.

    Some members in the House want to mitigate the cost of this provision by mandating that employers maintain existing levels of retiree coverage despite the reduced subsidy. But it's not that simple. A mandate would increase costs on businesses, which in turn would make it harder for those businesses to hire new employees. The mandate would effectively be a tax on employers that provide retiree benefits; this in turn will simply induce some unknown number of employers to terminate their retiree drug programs before the mandate kicks in.

    In short, if the changes that are proposed for employer subsidies in the current Medicare Part D program are enacted, everyone will lose. Unions will lose as employers seek ways to drop retiree drug coverage. Seniors will lose as employers drop them into Medicare Part D. Medicare and taxpayers will lose as they face higher costs. And employers will lose as they find it harder to provide benefits.

    To make matters worse, accounting rules for post-retirement benefits will require companies that keep their retiree benefits to record the entire accrued present value of the new tax the day the provision is signed into law. This would cause many employers to immediately post billions in losses, which could significantly impact our financial markets.

    There are many reasons to pass health-care reform. There is no reason to hurt seniors, employers and taxpayers in the process. Businesses are struggling, and the Medicare trust funds have plenty of problems as it is. It makes no sense to make these problems worse.

    Mr. Scully was the administrator of the Centers for Medicare and Medicaid Services from 2001-04 and was one of the designers of the Medicare Part D benefit.


    Updates on November 25, 2009

    To its credit, Newsweek includes this columnist's articles among what is otherwise unfailing support for the House version of massive spending for universal health care "reform."

    "Obama's Malpractice: Why the health-care bill isn't reform," Robert J. Samuelson (economist), Newsweek Magazine, November 23, 2009 --- http://commons.aaahq.org/posts/570fd14ba7

    There is an air of absurdity to what is mistakenly called "health-care reform." Everyone knows that the United States faces massive governmental budget deficits as far as calculators can project, driven heavily by an aging population and uncontrolled health costs. Recovering slowly from a devastating recession, it's widely agreed that, though deficits should not be cut abruptly (lest the economy resume its slump), a prudent society would embark on long-term policies to control health costs, reduce government spending, and curb massive future deficits. The president and his top economic advisers all say this. (Click here to follow Robert J. Samuelson ).

    So, what do they do? Just the opposite. Their sweeping overhaul of the health-care system—which Congress is halfway toward enacting—would almost certainly make matters worse. It would create new, open-ended medical entitlements that would probably expand deficits and do little to suppress surging health costs. The disconnect between what Obama says and what he's doing is so glaring that most people could not abide it. The president and his allies have no trouble. But reconciling blatantly contradictory objectives requires them to engage in willful self-deception, public dishonesty, or both.

    The campaign to pass Obama's health-care plan has assumed a false, though understandable, cloak of moral superiority. It's understandable because almost everyone thinks that people in need of essential medical care should get it; ideally, everyone would have health insurance. The pursuit of these worthy goals can easily be projected as a high-minded exercise in the public good.

    It is false for two reasons. First, the country has other goals—including preventing future financial crises and minimizing the crushing effects of high deficits or taxes on the economy and younger Americans—that "health-care reform" would jeopardize. And second, the benefits of "reform" are exaggerated. Sure, many Americans would feel less fearful about losing insurance; but there are cheaper ways to limit insecurity. Meanwhile, improvements in health for today's uninsured would be modest. They already receive substantial medical care; insurance would help some individuals enormously, but studies find that, on average, gains are moderate.

    The pretense of moral superiority dissolves before all the expedient deceptions used to sell the health-care agenda. Obama says he won't sign legislation that adds to the deficit. One way to do this is to put costs outside the legislation. So: doctors have long complained that their Medicare reimbursements are too low; the fix for replacing the present formula would cost $210 billion over a decade, says the Congressional Budget Office. That cost was originally in the legislation. Now it's been moved to another bill, but because there are no means to pay for it, deficits would increase.

    Another way to disguise the costs is to count savings that, though they exist on paper, would probably never be realized in practice. The House bill claims reductions in Medicare reimbursements of $228 billion over a decade for hospitals and other providers. But Congress has often prescribed reimbursement cuts that, under pressure from providers, it's later rescinded. Claims of "fiscal responsibility" for the health-care proposals reflect "assumptions that are totally unrealistic based on past history," says David Walker, former U.S. comptroller general and now head of the Peter G. Peterson Foundation.

    Equally misleading, Obama's advisers assert that the present proposals would slow the growth of overall national health spending. Outside studies disagree. Three studies (two by the consulting firm the Lewin Group and one by the Centers for Medicare & Medicaid Services, a federal agency) conclude that various congressional plans would increase national health spending compared with no legislation. The studies estimate the extra spending, over the next decade, at $750 billion, $525 billion, and $114 billion, respectively. The reasoning: greater use of the health-care system by the newly insured would overwhelm cost-saving measures ("bundled payments," "comparative effectiveness research," tort reform), which are weak or experimental.

    Though these estimates could prove wrong, they are more plausible than the administration's self-serving claims. Its health-care plan is not "comprehensive" because it slights cost control; and if its spending commitments worsened some future budget crisis, it wouldn't qualify as "reform." It would be a self-inflicted wound.


    U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

    Obama Criticizes Himself, Warns on High Deficits
    President Barack Obama gave his sternest warning yet about the need to contain rising U.S. deficits, saying on Wednesday that if government debt were to pile up too much, it could lead to a double-dip recession. With the U.S. unemployment rate at 10.2 percent, Obama told Fox News his administration faces a delicate balance of trying to boost the economy and spur job creation while putting the economy on a path toward long-term deficit reduction . . . As if things could not possibly get more weird and delusional, President Obama now criticizes the very high government deficits he himself supported, promoted, and helped create. I don’t think the word “pathological” is sufficient to describe this man. We need to invent a new term.
    Reuters, November 18, 2009 --- Click Here
    Also see http://www.foxnews.com/politics/2009/11/18/obama-warns-double-dip-recession/ 


    "We Pay Them to Lie to Us," by my hero John Stossel, Townhall, November 25, 2009 ---
    http://townhall.com/columnists/JohnStossel/2009/11/25/we_pay_them_to_lie_to_us 

    When you knowingly pay someone to lie to you, we call the deceiver an illusionist or a magician. When you unwittingly pay someone to do the same thing, I call him a politician.

    President Obama insists that health care "reform" not "add a dime" to the budget deficit, which daily grows to ever more frightening levels. So the House-passed bill and the one the Senate now deliberates both claim to cost less than $900 billion. Somehow "$900 billion over 10 years" has been decreed to be a magical figure that will not increase the deficit.

    It's amazing how precise government gets when estimating the cost of 10 years of subsidized medical care. Senate Majority Leader Harry Reid's bill was scored not at $850 billion, but $849 billion. House Speaker Nancy Pelosi said her bill would cost $871 billion.

    How do they do that?

    The key to magic is misdirection, fooling the audience into looking in the wrong direction.

    I happily suspend disbelief when a magician says he'll saw a woman in half. That's entertainment. But when Harry Reid says he'll give 30 million additional people health coverage while cutting the deficit, improving health care and reducing its cost, it's not entertaining. It's incredible.

    The politicians have a hat full of tricks to make their schemes look cheaper than they are. The new revenues will pour in during Year One, but health care spending won't begin until Year Three or Four. To this the Cato Institute's Michael Tanner asks, "Wouldn't it be great if you could count a whole month's income, but only two weeks' expenditures in your household budget?"

    To be deficit-reducers, the health care bills depend on a $200 billion cut in Medicare. Current law requires cuts in payments to doctors, but let's get real: Those cuts will never happen. The idea that Congress will "save $200 billion" by reducing payments for groups as influential as doctors and retirees is laughable. Since 2003, Congress has suspended those "required" cuts each year

    Do you feel the leaked information from a global warming alarmist organization is meaningful? This was an illegal information leak that should be ignored It makes me question my belief in global warming activists It's an example of dangerous scientific politicization I haven't really heard about the controversy

    This was an illegal information leak that should be ignored (1 %)

    It makes me question my belief in global warming activists (8 %)

    It's an example of dangerous scientific politicization (86 %)

    I haven't really heard about the controversy (5 %)

    Our pandering congressmen rarely cut. They just spend. Even as the deficit grows, they vomit up our money onto new pet "green" projects, bailouts for irresponsible industries, gifts for special interests and guarantees to everyone.

    Originally, this year's suspension, "the doc fix," was included in the health care bills, but when it clearly pushed the cost of "reform" over Obama's limit and threatened to hike the deficit, the politicians moved the "doc fix" to a separate bill and pretended it was unrelated to their health care work.

    Megan McArdle of The Atlantic reports that Rep. Paul Ryan of Wisconsin asked the Congressional Budget Office what the total price would be if the "doc fix" and House health care overhaul were passed together. "The answer, according to the CBO, is that together they'd increase the deficit by $89 billion over 10 years." McArdle explains why the "doc fix" should be included: "They're passing a bill that increases the deficit by $200 billion in order to pass another bill that hopefully reduces it, but by substantially less than $200 billion. That means that passage of this bill is going to increase the deficit."

    From the start, Obama has promised to pay for half the "reform" cost by cutting Medicare by half a trillion over 10 years. But, Tanner asks, "how likely is it that those cuts will take place? After all, this is an administration that will pay seniors $250 to make up for the fact that they didn't get a Social Security cost-of-living increase this year (because the cost of living didn't increase). And Congress is in the process of repealing a scheduled increase in Medicare premiums."

    Older people vote in great numbers. AARP is the most powerful lobby on Capitol Hill. Like the cut in doctor's pay, the other cuts will never happen.

    I will chew on razor blades when Congress cuts Medicare to keep the deficit from growing.

    Medicare is already $37 trillion in the hole. Yet the Democrats proudly cite Medicare when they demand support for the health care overhaul. If a business pulled the accounting tricks the politicians get away with, the owners would be in prison.


    In the Testimony of a Former Congressional Budget Office Director
    "The Coming Deficit Disaster:  The president says he understands the urgency of our fiscal crisis, but his policies are the equivalent of steering the economy toward an iceberg." by Douglas Hotlz-Eagen, The Wall Street Journal, November 20, 2009 --- Click Here

    President Barack Obama took office promising to lead from the center and solve big problems. He has exerted enormous political energy attempting to reform the nation's health-care system. But the biggest economic problem facing the nation is not health care. It's the deficit. Recently, the White House signaled that it will get serious about reducing the deficit next year—after it locks into place massive new health-care entitlements. This is a recipe for disaster, as it will create a new appetite for increased spending and yet another powerful interest group to oppose deficit-reduction measures.

    Our fiscal situation has deteriorated rapidly in just the past few years. The federal government ran a 2009 deficit of $1.4 trillion—the highest since World War II—as spending reached nearly 25% of GDP and total revenues fell below 15% of GDP. Shortfalls like these have not been seen in more than 50 years.

    Going forward, there is no relief in sight, as spending far outpaces revenues and the federal budget is projected to be in enormous deficit every year. Our national debt is projected to stand at $17.1 trillion 10 years from now, or over $50,000 per American. By 2019, according to the Congressional Budget Office's (CBO) analysis of the president's budget, the budget deficit will still be roughly $1 trillion, even though the economic situation will have improved and revenues will be above historical norms.

    The planned deficits will have destructive consequences for both fairness and economic growth. They will force upon our children and grandchildren the bill for our overconsumption. Federal deficits will crowd out domestic investment in physical capital, human capital, and technologies that increase potential GDP and the standard of living. Financing deficits could crowd out exports and harm our international competitiveness, as we can already see happening with the large borrowing we are doing from competitors like China.

    At what point, some financial analysts ask, do rating agencies downgrade the United States? When do lenders price additional risk to federal borrowing, leading to a damaging spike in interest rates? How quickly will international investors flee the dollar for a new reserve currency? And how will the resulting higher interest rates, diminished dollar, higher inflation, and economic distress manifest itself? Given the president's recent reception in China—friendly but fruitless—these answers may come sooner than any of us would like.

    Mr. Obama and his advisers say they understand these concerns, but the administration's policy choices are the equivalent of steering the economy toward an iceberg. Perhaps the most vivid example of sending the wrong message to international capital markets are the health-care reform bills—one that passed the House earlier this month and another under consideration in the Senate. Whatever their good intentions, they have too many flaws to be defensible.

    First and foremost, neither bends the health-cost curve downward. The CBO found that the House bill fails to reduce the pace of health-care spending growth. An audit of the bill by Richard Foster, chief actuary for the Centers for Medicare and Medicaid Services, found that the pace of national health-care spending will increase by 2.1% over 10 years, or by about $750 billion. Senate Majority Leader Harry Reid's bill grows just as fast as the House version. In this way, the bills betray the basic promise of health-care reform: providing quality care at lower cost.

    Second, each bill sets up a new entitlement program that grows at 8% annually as far as the eye can see—faster than the economy will grow, faster than tax revenues will grow, and just as fast as the already-broken Medicare and Medicaid programs. They also create a second new entitlement program, a federally run, long-term-care insurance plan.

    Finally, the bills are fiscally dishonest, using every budget gimmick and trick in the book: Leave out inconvenient spending, back-load spending to disguise the true scale, front-load tax revenues, let inflation push up tax revenues, promise spending cuts to doctors and hospitals that have no record of materializing, and so on.

    If there really are savings to be found in Medicare, those savings should be directed toward deficit reduction and preserving Medicare, not to financing huge new entitlement programs. Getting long-term budgets under control is hard enough today. The job will be nearly impossible with a slew of new entitlements in place.

    In short, any combination of what is moving through Congress is economically dangerous and invites the rapid acceleration of a debt crisis. It is a dramatic statement to financial markets that the federal government does not understand that it must get its fiscal house in order.

    What to do? The best option would be for the president to halt Congress's rush to fiscal suicide, and refocus on slowing the dangerous growth in Social Security, Medicare and Medicaid. He should call on Congress to pass a comprehensive reform of our income and payroll tax systems that would generate revenue sufficient to fund its spending desires in a pro-growth and fair fashion.

    Reducing entitlement spending and closing tax loopholes to create a fairer tax system with more balanced revenues is politically difficult and requires sacrifice. But we will avert a potentially devastating credit crisis, increase national savings, drive productivity and wage growth, and enhance our international competitiveness.

    The time to worry about the deficit is not next year, but now. There is no time to waste.

    Mr. Holtz-Eakin is former director of the Congressional Budget Office and a fellow at the Manhattan Institute. This is adapted from testimony he gave before the Senate Committee on the Budget on Nov. 10.

    U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

    Bob Jensen's threads on the pending collapse of the United States (not just the economy) ---
    http://faculty.trinity.edu/rjensen/entitlements.htm


    What's sad is that 2009 payola destroys the U.S. economy for our grandchildren.

    Makes you think Blue State Senators from NY, Massachusetts, Illinois, and California Sold Out Too Cheap
    But none of the rogue Senators are getting the tens of millions in earmarks Nancy Pelosi doled out for votes.
    "Health Care Payola:  Harry Reid is passing out goodies in hopes of garnering the 60 votes he needs," by John Fund, The Wall Street Journal, November 21, 2009 --- Click Here

    Maneuvering on health care in the Senate may come down to who wants it more -- and Republicans are drawing a line at some of the more aggressive dilatory parliamentary tactics open to them.

    On the Democratic side, Majority Leader Harry Reid is passing out goodies in hopes of garnering the 60 votes he needs for a motion to proceed to debate on the bill. Yesterday, Mr. Reid announced he'll hold that vote on Saturday at 8 pm after a day-long debate. Whether he has the 60 votes is uncertain at the moment, but you can bet he will open the taxpayer spigots to secure those he needs.

    Take Louisiana Senator Mary Landrieu. She's now likely to vote with Mr. Reid on Saturday after an amendment was inserted to increase her state's federal Medicaid subsidies by $100 million. The amendment devotes two pages to language making certain that only Louisiana would be entitled to the extra cash.

    On the Republican side, Mr. Reid must be relieved the GOP has apparently decided not to force a reading of the entire 2,074-page bill over the weekend. Instead, Republicans will settle for a full day of debate before the Saturday night vote.

    Republicans had the option of staying on the floor and having Senator Tom Coburn of Oklahoma and others read the bill, a process that would take at least two days. They opted for a less strenuous path that will allow them to spend plenty of time at home during the Thanksgiving holiday. "Republican members oppose the bill, but they don't appear willing to stay up nights arguing against it," one former Hill staffer told me.

    Mr. Reid still has to be nervous as he corrals his 60 votes. He has no margin for error, since he needs all 58 Democrats plus the two independents who caucus with the party to bring his health care bill to the floor. He has to worry particularly about Senator Robert Byrd, who turns 92 today, and has missed more than 130 roll call votes this year due to illness. The old adage that every vote counts actually applies here as the Senate sets about the task of reordering one-sixth of the nation's economy.

     


    "Where Are the Doctors to Implement ObamaCare? A University of California chancellor warns that America could soon look like Massachusetts (Romney Care)," by Timothy P. White, The Wall Street Journal, November 18, 2009 --- Click Here

    Health care reform will fail to achieve its promise of affordable access to medical care unless the nation's physician workforce is substantially expanded to meet the demand that newly insured patients will place on an already over-burdened system.

    A comprehensive strategy for growing the physician workforce – as well as other allied health professionals such as nurses and physicians' assistants – should be developed and supported with a federal investment at the same time health insurance is expanded to cover millions of additional people.

    Without this, gaining access to prompt medical care for all patients will become even more difficult. There will be longer wait times for appointments, less face time with a physician and, in all likelihood, delayed diagnoses leading to more expensive treatment and increased risk of complications. One need only look at the experience of Massachusetts, where the adoption of universal health coverage has intensified the physician shortage.

    Nationally, the physician shortage will persist for the foreseeable future, even without adding tens of millions of people to the ranks of insured. The Association of American Medical Colleges (AAMC) forecasts a national physician shortage by 2025 of between 124,000 and 159,300, adding that universal health coverage could increase the shortage by another 31,000 physicians.

    Many regions of the U.S. already experience severe physician shortages. Riverside County – located in the diverse and rapidly growing Inland Southern California region – is the only county in the state with a population greater than 1 million to have fewer than 100 M.D.s per 100,000 people, according to a recent report prepared for the California HealthCare Foundation.

    Furthermore, the physician workforce does not reflect the ethnicity of the population, underscoring health disparities that result in a higher incidence of chronic diseases and higher mortality in minority and low-income populations. Because minority physicians are more likely than non-minority physicians to practice in ethnically diverse communities, it is vital for medical schools to train a diverse workforce of physicians to practice with a clear emphasis on prevention, and with cultural competency and sensitivity.

    The AAMC has called for a 30 percent increase in medical school enrollments by 2015, and higher education institutions are responding, both by increasing enrollment at existing medical schools and by establishing new schools of medicine, such as the one under development at the University of California, Riverside, in the heart of one of the most medically underserved regions in the state.

    In the current recession, it is important to note that these new enterprises will also bring new economic stimuli to their regions for many decades to come. New medical schools, of course, bring new jobs and new construction. But they are also generators of new funding in the form of federal grants for biomedical research and clinical studies, the most promising of which will complete the innovation pipeline to new business formation. So, too, are they magnets for high tech industry in fields such as biotechnology and pharmaceuticals.

    In reaching consensus on how best to enact health care reform, President Obama and Congress should be mindful and attentive to the workforce impact of expanding health care coverage. Additional scholarship funds and debt relief for aspiring physicians who choose primary care fields and practice in medically underserved areas are a good start, as is lifting the cap on Medicare-funded residency positions. Federal policy should also reflect the need to develop a reimbursement structure that will emphasize preventive care and entice physicians to practice primary care medicine.

    But it will take a much greater investment to expand medical education opportunities. Economic stimulus funds directed at this national crisis will reap both short- and long-term economic impetus, in addition to the vast social benefits of a healthy and productive U.S. populace.

    Because it takes at least seven years to train an independent practicing physician, the urgency is acute. We must start training future physicians now. Only by producing more physicians and health care practitioners and encouraging them to practice in the primary care disciplines can this nation achieve the promise of affordable access to high-quality health care for all.

    Mr. White is chancellor of the University of California, Riverside.


    There is a way around "passing the trash" (high risk health insurance patients), but it's not being discussed in Washington or in town hall meetings.


    "Why Health Care Reform Is Vulnerable to Smart Analytics," by Tom Davenport, Harvard Business Publishing, November 19, 2009 --- Click Here

    . . .

    Increasingly, however, life and property & casualty insurers have attempted to increase their profits by predicting just how much risk a particular customer represents, and pricing the risk accordingly. You'll pay more for life insurance, for example, if you're a smoker or a private pilot. You'll pay more for automobile insurance in most states if your credit score is low. (A low credit score has been found to predict higher risk of dying or crashing your car.) Pooling the risk, it seems, is no longer an attractive proposition for life and property insurers.

    It seems obvious that the same predictive approaches to segmenting risk would eventually move into health insurance. "But wait," you say. "Isn't information about my health confidential and secure?" It's true that HIPAA and other laws protect your medical history data in doctors' offices and hospitals. But with predictive analytics, you don't need to have access to anyone's medical records. All you need to know is how much someone weighs, what kind of food he or she eats, how much exercise they get, and so forth. Much of that information is publicly available, can be bought, or can be legally requested in insurance applications. One health insurance actuary told me that such "lifestyle" data is a much better predictor than age of who is going to contract, say, diabetes. Among 45-year olds, for example, there is an eightfold difference in annual medical spending between the highest-risk lifestyle group and the lowest.

    Such predictions are already employed today by health insurance firms, who use them to enroll certain customers in "disease management" programs. In some cases, these programs recommend preventive therapies to try to head off diseases before they happen, which is usually good for both customer and insurer. However, it's a relatively short step to using the predictions to refuse coverage, or to price coverage at a much higher level.

    Today most health insurance companies still practice risk pooling, either because they insure large organizations with group insurance coverage for many employees, or because their small group or individual insurance is heavily regulated at the state level.

    However, if we adopt universal coverage in the United States with mandates to have insurance — as do most of the health care reform plans under discussion — selection of the lowest-risk customers may rise dramatically. Many more people will seek insurance as individuals, rather than as members of groups. It will then be possible for insurance firms to identify which customers will be profitable, and which will cost them too much money to insure. They will seek the healthy (and those likely to stay that way) and shun the sick (and those soon to become sick) as a result. Since 15% of patients in the U.S. account for 75% of health care costs, there will be plenty of financial incentives for insurers to do so.

    Since some insurance companies will be better at predicting health risk than others, and since everyone must be insured by someone, this will lead to dramatic differences in performance between the more and less analytical health insurers. Some will go out of business, creating disruption for the entire industry and its consumers. If there is a "public option" that takes consumers no one else wants, it will undoubtedly get the citizens who are most likely to acquire expensive diseases. Taxpayers will foot the bill, while the private health insurers who are good at prediction will become much richer.

    There is a way around this problem, but it's not being discussed in Washington or in town hall meetings. It's called "risk adjustment." Under such an approach, if one company (or public insurance payer) takes on more risky customers and suffers losses as a result, that company's losses would be paid for out of a risk adjustment pool into which all insurers would pay — a sort of FDIC for health insurance. That would dramatically reduce the incentive to select the least likely customers to get sick.

    Risk adjustment is already incorporated today into Medicare Advantage — private plans that 10 million U.S. consumers use to augment their basic Medicare coverage — which may be one reason why Medicare Advantage is being criticized by some legislators as too costly.

    The way to avoid all this complexity, of course, is to have a single-payer system. Then no insurance provider can skim off the best customers. We generally say we prefer competition between providers in this country, but that means we have to create approaches to deal with the fact that some competitors are much more clever than others.


    Harvard Study (with tongue in cheek) Predicts Wall Street and Dow Recovery
    However, according to an only half-joking report released last week, the low numbers of Harvard MBAs landing Wall Street jobs could point to something else – an impending recovery. The “Harvard MBA Indicator” is a market predictor designed by HBS alum Ray Soifer. According to his somewhat facetious theory, the percentage of Harvard MBAs each year who take market-sensitive jobs, generally those closely tied to investing, is inversely related to the health of the stock market. In other words, the fewer HBS grads that take jobs in banking, venture capital, leveraged buyouts, etc., the better the Dow will do.
    "Harvard MBA Indicator: Good Times Ahead for Finance Jobs?" by Geoff Gloeckler, Business Week, November 11, 2009 --- Click Here

    Jensen Comment
    I'm more inclined to attribute the rise in the Dow to the plunge in the value of the U.S. dollar, which of course does not bode well for real economic recovery. Menwhile the Fed continues to print free money for the big banks.

    The Obamacare entitlement program may well add $40 trillion (anybody's guess not mentioned in Congress) or more to unfunded entitlements obligations even if politicians are claiming it will add much less than a ten-year trillion to the booked U.S. National Debt standing above $12 trillion ---
    - http://www.usdebtclock.org/

    Here's the Doomsday Graphic being shown around the U.S. by David Walker (former Chief Accountant of the United States)
    The Real National Debt (booked + unbooked entitlements without Obamacare) 2008
    Source --- http://www.pgpf.org/about/nationaldebt/

     

    IOUSA (the most frightening movie in American history) ---
     
    (see a 30-minute version of the documentary at www.iousathemovie.com )

    More on David Walker’s warnings of impending entitlements disasters ---
    http://faculty.trinity.edu/rjensen/entitlements.htm

     

     

     


    Updates on November 17, 2009

    "Health Cost Containment Troublesome Issue," SmartPros, November 10, 2009 ---
    http://accounting.smartpros.com/x68073.xml 

    Some Democrats and analysts are raising alarms that bills to reform the U.S. healthcare system fall short of President Obama's pledge to slow health spending.

    Obama has made cost containment a key leg to healthcare reform. However, health economists say it isn't possible to know whether the bills would meet that goal, with many saying they doubt they would even come close, The New York Times reported Tuesday.

    Both the House and the Senate propose cost-saving measures. The House bill, which passed Saturday, projects $440 billion in Medicare savings over 10 years. The Senate Finance Committee bill projects about $420 billion. White House officials said additional savings in the private sector would be realized as well.

    Experts, even those whom the White House consulted, said the measures represent only small steps toward revising the existing fee-for-service system, which drives up costs by paying health providers for each visit or procedure performed -- and some lawmakers are paying attention, the Times said.

    "My assessment at this point," said Sen. Ron Wyden, D-Ore., and a member of the Finance Committee, "is that the legislation is heavy on health and light on reform."

    Sen. Susan Collins, R-Maine, during a news conference Monday with Sen. Lamar Alexander, R-Tenn., shared her concern about the cost-containment issue. Collins said she also has met with moderate Democrats who share her view.

    "I don't believe we need more pilot projects to show us that healthcare delivery reforms are necessary," Collins told the Times. "I think people are much more upset over the cost of care than the administration is acknowledging."


    "The U.S. House of Presumptuous Meddlers," by John Stossel, Townhall, November 11, 2009 ---
    http://townhall.com/columnists/JohnStossel/2009/11/11/the_us_house_of_presumptuous_meddlers 

    As an American, I am embarrassed that the U.S. House of Representatives has 220 members who actually believe the government can successfully centrally plan the medical and insurance industries.

    I'm embarrassed that my representatives think that government can subsidize the consumption of medical care without increasing the budget deficit or interfering with free choice.

    It's a triumph of mindless wishful thinking over logic and experience.

    The 1,990-page bill is breathtaking in its bone-headed audacity. The notion that a small group of politicians can know enough to design something so complex and so personal is astounding. That they were advised by "experts" means nothing since no one is expert enough to do that. There are too many tradeoffs faced by unique individuals with infinitely varying needs.

    Government cannot do simple things efficiently. The bureaucrats struggle to count votes correctly. They give subsidized loans to "homeowners" who turn out to be 4-year-olds. Yet congressmen want government to manage our medicine and insurance.

    Competition is a "discovery procedure," Nobel-prize-winning economist F. A. Hayek taught. Through the competitive market process, we producers and consumers constantly learn things that force us to adjust our behavior if we are to succeed. Central planners fail for two reasons:

    First, knowledge about supply, demand, individual preferences and resource availability is scattered -- much of it never articulated -- throughout society. It is not concentrated in a database where a group of planners can access it.

    Second, this "data" is dynamic: It changes without notice.

    No matter how honorable the central planners' intentions, they will fail because they cannot know the needs and wishes of 300 million different people. And if they somehow did know their needs, they wouldn't know them tomorrow.

    Proponents of so-called reform -- it's not really reform unless it makes things better -- have shamefully avoided criticism of their proposals. Often they just dismiss their opponents as greedy corporate apologists or paranoid right-wing loonies. That's easier than answering questions like these:

    1) How can the government subsidize the purchase of medical services without driving up prices? Econ 101 teaches -- without controversy -- that when demand goes up, if other things remain equal, price goes up. The politicians want to have their cake and eat it, too.

    2) How can the government promise lower medical costs without restricting choices? Medicare already does that. Once the planners' mandatory insurance pushes prices to new heights, they must put even tougher limits on what we may buy -- or their budget will be even deeper in the red than it already is. As economist Thomas Sowell points out, government cannot really reduce costs. All it can do is disguise and shift costs (through taxation) and refuse to pay for some services (rationing).

    3) How does government "create choice" by imposing uniformity on insurers? Uniformity limits choice. Under House Speaker Nancy Pelosi's bill and the Senate versions, government would dictate to all insurers what their "minimum" coverage policy must include. Truly basic high-deductible, low-cost catastrophic policies tailored to individual needs would be forbidden.

    4) How does it "create choice" by making insurance companies compete against a privileged government-sponsored program? The so-called government option, let's call it Fannie Med, would have implicit government backing and therefore little market discipline. The resulting environment of conformity and government power is not what I mean by choice and competition. Rep. Barney Frank is at least honest enough to say that the public option will bring us a government monopoly.

    Advocates of government control want you to believe that the serious shortcomings of our medical and insurance system are failures of the free market. But that's impossible because our market is not free. Each state operates a cozy medical and insurance cartel that restricts competition through licensing and keeps prices higher than they would be in a genuine free market. But the planners won't talk about that. After all, if government is the problem in the first place, how can they justify a government takeover?

    Many people are priced out of the medical and insurance markets for one reason: the politicians' refusal to give up power. Allowing them to seize another 16 percent of the economy won't solve our problems.

    Freedom will.


    "A Minority View: Constitutional Contempt," by Walter E. Williams, Townhall, November 11, 2009 ---
    http://townhall.com/columnists/WalterEWilliams/2009/11/11/a_minority_view_constitutional_contempt

    At Speaker Nancy Pelosi's Oct. 29th press conference, a CNS News reporter asked, "Madam Speaker, where specifically does the Constitution grant Congress the authority to enact an individual health insurance mandate?" Speaker Pelosi responded, "Are you serious? Are you serious?" The reporter said, "Yes, yes, I am." Not responding further, Pelosi shook her head and took a question from another reporter. Later on, Pelosi's press spokesman Nadeam Elshami told CNSNews.com about its question regarding constitutional authority mandating that individual Americans buy health insurance. "You can put this on the record. That is not a serious question. That is not a serious question."

    Suppose Congress was debating a mandate outlawing tea-party-type protests and other large gatherings criticizing Congress. A news reporter asks Nancy Pelosi where specifically does the Constitution grant Congress the authority to outlaw peaceable assembly. How would you feel if she answered, "Are you serious? Are you serious?" and ignored the question. And what if, later on, someone from her office sent you a press release, as was sent to CNS News, saying that Congress has "broad power to regulate activities that have an effect on interstate commerce," pointing out that demonstrations cause traffic jams and therefore interferes with interstate commerce?

    Speaker Pelosi's constitutional contempt, perhaps ignorance, is representative of the majority of members of both the House and the Senate. Their comfort in that ignorance and constitutional contempt, and how readily they articulate it, should be worrisome for every single American. It's not a matter of whether you are for or against Congress' health care proposals. It's not a matter of whether you're liberal or conservative, black or white, male or female, Democrat or Republican or member of any other group. It's a matter of whether we are going to remain a relatively free people or permit the insidious encroachment on our liberties to continue.

    Where in the U.S. Constitution does it authorize Congress to force Americans to buy health insurance? If Congress gets away with forcing us to buy health insurance, down the line, what else will they force us to buy; or do you naively think they will stop with health insurance? We shouldn't think that the cure to Congress' unconstitutional heavy-handedness will end if we only elect Republicans. Republicans have demonstrated nearly as much constitutional contempt as have Democrats. The major difference is the significant escalation of that contempt under today's Democratically controlled Congress and White House with the massive increase in spending, their proposed legislation and the appointment of tyrannical czars to control our lives. It's a safe bet that if and when Republicans take over the Congress and White House, they will not give up the massive increase in control over our lives won by the Democrats.

    In each new session of Congress since 1995, John Shadegg, R-Ariz.,) has introduced the Enumerated Powers Act, a measure "To require Congress to specify the source of authority under the United States Constitution for the enactment of laws, and for other purposes." The highest number of co-sponsors it has ever had in the House of Representatives is 54 and it has never had co-sponsors in the Senate until this year, when 22 senators signed up. The fact that less than 15 percent of the Congress supports such a measure demonstrates the kind of contempt our elected representatives have for the rules of the game -- our Constitution.

    If you asked the questions: Which way is our nation heading, tiny steps at a time? Are we headed toward more liberty, or are we headed toward greater government control over our lives? I think the answer is unambiguously the latter -- more government control over our lives. Are there any signs on the horizon that the direction is going to change? If we don't see any, we should not be surprised. After all, mankind's standard fare throughout his history, and in most places today, is arbitrary control and abuse by government.

     


     

    Updates on November 10, 2009

    "The Worst Bill Ever:   Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all," The Wall Street Journal, November 1, 2009 ---
    http://online.wsj.com/article/SB10001424052748703399204574505423751140690.html?mod=djemEditorialPage

    Speaker Nancy Pelosi has reportedly told fellow Democrats that she's prepared to lose seats in 2010 if that's what it takes to pass ObamaCare, and little wonder. The health bill she unwrapped last Thursday, which President Obama hailed as a "critical milestone," may well be the worst piece of post-New Deal legislation ever introduced.

    In a rational political world, this 1,990-page runaway train would have been derailed months ago. With spending and debt already at record peacetime levels, the bill creates a new and probably unrepealable middle-class entitlement that is designed to expand over time. Taxes will need to rise precipitously, even as ObamaCare so dramatically expands government control of health care that eventually all medicine will be rationed via politics.

    Yet at this point, Democrats have dumped any pretense of genuine bipartisan "reform" and moved into the realm of pure power politics as they race against the unpopularity of their own agenda. The goal is to ram through whatever income-redistribution scheme they can claim to be "universal coverage." The result will be destructive on every level—for the health-care system, for the country's fiscal condition, and ultimately for American freedom and prosperity.

    •The spending surge. The Congressional Budget Office figures the House program will cost $1.055 trillion over a decade, which while far above the $829 billion net cost that Mrs. Pelosi fed to credulous reporters is still a low-ball estimate. Most of the money goes into government-run "exchanges" where people earning between 150% and 400% of the poverty level—that is, up to about $96,000 for a family of four in 2016—could buy coverage at heavily subsidized rates, tied to income. The government would pay for 93% of insurance costs for a family making $42,000, 72% for another making $78,000, and so forth.

    At least at first, these benefits would be offered only to those whose employers don't provide insurance or work for small businesses with 100 or fewer workers. The taxpayer costs would be far higher if not for this "firewall"—which is sure to cave in when people see the deal their neighbors are getting on "free" health care. Mrs. Pelosi knows this, like everyone else in Washington.

    Even so, the House disguises hundreds of billions of dollars in additional costs with budget gimmicks. It "pays for" about six years of program with a decade of revenue, with the heaviest costs concentrated in the second five years. The House also pretends Medicare payments to doctors will be cut by 21.5% next year and deeper after that, "saving" about $250 billion. ObamaCare will be lucky to cost under $2 trillion over 10 years; it will grow more after that.

    • Expanding Medicaid, gutting private Medicare. All this is particularly reckless given the unfunded liabilities of Medicare—now north of $37 trillion over 75 years. Mrs. Pelosi wants to steal $426 billion from future Medicare spending to "pay for" universal coverage. While Medicare's price controls on doctors and hospitals are certain to be tightened, the only cut that is a sure thing in practice is gutting Medicare Advantage to the tune of $170 billion. Democrats loathe this program because it gives one of out five seniors private insurance options.

    As for Medicaid, the House will expand eligibility to everyone below 150% of the poverty level, meaning that some 15 million new people will be added to the rolls as private insurance gets crowded out at a cost of $425 billion. A decade from now more than a quarter of the population will be on a program originally intended for poor women, children and the disabled.

    Even though the House will assume 91% of the "matching rate" for this joint state-federal program—up from today's 57%—governors would still be forced to take on $34 billion in new burdens when budgets from Albany to Sacramento are in fiscal collapse. Washington's budget will collapse too, if anything like the House bill passes.

    • European levels of taxation. All told, the House favors $572 billion in new taxes, mostly by imposing a 5.4-percentage-point "surcharge" on joint filers earning over $1 million, $500,000 for singles. This tax will raise the top marginal rate to 45% in 2011 from 39.6% when the Bush tax cuts expire—not counting state income taxes and the phase-out of certain deductions and exemptions. The burden will mostly fall on the small businesses that have organized as Subchapter S or limited liability corporations, since the truly wealthy won't have any difficulty sheltering their incomes.

    This surtax could hit ever more earners because, like the alternative minimum tax, it isn't indexed for inflation. Yet it still won't be nearly enough. Even if Congress had confiscated 100% of the taxable income of people earning over $500,000 in the boom year of 2006, it would have only raised $1.3 trillion. When Democrats end up soaking the middle class, perhaps via the European-style value-added tax that Mrs. Pelosi has endorsed, they'll claim the deficits that they created made them do it.

    Under another new tax, businesses would have to surrender 8% of their payroll to government if they don't offer insurance or pay at least 72.5% of their workers' premiums, which eat into wages. Such "play or pay" taxes always become "pay or pay" and will rise over time, with severe consequences for hiring, job creation and ultimately growth. While the U.S. already has one of the highest corporate income tax rates in the world, Democrats are on the way to creating a high structural unemployment rate, much as Europe has done by expanding its welfare states.

    Meanwhile, a tax equal to 2.5% of adjusted gross income will also be imposed on some 18 million people who CBO expects still won't buy insurance in 2019. Democrats could make this penalty even higher, but that is politically unacceptable, or they could make the subsidies even higher, but that would expose the (already ludicrous) illusion that ObamaCare will reduce the deficit.

    • The insurance takeover. A new "health choices commissioner" will decide what counts as "essential benefits," which all insurers will have to offer as first-dollar coverage. Private insurers will also be told how much they are allowed to charge even as they will have to offer coverage at virtually the same price to anyone who applies, regardless of health status or medical history.

    The cost of insurance, naturally, will skyrocket. The insurer WellPoint estimates based on its own market data that some premiums in the individual market will triple under these new burdens. The same is likely to prove true for the employer-sponsored plans that provide private coverage to about 177 million people today. Over time, the new mandates will apply to all contracts, including for the large businesses currently given a safe harbor from bureaucratic tampering under a 1974 law called Erisa.

    The political incentive will always be for government to expand benefits and reduce cost-sharing, trampling any chance of giving individuals financial incentives to economize on care. Essentially, all insurers will become government contractors, in the business of fulfilling political demands: There will be no such thing as "private" health insurance.

    *** All of this is intentional, even if it isn't explicitly acknowledged. The overriding liberal ambition is to finish the work began decades ago as the Great Society of converting health care into a government responsibility. Mr. Obama's own Medicare actuaries estimate that the federal share of U.S. health dollars will quickly climb beyond 60% from 46% today. One reason Mrs. Pelosi has fought so ferociously against her own Blue Dog colleagues to include at least a scaled-back "public option" entitlement program is so that the architecture is in place for future Congresses to expand this share even further.

    As Congress's balance sheet drowns in trillions of dollars in new obligations, the political system will have no choice but to start making cost-minded decisions about which treatments patients are allowed to receive. Democrats can't regulate their way out of the reality that we live in a world of finite resources and infinite wants. Once health care is nationalized, or mostly nationalized, medical rationing is inevitable—especially for the innovative high-cost technologies and drugs that are the future of medicine.

    Mr. Obama rode into office on a wave of "change," but we doubt most voters realized that the change Democrats had in mind was making health care even more expensive and rigid than the status quo. Critics will say we are exaggerating, but we believe it is no stretch to say that Mrs. Pelosi's handiwork ranks with the Smoot-Hawley tariff and FDR's National Industrial Recovery Act as among the worst bills Congress has ever seriously contemplated.


    "Transparency Mañana Nancy Pelosi backs off her commitment to a 72-hour online," by John Fund, The Wall Street Journal, November 6, 2009 --- Click Here

    Back in September, House Speaker Nancy Pelosi told reporters she was "absolutely" committed to having the final language of any health care bill posted on the Internet for 72 hours before a vote on the House floor.

    Well, the bill isn't finished, with major issues such as taxpayer funding of abortions and rules governing amendments still unresolved. Nonetheless, the Speaker is rushing towards a Saturday vote on the bill.

    Back on September 24, the Weekly Standard asked Ms. Pelosi at a news conference: "Do you support the measure to put the final House bill online for 72 hours before it's voted on at the very end?" Her response was "Absolutely. Without question."

    But now Pelosi spokesman Brendan Daly tells the Standard: "No, [the] pledge was to have manager's amendment online for 72 hours and we will do that." The manager's amendment makes major changes to a bill (witness the 309-page monstrosity dropped on Congress just before July's vote on the "cap-and-trade" global warming bill). But it's not the final bill, so Speaker Pelosi's pledge last September was hollow.

    Mrs. Pelosi viewed rushing to judgment on bills differently when she was in the minority. In 2004, she unveiled a proposed "Bill of Rights" to protect House minority interests, which included giving members enough time to read bills and a stop to the practice of holding votes open well past the normal 15 minutes. She had a point: In late 2003, Republican leaders held open a roll-call vote on the Medicare drug entitlement for three hours until they bullied enough wavering members into voting aye.

    "When we [Democrats] are shut out, they are shutting out the great diversity of America. We want a higher standard," Ms. Pelosi said at the time. In 2006, just before becoming speaker, she reiterated her plans to promote "bipartisanship" and "to ensure the rights of the minority."

    That was then. Now Ms. Pelosi is intent on using her political machine to run roughshod over opposition. Republican consultant Alex Castellanos notes that Democrats are replicating the worst practices of the Bush Republicans: "It is ironic that Obama and the Democrats are becoming the very thing they worked so hard to reject. Democrats criticized George W. Bush and the Republicans for not listening to Americans and being blindly ideological and inflexible. They might as well put on his swaggering Texas belt-buckle. They have caught the disease they tried to cure."


    Lie:  Requiring private insurers to cover all pre-existing health conditions from Day 1 will actually reduce the premiums for medical insurance.

    We believe premiums would come down for several reasons. Companies would no longer need to spend as much money on administrative costs, to screen out people with pre-existing conditions (prohibited by all reform bills). If they wanted to participate on the exchanges (and have access to millions of new customers), the companies would also be forced to compete with other private plans, and possibly a public option, encouraging them to lower premiums and accept lower profits.
    The New York Times Editorial, November 1, 2009 ---
    http://www.nytimes.com/2009/11/01/opinion/01sun1.html?hp

    Jensen Comment
    You can argue for coverage of all new insureds irrespective of pre-existing conditions on the basis of social equity, but the reasoning of the NYT editorial above is pure hogwash. If this were true at least one medical insurance company would've added to profits by ending pre-screening expenses. Pre-existing conditions often require the most expensive kinds of treatment for such things as organ transplants, cataracts, kidney dialysis, etc. 

    Also eliminating pre-existing conditions coupled with the inevitable coverage of illegal immigrants creates moral hazard in that when Grandma Lopez in Mexico City needs an eye operation, her relatives will float her across the Rio Grande primarily for immediate $25,000 eye surgery. If she wants to return she might even walk back across the border unassisted after she can see better.


    States like Texas that have capped punitive damages in medical lawsuits probably may not keep their limiting caps according to pending Obamacare legislation. Such caps purportedly have significantly lowered medical insurance rates in those states.

    "Pelosi Health Care Bill Blows a Kiss to Trial Lawyers," Andrew Breitbart, October 30, 2009 --- Click Here

    The health care bill recently unveiled by Speaker Nancy Pelosi is over 1,900 pages for a reason. It is much easier to dispense goodies to favored interest groups if they are surrounded by a lot of legislative legalese. For example, check out this juicy morsel to the trial lawyers (page 1431-1433 of the bill):

    Section 2531, entitled “Medical Liability Alternatives,” establishes an incentive program for states to adopt and implement alternatives to medical liability litigation. [But]…… a state is not eligible for the incentive payments if that state puts a law on the books that limits attorneys’ fees or imposes caps on damages.

    So, you can’t try to seek alternatives to lawsuits if you’ve actually done something to implement alternatives to lawsuits. Brilliant! The trial lawyers must be very happy today!

    While there is debate over the details, it is clear that medical malpractive lawsuits have some impact on driving health care costs higher. There are likely a number of procedures that are done simply as a defense against future possible litigation. Recall this from the Washington Post:

    “Lawmakers could save as much as $54 billion over the next decade by imposing an array of new limits on medical malpractice lawsuits, congressional budget analysts said today — a substantial sum that could help cover the cost of President Obama’s overhaul of the nation’s health system. New research shows that legal reforms would not only lower malpractice insurance premiums for medical providers, but would also spur providers to save money by ordering fewer tests and procedures aimed primarily at defending their decisions in court, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, wrote in a letter to Sen. Orrin Hatch (R-Utah).”

    "Canadian Malpractice Insurance Takes Profit Out Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
    Click Here
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890  

    The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

    A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

    A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

    Why the difference?

    In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.

    In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.

    In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.

    Canadian Medical Protective Association

    Here’s how it works.

    Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium

    "We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.

    If a doctor is sued, the group pays the claim and provides legal counsel.

    In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.

    "We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''

    But the importance of limiting jury awards may not play into the big picture on health care reform.

    Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.

    Major Difference

    In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.

    In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.

    A bad outcome in itself is not the basis of a lawsuit.

    The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.

    In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.

    In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.

    Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”

    For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.

    2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.

    In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”

    Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #

    Read more: http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP

     


    "The Return of the Inflation Tax:  The Pelosi tax surcharge applies to capital gains and dividends," The Wall Street Journal, November 6, 2009 --- Click Here

    All of those twentysomethings who voted for Barack Obama last year are about to experience the change they haven't been waiting for: the return of income tax bracket creep. Buried in Nancy Pelosi's health-care bill is a provision that will partially repeal tax indexing for inflation, meaning that as their earnings rise over a lifetime these youngsters can look forward to paying higher rates even if their income gains aren't real.

    In order to raise enough money to make their plan look like it won't add to the deficit, House Democrats have deliberately not indexed two main tax features of their plan: the $500,000 threshold for the 5.4-percentage-point income tax surcharge; and the payroll level at which small businesses must pay a new 8% tax penalty for not offering health insurance.

    This is a sneaky way for politicians to pry more money out of workers every year without having to legislate tax increases. The negative effects of failing to index compound over time, yielding a revenue windfall for government as the years go on. The House tax surcharge is estimated to raise $460.5 billion over 10 years, but only $30.9 billion in 2011, rising to $68.4 billion in 2019, according to the Joint Tax Committee.

    Americans of a certain age have seen this movie before. In 1960, only 3% of tax filers paid a 30% or higher marginal tax rate. By 1980, after the inflation of the 1970s, the share was closer to 33%, according to a Heritage Foundation analysis of tax returns.

    These stealth tax increases—forcing ever more Americans to pay higher tax rates on phantom gains in income—were widely seen to be unjust. And in 1981 as part of the Reagan tax cuts, a bipartisan coalition voted to index the tax brackets for inflation.

    We also know what has happened with the Alternative Minimum Tax. Passed to hit only 1% of all Americans in 1969, the AMT wasn't indexed for inflation at the time and neither was Bill Clinton's AMT rate increase in 1993. The number of families hit by this shadow tax more than tripled over the next decade. Today, families with incomes as low as $75,000 a year can be hit by the AMT unless Congress passes an annual "patch."

    The Pelosi-Obama health tax surcharge will have a similar effect. The tax would begin in 2011 on income above $500,000 for singles and $1 million for joint filers. Assuming a 4% annual inflation rate over the next decade, that $500,000 for an individual tax filer would hit families with the inflation-adjusted equivalent of an income of about $335,000 by 2020. After 20 years without indexing, the surcharge threshold would be roughly $250,000.

    And by the way, this surcharge has also been sneakily written to apply to modified adjusted gross income, which means it applies to both capital gains and dividends that are taxed at lower rates. So the capital gains tax rate that is now 15% would increase in 2011 to 25.4% with the surcharge and repeal of the Bush tax rates. The tax rate on dividends would rise to 45% from 15% (5.4% plus the pre-Bush rate of 39.6%).

    As for the business payroll penalty, it is imposed on a sliding scale beginning at a 2% rate for firms with payrolls of $500,000 and rising to 8% on firms with payrolls above $750,000. But those amounts are also not indexed for inflation, so again assuming a 4% average inflation rate in 10 years this range would hit payrolls between $335,000 and $510,000 in today's dollars. Note that in pitching this "pay or play" tax today, Democrats claim that most small businesses would be exempt. But because it isn't indexed, this tax will whack more and more businesses every year. The sales pitch is pure deception.

    As for the Senate, instead of the 5.4% surcharge, the Finance Committee bill raises taxes on "high-cost" health care plans. But this too uses the inflation ruse. The Senate bill indexes its tax proposal for the inflation rate plus one percentage point. But that is only about half as high as the rate of overall health-care inflation, i.e., the rate of increase in health-care premiums. So the Joint Tax Committee has found that a Senate tax that starts in 2013 by hitting 13.8 million Americans will hit 39.1 million by 2019.

    The return of the inflation tax demonstrates once again the stealth radicalism that animates ObamaCare. In the case of inflation indexing, Democrats would repeal a 30-year bipartisan consensus that it is unfair to tax unreal gains in income, thus hitting millions of middle-class Americans over time with tax rates advertised as only hitting "the rich." Oh, and the House vote on this exercise in dishonest government will come as early as Saturday.


    "Obamacare: Startling New Revelations Scare Public," by Floyd and Mary Beth Brown, Townhall, October 29, 2009 -http://townhall.com/columnists/FloydandMaryBethBrown/2009/10/29/obamacare_startling_new_revelations_scare_public

    First, we learned that a $500 billion cut in Medicare will dramatically affect the quality and quantity of healthcare available to America's senior citizens. Grandma's access is being slashed to add illegal immigrants and twenty-somethings into the insurance system. However, this revelation pales in relation to what we heard this week.

    Here's the latest shock: Average current health insurance premiums with likely triple under Obamacare.

    The new data comes from a well regarded, state-by-state study conducted for WellPoint, Inc. The most dramatic premium boosts will hit young people. These are the actual individuals that often opt out of insurance plans now.

    Reaction from the Obama White House was swift and harsh. Linda Douglass, Obama's healthcare spokesperson, had the audacity to compare the health insurance firm with tobacco companies. Since the White House refuses to argue the facts, they instead turned to using one of their favorite tactics, which is demonizing any voices of dissent.

    The reason for the dramatic insurance premium increases is the result of Obamacare regulations. First cause is the mandate that insurance companies take any customer. Insurance traditionally is an actuarial business that rates different customers based on risk factors. This is the reason a driver aged 19 with two speeding tickets pays more for auto insurance than a customer aged 35 with no speeding tickets. Nineteen-year-olds have more accidents. Therefore they pose more risk.

    Traditionally, health insurance companies charged customers with risk factors and chronic illness more than young, healthy 19-year-olds. Obamacare stands the concept of insurance on its head. Since an insurance company will be forced to sell to any sick patient, the incentive to buy insurance when you are healthy decreases. Why not wait until you are sick; get cancer, diabetes or some other severe illness before you buy? To circumvent this problem, Obama is riddling the program with police-state mandates on healthy, younger citizens. Perverted, negative incentives such as threats of large fines and even prison time will hang over young people's heads to force them to join and stay enrolled in Obama's healthcare scheme. Does this sound like America to you?

    Democratic leaders in Congress are seeing support slip through their fingers because Americans are learning that they will end up paying more for less-adequate care. The beneficiaries of this plan are still lobbying hard. Big business will likely dump most of their current employee-based plans and pay the less expensive tax. Big unions are facing the reality that they are going to be bankrupted by their generous membership health plans. Many want to dump their responsibilities on the new government option recently revived by Senate Majority Leader Harry Reid, D-Nev. AARP is salivating at the money they will make selling new, bigger Medicare-gap plans after the current program is gutted.

    Continued in article


    "The Health Care Fatal Conceit," by Star Parker, Townhall, October 26, 2009 ---
    http://townhall.com/columnists/StarParker/2009/10/26/the_health_care_fatal_conceit

    Nobel prize winning economist F.A.Hayek called socialism "the fatal conceit."

    Why conceit? Because socialism's basic premise, according to Hayek, is that "man is able to shape the world around him according to his wishes."

    Why fatal? Because, like all falsehoods and misconceptions, it leads to failure, and sometimes disaster.

    Although the socialist label is being thrown around a lot now, we must recognize this isn't new. This conceit has been inflating in American hearts and minds for years, with the inexorable growth of government and the ongoing change in American attitudes about what government is about.

    If there is anything new today, it's the extent to which we're taking this.

    The Declaration of Independence, signed by our founders, states that man has the "unalienable rights" to "life, liberty and the pursuit of happiness" and that men form government to "secure these rights." According to Jefferson's words, the purpose of the government is to protect me.

    Now Congress is moving health-care legislation in which the role of government will evolve to defining what health insurance is, forcing me to buy a policy that covers what government dictates, tracking my behavior through the IRS to see if I have complied, fining me if I haven't, and sending me to jail if I refuse to do it.

    Government will expand to tell employers that they have to provide government-defined insurance to their employees or be fined. And government will tell insurance companies who they have to insure and how much they can charge to do it.

    And we'll spend $1 trillion dollars or so that will come one way or another out of taxpayer hides to subsidize individuals who can't afford to buy this government defined health insurance.

    Whoa! Wasn't this country supposed to be about freedom?

    Didn't Jefferson write those words because the colonists who came to this then-unsettled continent wanted to get kings and tyrants off their backs?

    Most of the Declaration is a long list of King George's violations of colonists' freedom.

    It's worth being reminded of how it starts.

    "The History of the present King of Great Britain is a history of repeated Injuries and Usurpations, all having in direct Object the Establishment of an absolute Tyranny over these States."

    Continued in article


    "Regarding Harry:  The public option diverts attention from the legislation's real," by Kimberly Strassel, The Wall Street Journal, October 29, 2009 --- Click Here

    You couldn't swing a cat this week without hitting a discussion of the public option. Somewhere, in some Capitol office, Senate Majority Leader Harry Reid is grinning.

    Two weeks ago, the subject of a government-run insurance plan was a sore point with the Nevadan. He didn't have the votes for it, his base was bitter, and he didn't want to talk about it. This week, a transformed Mr. Reid devoted an entire news conference to it. Americans support the public option! His caucus supports a public option! He supports a public option! The public option is in! No problem!

    In the real world, this kind of behavioral shift lands you in a psych ward. In Washington, the press just marked it down to forces bigger than Harry. The majority leader had been pushed into a public option by his liberal members, we were told. Chuck Schumer was scarier than Ben Nelson. The Huffington Post was even scarier than Chuck Schumer. Poor Mr. Reid, clucked observers, had been backed into a corner.

    Maybe. Then again, maybe he is majority leader for a reason. Maybe Mr. Reid didn't just wander out of the Nevada desert. Maybe he has a plan. Maybe, just maybe, he sees a big upside in turning the public option into the centerpiece of the health-care debate. After all, what does he have to lose?

    Up for re-election next year, Mr. Reid is facing Nevada polls that suggest he's lost most voters outside his base. His base too, was slipping, with Moveon.org making him a punching bag for not embracing the public option. With this week's announcement, he is once again the hero of the left, and has that baboon off his back.

    Who knows? It might even work. Mr. Reid included the fig leaf of an "opt-out" for states that don't want the public option. It's a ruse, but it might provide cover for votes. If not, he's got room to maneuver. There's the "opt-in" alternative, which even some Republicans claim to like. There's the fall-back "trigger," which re-earns him Olympia Snowe.

    And if it doesn't fly, well, is that so bad? Mr. Reid can still say he gave it the varsity try. He'll get it to the floor and let those swing-state Democrats amend the public option away. Not his fault! What he also knows, even if the press doesn't, is that for all the big talk of his liberal members, they are the more likely to give way. Even without a public option, this bill is a big step toward a single-payer system. And it isn't as if any of them risk losing their seats by voting "only" for a $1 trillion health expansion.

    Better yet, by turning the public option into the big, bad bogeyman, he makes it more likely he'll snag those swing-state votes in the end. Nebraska's Mr. Nelson, Arkansas's Blanche Lincoln, Indiana's Evan Bayh—they can all claim victory for stripping the bill of a national insurance plan, then feel comfortable voting for all the tax hikes and Medicare cuts that remain.

    Speaking of tax hikes, premium jumps and Medicare cuts, notice how nobody is today talking about them? Mr. Reid surely has. The public option might be controversial in D.C., but the majority leader knows most of the country doesn't understand it, or assumes it doesn't apply to them. Most Americans already have health care that they like, and polls show their real fear is that this experiment will leave them paying more for less. This, not the public option, is ObamaCare's exposed jugular.

    The insurers get this, which is why (as they now try to bottle the genie they helped loose) they are issuing reports on how "reform" will double or triple premium prices. It is why America's Health Insurance Plans, the lobby group, has run ads in swing states warning about huge cuts to Medicare Advantage. Some of the grass roots get it, too, which is why Americans for Tax Reform is now live on TV in Nebraska noting Sen. Nelson has signed its taxpayer pledge and that he'd violate it by voting for the bill's nearly $500 billion in tax increases.

    If Mr. Reid had pulled the plug on the public option, these highly unpopular policy issues would be front and center. As it is, the public-option sideshow is sucking up all the air, and will continue to. It even overshadowed liberal divisions, such as union pushback on Cadillac-plans taxes. Maybe, just maybe, Mr. Reid likes it that way.

    Granted, this is the cynic's view of Democrats' health-care strategy. Mr. Reid did, after all, goof last week, failing to round up the votes to pass his party's proposed "fix" to Medicare reimbursement rates. Maybe he doesn't know which way is up. Maybe he is taking a flier.

    Then again, anyone who has watched this debate has earned the right to cynicism. Democrats are determined to get a health bill, and Mr. Reid is no rube. His opponents—those trying to save the country from this wreck of a bill—would be wise not to forget it


     


    Updates for October 26, 2009

    The Wall Street Journal Guide to Obamacare, October 14, 2009 --- Click Here
    http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage

    Obamacare Chart --- http://faculty.trinity.edu/rjensen/ObamaCareChart.pdf

    "Follow the Money," by Ben Shapiro, Townhall, October 21, 2009 ---
    http://townhall.com/columnists/BenShapiro/2009/10/21/follow_the_money 

    "WaPo/ABC poll uses skewed sample to show public-option support," HotAir, October 20, 2009 ---
    http://hotair.com/


    "Brouhaha erupts over PwC private health insurance report," AccountingWeb, October 21, 2009 ---
    http://www.accountingweb.com/topic/cfo/brouhaha-erupts-over-pwc-private-health-insurance-report

    PricewaterhouseCoopers (PwC) has found itself at the center of a controversy over its estimates of cost increases in private health insurance premiums if certain provisions of the heath care reform bill passed by the Senate Finance Committee become law.  PwC was engaged to conduct the study, "Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage," by the American Health Insurance Plans (AHIP).  Critics have questioned the methodology used by PwC, saying it does not take into consideration some of the cost containment measures in the bill and potential behavioral responses that could affect premium increases. 

    AHIP president and CEO Karen Ignagni told ABC News, "One of the most important things that should be done is for PricewaterhouseCoopers, a world class firm, to speak for itself about methodology."

    PwC defends its analysis and conclusions in a statement provided to AccountingWEB, citing the specific parameters of the study, saying that "America's Health Insurance Plans engaged PricewaterhouseCoopers to prepare a report that focused on four components of the Senate Finance Committee proposal:

    * Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.
    * An excise tax on employer-sponsored high value health plans.
    * Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers.
    * New taxes on health sector entities.

    The study concluded that collectively the four provisions would raise premiums for private health insurance coverage.  As the report itself acknowledges, other provisions that are part of health reform proposals were not included in the PwC analysis."

    By 2019, the study says, after analysis of these four provisions, the cost of single coverage is expected to increase by $1,500 more than it would under the current system and the cost of family coverage is expected to increase by $4,000 more than it would under the current system.  This amounts to an additional 18 percent increase in premiums by 2019. The overall 18 percent increase is a composite of increases by market segment as follows:

    * 49% increase for the non-group (individual) market;
    * 28% increase for small employers (those firms with fewer than 50 employees);
    * 11% increase for large employers with insured coverage; and,
    * 9% increase for self-insured employers.

    The highest increase would be for individuals covered by private insurance.

    In its discussion of a "Strong Workable Coverage Requirement," the study acknowledges it methodology as it does elsewhere in the report.  "The reform packages under consideration have other provisions that we have not included in this analysis.  We have not estimated the impact of the new subsidies on the net insurance cost to households.  Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated."  The analysis of the coverage requirement shows the potential impact on premiums for individuals without a broad coverage requirement."

    PwC says that impacts identified in the study assume payment of tax on high-value plans, cost-shifting of cuts to public programs, and full pass-through of industry taxes. 

    The PwC study also states that it factored in the excise tax but not any anticipated behavioral changes:  "We have estimated the potential impact of the tax on premiums," the study says.  "Although we expect employers to respond to the tax by restructuring their benefits to avoid it, we demonstrate the impact assuming it is applied."

    In an earlier study based on AHIP data, PwC estimated that structural reforms, such as improved wellness and prevention, disease management, value based payment reform, improvements in health information technology, comparative effectiveness, and malpractice reform, could mitigate growth in healthcare costs by between 0.5 and 1.0 percent per year after an initial investment period.  See PricewaterhouseCoopers "A Review of AHIP Savings Estimates" in Appendix to AHIP, "A Shared Responsibility," 2008.

    Bob Jensen's threads on the health care mess are at
    http://faculty.trinity.edu/rjensen/Health.htm


    "'Conceptual Language' Hides Health Care's Costs," by Michael Barone, Townhall, October 12, 2009 ---
    http://townhall.com/columnists/MichaelBarone/2009/10/12/conceptual_language_hides_health_cares_costs

    Some of the headlines in recent days are not worthy of belief. No, I'm not referring to the headlines that Barack Obama won the Nobel Peace Prize, however odd that many seem to many (including, it seems, Obama himself). I'm referring to the headlines earlier in the week to the effect that the health care bill sponsored by Senate Finance Committee Chairman Max Baucus will cut the federal deficit by $81 billion over the next 10 years.

    Yes, that is what the Congressional Budget Office estimated. But, as the CBO noted, there's no actual Baucus bill, just some "conceptual language." Actual language, CBO noted, might result in "significant changes" in its estimates. No wonder Democratic congressional leaders killed requirements that the actual language be posted on the Internet for 72 hours before Congress votes.

    More significant is the number most publications did not put in their headlines and lead paragraphs: CBO's estimate that the Baucus "conceptual language" would increase federal spending by $829 billion over 10 years. So how do you increase federal spending and cut the deficit at the same time?

    One way is taxes. The Baucus conceptual language includes a tax on high-cost insurance plans ($210 billion), penalties for not having insurance ($27 billion) and "indirect offsets" (whatever they are -- $83 billion).

    In addition, costs are fobbed off on state governments in the form of more Medicaid spending, and savings are projected from future reductions in Medicare that will surely turn out to be imaginary (Congresses of both parties have acted to prevent such reductions every year since 2003).

    We know from past experience that cost estimates of all government health care programs (except the 2003 Medicare Part D prescription drug benefit, which has private market competition) tend to understate actual costs. So the Baucus bill -- er, conceptual language -- if enacted is likely to expand government spending by more than the estimated $829 billion.

    And perhaps quite a bit more. The Baucus measure enables families without employer-provided insurance to obtain it at exchanges with subsidies that make it cost less than what those with employer-provided insurance pay. The latter are a majority of voters -- how long are their elected representatives going to let this disadvantage stand?

    The Baucus measure subsidizes low-income families. Say you make $48,000 a year and get a $900 subsidy. As your income rises, this subsidy would be phased out, raising your effective marginal tax rate to as much as 70 percent. How long will Congress let this stand?

    Continued in article


    "The Stressed German Model:  It took the Germans 125 years to figure out that their health-care,"  The Wall Street Journal, October 10, 2009 --- http://online.wsj.com/article/SB10001424052748703746604574461573950211460.html

    What if the Obama health-care proposal turned out to be the biggest public-policy mistake in 125 years?

    Yesterday, these columns discussed the Congressional Budget Office's efforts to push the square peg of the Obama plan through the round hole of affordability. Meanwhile in Germany, often cited by American liberals as the "model" of a well-run health-care plan, the political debate is running in the opposite direction. Chancellor Angela Merkel's new coalition partner, the Free Democratic Party, is pressing her to claw back the state's participation in a system that now insures nine of 10 Germans.

    Germany's health-care system was brought to life in 1883 by Otto von Bismarck and became the model for virtually every such state-directed national insurance plan since. Alas, the German system is starting to come apart at the financial seams. Germany's system relies on a handful of state-supported health insurers. This week they informed the government that the system was on the brink of a financial shortfall equal to nearly $11 billion.

    Pointedly, the insurers made clear that cutbacks alone won't solve the problem. They said the government would have to consider raising premiums on the insured or, you guessed it, raise taxes. Currently, German workers pay a fixed-rate premium into the insurance scheme; that rate is now set at 14.9% of gross pay.

    Chancellor Merkel, something of a political acrobat, was previously allied in coalition with leftist Social Democrats. She's now resisting calls from the Free Democrats to get off the state-pulled health-care train. The FDP's spokesman on health, Daniel Bahr, wants a "shift in direction away from state-run medicine." Why? Because "the current financial figures have showed us that the health-care fund doesn't work."

    With Congress inching ever closer to passing a greater federal presence in providing health insurance under ObamaCare, let's hope it doesn't take the U.S. until the year 2134 to figure out it isn't working.

     

     


     

    Updates for October 15, 2009

    The Wall Street Journal Guide to Obamacare, October 14, 2009 --- Click Here
    http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage

    "The Trouble With Health Care Is Paying For It," by Michael Barone, Townhall, October 15, 2009 ---
    http://townhall.com/columnists/MichaelBarone/2009/10/15/the_trouble_with_health_care_is_paying_for_it 

    Baucus' bill would impose $829 billion in added costs, financed by a variety of taxes and spending cuts that are just as dubious. One is a tax on so-called Cadillac health insurance plans. But unions that have negotiated such plans are opposed, and House Democratic leaders are uninterested. Another is a tax on makers of medical devices that will be paid for by consumers. Critics have pointed out that most of these taxes will fall on people with ordinary incomes, far below the $250,000-plus moguls that Barack Obama said would bear all his tax increases.

    Another Baucus tax is the penalties that would be paid by those who don't buy health insurance. But the penalties in his bill are so low that many will choose to pay them and go uninsured, thus foiling the goal of lowering the uninsured percentage. And as the insurers' lobbying group has pointed out, this will increase premium costs for those who are insured -- a form of tax on those behaving the way Baucus wants.

    Then there are the Medicare cuts that supposedly would finance the Baucus bill. But this Congress can't bind future Congresses, and Congresses controlled by both parties have regularly cancelled projected cuts in reimbursement rates. Democratic leaders have made this easier by exempting such actions from its pay-go rules.

    So as Michael Cannon of the Cato Institute points out, "Universal coverage is so expensive that Congress can't get there without taxing Democrats." So when those taxes are cut on low and middle earners, there's not enough money to finance the deals the White House has been making with health care interest groups.

    The insurers and medical device people are squawking now -- look for more squawking from pharmaceutical companies, hospitals and physicians' groups when they get targeted. House Speaker Nancy Pelosi has made it clear that she doesn't feel bound by deals the White House has made.

    The Senate Finance Committee got bipartisan cover from Maine Republican Olympia Snowe. But Snowe says she was just voting to "continue the process" and won't necessarily vote for the bill Senate leaders will meld from the Finance and Health committee versions.

    So the learning process may not be over. We know now that it costs a lot of money to pay for insurance policies with expanded coverage for an expanded number of people. And we know that no one wants to pay the price.

    We may be in the process of learning something else. Which is that insurance coverage that further insulates patients from costs results in unanticipated increases in health care spending. Yes, it bends the cost curve, but in the wrong direction. That's what has happened with the much-praised Massachusetts system.

    Democratic leaders may still have the votes to jam something through. In which case it could, as the Atlantic's Megan McArdle predicts, "spin out of control and eat a gigantic hole in the deficit." Who's going to pay for that?

    Also see http://www.jewishworldreview.com/michael/barone101509.php3

    "The Greatest Show on Earth:  Step Right Up to the Entitlement That Cuts the Deficit," The Wall Street Journal, October -, 2009 --- Click Here

    Washington spent the week waiting for the Congressional Budget Office to roll in with its new cost estimates of the Senate health-care bill, and what a carnival. Behold: a new $829 billion entitlement that will subsidize insurance for tens of millions of people—and reduce deficits by $81 billion at the same time. In the next tent, see the mermaid and a two-headed cow.

    The political and media classes are proving they'll believe anything, as they are now pronouncing that this never-before-seen miracle is a "green light" for ObamaCare. (What isn't these days?) The irony is that the CBO's guesstimate exposes the fraudulence and fiscal sleight-of-hand underlying this whole exercise. Anyone who reads beyond the top-line numbers will find that the bill creates massive new spending commitments that will inevitably explode over time, and that this is "paid for" with huge tax increases plus phantom spending cuts that will never happen in practice.

    The better part of the 10-year $829 billion overall cost will finance insurance "exchanges" where individuals and families could purchase coverage at heavily subsidized rates. Senate Finance Chairman Max Baucus kept a lid on the cost by making this program non-universal: Enrollment is limited to those who aren't offered employer-sponsored insurance and earn under 400% of the poverty level, or about $88,000 for a family of four. CBO expects some 23 million people to sign up by 2019.

    But this "firewall" is unlikely to last even that long. Liberals are demanding heftier subsidies, and once people see the deal their neighbors are getting on "free" health care, they too will want in. Even CBO seems to find this unrealistic, noting "These projections assume that the proposals are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation." Scratch "often."

    Then there are the many budget gimmicks. Take the "failsafe budgeting mechanism" that would require automatic cuts in exchange spending if it increases the deficit. CBO expects 15% reductions in exchange subsidies each year from 2015 to 2018, even though the exchanges don't open until 2014. That kind of re-gifting should have been laughed out of the committee room, but the ruse helps to move future spending off the current budget "score."

    Mr. Baucus spends $10.9 billion to eliminate the scheduled Medicare cuts to physician payments—but only for next year. In 2011, he assumes they'll be reduced by 25%, with even deeper cuts later. Congress has overridden this "sustainable growth rate" every year since 2003 and will continue to do so because deeper cuts in Medicare's price controls will cause many doctors to quit the program. Fixing this alone would add $245 billion to the bill's costs, according to an earlier CBO estimate.

    The Baucus bill also expands ailing Medicaid by $345 billion—even as it busts state budgets by imposing an additional $33 billion unfunded mandate. The only Medicare cut that isn't made merely on paper is $117 billion in Medicare Advantage, which Democrats hate because it gives one of five seniors private insurance options.

    Recall that when President Obama started the health-care debate, the goal was "bending the curve"—finding a way to reduce both Medicare and overall health spending. Budget director Peter Orszag talked about "game changers," which CBO has now outed as nonchangers. Comparative effectiveness research about what treatments work best? That will save all of $300 million in Medicare, even as it costs $2.6 billion in new taxes on premiums. More prevention and primary care will increase spending by $4.2 billion.

    Meanwhile, the bill piles on new taxes, albeit on health-care businesses so the costs are hidden from customers. Insurance companies offering policies that cost more than $8,000 for individuals and $21,000 for families will pay $201 billion per a 40% excise tax, which will be passed down to all policy holders in higher premiums. Another $180 billion will hit the likes of drug and device makers, including $29 billion because companies won't be allowed to deduct these "fees" from their corporate income taxes. Then there's the $4 billion in penalty payments on those who don't buy insurance because all of ObamaCare's other new taxes and mandates have made it more expensive.

    Senate Finance votes next week, and no doubt this freak of political nature will pass amid fanfare and self-congratulation that their new entitlement will reduce deficits. Never mind that such a spectacle has never happened in the history of the republic. P.T. Barnum had nothing on this crowd, and the bill hasn't even hit the Senate floor yet.

    VooDoo Accounting for Obamacare?
    "Too Good to Check Want to cut the deficit? Just spend $829 billion!" by James Taranto, The Wall Street Journal Best of the Web Today Newsletter, October 8, 2009

    But here's something CNN has not, to our knowledge, bothered to fact-check:

    A compromise health care proposal widely seen as having the best chance to win Democratic and Republican support would cost $829 billion over the next 10 years, nonpartisan budget analysts concluded Wednesday.

    It also would reduce the federal deficit by more than $80 billion, according to a report from the Congressional Budget Office.

    So Congress is going to reduce the deficit by increasing spending $829,000,000,000.00? Doesn't this sound like--well, a joke? Too good a joke to check, evidently.

    Through what voodoo exactly does the CBO surmise Congress will cut the deficit while spending close to a trillion dollars? CNN does not even attempt to detail the argument. Instead we have to turn to Megan McArdle of The Atlantic:

    Virtually all of the extra benefit appears to come from estimating that employers will see their health care costs fall, mostly because they put those workers into federally subsidized programs, pass the resulting savings along to their workers in the form of higher wages and salaries, and that the Treasury will thereby gain, at a rough guess, about $12-15 billion a year in tax revenues.

    This is somewhat confusing to me. The CBO seems to be assuming it will get just about 20% of the amount spent on subsidies back in the form of tax revenues. But the effective income tax rate on the quintiles covered by the subsidies, according to the CBO, is less than 5%. Perhaps the savings comes from the payroll tax, but even including the payroll tax, it's less than 15%. And the tax rates are directly proportional to the size of the income, while the subsidies are inversely proportional. I'm sure I'm missing something that would make the math work, but I can't figure out what.

    "New Math Boosts Health Plan Budget Office Says:  Senate Bill Will Trim Deficit; Democrats Still Split on Key Details," by Janet Adamy and Jonathan Weisman, The Wall Street Journal, October 8, 2009 ---

    The latest Senate health bill will cost $829 billion over a decade and slightly reduce the federal budget deficit, congressional budget crunchers said Wednesday, marking a major step forward for Democrats' plans to overhaul American health care.

    The nonpartisan Congressional Budget Office found the sweeping measure will cover 94% of nonelderly legal U.S. residents, up from about 83% currently. The bill will cut the deficit by $81 billion over the 10-year period, owing to trims in Medicare spending and new taxes.

    The widely awaited report paves the way for the Senate Finance Committee to approve its bill in the next few days.

    After appearing in peril in August, the health-care overhaul has cleared a series of hurdles in recent weeks that have given Democrats increased confidence they will pass a bill. Lobbyists on both sides of the issue have shifted their focus to what the bill will look like rather than questioning whether a measure can succeed.

    But plenty of potential pitfalls remain. Democrats are still divided over core elements, including whether to create a public health insurance plan and how to pay for the overhaul. The hospital industry, a key ally, says the latest bill from the Senate doesn't expand health insurance broadly enough to meet the terms of its pledge to contribute $155 billion to the effort.

    According to the budget office, the bill spends $461 billion over a decade to give tax credits to low- and middle-income Americans to offset the cost of buying insurance. It spends $345 billion to expand the Medicaid insurance program to cover a larger swath of the poor.

    The bill, introduced by Senate Finance Committee Chairman Max Baucus, calls for the government to fund a series of new nonprofit health-insurance cooperatives designed to increase competition with private insurance companies. It gives doctors and hospitals incentives to improve the quality of their care and to offer fewer unnecessary tests and treatments.

    Most of the bill's funding comes from $404 billion in cuts to Medicare and other government insurance programs that Democrats say will reduce waste but won't hurt recipients' benefits. An additional $201 billion comes from a 40% excise tax on particularly generous health-insurance plans levied on insurers. The rest comes from annual fees on insurers, medical-device makers and pharmaceutical companies, as well as a series of other changes to the tax treatment of health expenses.

    Continued in article


    "4 Senators’ Concerns Reflect Health Care Challenge," by Robert Pear and David M. Herszenhorn, The New York Times, October 6, 2009 --- http://www.nytimes.com/2009/10/07/health/policy/07health.html?hpw

    Senator John D. Rockefeller IV of West Virginia is upset that a health care bill poised for approval by the Finance Committee would turn nearly a half-trillion dollars over to insurance companies, whose profits he says are “out of sight.”

    Senator Olympia J. Snowe of Maine worries that the bill would require people to buy insurance they cannot afford. Senator Blanche Lincoln of Arkansas fears that the bill would be too costly for the government.

    And Senator Ron Wyden of Oregon warns that the bill would lock many workers into health plans selected by their employers, without allowing them to shop for better, cheaper plans, an alternative that could help drive down costs for everyone.

    Those senators — three Democrats and one Republican, Ms. Snowe — have not indicated how they will vote on the Finance Committee legislation and said Tuesday that they were agonizing over the decision.

    White House officials and the committee chairman expect the Democrats to support the bill, if only to advance it to the next stage of the legislative process, the Senate floor, for what is likely to be a raucous, riveting and unpredictable debate.

    Taken together, the four senators represent the spectrum of concerns Democrats will face in trying to assemble the 60 votes they need to get a bill through the full Senate using regular procedure. Satisfying each of them, without alienating the others, is the challenge facing Democratic leaders.

    The committee chairman, Senator Max Baucus, Democrat of Montana, predicted Tuesday that Mrs. Lincoln, Mr. Rockefeller and Mr. Wyden would be with him “when the final votes are cast” in committee. Other Democrats said, with less certainty, that they expected Ms. Snowe to support the bill in committee as well.

    While the four senators do seem genuinely undecided, by declining to commit in advance they also maximize their leverage: their ability to win changes in the legislation later on.

    “I’m pondering,” Mr. Rockefeller said. “It’s an imperfect bill, with a lot of pluses and minuses.”

    Mr. Rockefeller said the committee had improved the bill over the last two weeks by preserving the Children’s Health Insurance Program and by preventing taxes on expensive insurance policies for some people in high-risk occupations, like coal miners

    Mrs. Lincoln, Mr. Rockefeller and Ms. Snowe said that in deciding how to vote, they would be influenced by a cost estimate soon to be completed by the Congressional Budget Office. President Obama has insisted that whatever final legislation emerges from Congress must not add to the federal budget deficit and must slow the growth of health spending in the long term.

    On health care, Mr. Rockefeller illustrates the views of liberal Democrats. Under the bill, he said, insurance companies would receive more than $460 billion over 10 years to help pay for the coverage of low- and middle-income people. Congress, he said, must create a new government-run health plan, to compete directly with private insurers. The Finance Committee last week rejected his proposal to create such a public option.

    Although she is a Republican, Ms. Snowe’s views reflect the concerns of many centrist Democrats. She worries that some middle-income families will find insurance unaffordable, even with federal subsidies. And she wants to give the private insurance market an opportunity to work, under new federal rules, before setting up a government plan in states where affordable coverage proves unavailable.

    Centrist Democrats like Senator Thomas R. Carper of Delaware have similar ideas. Rather than setting up a single national government health plan, they would prefer to let states decide what to do.

    Senator Ben Nelson of Nebraska, describing himself as a “Jeffersonian Democrat, someone who believes the laboratories of democracy typically work,” said it might make sense for states to act as a testing ground for a public option. That way, Mr. Nelson said, if the public option failed, it would do so on a small scale, and problems might be easier to fix.

    But reflecting divisions that could lie ahead on the Senate floor, Mr. Rockefeller said this approach was unacceptable to him. State health plans would not be strong enough to compete effectively with big private insurance companies, he said.

    Mrs. Lincoln, who is up for re-election next year in a state that voted heavily Republican in the 2008 presidential race, said she and her constituents in Arkansas would focus on the cost of the legislation and its effect on the country’s fiscal condition.

    “We have got probably one of the lowest median incomes in the country,” Mrs. Lincoln said. “We have got people who know what it means when you spend beyond your means and you hit difficult economic times.”

    Mrs. Lincoln said her constituents were “enormously alarmed about the amount of debt that we have.” And she said she worried that the cost of the bill could rise further as a result of amendments that might be added by her Democratic colleagues on the Senate floor.

    As for how she would vote in the committee, Mrs. Lincoln said the budget office analysis would be crucial. “I am going to wait and see what the scores are,” she said.

    Mr. Wyden noted that the committee’s bill would not offer additional options to the overwhelming majority of Americans who already have insurance. His concern is shared by some Democrats and also by many Republicans, who say the bill does not do enough to let the marketplace spur competition, and he said he would continue fighting on the Senate floor to make changes to the measure.

    “Democrats from the president on talk about how the American people ought to have choices like a member of Congress,” Mr. Wyden said. “Now under consideration is an idea that millions and millions won’t get any choice at all, let alone what a member of Congress gets.”

    “When you think about where this is headed,” he added, “you are still seeing additional patches added to the crazy quilt that is American health care.”

     

    How to lie with statistics
    These Democrats are all over the map on where precisely Americans place in the life-expectancy rankings. We're 24th, according to Vice President Joe Biden and Sen. Barbara Boxer; 42nd, according to Pennsylvania Gov. Ed Rendell; 35th, according to Washington Post columnist Eugene Robinson; and 47th, according to Rep. Dennis Kucinich. So the U.S. may have less of a "life expectancy" problem than a "Democratic math competency" problem. (Coulter mentions other widely varying medical statistics reported in the media)
    Ann Coulter, "Would Your Company Like to Sponsor the Next Installment of Liberal Lies on National Health Care?" , Townhall, October 7, 2009 --- Click Here

    Well, the Senate side, we can`t expect very much from them. I don`t think they`re going to have public option in their final bill. But I want to tell you something, Joy. We`re going to get it on the house side. It`s going to be a terrible fight if we don`t get this, I mean, you know, the bricks are going to fly. We have got to have public option.
    Maxine Waters, CNN October 7, 2009 --- http://transcripts.cnn.com/TRANSCRIPTS/0910/07/joy.01.html

     

     

    Updates for October 5, 2009

    If the government can cobble together a cheaper insurance policy that gives the same benefits, I see that as a plus.
    Bill O'Reilly, Fox News
    Jensen Comment
    I think O'Reilly still holds President Obama to his pledge of new new taxes or added national debt for Obamacare. The catch phrase is "same benefits." At a minimum this would mean the same freedom to choose doctors and other benefits of Medicare. The fact that Medicare is now $33 trillion dollars in the hole and riddled with fraud probably means that no Obama is seeking to do the impossible.

    I personally favor a single-payer government insurance program but dread the years of chaos and waste that would arise from a sudden shift to having the government process the gazillion claims of 300 million patients. That would not be a pretty sight.


    "How Congress Is Cooking the Books," by Michael Tanner, The New York Post, September 30, 2009 --- Click Here

    LAST week, the Senate Finance Committee voted 12-11 not to wait for the Congressional Budget Office to "score" its health-care bill before the committee votes on it. Imagine that: Some senators actually wanted to know how much the bill costs before voting on it.

    Let them get away with something like that, and before you know it they'll be demanding honest accounting practices -- sending the whole legislative process to hell in a hand basket.

    When it comes to the health-care-reform debate, you see, honest budgeting is nowhere to be seen.

    Start with the simple matter of how much health-care reform will cost. The House bill, HR 3200, will cost roughly $1.3 trillion over 10 years -- or so we're told. By the same token, the Senate Finance Committee bill is supposed to cost just under $900 billion. Sure, that's a lot of money -- but it still badly understates the true cost.

    The CBO provides 10- year projections of a bill's cost. But most provisions of the health bill don't take effect until 2014. So the "10-year" cost projection only includes six years of the bill.

    Plus, the costs ramp up slowly. In its first year, the House bill would only cost about $6 billion; in its first three, less than $100 billion. The big costs are in the final years of the 10-year budget window -- and beyond. In fact, over the first 10 years that the House bill would be in existence (2014 to 2024), its costs would be closer to $2.4 trillion. Similarly, the real cost of the Senate bill over 10 years of operation is estimated at $1.5 trillion.

    Worse, the trajectory of the costs after 10 years rises dramatically -- meaning "reform" would cost even more in its second 10 years and beyond.

    Such gimmicks also infest the projections of how much reform will add to the deficit. CBO says the House bill adds $235 billion to the deficit. But that, again, cuts off arbitrarily in 2019. Beyond that date, the bill adds enormously to the deficit, about $1.5 trillion in the second 10 years. In fact, if the health-reform bill were treated like other entitlements, such as Social Security and Medicare, which are required to have a 75-year actuarial forecast, its unfunded liabilities would exceed $9.2 trillion.

    Of course, the Senate Finance Bill is supposed to be deficit-neutral. But that claim relies on other forms of budgetary flimflam.

    For example, the Senate bill relies on Medicare "savings" that Congress keeps refusing to make. Specifically, Medicare has long been ordered to cut 21 percent from what it pays health-care providers -- yet, each year since 2003, for reasons both good and bad, Congress has voted to defer the cuts.

    Does anyone else really think that Congress is simply going to slash payments to doctors and hospitals by 21 percent across the board?

    Of course, President Obama has long said we can cut Medicare by $500 billion simply by eliminating fraud, waste and abuse. That would be the same "fraud, waste and abuse" that the government has been cutting since Ronald Reagan first used the term.

    The truth is that health-care reform is going to cost us a lot. And we're going to pay for it in higher taxes and more debt.

    No wonder they don't want us to know.


    Why Medical Malpractice Is Off Limits in Terms of Health Care Reform
    The upshot is simple: A few thousand trial lawyers are blocking reform that would benefit 300 million Americans. This is not just your normal special-interest politics. It's a scandal—it is as if international-trade policy was being crafted in order to get fees for customs agents. Trial lawyers are agents, and their claims are only as valid as those they represent. They argue, of course, that they are champions of malpractice victims. As Anthony Tarricone, president of the trial lawyers association (called the American Association of Justice) put it: "Trial attorneys see first-hand the effects medical errors have on patients and their families. We should keep those injured people in mind as the debate moves forward." But under the current system, 54 cents of the malpractice dollar goes to lawyers and administrative costs, according to a 2006 study in the New England Journal of Medicine. And because the legal process is so expensive, most injured patients without large claims can't even get a lawyer. "It would be hard to design a more inefficient compensation system," says Michelle Mello, a professor of law and public health at Harvard, "or one which skewed incentives more away from candor and good practices."
    Philip K. Howard, "Why Medical Malpractice Is Off Limits:  A few thousand lawyers have a lock on Democrats, who refuse any legal reform," The Wall Street Journal, September 29, 2009 ---
    http://online.wsj.com/article/SB10001424052970204488304574432853190155972.html?mod=djemEditorialPage

    "Dean says Obamacare authors don't want to challenge trial lawyers," by: Mark Tapscott, Washington Examiner, August 26, 2009 --- Click Here

    Whatever else he said Wednesday evening at the town hall hosted by Rep. Jim Moran, D-VA, former Democratic National Committee chairman and presidential candidate Howard Dean let something incredibly candid slip out about President Obama's health-care reform bill in Congress.

    Asked by an audience member why the legislation does nothing to cap medical malpractice class-action lawsuits against doctors and medical institutions (aka "Tort reform"), Dean responded by saying: “The reason tort reform is not in the [health care] bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on. And that’s the plain and simple truth,”

    Dean is a former physician, so he knows about skyrocketing medical malpractice insurance rates, and the role of the trial lawyers in fueling the "defensive medicine" approach among medical personnel who order too many tests and other sometimes unneeded procedures "just to be sure" and to protect themselves against litigation.

    Texas Gov. Rick Perry recently described in an Examiner oped the medical-malpractice caps enacted by the state legislature at his urging that reversed a serious decline in the number of physicians practicing in the Lone Star state and the resulting loss of access to quality medical care available to Texas residents. Mississippi Gov. Haley Barbor also shared some of his successes in this area in a recent Examiner oped.

    Credit goes to the American Tort Reform Association's Darren McKinney for catching this momentary outbreak of political honesty by Dean. McKinney has conveniently posted an audio recording of Dean speaking here, so you can listen for yourself. Mckinney has also offered more comment here, helpfully even including a link to the Examiner's recent analysis of the degree to which trial-lawyer political contributions go to Democrats in Congress.

    Those contributions are why Dean knows it would be a difficult task indeed for Obama to persuade congressional Democrats to do anything that might offend the trial-lawyers lobby. The Examiner's David Freddoso and Kevin Mooney did the reporting on this link here.

    Jensen Comment
    Reports are that the Texas cap on punitive damages has been quite successful in restraining outrageous settlements of malpractice lawsuits.

    "The President's Tort Two-Step Special-interests and the health-care status," by Kimberly Strassel, The Wall Street Journal, September 11, 2009 --- Click Here

    Tort reform is a policy no-brainer. Experts on left and right agree that defensive medicine—ordering tests and procedures solely to protect against Joe Lawyer—adds enormously to health costs. The estimated dollar benefits of reform range from a conservative $65 billion a year to perhaps $200 billion. In context, Mr. Obama's plan would cost about $100 billion annually. That the president won't embrace even modest change that would do so much, so quickly, to lower costs, has left Americans suspicious of his real ambitions.

    It's also a political no-brainer. Americans are on board. Polls routinely show that between 70% and 80% of Americans believe the country suffers from excess litigation. The entire health community is on board. Republicans and swing-state Democrats are on board. State and local governments, which have struggled to clean up their own civil-justice systems, are on board. In a debate defined by flash points, this is a rare area of agreement.

    The only folks not on board are a handful of powerful trial lawyers, and a handful of politicians who receive a generous cut of those lawyers' contingency fees. The legal industry was the top contributor to the Democratic Party in the 2008 cycle, stumping up $47 million. The bill is now due, and Democrats are dutifully making a health-care down payment.

    During the markup of a bill in the Senate Health Committee, Republicans offered 11 tort amendments that varied in degree from mere pilot projects to measures to ensure more rural obstetricians. On a party line vote, Democrats killed every one. Rhode Island senator and lawyer Sheldon Whitehouse went so far as to speechify on the virtues of his tort friends. He did not, of course, mention the nearly $900,000 they have given him since 2005, including campaign contributions from national tort powerhouses like Baron & Budd and Motley Rice.

    Even Senate Finance Chair Max Baucus, of bipartisan bent, has bowed to legal powers. The past two years, Mr. Baucus has teamed up with Wyoming Republican Mike Enzi to offer legislation for modest health-care tort reform in states. That Enzi-Baucus proposal had been part of the bipartisan health-care talks. When Mr. Baucus released his draft health legislation this weekend, he'd stripped out his own legal reforms. The Montanan is already in the doghouse with party liberals, and decided not to further irk leadership's Dick Durbin ($3.6 million in lawyer contributions), the Senate's patron saint of the trial bar.

    Over in the House the discussion isn't about tort reform, but about tort opportunities. During the House Ways & Means markup of a health bill, Texas Democrat Lloyd Doggett ($1.5 million from lawyers) introduced language to allow freelance lawyers to sue any outfit (say, McDonald's) that might contribute to Medicare costs. Only after Blue Dogs freaked out did the idea get dropped, though the trial bar has standing orders that Democrats make another run at it in any House-Senate conference.

    It says everything that Mr. Obama wouldn't plump for reform as part of legislation. The president knows the Senate would never have passed it in any event. Yet even proposing it was too much for the White House's legal lobby. Mr. Obama is instead directing his secretary of health and human services to move forward on test projects. That would be Kathleen Sebelius, who spent eight years as the head of the Kansas Trial Lawyers Association.

    The issue has assumed such importance that even some Democrats acknowledge the harm. With bracing honesty, former DNC chair Howard Dean recently acknowledged his party "did not want to take on the trial lawyers." Former Democratic Sen. Bill Bradley, in a New York Times piece, suggested a "grand bipartisan compromise" in which Democrats got universal coverage in return for offering legal reform. The White House yawned, and moved on.

    It isn't clear if Republicans would or should take that deal, but we won't know since it won't be offered. The tort-reform issue has instead clarified this presidency. Namely, that the bipartisan president is in fact very partisan, that the new-politics president still takes orders from the old Democratic lobby.

    "20 Questions About Obamacare," by John Hawkins, Townhall, September 29, 2009 ---
    http://townhall.com/columnists/JohnHawkins/2009/09/29/20_questions_about_obamacare?page=2

    So, let's talk about the basic questions YOU should have answered to your satisfaction before you consider supporting any health care bill that comes out of Congress. As you read these questions, keep in mind that every one has been inspired by bills that are moving through Congress as we speak.

    1) Medicare and Social Security are driving this country into bankruptcy. Can we afford another gargantuan government entitlement program when we know we can't pay for the programs we already have?

    2) Given that the Medicare system will soon be going into the red, does it make sense to attempt to cut 500 billion dollars in funds out of the program to move over to another entitlement program?

    3) One of the biggest selling points of government run health care is that it will reduce costs. How can anyone believe the same federal government that is running an almost 2 trillion dollar deficit is going to be financially responsible enough to cut health care costs.

    4) Will people who have previously decided not to get health care coverage be forced to spend a significant portion of their income on mandated coverage or risk huge fines or perhaps even jail time?

    5) Will abortions be covered under the health care plan?

    6) Will illegal aliens be able to get coverage?

    7) Will you have to deal with the IRS in order to pay your medical bills?

    8) Would you be able to keep your current doctor under a new plan?

    9) If you like your insurance plan, will you be allowed to keep it?

    10) If the health care bill passes, will dozens of government bureaucrats suddenly have access to your private medical records, which are zealously guarded under our current laws?

    11) Given that the cost of lawsuits and tort reform significantly drive up the cost of medical care for all Americans, why is tort reform not being included in these bills?

    12) By simply giving tax breaks to individuals instead of employers, Congress could make health care portable; so you wouldn't risk losing your health care when you lose your job. Why isn't that being considered?

    13) The employee mandates in the bill could cost as many as 1.5 million people their jobs. Does it make sense to do that in a recession?

    14) The new health care plan will dramatically increase taxes on expensive plans by 1/3. But quickly, because of medical inflation, other much more modest plans will become worth enough to be hit with the tax. Does it really make sense to implement what will become a gigantic new tax on the middle class?

    15) Will the health care bill destroy the insurance industry and leave the country with a single payer system run by the government?

    16) There has been a lot of talk about making insurance companies compete. In fact, that is the biggest stated rationale for the public option. However, if this is so, why aren't these health plans allowing insurance companies to compete across state lines? That would inspire real market based competition.

    17) You can sue an insurance company if they illegally deny your claim. Will you be able to do the same if the government is running things?

    18) Obama is promising that insurance companies can't turn you down for coverage if you're sick, drop you if you lie about your coverage, or place any kind of cap on how much coverage you can get. Do you really believe insurance companies can continue to exist and function under those circumstances?

    19) There are only roughly 8-10 million people who want insurance but can't afford it. Why not concentrate on helping those people instead overhauling the whole system?

    20) What guarantees do the American people have that senior citizens won't be denied life saving treatment to save money as they are in nations like Britain?

     


    The Republicans lie! They want to see you dead! They’d rather make money off your dead corpse! They kinda like it when that woman has cancer and they don’t have anything for her…My God, Democrats, what’s wrong with you?! You can’t deal with these people, at all!  . . . Sometimes I think they [conservatives] want Obama to get shot. I do! I really think that there are conservative broadcasters in this country who would love to see Obama taken out. They fear socialism. They fear Marxism.
    MSNBC Commentator Ed Schultz --- Watch the Video --- http://www.msnbc.msn.com/id/21134540/vp/32992075#32992075

    On the Wednesday evening edition of “The Ed Show,” MSNBC commentator Ed Schultz stated that Republicans want Americans to die, and that they enjoy it when middle-aged women contract cancer. He then suggested that moderate Republican Sen. Olympia Snowe of Maine should allow tumors to spread through her body if she ever gets cancer. Schultz, whose program runs between episodes of Hardball, began his program by discussing the story of a woman who came to a health-care town hall meeting sponsored by Rep. Eric Cantor, R-VA. The woman told of her uninsured friend, a middle-aged woman with stomach tumors. Incensed that Cantor did not immediately suggest socializing one-sixth of the nation’s economy as a result, an increasingly unhinged Schultz began screaming (starting at 5:14 in this clip):

    Jensen Comment
    Ed Schultz has become the nuttiest of the nut cases at MSNBC.

    On September 14th, he lied that 9/12 protesters carried signs that read “Bury Obama with Kennedy,” as the television screen showed a full-screen shot of the correct sign, which read, “Bury ObamaCare with Kennedy.”


    'Liberals Seek Health Care Access for Illegals:  A group of House Democrats say it's unfair to bar illegal immigrants from paying their own way in a government-sponsored exchange," The Washington Times, September 27, 2009 ---
    http://www.foxnews.com/politics/2009/09/27/liberals-seek-health-care-access-illegals/

    Fearful that they're losing ground on immigration and health care, a group of House Democrats is pushing back and arguing that any health care bill should extend to all legal immigrants and allow illegal immigrants some access, The Washington Times reported on Monday.

    The Democrats, trying to stiffen their party's spines on the contentious issue, say it's unfair to bar illegal immigrants from paying their own way in a government-sponsored exchange. Legal immigrants, they say, regardless of how long they've been in the United States, should be able to get government-subsidized health care if they meet the other eligibility requirements.

    "Legal permanent residents should be able to purchase their plans, and they should also be eligible for subsidies if they need it. Undocumented, if they can afford it, should be able to buy their own private plans. It keeps them out of the emergency room," said Rep. Michael M. Honda, California Democrat and chairman of the Congressional Asian Pacific American Caucus.

    Honda was joined by more than 20 of his colleagues in two letters laying out the demands.

    Coverage for immigrants is one of the thorniest issues in the health care debate, and one many Democratic leaders would like to avoid. But immigrant rights groups and the Democrats who sent the letters say they have to take a stand now.

    Jensen Comment
    The key absurdity here is the statement "pay their own way." If a foreigner in need of a $50,000 eye implant surgeries sneak into the U.S. for the main purpose of paying $100 in premiums for each $50,000 surgery and then return to their home countries, these aliens have hardly "paid their own way." They've taken on illegal alien status mainly for getting expensive health care on the cheap.


    "Max's Mad Mandate The Baucus health bill will break 50 state budgets via Medicaid," The Wall Street Journal, September 27, 2009 --- Click Here

    The more we inspect Max Baucus's health-care bill, the worse it looks. Today's howler: One reason it allegedly "pays for itself" over 10 years is because it would break all 50 state budgets by permanently expanding Medicaid, the joint state-federal program for the poor.

    Democrats want to use Medicaid to cover everyone up to at least 133% of the federal poverty level, or about $30,000 for a family of four. Starting in 2014, Mr. Baucus plans to spend $287 billion through 2019—or about one-third of ObamaCare's total spending—to add some 11 million new people to the Medicaid rolls.

    About 59 million people are on Medicaid today—which means that a decade from now about a quarter of the total population would be on a program originally sold as help for low-income women, children and the disabled. State budgets would explode—by $37 billion, according to the Congressional Budget Office—because they would no longer be allowed to set eligibility in line with their own decisions about taxes and spending. This is the mother—and father and crazy uncle—of unfunded mandates.

    This burden would arrive on the heels of an unprecedented state fiscal crisis. As of this month, some 48 states had shortfalls in their 2010 budgets totaling $168 billion—or 24% of total state budgets. The left-wing Center for Budget and Policy Priorities expects total state deficits in 2011 to rise to $180 billion. And this is counting the $87 billion Medicaid bailout in this year's stimulus bill.

    While falling revenues are in part to blame, Medicaid is a main culprit, even before caseloads began to surge as joblessness rose. The National Association of State Budget Officers notes that Medicaid spending is on average the second largest component in state budgets at 20.7%—exceeded only slightly by K-12 education (20.9%) and blowing out state universities (10.3%), transportation (8.1%) and prisons (3.4%).

    In some states it is far higher—39% in Ohio, 27% in Massachusetts, 25% in Michigan, Rhode Island and Pennsylvania. Forcing states to spend more will crowd out other priorities or result in a wave of tax increases, or both, even as Congress also makes major tax hikes inevitable at the national level.

    The National Governors Association is furious about Mr. Baucus's Medicaid expansion, and rightly so, given that governors and their legislatures will get stuck with the bill while losing the leeway to manage or reform their budget-busters. NGA President Jim Douglas of Vermont recently said at the National Press Club that the Baucus plan poses a "tremendous financial liability" and doesn't "respect that no one size fits all at the state level." He added: "Unlike the federal government, states can't print money."

    Mr. Baucus hopes to use his printing press to bribe the governors, at least for a time. Currently, the federal government pays about 57 cents out of every dollar the states spend on Medicaid, though the "matching rate" ranges as high as 76% in some states. That would rise to 95%—but only for five years. After that, who knows? It all depends on which budget Congress ends up ruining. Either the states will be slammed, or Washington will extend these extra payments into perpetuity—despite the fact that CBO expects purely federal spending on Medicaid to consume 5% of GDP by 2035 under current law.

    As for the poor uninsured, they'll be shunted off into what Democratic backbencher Ron Wyden calls a "caste system." While some people will be eligible for subsidized private health insurance, everyone in the lowest income bracket will be forced into Medicaid, the country's worst insurance program by a long shot. States try to control spending by restricting access to prescription drugs and specialists. About 40% of U.S. physicians won't accept Medicaid at all.

    Why? One reason is that Medicaid's price controls are even tighter than Medicare's, which in turn are substantially below private payers. In 2009 or 2010, 29 states will have either reduced or frozen their reimbursement rates to providers. Democrats love Medicaid because is it much cheaper than subsidizing private insurance, but that is true only because of this antimarket brute force. Of course, such coercion will be extended to the rest of the health market under ObamaCare.

    *** The states aren't entirely victims here. Both Republican and Democratic state houses regularly game the Medicaid funding formula—which itself is designed to reward higher spending—to steal more money from national taxpayers. Then when tax collections fall during downturns, budget gaskets blow all over the place. This dynamic helps explain the spectacular budget catastrophes in New York and California. We'd prefer a policy of block grants, which would extricate Washington from state accounting and encourage Governors to spend more responsibly.

    That's not going to happen any time soon, but the least Mr. Baucus can do is not make things worse. Instead, his Medicaid expansion is a disaster on every level—like the rest of ObamaCare.

     

     


    Updates for September 24, 2009

    One woman Michelle Obama will not mention
    Yes, First Lady Michelle Obama is now aggressively crusading for her husband’s health care takeover under the guise of championing woman who have been “crushed” by the system . . . I blogged about Michelle Obama’s role in creating a patient-dumping scheme for the University of Chicago Medical Center back in
    March. With her husband and the Democrats unleashing health care horror story anecdotes to gin up public fear and build support for the beleaguered Obamacare plan, my syndicated column today revisits the kind of “reform” the Obamas and their Chicago cronies champion — and who benefits.Here’s a challenge to the ABC News Obamacare infomercial producers. I dare you to ask President Obama this question: What have you done for Dontae Adams, lately? One woman Mrs. Obama won’t be spotlighting? The mother of Dontae Adams.
    Michelle Malkin,  September 18, 2009 ---
    http://michellemalkin.com/2009/09/18/one-woman-michelle-obama-will-not-mention/

    ACORN could open Pandora's box
    In the wake of Fox News reporting on the unfolding ACORN scandal, ACORN is now threatening to sue the network. Now that Fox is actually breaking news on this story by showing new videos, ACORN might just do it. Fox News should pray that ACORN does sue, because it would blow the doors off this story, possibly destroying ACORN and erupting into a political scandal in Washington.
    Ken Blackwell and Ken Klukowski, Townhall, September 21, 2009 ---
    http://townhall.com/columnists/KenBlackwell/2009/09/21/acorn_could_open_pandoras_box

    In 2005, Citibank and ACORN Housing Corporation -- which received tens of millions of tax dollars under the Bush administration alone -- began recruiting Mexican illegal aliens for a lucrative program offering loans with below-market interest rates, down-payment assistance and no mortgage insurance requirements. Instead of the Social Security numbers required of law-abiding citizens, the program allows illegal alien applicants to supply loosely monitored tax identification numbers issued by the IRS . . . And ACORN advisory council member Eric Eve of Citigroup is a champion of the ACORN/Citibank illegal alien loan program that openly undermines immigration laws and integrity in banking. The truth is more sordid than any fictional scenarios caught on tape: ACORN is a corrupt enterprise.
    Michelle Malkin, "ACORN's Illegal Alien Home Loan Racket," Frontpage, September 18, 2009 ---
    http://townhall.com/columnists/MichelleMalkin/2009/09/18/acorns_illegal_alien_home_loan_racket

    "Fact Check:  Obama Uses Iffy Math on Deficit Pledge," SmartPros, September 10, 2009 --- http://accounting.smartpros.com/x67604.xml

    President Barack Obama used only-in-Washington accounting Wednesday when he promised to overhaul the nation's health care system without adding "one dime" to the deficit. By conventional arithmetic, Democratic plans would drive up the deficit by billions of dollars.

    The president's speech to Congress contained a variety of oversimplifications and omissions in laying out what he wants to do about health insurance.

    A look at some of Obama's claims and how they square with the facts or the fuller story:

    ---

    OBAMA: "I will not sign a plan that adds one dime to our deficits either now or in the future. Period."

    THE FACTS: Though there's no final plan yet, the White House and congressional Democrats already have shown they're ready to skirt the no-new-deficits pledge.

    House Democrats offered a bill that the Congressional Budget Office said would add $220 billion to the deficit over 10 years. But Democrats and Obama administration officials claimed the bill actually was deficit-neutral. They said they simply didn't have to count $245 billion of it - the cost of adjusting Medicare reimbursement rates so physicians don't face big annual pay cuts.

    Their reasoning was that they already had decided to exempt this "doc fix" from congressional rules that require new programs to be paid for. In other words, it doesn't have to be paid for because they decided it doesn't have to be paid for.

    The administration also said that since Obama already had included the doctor payment in his 10-year budget proposal, it didn't have to be counted again.

    That aside, the long-term prognosis for costs of the health care legislation has not been good.

    CBO Director Douglas Elmendorf had this to say in July: "We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount."

    ---

    OBAMA: "Nothing in this plan will require you or your employer to change the coverage or the doctor you have."

    THE FACTS: That's correct, as far as it goes. But neither can the plan guarantee that people can keep their current coverage. Employers sponsor coverage for most families, and they'd be free to change their health plans in ways that workers may not like, or drop insurance altogether. The Congressional Budget Office analyzed the health care bill written by House Democrats and said that by 2016 some 3 million people who now have employer-based care would lose it because their employers would decide to stop offering it.

    In the past Obama repeatedly said, "If you like your health care plan, you'll be able to keep your health care plan, period." Now he's stopping short of that unconditional guarantee by saying nothing in the plan "requires" any change.

    ---

    OBAMA: "The reforms I'm proposing would not apply to those who are here illegally." One congressman, South Carolina Republican Joe Wilson, shouted "You lie!" from his seat in the House chamber when Obama made this assertion. Wilson later apologized.

    THE FACTS: The facts back up Obama. The House version of the health care bill explicitly prohibits spending any federal money to help illegal immigrants get health care coverage. Illegal immigrants could buy private health insurance, as many do now, but wouldn't get tax subsidies to help them. Still, Republicans say there are not sufficient citizenship verification requirements to ensure illegal immigrants are excluded from benefits they are not due.

    ---

    OBAMA: "Don't pay attention to those scary stories about how your benefits will be cut. ... That will never happen on my watch. I will protect Medicare."

    THE FACTS: Obama and congressional Democrats want to pay for their health care plans in part by reducing Medicare payments to providers by more than $500 billion over 10 years. The cuts would largely hit hospitals and Medicare Advantage, the part of the Medicare program operated through private insurance companies.

    Although wasteful spending in Medicare is widely acknowledged, many experts believe some seniors almost certainly would see reduced benefits from the cuts. That's particularly true for the 25 percent of Medicare users covered through Medicare Advantage.

    Supporters contend that providers could absorb the cuts by improving how they operate and wouldn't have to reduce benefits or pass along costs. But there's certainly no guarantee they wouldn't.

    ---

    OBAMA: Requiring insurance companies to cover preventive care like mammograms and colonoscopies "makes sense, it saves money, and it saves lives."

    THE FACTS: Studies have shown that much preventive care - particularly tests like the ones Obama mentions - actually costs money instead of saving it. That's because detecting acute diseases like breast cancer in their early stages involves testing many people who would never end up developing the disease. The costs of a large number of tests, even if they're relatively cheap, will outweigh the costs of caring for the minority of people who would have ended up getting sick without the testing.

    The Congressional Budget Office wrote in August: "The evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall."

    That doesn't mean preventive care doesn't make sense or save lives. It just doesn't save money.

    ---

    OBAMA: "If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage."

    THE FACTS: It's not just a matter of being able to get coverage. Most people would have to get coverage under the law, if his plan is adopted.

    In his speech, Obama endorsed mandatory coverage for individuals, an approach he did not embrace as a candidate.

    He proposed during the campaign - as he does now - that larger businesses be required to offer insurance to workers or else pay into a fund. But he rejected the idea of requiring individuals to obtain insurance. He said people would get insurance without being forced to do so by the law, if coverage were made affordable. And he repeatedly criticized his Democratic primary rival, Hillary Rodham Clinton, for proposing to mandate coverage.

    "To force people to get health insurance, you've got to have a very harsh penalty," he said in a February 2008 debate.

    Now, he says, "individuals will be required to carry basic health insurance - just as most states require you to carry auto insurance."

    He proposes a hardship waiver, exempting from the requirement those who cannot afford coverage despite increased federal aid.

    ---

    OBAMA: "There are now more than 30 million American citizens who cannot get coverage."

    THE FACTS: Obama time and again has referred to the number of uninsured as 46 million, a figure based on year-old Census data. The new number is based on an analysis by the Kaiser Commission on Medicaid and the Uninsured, which concluded that about two-thirds of Americans without insurance are poor or near poor. "These individuals are less likely to be offered employer-sponsored coverage or to be able to afford to purchase their own coverage," the report said. By using the new figure, Obama avoids criticism that he is including individuals, particularly healthy young people, who choose not to obtain health insurance.

    Jensen Comment
    In fairness, a single-payer medical insurance provider that covered all Americans would probably result in cost savings in the long run. However, President Obama realistically proclaims that such an abrupt changeover with lead to unprecedented turmoil and inefficiencies, to say nothing of quality of care, if the U.S. Government abruptly decided to insure 300 million Americans in one fell swoop.

    And the cost of phasing in a single-payer system would cause massive deficits, including the windfall profits that government would have to pay present medical insurance companies to operate efficiently over the years before they must operate before being terminated.

    The fact of the matter is that we will be forced to live with inefficient private insurers until they are shut down or take over by government. In the meantime, government spending deficits will soar due to increased numbers of insured Americans, illegal immigrants, and expanded scope of coverage (mental health, pre-existing conditions, marriage counseling, and expanded social services).

    The Lie: AARP perpetuates a lie that government run insurance, like Medicare, is a good deal for patients and taxpayers.
    To put the reader at ease the (AARP) article says that government run health care can’t be so bad since, after all, Medicare is government run health care and everybody loves it. The article omits the fact that Medicare is $38 trillion in the red. Yes, trillion with a “tr”) and by Obama’s own admission is overrun by $500 billion of waste, fraud and abuse. Obama says Medicare and Medicaid are responsible for our deficits. So what does he do? He proposes the vast expansion of the Medicare and Medicaid programs to further balloon our deficits and our health care inflation.
    Herb Dennenberg, "AARP: The Hype, The Lies, The Facts," The Bulletin (Philadelphia's oldest newspaper), September 21, 2009 --- Click Here

    Meanwhile, we have the case of the Association for the Advancement of Retired Persons (AARP), and its fanciful Medicare claims. The self-styled seniors lobby is using all its money and influence to cheer on ObamaCare, even though polls show that most retired persons oppose it. AARP has spent millions of dollars on its TV ad campaign and bulletins and newsletters to its members, including eight million direct-mail letters over Labor Day. The AARP Web site claims that it is a "myth" that "health care reform will hurt Medicare," while it is a "fact" that "none of the health care reform proposals being considered by Congress will cut Medicare benefits or increase your out-of-pocket costs."
    "Medicare and Gag Orders Humana gets whacked for telling the truth, AARP gets a pass for spreading falsehoods," The Wall Street Journal, September 24, 2009 --- Click Here

     


    "Government Medicine vs. the Elderly:  In Britain in 2007-08, 16.5% of deaths came after 'terminal sedation," by Rupert Darwall, The Wall Street Journal, September 14, 2009 ---
    http://online.wsj.com/article/SB10001424052970203917304574412680569936844.html?mod=djemEditorialPage

    Rarely has the Atlantic seemed as wide as when America's health-care debate provoked a near unanimous response from British politicians boasting of the superiority of their country's National Health Service. Prime Minister Gordon Brown used Twitter to tell the world that the NHS can mean the difference between life and death. His wife added, "we love the NHS." Opposition leader David Cameron tweeted back that his plans to outspend Labour showed the Conservatives were more committed to the NHS than Labour.

    This outbreak of NHS jingoism was brought to an abrupt halt by the Patients Association, an independent charity. In a report, the association presented a catalogue of end-of-life cases that demonstrated, in its words, "a consistent pattern of shocking standards of care." It provided details of what it described as "appalling treatment," which could be found across the NHS.

    A few days later, a group of senior doctors and health-care experts wrote to a national newspaper expressing their concern about the Liverpool Care Pathway, a palliative program being rolled out across the NHS involving the withdrawal of fluids and nourishment for patients thought to be dying. Noting that in 2007-08, 16.5% of deaths in the U.K. came after "terminal sedation," their letter concluded with the chilling observation that experienced doctors know that sometimes "when all but essential drugs are stopped, 'dying' patients get better" if they are allowed to.

    The usual justification for socialized health care is to provide access to quality health care for the poor and disadvantaged. But this function can be more efficiently performed through the benefits system and the payment of refundable tax credits.

    The real justification for socialized medicine is left unstated: Because health-care resources are assumed to be fixed, those resources should be prioritized for those who can benefit most from medical treatment. Thus the NHS acts as Britain's national triage service, deciding who is most likely to respond best to treatment and allocating health care accordingly.

    It should therefore come as no surprise that the NHS is institutionally ageist. The elderly have fewer years left to them; why then should they get health-care resources that would benefit a younger person more? An analysis by a senior U.K.-based health-care expert earlier this decade found that in the U.S. health-care spending per capita goes up steeply for the elderly, while the U.K. didn't show the same pattern. The U.K.'s pattern of health-care spending by age had more in common with the former Soviet bloc.

    A scarcity assumption similar to the British mentality underlies President Barack Obama's proposed health-care overhaul. "We spend one-and-a-half times more per person on health care than any other country, but we aren't any healthier for it," Mr. Obama claimed in his address to Congress last Wednesday, a situation that, he said, threatened America's economic competitiveness.

    This assertion is seldom challenged. Yet what makes health care different from spending on, say, information technology—or any category of consumer service—such that spending on health care is uniquely bad for the American economy? Distortions like malpractice suits that lead to higher costs or the absence of consumer price consciousness do result in a misallocation of resources. That should be an argument for tackling those distortions. But if high health-care spending otherwise reflects the preferences of millions of consumers, why the fuss?

    The case for ObamaCare, as with the NHS, rests on what might be termed the "lump of health care" fallacy. But in a market-based system triggering one person's contractual rights to health care does not invalidate someone else's health policy. Instead, increased demand for health care incentivizes new drugs, new therapies and better ways of delivering health care. Government-administered systems are so slow and clumsy that they turn the lump of health-care fallacy into a reality.

    According to the 2002 Wanless report, used by Tony Blair's government to justify a large tax hike to fund the higher spending, the NHS is late to adopt and slow to diffuse new technology. Still, NHS spending more than doubled to £103 billion in 2009-10 from £40 billion in 1999-2000, equivalent to an average growth rate of over 7% a year after inflation.

    In 1965, economist (and future Nobel laureate) James Buchanan observed of the 17-year old NHS that "hospital facilities are overcrowded, and long delays in securing treatment, save for strictly emergency cases, are universally noted." Forty-four years later, matters are little improved. The Wanless report found that of the five countries it looked at, the U.S. was the only one to be both an early adopter and rapid diffuser of new medical techniques. It is the world's principal engine driving medical advance. If the U.S. gets health-care reform wrong, the rest of the world will suffer too.

    Mr. Darwall, a London-based strategist, is currently writing a book on the history of global warming, to be published by Quartet Books in Spring 2010.

    Jensen Comment
    If and when I become gaga please sedate me to the max.

    The Lie:  The health insurance mandate is not a tax.

    "Yes, health-insurance mandate is a tax."  by Donald Lambro, Townhall, September 23, 2009 ---
    http://townhall.com/columnists/DonaldLambro/2009/09/23/yes,_health-insurance_mandate_is_a_tax 

    President Obama absolutely refuses to acknowledge there is a huge middle-class tax in the Senate Finance Committee's healthcare bill. The president flatly denies the legislation that the White House supports contains a stiff penalty tax that would hit uninsured middle-income people the hardest -- the very folks he promised would never see their taxes rise under his presidency.

    Obama has repeatedly stated that promise throughout the healthcare debate, despite evidence to the contrary, and no one in the national news media has called him on it. That is, until George Stephanopoulos raised the issue with him Sunday on ABC's "This Week."

    First, Stephanopoulos reminded the president that in his campaign for the presidency he was "against the individual mandate" that all Americans be required to buy health insurance.

    "Yes," Obama replied.

    Then Stephanopoulos hit him with the question no one apparently had asked him before. Pointing out that the Finance Committee plan contained just such a mandate whereby "the government is forcing people to spend money, fining you if you don't," he asked, "How is that not a tax?"

    Obama replied, "No, but ... but, George, you ... can't just make up that language and decide that that's called a tax increase."

    "You reject that it's a tax increase?" Stephanopoulos asked. Obama said, "I absolutely reject that notion."

    But if Obama looked on page 29 of Senate Finance Committee Chairman Max Baucus' legislation -- the bill he hopes will enact his healthcare plans into law -- he would have read this line: "The consequence for not maintaining (health) insurance would be an excise tax."

    What part of those two words doesn't he understand? The government imposes a raft of excise taxes on all of us: the tires for our cars, alcoholic beverages, jewelry and many other purchases. Now it wants to add health insurance to the tax-revenue list as a penalty for those who do not purchase a product the feds insist you must buy or else face fines up to $950 for an individual and up to $3,800 a year for a family.

    Continued in article


    Updates for September 15, 2009

     

     


     

    Updates for September 3, 2009

    Under H.R. 676 [Text of Bill], Medicare would be extended and improved so that all individuals residing in the United States would receive high quality and affordable health care services. They would receive all medically necessary services by the physicians of their choice, with no restrictions on what providers they could visit. If implemented, the United States National Health Insurance Act would cover primary care, dental, mental health, prescription drugs, and long term care.
    Michael Moore --- http://www.michaelmoore.com/sicko/what-can-i-do/petitions/pnum649.php

    Jensen Comment
    Mike will never understand that there will be no decent health care for anyone in the United States when the annual budget deficit hits $20 trillion and nobody will invest in our National Debt. He never took Economics 101.

    There are times when Americans’ attitude toward health-care reform seems a bit like St. Augustine’s take on chastity: Give it to us, Lord, but not yet. In theory, the public overwhelmingly supports reform—earlier this year, polls showed big majorities in favor of fundamental change. But, when it comes to actually making fundamental change, people go all wobbly. Just about half of all Americans now disapprove of the way the Obama Administration is handling health care.
    James Surowiecki, "Status-Quo Anxiety," The New Yorker, August 31, 2009 ---
    http://www.newyorker.com/talk/financial/2009/08/31/090831ta_talk_surowiecki
    Jensen Comment
    The fact of the matter is that liberals like Surowiecki cannot mention universal health care, economic disaster, and deficit spending in the same article. Opponents are all ignorant sheep being guided by the demonizing GOP. Not once does Surowiecki discuss how to pay for the many costly provisions in H.R. 3200.

    Congressman Mike Rogers' opening statement on Health Care reform in Washington D.C. ---
    http://www.youtube.com/watch?v=G44NCvNDLfc

    "Dean says Obamacare authors don't want to challenge trial lawyers," by: Mark Tapscott, Washington Examiner, August 26, 2009 --- Click Here

    Whatever else he said Wednesday evening at the town hall hosted by Rep. Jim Moran, D-VA, former Democratic National Committee chairman and presidential candidate Howard Dean let something incredibly candid slip out about President Obama's health-care reform bill in Congress.

    Asked by an audience member why the legislation does nothing to cap medical malpractice class-action lawsuits against doctors and medical institutions (aka "Tort reform"), Dean responded by saying: “The reason tort reform is not in the [health care] bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on. And that’s the plain and simple truth,”

    Dean is a former physician, so he knows about skyrocketing medical malpractice insurance rates, and the role of the trial lawyers in fueling the "defensive medicine" approach among medical personnel who order too many tests and other sometimes unneeded procedures "just to be sure" and to protect themselves against litigation.

    Texas Gov. Rick Perry recently described in an Examiner oped the medical-malpractice caps enacted by the state legislature at his urging that reversed a serious decline in the number of physicians practicing in the Lone Star state and the resulting loss of access to quality medical care available to Texas residents. Mississippi Gov. Haley Barbor also shared some of his successes in this area in a recent Examiner oped.

    Credit goes to the American Tort Reform Association's Darren McKinney for catching this momentary outbreak of political honesty by Dean. McKinney has conveniently posted an audio recording of Dean speaking here, so you can listen for yourself. Mckinney has also offered more comment here, helpfully even including a link to the Examiner's recent analysis of the degree to which trial-lawyer political contributions go to Democrats in Congress.

    Those contributions are why Dean knows it would be a difficult task indeed for Obama to persuade congressional Democrats to do anything that might offend the trial-lawyers lobby. The Examiner's David Freddoso and Kevin Mooney did the reporting on this link here.

    Jensen Comment
    Reports are that the Texas cap on punitive damages has been quite successful in restraining outrageous settlements of malpractice lawsuits.

    "Straight talk on the federal budget deficit," EPI News, August 25, 2009 ---
    http://www.epi-data.org/epinews/epinews20090825.html

    Some little-known facts about the federal budget deficit: It grew slower than was expected just a few months ago, stimulus spending accounts for only a small sliver of its total, and the leading health care reform proposal would provide coverage for most uninsured Americans without adding a penny to its total. Although the federal deficit is commonly dangled as the reason to block further public investment or comprehensive health care reform, that argument ignores some basic truths about the deficit.

    On August 25, the White House released an updated estimate of the federal budget deficit, which shows it now totals $1.6 trillion or 11.2% of GDP. This is $262 billion less than what was estimated in May. The Congressional Budget Office showed a smaller improvement. In anticipation of that release, EPI produced a series of reports (see below) examining the roots of the deficit and the potential impact that health care reform would have on it.

    Don’t blame Obama
    For all the criticism President Obama has received for running up the deficit, it turns out that Obama’s policies have been a very small factor in the expansion of the federal budget deficit. Bush-era policies, including aggressive tax cuts and spending on the wars in Iraq and Afghanistan, have added significantly more to the total

    In The 2009 Budget Deficit: How Did We Get Here? EPI's Research and Policy Director John Irons notes that George Bush inherited a budget surplus in 2001. Irons and a team of researchers parsed the data to show that 42% of the $2 trillion reversal of fortunes since then reflects Bush-era policies. Another 42% of that $2 trillion reflects the impact of the recession on tax revenues and spending on programs such as unemployment insurance. By contrast, the American Recovery and Reinvestment Act (ARRA), which so often is blamed for the growing deficit, accounts for just 7.6% of the total.

    Irons sums up his findings in the analysis Roots of Deficit Pre-Date Obama, where he notes that Bush-era tax cuts combined with revenues lost during the current recession will produce a level of federal revenue in 2009 which, as a portion of GDP, is the lowest since 1950. “An economic downturn will automatically create deficits because job loss and income declines reduce tax revenues, and because they create more demand for public services such as unemployment, nutrition assistance, and increased Medicaid spending,” Irons writes.

    Health care reform and the deficit
    Economist Josh Bivens, meanwhile, notes in Reform We Can Afford that efforts to block health care reform out of fear of the swelling deficit are misguided for a number of reasons, mainly because the House bill outlines ways to fully pay for the reforms it proposes, meaning that it would provide health insurance to the majority of Americans who do not have it, without adding to the deficit. The reform bill also ends a longstanding budget gimmick that projects steep cuts in Medicare reimbursement rates and then rescinds them at the last minute. Including those costs, which have really been in the budget all along (though largely disguised), would result in the reform bill adding about $239 billion to the deficit over the next 10 years. To put that figure in context, it is roughly 15% of the cost of the tax cuts passed during the Bush administration, or 25% of the cost of spending on wars in Iraq and Afghanistan to date, Bivens notes.

    Numbers aside, Bivens makes the point that a philosophical opposition to spending that could increase the deficit is as misguided as, say, an opposition to borrowing money to buy a home or pay for a college education. During an extremely steep economic downturn, curtailing spending to protect the deficit is especially foolhardy. “Green eyeshades just have no place at all in current economic debates,” Bivens writes. “The U.S. economy has lost 6.7 million jobs in the past 19 months as private spending has collapsed. Literally the only thing keeping another economic depression at bay has been the very large rise in the federal budget deficit…. Normally, it would be considered a bad idea to dump a bucket of water on your living room rug. When that rug is on fire, however, it’s not just a good idea, it’s absolutely necessary.” Indeed, EPI’s recent report The Recovery Package in Action by Irons and Policy Analyst Ethan Pollack outlines how spending made this year under the Recovery Act has been integral in stopping the economy from going into “a full-blown nose dive.”

    Replacing No Child Left Behind
    EPI Research Associate
    Richard Rothstein recently published a piece in Education Week magazine outlining some of the recommendations made by the Broader, Bolder Approach to Education campaign for providing students a well-rounded education that would help them succeed in life, rather than just on standardized tests. Rothstein’s opinion piece is available on EPI’s Web site.

    In the news
    As a debate heats up over whether an economic recovery is underway, a number of news stories discussing the persistently weak job market quote EPI. An
    Arizona Republic story cites EPI data showing that the United States has lost virtually all the jobs gained since the last recession ended in 2001. A Seattle Times story quotes EPI’s analysis on the high ratio of job seekers to job openings. EPI Vice President Ross Eisenbrey was interviewed for a Nightly Business Report story on the same topic. Eisenbrey pointed out that large numbers of unemployed have not received unemployment insurance, or will soon exhaust those benefits.

    The Lie:  Obama's relationship with tort lawyers is the real driver of Obamacare costs
    According to a 2007
    study by McKinsey&Company, physician compensation bumps up health care spending in America by $58 billion annually,on average, because U.S. doctors make twice as much as their OECD peers. And even the poorest in specializations like radiology and surgery routinely rake in around $400,000 annually. Doctors—and many Republicans—constantly carp about the costs of "defensive medicine" because it forces providers to perform unnecessary procedures and tests to insulate them from potential lawsuits. But excessive physician salaries contribute nearly three times more to wasteful health care spending than the $20 billion or so that defensive medicine does. "While the U.S. malpractice system is extraordinary," the study notes, "it is only a small contributor to the higher cost of health care in the United States." Meanwhile, other studies have found that doctors' salaries contribute more to soaring medical costs than the $40 billion or so that the uninsured cost in uncompensated care--the president's bete noir.
    Shikha Dalmia, "The Evil-Mongering of the American Medical Association:  Obama's cozy relationship with Big Medicine will hurt patients," Reason Magazine, August 27, 2009 --- http://www.reason.com/news/show/135682.html

    From Former Liberal Senator Bill Bradley
    The bipartisan trade-off in a viable health care bill is obvious: Combine universal coverage with malpractice tort reform in health care. Universal coverage can be obtained in many ways — including the so-called public option. Malpractice tort reform can be something as commonsensical as the establishment of medical courts — similar to bankruptcy or admiralty courts — with special judges to make determinations in cases brought by parties claiming injury. Such a bipartisan outcome would lower health care costs, reduce errors (doctors and nurses often don’t report errors for fear of being sued) and guarantee all Americans adequate health care. Whenever Congress undertakes large-scale reform, there are times when disaster appears certain — only to be averted at the last minute by the good sense of its sometimes unfairly maligned members. What now appears in Washington as a special-interest scrum could well become a triumph for the general interest. But for that to happen, the two parties must strike a grand bargain on universal coverage and malpractice tort reform. The August recess has given each party and its constituencies a chance to reassess their respective strategies. One result, let us hope, may be that Congress will surprise everyone this fall.
    Bill Bradley, "Tax Reform’s Lesson for Health Care Reform," The New York Times, August 30, 2009 ---
    http://www.nytimes.com/2009/08/30/opinion/30bradley.html?_r=1

    "Dean says Obamacare authors don't want to challenge trial lawyers," by: Mark Tapscott, Washington Examiner, August 26, 2009 --- Click Here

    Whatever else he said Wednesday evening at the town hall hosted by Rep. Jim Moran, D-VA, former Democratic National Committee chairman and presidential candidate Howard Dean let something incredibly candid slip out about President Obama's health-care reform bill in Congress.

    Asked by an audience member why the legislation does nothing to cap medical malpractice class-action lawsuits against doctors and medical institutions (aka "Tort reform"), Dean responded by saying: “The reason tort reform is not in the [health care] bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on. And that’s the plain and simple truth,”

    Dean is a former physician, so he knows about skyrocketing medical malpractice insurance rates, and the role of the trial lawyers in fueling the "defensive medicine" approach among medical personnel who order too many tests and other sometimes unneeded procedures "just to be sure" and to protect themselves against litigation.

    Texas Gov. Rick Perry recently described in an Examiner oped the medical-malpractice caps enacted by the state legislature at his urging that reversed a serious decline in the number of physicians practicing in the Lone Star state and the resulting loss of access to quality medical care available to Texas residents. Mississippi Gov. Haley Barbor also shared some of his successes in this area in a recent Examiner oped.

    Credit goes to the American Tort Reform Association's Darren McKinney for catching this momentary outbreak of political honesty by Dean. McKinney has conveniently posted an audio recording of Dean speaking here, so you can listen for yourself. Mckinney has also offered more comment here, helpfully even including a link to the Examiner's recent analysis of the degree to which trial-lawyer political contributions go to Democrats in Congress.

    Those contributions are why Dean knows it would be a difficult task indeed for Obama to persuade congressional Democrats to do anything that might offend the trial-lawyers lobby. The Examiner's David Freddoso and Kevin Mooney did the reporting on this link here.

    Jensen Comment
    Reports are that the Texas cap on punitive damages has been quite successful in restraining outrageous settlements of malpractice lawsuits.

    "The President's Tort Two-Step Special-interests and the health-care status," by Kimberly Strassel, The Wall Street Journal, September 11, 2009 --- Click Here

    Tort reform is a policy no-brainer. Experts on left and right agree that defensive medicine—ordering tests and procedures solely to protect against Joe Lawyer—adds enormously to health costs. The estimated dollar benefits of reform range from a conservative $65 billion a year to perhaps $200 billion. In context, Mr. Obama's plan would cost about $100 billion annually. That the president won't embrace even modest change that would do so much, so quickly, to lower costs, has left Americans suspicious of his real ambitions.

    It's also a political no-brainer. Americans are on board. Polls routinely show that between 70% and 80% of Americans believe the country suffers from excess litigation. The entire health community is on board. Republicans and swing-state Democrats are on board. State and local governments, which have struggled to clean up their own civil-justice systems, are on board. In a debate defined by flash points, this is a rare area of agreement.

    The only folks not on board are a handful of powerful trial lawyers, and a handful of politicians who receive a generous cut of those lawyers' contingency fees. The legal industry was the top contributor to the Democratic Party in the 2008 cycle, stumping up $47 million. The bill is now due, and Democrats are dutifully making a health-care down payment.

    During the markup of a bill in the Senate Health Committee, Republicans offered 11 tort amendments that varied in degree from mere pilot projects to measures to ensure more rural obstetricians. On a party line vote, Democrats killed every one. Rhode Island senator and lawyer Sheldon Whitehouse went so far as to speechify on the virtues of his tort friends. He did not, of course, mention the nearly $900,000 they have given him since 2005, including campaign contributions from national tort powerhouses like Baron & Budd and Motley Rice.

    Even Senate Finance Chair Max Baucus, of bipartisan bent, has bowed to legal powers. The past two years, Mr. Baucus has teamed up with Wyoming Republican Mike Enzi to offer legislation for modest health-care tort reform in states. That Enzi-Baucus proposal had been part of the bipartisan health-care talks. When Mr. Baucus released his draft health legislation this weekend, he'd stripped out his own legal reforms. The Montanan is already in the doghouse with party liberals, and decided not to further irk leadership's Dick Durbin ($3.6 million in lawyer contributions), the Senate's patron saint of the trial bar.

    Over in the House the discussion isn't about tort reform, but about tort opportunities. During the House Ways & Means markup of a health bill, Texas Democrat Lloyd Doggett ($1.5 million from lawyers) introduced language to allow freelance lawyers to sue any outfit (say, McDonald's) that might contribute to Medicare costs. Only after Blue Dogs freaked out did the idea get dropped, though the trial bar has standing orders that Democrats make another run at it in any House-Senate conference.

    It says everything that Mr. Obama wouldn't plump for reform as part of legislation. The president knows the Senate would never have passed it in any event. Yet even proposing it was too much for the White House's legal lobby. Mr. Obama is instead directing his secretary of health and human services to move forward on test projects. That would be Kathleen Sebelius, who spent eight years as the head of the Kansas Trial Lawyers Association.

    The issue has assumed such importance that even some Democrats acknowledge the harm. With bracing honesty, former DNC chair Howard Dean recently acknowledged his party "did not want to take on the trial lawyers." Former Democratic Sen. Bill Bradley, in a New York Times piece, suggested a "grand bipartisan compromise" in which Democrats got universal coverage in return for offering legal reform. The White House yawned, and moved on.

    It isn't clear if Republicans would or should take that deal, but we won't know since it won't be offered. The tort-reform issue has instead clarified this presidency. Namely, that the bipartisan president is in fact very partisan, that the new-politics president still takes orders from the old Democratic lobby.

     


    Updates for August 26, 2009

    "What The Health Care Bill Actually Says," by Professor John David Lewis (Duke University), August 6, 2009  ---
    http://sweetness-light.com/archive/what-the-health-care-bill-actually-says

    Dr. Anne Doig (incoming President of the Canadian Medical Association) says patients are getting less than optimal care and she adds that physicians from across the country - who will gather in Saskatoon on Sunday for their annual meeting - recognize that changes must be made. "We all agree that the system is imploding, we all agree that things are more precarious than perhaps Canadians realize,"
    Jennifer Graham, "Overhauling health-care system tops agenda at annual meeting of Canada's doctors," The Canada Press, August 15, 2009 --- Click Here


    [Waste is about] half of the $2.2 trillion the United States spends on health care each year, according to the most recent data from accounting firm PricewaterhouseCoopers' Health Research Institute. What counts as waste? The report identified 16 different areas in which health care dollars are squandered. But in talking to doctors, nurses, hospital groups and patient advocacy groups, six areas totaling nearly $500 billion stood out as issues to be dealt with in the health care reform debate . . . "Sometimes the motivation is to avoid malpractice suits, or to make more money because they are compensated more for doing more," said Dr. Arthur Garson, provost of the University of Virginia and former dean of its medical school. "Many are also convinced that doing more tests is the right thing to do." "But any money that is spent on a patient that doesn't improve the outcome is a waste," said Garson. Some conservatives have suggested that capping malpractice awards would help solve the problem. President Obama doesn't agree; instead, his reform proposal encourages doctors to practice "evidence-based" guidelines as a way to scale back on unnecessary tests.
    Parija B. Kavilanz, CNN Money, August 10, 2009 --- Click Here  http://money.cnn.com/2009/08/10/news/economy/healthcare_money_wasters/index.htm?section=money_news_economy
    Jensen Comment
    Another excess cost is the number of support staff needed to process claims forms. Erika and I have doctor in a clinic that has four doctors (the only source of revenue) and 24 staff (a major source of expense), many of whom are just there to process reimbursement forms sent to private insurance companies, Medicare, and Medicaid.

    Since much of the added paperwork is for fraud prevention and detection, this is a classic problem of calculating the cost of fraud plus fraud prevention plus billing errors juxtaposed against losses expected to be incurred with less costly prevention and alternate delivery systems. Our doctor is contemplating opening a new practice, but front end costs of setting up a small practice makes this virtually impossible. For example, just setting up an Medicare billing system and Medicare Supplemental Claims authorization takes thousands of pages and tens of thousands of dollars. Then there’s the nearly impossible cost of malpractice insurance for a solo doctor practice.

    Since all proposed health care reform legislation calls for continued private health insurance coverage and continued high cost of malpractice insurance, it’s doubtful that anything on the table comes anywhere close to the savings obtained from national health care plans (such as in Canada) for bureaucratic efficiency and caps and other restraints on malpractice awards.

    Add all this to the fact that the GAO refuses to sign off on audits of the Pentagon on the grounds that defense spending cannot be audited with any degree of confidence. This is not accountancy’s finest era.

    "Study Calculates Economic Cost of Higher Tax Rates, Health Care Surtax," Tax Foundation, August 14, 2009 ---
    http://www.taxfoundation.org/news/show/25008.html

    The actual economic costs of the proposed health care surtax and the expiration of the 2001 and 2003 tax cuts will be twice the amount of revenue the government intends to collect. According to a new analysis from the Tax Foundation, the higher tax rates are estimated to raise $88 billion in 2011, but the economy will incur an additional burden of $76 billion—or "deadweight loss"—as a result, which raises the total cost of the tax increases to $164 billion, roughly double what lawmakers intend to raise.

    Tax Foundation Special Report No. 170, "The Excess Burden of Taxes and the Economic Cost of High Tax Rates," attempts to put a price tag on the cost of pending rollbacks of the Bush tax cuts (which would raise the top tax rate to 39.6%) as well as the proposed health care surtax (ranging from 1% to 5.4%). This loss in economic efficiency is also known as the "excess burden" or "deadweight loss" of taxes—the income that would need to be given to people to compensate them for the resources that are lost due to the distorting effect of taxes. The Special Report is available online at http://www.taxfoundation.org/news/show/25003.html.

    "The notion that the total burden is nearly twice the revenue collected should give lawmakers some pause when considering these higher tax rates," said Tax Foundation Senior Fellow Robert Carroll, Ph.D., who authored the paper.

    "Lawmakers need to understand that the current income tax system already costs the economy between $110 billion and $150 billion above and beyond the $1 trillion the government actually collects in taxes," Carroll said. "This means the actual economic cost of our income tax system is at least $1.10 for every dollar the government collects. The proposed higher tax rates could boost those deadweight costs to more than $1.20 for every dollar of tax revenues collects."

    "The burden is particularly high for the higher income tax rates being considered by the Congress," says Carroll. "With every dollar in additional revenue, these tax increases impose an extra burden of 86 cents." For example, in 2011 a couple earning $500,000 will pay $112,437 in income taxes. But the excess burden to them of that tax payment is $16,664, about 15% of their tax burden. The increase in the top two tax rates plus the health care surtax would boost their income tax payment an additional $7,719 to $120,156. However, that tax hike would also increase their excess burden by $8,748, larger than the tax increase itself.

    "When totaled over all taxpayers, this means," says Carroll, "that the total economic cost of the higher tax rates will be close to twice the amount lawmakers hope to collect."

    "Lawmakers should be wary of policies that are purported to make higher-income taxpayers 'pay their fair share' but that impose very substantial burdens on all taxpayers—nearly twice the revenue that is raised—and waste substantial economic resources," Carroll concluded.

    The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.

    "Ingrates! The Angry Left turns its wrath on President Obama," by James Taranto, The Wall Street Journal Newsletter, August . 24, 2009

    The Angry Left is angry at the president of the United States. That makes it official. Nothing changed when Barack Obama became president.

    "A backlash in the progressive base--which pushed President Obama over the top in the Democratic primary and played a major role in his general election victory--has been building for months," writes former Enron adviser Paul Krugman, the Angry Left's tribune, in the New York Times. Krugman faults the Obama administration for being insufficiently tender to terrorists and not harsh enough with bankers--but it's clear that what's brought the anger to the surface is the political failure of ObamaCare:

    On the issue of health care itself, the inspiring figure progressives thought they had elected comes across, far too often, as a dry technocrat who talks of "bending the curve" but has only recently begun to make the moral case for reform. Mr. Obama's explanations of his plan have gotten clearer, but he still seems unable to settle on a simple, pithy formula; his speeches and op-eds still read as if they were written by a committee. . . .

    There's a point at which realism shades over into weakness, and progressives increasingly feel that the administration is on the wrong side of that line. It seems as if there is nothing Republicans can do that will draw an administration rebuke: Senator Charles E. Grassley feeds the death panel smear, warning that reform will "pull the plug on grandma," and two days later the White House declares that it's still committed to working with him.

    It's hard to avoid the sense that Mr. Obama has wasted months trying to appease people who can't be appeased, and who take every concession as a sign that he can be rolled.

    As we all know, you can't appease terrorists. Oh wait, sorry--appeasing terrorists is worth a try. It's Republicans you can't appease.

    Krugman's colleague Bob Herbert echoes the complaint:

    Mr. Obama, who has a command of the English language like few others, has been remarkably opaque about his intentions regarding health care. He left it up to Congress to draft a plan and he has not gotten behind any specific legislation. He has seemed to waffle on the public option and has not been at all clear about how the reform that is coming will rein in runaway costs. At times it has seemed as though any old "reform" would be all right with him.

    It's still early, but people are starting to lose faith in the president.

    What ingrates! Obama has been courting political ruin by pushing for the policies these guys want, but do they give him any credit? Far from it. Instead they damn him for not being clear or forceful enough in his advocacy.

    What would a clear and forceful case for ObamaCare look like? We don't have to look very far. Here's former Enron adviser Paul Krugman in a YouTube medley we've cited before:

    Politically, it's hard to do in one step. You have to convince people to give up the insurance--forget about mollifying the insurance companies; that's not going to happen. But you're going to have to convince people to completely give up the insurance they have, whereas something that lets people keep the insurance they have but then offers the option of a public plan may evolve into single-payer, but you can do it politically.

    Under the "public option," the central provision of ObamaCare, the government would become a health-insurance company. Under "single payer," Krugman's ideal, the government would have a monopoly on health insurance. As the YouTube video demonstrates, Krugman is far from alone in hoping that the "public option" would "evolve" into the only "option."

    "You can do it politically," Krugman opines, but it's clear that you can do it only if you are able to conceal your true aims--hence the opacity that frustrates Herbert. If Obama is failing, it is not because he has been too accommodating but because people have managed to figure out that he has been pushing for a bad and unpopular policy--Krugman's policy--despite his best efforts to make it sound palatable.

    Instead of denouncing the president, Krugman ought to be honoring him for the political sacrifice he has made in what appears likely to be a losing effort. But then some people just can't be appeased.

    Would ObamaCare Lead to an Obamonopoly?
    President Obama has been insisting of late that he does not support a government health-insurance monopoly ("single payer"). Here he is two weeks ago in Portsmouth, N.H.:

    I have not said that I was a single-payer supporter because, frankly, we historically have had a employer-based system in this country with private insurers, and for us to transition to a system like that I believe would be too disruptive. So what would end up happening would be, a lot of people who currently have employer-based health care would suddenly find themselves dropped, and they would have to go into an entirely new system that had not been fully set up yet. And I would be concerned about the potential destructiveness of that kind of transition.

    All right? So I'm not promoting a single-payer plan.

    As we noted last week, this contradicts what Obama said in 2003:

    I happen to be a proponent of a single-payer universal health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14% of its gross national product on health care, cannot provide basic health insurance to everybody. And that's what Jim is talking about when he says everybody in, nobody out. A single payer health care plan, a universal health care plan. And that's what I'd like to see. But as all of you know, we may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, and we have to take back the House.

    Now he says he does see a reason, namely the "destructiveness of that kind of transition." This is his rebuttal to people who say he supports a government insurance monopoly. Tellingly, though, on Jan. 21, 2008, when he was running against Hillarly Clinton, the Web site of his "grass-roots" outfit, Organizing for America, featured an item titled "Fact Check: Obama Consistent in His Position on Single Payer Health Care":

    Rhetoric: "Today, he opposes single payer health care, and attacks Sen. Clinton for proposing a plan that covers everyone"

    Reality: Obama Has Consistently Said That If We Were Starting From Scratch, He Would Support A Single Payer System, But Now We Need To Build On The System We Have

    If Obama Were Starting From Scratch, He Would Support A Single Payer System. The New Yorker wrote, " 'If you're starting from scratch,' he [Obama] says, 'then a single-payer system'-a government-managed system like Canada's, which disconnects health insurance from employment-'would probably make sense. But we've got all these legacy systems in place, and managing the transition, as well as adjusting the culture to a different system, would be difficult to pull off. So we may need a system that's not so disruptive that people feel like suddenly what they've known for most of their lives is thrown by the wayside.' " [New Yorker, 5/7/07]

    If Obama Were Starting From Scratch, He Would Support A Single Payer System. "At a roundtable with a handful of invited guests at Lindy's Diner in Keene, Obama said if he were starting from scratch, he would probably propose a single payer health care system, but because of existing infrastructure, he created a proposal to improve the current system." [Concord Monitor, 8/14/07]

    If Obama Were Starting From Scratch, He Would Support A Single Payer System. Obama said, "Here's the bottom line. If I were designing a system from scratch I would probably set up a single-payer system...But we're not designing a system from scratch...And when we had a healthcare forum before I set up my healthcare plan here in Iowa there was a lot of resistance to a single-payer system. So what I believe is we should set up a series of choices. . . . Over time it may be that we end up transitioning to such a system. For now, I just want to make sure every American is covered . . . I don't want to wait for that perfect system . . . The one thing you should ask about the candidates though is who's gonna have the capacity to actually deliver on the change? . . . I believe I've got a better capacity to break the gridlock and attract both Independents and Republicans to work together."

    And indeed Obama's position in 2008 is consistent with his position in 2009--but back then, it was a rebuttal to those who said he opposed a government insurance monopoly. Given that so many pro-monopoly politicians and commentators have enthusiastically endorsed the so-called public option, it seems to us there is ample reason to believe that Obama was more honest about his intentions in 2008 and 2003 than he is in 2009.

    "5 Liberal Lies About Obamacare," by John Hawkins, Townhall, August 25, 2009 ---
    http://townhall.com/columnists/JohnHawkins/2009/08/25/5_liberal_lies_about_obamacare 

    Barrack Obama and his pals in the mainstream media are doing everything in their power to keep people from finding out the truth about the health care bills that are winding their way through Congress.

    Rather than engaging in an honest debate about the pluses and minuses of socialized medicine, they've abandoned all significant attempts to work with the GOP, they've demonized American citizens who've dared to voice their concern at townhalls, and they have lied more than Bill Clinton probably did the first time Hillary mentioned the name "Gennifer Flowers" to him.

    Liberal claim:
    The public option won't kill private health insurance. When that sleazy old terrorist Yasser Arafat was alive, he was famous for telling Westerners he wanted peace in English, while telling his own people in Arabic to kill the Jews. Liberals are using the same tactic with the public option.

    When they're talking to the general public, they assure them that the public option won't kill private insurance and if people like the plans they have, they'll be able to keep them.

    But when liberals talk to each other, they explicitly admit that the public option is designed to kill private insurance so the government can take complete control.

    There are many examples of this, but this quote from Barney Frank is so crystal clear about what they're doing that no more examples are really needed,

    I think if we get a good public option, it could lead to single payer and that's the best way to reach single payer. Saying you'll do nothing until you reach single payer is a sure way never to get it.

    Liberal Claim:
    Illegal aliens won't be covered If you want to know why Americans don't believe Congress or the mainstream media, the sort of slick deception that's being practiced here is typical of what's driving the distrust.

    There is indeed a clause in the House bill that says illegal aliens aren't covered. The mainstream media looks at that clause and then dutifully reports, as if it were a fact, that illegal aliens won't be getting taxpayer funded health care.

    However, here's the catch: there's no enforcement provision. Texas Congressman Lamar Smith explains how the scam will work:

    The Democrats’ bill in the House, H.R. 3200, contains gaping loopholes that will allow illegal immigrants to receive taxpayer-funded benefits. And these loopholes are no accident.

    The legislation contains no verification mechanism to ensure that illegal immigrants do not apply for benefits. Republicans offered an amendment to close this loophole — it would have required verification using the existing methods that are already in place to verify eligibility for other federal benefits programs. But when they were asked to put the language of the bill where their words were, in a party-line vote, House Democrats rejected the amendment to require verification and close this loophole.

    In other words, the Democrats can claim that illegal aliens won't be covered by the bill and even point to a provision in it that says it won't happen. Meanwhile, if the health care bill passes, millions of illegals aliens will have their health care picked up on the taxpayer's dime -- just as the Democrats planned all along.

    Continued in article

     


    "No Maine Miracle Cure:  Another state 'public option' that failed," The Wall Street Journal, August 21, 2009 --- http://online.wsj.com/article/SB10001424052970204619004574322401816501182.html#mod=djemEditorialPage

    Want a preview of ObamaCare in action? Sneak a look at what has happened in Maine. In 2003, the state to great fanfare enacted its own version of universal health care. Democratic Governor John Baldacci signed the plan into law with a bevy of familiar promises. By 2009, it would cover all of Maine's approximately 128,000 uninsured citizens. System-wide controls on hospital and physician costs would hold down insurance premiums. There would be no tax increases. The program was going to provide insurance for everyone and save businesses and patients money at the same time.

    After five years, fiscal realities as brutal as the waves that crash along Maine's famous coastline have hit the insurance plan. The system that was supposed to save money has cost taxpayers $155 million and is still rising.

    Here's how the program was supposed to work. Two government programs would cover the uninsured. First the legislature greatly expanded MaineCare, the state's Medicaid program. Today Maine families with incomes of up to $44,000 a year are eligible; 22% of the population is now in Medicaid, roughly twice the national average.

    Then the state created a "public option" known as DirigoChoice. (Dirigo is the state motto, meaning "I Lead.") This plan would compete with private plans such as Blue Cross. To entice lower income Mainers to enroll, it offered taxpayer-subsidized premiums. The plan's original funding source was $50 million of federal stimulus money the state got in 2003. Over time, the plan was to be "paid for by savings in the health-care system." This is precisely the promise of ObamaCare. Maine saved by squeezing payments to hospitals and physicians.

    The program flew off track fast. At its peak in 2006, only about 15,000 people had enrolled in the DirigoChoice program. That number has dropped to below 10,000, according to the state's own reporting. About two-thirds of those who enrolled already had insurance, which they dropped in favor of the public option and its subsidies. Instead of 128,000 uninsured in the program today, the actual number is just 3,400. Despite the giant expansions in Maine's Medicaid program and the new, subsidized public choice option, the number of uninsured in the state today is only slightly lower that in 2004 when the program began.

    Why did this happen? Among the biggest reasons is a severe adverse selection problem: The sickest, most expensive patients crowded into DirigoChoice, unbalancing its insurance pool and raising costs. That made it unattractive for healthier and lower-risk enrollees. And as a result, few low-income Mainers have been able to afford the premiums, even at subsidized rates.

    This problem was exacerbated because since the early 1990s Maine has required insurers to adhere to community rating and guaranteed issue, which requires that insurers cover anyone who applies, regardless of their health condition and at a uniform premium. These rules—which are in the Obama plan—have relentlessly driven up insurance costs in Maine, especially for healthy people.

    The Maine Heritage Policy Center, which has tracked the plan closely, points out that largely because of these insurance rules, a healthy male in Maine who is 30 and single pays a monthly premium of $762 in the individual market; next door in New Hampshire he pays $222 a month. The Granite State doesn't have community rating and guaranteed issue.

    One proposal to get people into the DirigoChoice system is to reduce the premiums, presumably to give the uninsured a larger incentive to join. But that would explode the program's costs when it already can't pay its bills. A program that was supposed to save money by reducing health-care waste and inefficiencies has seen a 74% increase in premiums. But even those inflated payments can't keep the program out of the red.

    Last year, DirigoCare was so desperate for cash that the legislature broke its original promise of no tax hikes and proposed an infusion of funds through a beer, wine and soda tax, similar to what has been floated to pay for the Obama plan. Maine voters rejected these taxes by two to one. Then this year the legislature passed a 2% tax on paid health insurance claims. Taxing paid insurance claims sounds a tad churlish, but the previous funding formula was so complicated that it was costing the state $1 million a year in lawsuits.

    Unlike the federal government, Maine has a balanced budget requirement. So out of fiscal necessity, the state has now capped the enrollment in the program and allowed no new entrants. Now there is a waiting list. DirigoChoice has become yet another expensive, failed experiment in government-run health care, alongside similar fiascoes in Massachusetts and Tennessee.

    Not everyone sees it this way. Noting the similarities between the Maine program and the Congressional initiative, Karynlee Harrington, the executive director of the Dirigo Health Agency, boasted recently: "DirigoChoice is consistent with what we think the definition of a public health option is." It certainly is.


    "What If Obamacare Actually Happens?" by Austin Hill, Townhall, August 23, 2009 ---
    http://townhall.com/columnists/AustinHill/2009/08/23/what_if_obamacare_actually_happens

    What if a health care bill actually passes in the Congress, and President Obama signs it into law?

    Given the ways in which his “hope” and “change” are being embraced across the nation right now, such a legislative “victory” for Mr. Obama could be the worst thing, politically, for his presidency and his party.

    Earlier this year, I contemplated here in this column how Obama’s behavior tends to be woefully inconsistent with his rhetoric, and how our President has a propensity for “doing the opposite” of what he says. For example, as a candidate Obama insisted that he is not a “big government” advocate, but then as President proposed a federal budget in excess of $3.5 trillion (Treasury Secretary Tim Geithner is now asking Congress to raise the federal debt ceiling above $12 trillion for fear that there won‘t be money to fund Obama‘s budget after October of this year). As a candidate Obama decried the “petty distractions” and “partisan politics as usual” that stifle honest dialog, and prevent people from focusing on the real important issues. Yet from the White House Obama unleashed an intentional and strategic game of publicly demonizing talk show host Rush Limbaugh earlier this year; it appeared that members of his Administration “organized” their “friends” to demonstrate in front of the private homes of AIG Executives to harrass them for having earned bonuses from their employer last Spring; and last week Obama himself told participants in a faith-based organizing conference call that he needed their help to sell his health care take-over plans, admonishing that “I need you to knock on doors, talk to neighbors, spread the facts and speak the truth” (great “community organizing,” but not particularly presidential).

    But just as President Obama has established a clear pattern of ignoring many of his campaign promises and “doing the opposite” in so many areas of his presidency, it is also true that on many economic matters, Obama is essentially in lock-step with what he promised on the campaign trail. He campaigned as an economic redistributionist. As President, he has most certainly been a redistributionist, and has displayed little comprehension or respect for the free-market economy.

    As a candidate he expressed all-out disdain for business, and repeatedly promised to dramatically increases taxes and regulations on corporations, expressed anger and “outrage” when corporations reported profits that were “too big,” and promised to “give back” corporate profits to “the American people.”

    So for those who have been paying attention, “Obamacare” should be no surprise. The candidate promised a “single payer” health insurance plan, and even once lamented that it may take “ten to fifteen years” to get private insurance companies out of the health insurance market entirely. When single-payer proposals began emerging in Congress and were met with staunch opposition from American citizens, President Obama changed his position on single-payer insurance, insisting that all he wanted was an “option” of government funded insurance.

    And now it appears that Congress, owing to Obama’s community organizer instincts, is about to begin demonizing health insurance company executives, trashing their lavish lifestyles and portraying them as perpetrators (you thought the treatment of the AIG folks was rough? Stay tuned).

    So what if some form of “Obamacare” actually comes to pass? It will likely be woefully unpopular, it could cost the Democrats dearly in the 2010 election, and could set-off an uprising far greater than anything we’ve seen in this summer’s congressional “townhall” meetings. Yet such a “reform” plan would likely be consistent with President Obama’s big-government, centrally-controlled economic sensibilities, complete with governmental conrols over what procedures physicians will perform, and how much money they will be compensated for performing them.

    If “Obamacare” comes to pass, it will be a significant fulfillment of President Obama’s vision of a “transformed” America. But it will not be what Americans want.

     

    America, what is happening to you?
    “One thing seems probable to me,” said Peer Steinbrück, the German finance minister, in September 2008....“the United States will lose its status as the superpower of the global financial system.” You don’t have to strain too hard to see the financial crisis as the death knell for a debt-ridden, overconsuming, and underproducing American empire.
    Richard Florida, "How the Crash Will Reshape America," The Atlantic, March 2009 ---
    http://www.theatlantic.com/doc/200903/meltdown-geography

    Bob Jensen’s threads on impending disaster --- http://faculty.trinity.edu/rjensen/2008Bailout.htm#NationalDebt

    Updates for August 17, 2009

    We hear the trillion-dollar figure all the time, but how much would ObamaCare really end up costing? If we've learned anything from previous government programs, it's that the actual price almost always shoots far beyond the advertised price. Is there any reason to think things would be different this time around?
    Watch the video --- http://reason.com/blog/show/135279.html

    The Lie:  The public health insurance option is essential to having efficient private alternatives
    To the Democrats, I say this: If you want competition in health care, you won’t get it if the public option can make deals its competitors can’t. So either give the Republicans hard assurances that the public option would have to break even and not get special treatment, or, better yet, just give it up to ensure that some useful health care reform is passed. A public option is neither necessary nor sufficient for achieving the real goals of reform, and those goals are too important to risk losing the war.
    Professor Richard Thaler, "A Public Option Isn’t a Curse, or a Cure," The New York Times, August 16, 2009 --- Click Here

    So the present (health care) system is an unsustainable disaster, but you can keep your piece of it if you want. And the Democrats wonder why selling health care reform to the public has been so hard?
    Ramesh Ponuru,
    "Obamacare's Fatal Flaw:  Democrats claim their plans will save money, but they have too many conflicting goals," Time Magazine August 17, 2009, Page 35
    Jensen Comment
    The problem is that they keep adding expensive medical services that sound great on paper, but few people, companies, and certainly not government can afford these uncapped benefits.

    Obama Must Condemn NY Times Race-Baiting Tactics, Black Group Says
    The Project 21 black leadership network, New York Times liberal columnist Paul Krugman Obama Must Condemn NY Times Race-Baiting Tactics, Black Group Says Washington D.C. — The Project 21 black leadership network is condemning New York Times liberal columnist Paul Krugman (Nobel Economist and Princeton University Professor) for scurrilously pinning racist motives on critics of President Obama’s health care proposals. The group is calling upon President Obama to condemn all efforts to derail legitimate public debate, specifically including this effort to stifle debate with race-baiting tactics.
    Bob Parker, Canada Free Press, August 8, 2009 --- http://canadafreepress.com/index.php/article/13533
    Jensen Comment
    There will be ice caves in Hell before President Obama criticizes the GOP-hating New York Times.

    "Drug Dealers:  The White House buys Big Pharma’s," The Wall Street Journal, August 8, 2009 ---
    http://online.wsj.com/article/SB10001424052970204908604574336460960419516.html?mod=djemEditorialPage 

    Democrats are trying to explain opposition to ObamaCare as a sinister conspiracy controlled by the hidden hand of the health-care industry. Psychologists call this projection. Why bother with a new conspiracy when you’ve already clinched a secret deal with the President?

    Part of the Obama health strategy has been to assiduously co-opt the key health “stakeholders,” primarily with the leverage that legislation was inevitable so they might as well negotiate. Doctors, hospitals, insurers and the drug makers bought it—or perhaps it is more accurate to say were bought. This week it emerged that the pharmaceutical industry’s supposedly voluntary peace offering to cut drug costs by $80 billion to help finance ObamaCare was an explicit quid pro quo in exchange for White House protection.

    After the industry trade group PhRMA announced the plan in the Rose Garden in June, liberals on Capitol Hill promptly declared that they were “not bound” by it, as Henry Waxman and Nancy Pelosi repeatedly put it. If the industry could do Mr. Obama the favor of $80 billion, liberals wanted it to eat $100 billion in cuts, or $160 billion, or more.

    “The President made the agreements he made,” Mrs. Pelosi said. “And maybe we’ll be limited by that. But maybe not.” Sure enough, the House health bill pockets the money and then imposes price controls in Medicare and other “rebates” from manufacturers, much like Medicaid requires now.

    Chief pharma lobbyist Billy Tauzin’s clients were probably wondering about the return on their investment. Then, lo, Mr. Tauzin disclosed this week in a page-one story in the New York Times that, yes, the concessions were capped at $80 billion, no further. “We were assured: ‘We need somebody to come in first. If you come in first, you will have a rock-solid deal,’” Mr. Tauzin said. “Adding other stuff changes the deal.” The White House confirmed Mr. Tauzin’s account.

    It’s astonishing to watch the press corps pass all this off as just another day at the Oval Office. During the Bush years, even eye contact with a business, CEO or lobbyist was treated as prima facie evidence of corruption. There was the furor over Dick Cheney’s “secret energy task force,” and even the Iraq war was engineered to benefit Halliburton, Blackwater and Big Oil. But apparently having corporate America dictate public policy is fine as long as it’s the largest expansion of the welfare state since the Great Society.

    As for Mr. Tauzin’s gambit that playing nice would spare his industry, he evidently missed the sign hanging above Congress’s chambers: “Abandon all hope, ye who enter here.” Mr. Waxman responded, “PhRMA would like to see if they can get a bargain. I think that PhRMA should contribute more than PhRMA wants to contribute.” Senator Dick Durbin chimed in that “I don’t think any, if many, of us feel bound by any understanding or agreement along those lines.”

    What this Abbott and Costello routine exposes is the industry folly of thinking that liberals could be appeased. By now it is beyond obvious that Democrats view whole segments of the health-care industry as expendable. After all, what do insurers really do, besides bilk consumers? Government already pays Medicare bills; it can handle the under-65 crowd too. Over time doctors can be transferred into the civil service, but if they’re good sports maybe at a higher pay grade than the DMV. As for drug research and development, the National Institutes of Health can fill in—and as a bonus, all those government-funded professors won’t care about profits either. For the Democrats running Congress, merely allowing a business to continue to exist is a concession.

    Even if Mr. Tauzin’s strategy works this time around, it will only push his clients deeper into Mr. Waxman’s embrace as government pays for the majority of American medicine. If ObamaCare is defeated, it will be due to the common sense of the American people, not to the health-care lobbies that have become its political partners.

    The Poster Child of Universal Health Care is In Financial Troubles
    "France Fights Universal Care's High Cost," David Gauthier-Villars, The Wall Street Journal, August 7, 2009 ---
    http://online.wsj.com/article/SB124958049241511735.html 

    France claims it long ago achieved much of what today's U.S. health-care overhaul is seeking: It covers everyone, and provides what supporters say is high-quality care. But soaring costs are pushing the system into crisis. The result: As Congress fights over whether America should be more like France, the French government is trying to borrow U.S. tactics.

    In recent months, France imposed American-style "co-pays" on patients to try to throttle back prescription-drug costs and forced state hospitals to crack down on expenses. "A hospital doesn't need to be money-losing to provide good-quality treatment," President Nicolas Sarkozy thundered in a recent speech to doctors.

    And service cuts -- such as the closure of a maternity ward near Ms. Cuccarolo's home -- are prompting complaints from patients, doctors and nurses that care is being rationed. That concern echos worries among some Americans that the U.S. changes could lead to rationing.

    The French system's fragile solvency shows how tough it is to provide universal coverage while controlling costs, the professed twin goals of President Barack Obama's proposed overhaul

    "French people are so attached to their health-insurance system that they almost never support changes," says Frédéric Van Roekeghem, Assurance Maladie's director.

    Both patients and doctors say they feel the effects of Mr. Sarkozy's cuts. They certainly had an impact on Ms. Cuccarolo of the firetruck birth.

    She lives near the medieval town of Figeac, in southern France. The maternity ward of the public hospital there was closed in June as part of a nationwide effort to close smaller, less efficient units. In 2008, fewer than 270 babies were born at the Figeac maternity ward, below the annual minimum required of 300, says Fabien Chanabas, deputy director of the local public hospital.

    "We were providing good-quality obstetric services," he says. "But at a very high cost." Since the maternity closed, he says, the hospital narrowed its deficit and began reallocating resources toward geriatric services, which are in high demand.

    In the Figeac region, however, people feel short-changed. "Until the 1960s, many women delivered their babies at home," says Michel Delpech, mayor of the village where Ms. Cuccarolo lives. "The opening of the Figeac maternity was big progress. Its closure is perceived as a regression."

    For Ms. Cuccarolo, it meant she would have to drive to Cahors, about 30 miles away. "That's fine when you can plan in advance," she says. "But my little girl came a month earlier than expected."

    France launched its first national health-care system in 1945. World War II had left the country in ruins, and private insurers were weak. The idea: Create a single health insurer and make it compulsory for all companies and workers to pay premiums to it based on a percentage of salaries. Patients can choose their own doctors, and -- unlike the U.S., where private health insurers can have a say -- doctors can prescribe any therapy or drug without approval of the national health insurance.

    Private insurers, both for-profit and not-for-profit, continued to exist, providing optional benefits such as prescription sunglasses, orthodontics care or individual hospital rooms.

    At a time when the U.S. is considering ways of providing coverage for its entire population, France's blending of public and private medical structures offers important lessons, says Victor Rodwin, professor of health policy and management at New York University's Wagner School. The French managed to design a universal system incorporating physician choice and a mix of public and private service providers, without it being "a monolithic system of Soviet variety," he says.

    It took decades before the pieces fell into place. Only in 1999 did legislation mandate that anyone with a regular residence permit is entitled to health benefits with no strings attached. Also that year, France clarified rules for illegal residents: Those who can justify more than three months of presence on French territory, and don't have financial resources, can receive full coverage.

    That made the system universal.

    In the U.S., health-overhaul bills don't attempt to cover illegal immigrants. Doing so would increase costs and is considered politically difficult.

    Continued in article

    Jesus, the Great Healer, wants Obamacare according to MSNBC (even if top preachers are "dreadfully silent"). Watch the video ---
    http://hotair.com/archives/2009/08/13/msnbc-host-hey-wouldnt-jesus-want-us-to-have-universal-health-care/

    Bob Jensen's threads on Obamacare are at http://faculty.trinity.edu/rjensen/Health.htm


    Updates for August 7, 2009

    The President Bombs in Peoria
    His news conference the other night was bad. He was filibustery and spinny and gave long and largely unfollowable answers that seemed aimed at limiting the number of questions asked and running out the clock. You don’t do that when you’re fully confident. Far more seriously, he didn’t seem to be telling the truth. We need to create a new national health-care program in order to cut down on government spending? Who would believe that? Would anybody? The common wisdom the past week has been that whatever challenges health care faces, the president will at least get something because he has a Democratic House and Senate and they’re not going to let their guy die. He’ll get this or that, maybe not a new nationalized system but some things, and he’ll be able to declare some degree of victory. And this makes sense. But after the news conference, I found myself wondering if he’d get anything
    Peggy Noonan, "Common Sense May Sink ObamaCare:  It turns out the president misjudged the nation’s mood, The Wall Street Journal, July 24, 2009 ---
    http://online.wsj.com/article/SB10001424052970203517304574306533556532364.html#mod=djemEditorialPage

    President Blames Doctors for Health Care Costs --- http://townhall.com/columnists/KenKlukowski/2009/07/24/president_blames_doctors_for_health_care_costs
    Jensen Comment
    Of course the fact that lawyers are the cause of dysfunctional health care insurance costs is never mentioned by our lawyer-loving President Obama.

    Video:  Rep. Tom Price (also a surgeon for 25 years) admonishes govt-takeover of healthcare ---
    http://www.youtube.com/watch?v=SD_YOlUBoIk
    It falls on deaf ears.

    Nobel Prize winner Paul Krugman is the liberal economics professor at Princeton University and a leftist columnist for The New York Times. Until now he unfledgingly promoted Obamacare.
    Newsbusters, by Seton Motley, July 28, 2009 --- Click Here
    http://newsbusters.org/blogs/seton-motley/2009/07/28/nyts-krugman-conducts-informal-canadian-health-care-poll-result-bad-mo

    NYT's Krugman Conducts Informal Canadian Health Care Poll; "Result: 'Bad Move On My Part"
    Watch his truth time video --- Click Here

    Discussing from The Economist magazine on how the U.S. spends more than any other nation on health care and receives less for its buck than many other nations ---
    http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=348945&story_id=13899647

    "What disturbs Americans of all ideological persuasions is the fear that almost everything, not just government, is fixed or manipulated by some powerful hidden hand," Frank Rich wrote in Sunday's New York Times. That manipulation should disturb us. But contrary to Rich, it is not the work of "corporatists" who have sprung up to attack progressive reforms proposed by Obama and the Democratic majority. Manipulation is what we got many years ago when we traded a more or less free market for the "progressive" interventionist state. When government is big, the well-connected always have an advantage over the rest of us.
    "Big Business for Health-Care Reform," by John Stossel, ABC News, August 11, 2009 ---
    http://blogs.abcnews.com/johnstossel/2009/08/big-business-for-healthcare-reform.html

    Wal-Mart Does a Flip Flop on Obamacare in a Quest for Greater Monopoly Power
    Here's Wal-Mart's Plan Before Obama Care

    "I have diabetes, a pre-existing condition that requires regular doctor’s appointments. Wal-Mart suggests that I take its insurance and wait the two years until I become eligible. This means that I would pay about $2,000 or more and still not be covered for two years."
    http://walmartspeakout.com/speak-out/stories/c/health_care

    Here's Wal-Mart's Plan After Obama Care
    In what some see as an about face, Wal-Mart is now in favor of Obamacare, but the suspected reasons is that its smaller competitors will be put out of business because of the higher costs.
    “It will drive their smaller, less efficient competitors out of business.  There are a lot of mom and pop operations — and some that are their own small, regional chain stores — that are struggling to stay afloat right now. This new requirement will cause at least some of them to throw in the towel.” ---
    http://pajamasmedia.com/blog/why-wal-mart-embraced-obamacare/

    "Businesses Hit Hard With Obamacare, Say Goodbye to Mom and Pop Stores," by Werner Todd Huston, July 2, 2009 ---
    http://www.canadafreepress.com/index.php/article/12534

    The most insidious part of Obamacare is the backdoor taxes, and defacto control of our healthcare by the nanny state that President Obama’s plan is loaded with. And here is another one that is not getting much play. Employers would be socked with requirements to pay for 72.5 percent of the cost of insurance premiums for their full-time employees under the plan being considered in the House.

    They would also be required to pick up an as yet undetermined percentage of the insurance plans for part-time employees, as well. This alone will insure that part-time jobs across the nation are terminated for the destructive cost involved in having them.

    Or, conversely, many full-time jobs will be eliminated if the costs of insurance is so steep and that of part-timers less so. Either way, jobs will be lost because of these new, never before seen expenses. According to the draft legislation in the House, businesses would be required to pay the federal government a fine of 8 percent of their payroll if they do not offer a basic insurance package to their employees. The House bill has yet to determine how large a small business must be before they are forced into this requirement.

    Let’s think about what this means, though. This new mandatory expenditure will greatly drive up the costs of business for small and medium sized businesses and force many of them to close up shop. They will not be able to compete with the larger corporations that will have the resources to offer insurance plans even for part-time workers.

    This means the permanent elimination of mom-and-pop business nationwide and the proliferation of large, corporate held shops of all sorts. From the corner market and small book store to the local garage and sandwich shop, small businesses will be hounded out of business by overweening government mandates. This will naturally open the business to even more national chains of all sorts. It seems to me that the self-same people that claim they want nationalized healthcare are the same sort that decry the giants like WalMart. But here they are pushing an idea that will give them more WalMats from sea to shining sea!

    Jensen Comment
    As of August 3, 2009 we still don't have final passage of an Obamacare package such that it is not clear what things might be added to or deleted from the bill to protect smaller businesses. In my mind, Huston is entirely correct unless some type of relief is given to the mom and pop stores that provide more U.S. employment than the national chain stores. There also is an issue of seasonal business that needs to be resolved. Will business firms that are only open for three or four months each season have to pay year-around health insurance for full-time and part-time employees?

    The 8% of gross payroll good-deal-penalty still sounds like a great opt-out for millions of mom and pop stores across the U.S. As I've said repeatedly, however, the massive bureaucracy needed to process enrollment of between 100 million and 200 million people into the new Government Health Insurance Agency (GHIA) and process possibly billions GHIA claims for their health care each year just is not feasible for over a decade or more.

    Hence I think the 8% good-deal-penalty is a bait and switch fraud just to get the plan passed in 2009. In order to keep private insurance companies afloat and reduce the number GIAA enrollments of working people down to a manageable number, the 8% bait used to get Obamacare legislation passed will be switched around 2014 to a much higher penalty such as X=50% that either forces employers to enroll employees into private medical insurance plans, go out of business, or move the business to another country such as Mexico (if that is possible for that line of business).

    The X% no-longer-good-deal penalty will probably be bifurcated between full-time and part-time employees. Employers will have to provide private-plan coverage for their full-time employees because the X% is too high for opting out of the system entirely. The X% of gross payroll may still be the best deal for part-time employees when the percentage of work time (such as 20 hours per week divided by 40 hours per week) and number of weeks worked (such as 20 weeks divided by 52) are factored into the penalty payment for part-time workers.

    There are some other disturbing features that I found in the current House Bill, but I will not dwell on them now except to say that
     

    • There is rationing of health care treatment (which I don't object to in principle),
    • Equalization of payments for services such that brain surgeons who spent 12 years in medical school may not get any more income than primary care physicians who spent four years in medical school (which I object to in principle because there is no incentive to sacrifice time and money to become a specialist),
    • Various expensive social services built into health care (such as coverage of marriage and family counseling).

    Probably the most disturbing to me is the increased opportunity for fraud. This bill is a bonanza for community organizing groups in from big cities to tiny villages. ACORN (by whatever its series of deceitful name changes) and other "organizing groups" will have an unbelievable cash cow for signing up real and fictional people and providing home services to both real and fictional people. For example, people who aren't really married will probably get a lot of ACORN-reimbursable counseling where half goes to the fraudulent client and half goes to an ACORN-like counseling firm manned by professionals with phony diplomas.

    People who aren't really crippled will get a lot of scooters for their new scooter street ball games. Many will get expensive elevators (lifts) installed in their houses. What we now call Medicare fraud for home equipment and medications will be a drop in the bucket compared to the fraud to come. And the multiple-trillion dollar cash cow will be impossible to police given the cleverness of the fraudsters we cannot now detect in the Medicare claims service.

     


    July 23, 2009

    Video tutorial on the President's strategy and the legislative process for passing health reform legislations --- http://www.kaiseredu.org/tutorials/reformprocess/player.html

    The major stumbling block, apart from political gaming, is how to finance health care. Clearly, there's a limit to stacking more trillions on the trillions of budget deficits already in place. It's naive to think that any one cohort such as the top 3% of wage earners can pay for health care reform of the masses. Surtaxes on higher income people have enormous adverse impacts on employment opportunities in small business companies, incentives to take financial risks for new ventures, support of charities and colleges, tax cheating, etc. Even worse is that costs of universal health care are being so fraudulently underestimated that even total confiscation of high incomes would only be a drop in the bucket. For example, the massive fraud losses in Medicare will increase 100-fold under universal health care, and these new fraud losses have not been factored into the present cost estimates.

    The only sensible solution is to spread the pain of universal health care among virtually all recipients of the health insurance coverage. This means significant increases in taxes for all wage earners at all income levels, much like the cost of health care is spread out in Canada even if total nationalization of health care in the U.S. is not politically feasible at the moment.

    Moral Hazards of Precondition Coverage in Employer Health Insurance
    My major concern in the proposed universal health insurance legislation is the disastrous proposal that employers must pay for health insurance coverage of preconditions. This presents all sorts of moral hazards and financial risks that will either force employers out of business or force employers to shift to replacing nearly all full-time employees with part-time employees who do not have to be covered in the employer's health insurance plan.

    As an illustration of the moral hazard, consider the following scenario. A nurse-mom makes high wages as an excellent, albeit part-time, physician’s assistant. The wages are so high that she now affords to buy private health insurance that will not cover organ transplants. She discovers that one of her children needs a heart transplant. She then switches jobs to a become a minimum wage full-time filing clerk at a small private college in the community just so she can get precondition coverage the heart transplant. The small private college that has its own employee insurance coverage pool is now stuck with having to fund a child’s million dollar heart transplant as a precondition required by law by employers who hire new employees. Even if the college has a major medical kick-in policy, the cost of such a major medical policy will sky rocket when preconditions are required by law to be covered.

    Her income as a full-time filing clerk is about a tenth of her income as a part-time physician's assistant. After her child's heart transplant this nurse-mom goes back to being a highly paid part-time physician’s assistant.

    Another moral hazard will be when a worker’s family member in any nation has an expensive medical precondition. If the worker sneaks into the U.S., the entire family is eligible for the House version of the universal health care plan ---
     http://townhall.com/columnists/MichelleMalkin/2009/07/22/obamacare_for_illegal_aliens
    Also see http://www.avherald.com/h?article=41a81ef1/0037&opt=4608

     In other words a worker who would not otherwise sneak into the U.S. to become an illegal alien is motivated to do so just for the health insurance coverage of very expensive procedures such as organ transplants and neuro surgeries. The family might then return to their own home country after beating the U.S. health care system.

    Actually this scenario is unrealistic because, after the universal health care legislation requires employers to cover preconditions, the local college will probably adopt a new policy of hiring only part-time employees, including faculty, so that the new hires do not have to be covered in the health insurance plan.

    Many contracts that write in pre-existing coverage greatly limit the amounts to be paid out for pre-existing conditions relative to conditions arising after the insurance goes into effect. I grant you that it is more of a problem in individual plans but you’ve oversimplified the complications --- http://snipurl.com/preexistingissues  [www_medsave_com]

    Title I of HIPPA currently limits restrictions that a group health plan can place on benefits for preexisting conditions. Group health plans may refuse to provide benefits relating to preexisting conditions for a period of 12 months after enrollment in the plan or 18 months in the case of late enrollment. This moral hazard protection will of course all change under the proposed health care legislation.

    Do we want to become a nation of part-time workers having to carry multiple jobs?

    Do we want to require health coverage for part-time and seasonal workers such that there are no part-time or seasonal jobs available?

    I would prefer that the government take over all health insurance coverage and seriously tax everybody covered in the system. But if the mess of private and government insurance coverage comes into place, it is extremely important for government to somehow pick up the coverage of expensive preconditions such as organ transplants, AIDs, and severe mental health needs of some family members. To shunt these precondition costs onto employers will destroy full-time career opportunities throughout the land as employers fear the financial risks of preconditions. The repercussions will be enormous.

    Below is a message I recently sent out to the AECM listserve.

    Hi James,

    Health care is politically charged at the moment and should probably be avoided on the AECM. I would like to add that some studies contend that government-administered health insurance will be more expensive in terms of administrative costs per person covered.

    "Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance," by Robert Book, The Heritage Foundation, June 25, 2009 --- http://www.heritage.org/Research/HealthCare/wm2505.cfm 

    It’s probably unfair to compare private versus public health insurance if the two are not direct competitors. For example, private health insurance often, these days, is mostly administering employer-funded insurance that employers keep a close eye on for cost efficiency often by capping such risks as mental health coverage to $10,000 or less. I know of one small university that had seven children of employees who, in less than a year, wiped out the entire multi-million balance set up in a health coverage fund. After that a cap was placed on certain types of coverage. Medical costs for the seven children were shifted to taxpayers.

    I’m reminded of the guy whose only reason for committing a felony was to get into a California prison so he could get a “free” heart transplant. Who was really being held up here?

    I think the big issue in the short run will focus on preconditions that may soon be required by law to be funded by employers. These leads to real moral hazards.

    Medicare covers most people on permanent disability. These persons often have more frequent medical billings that require more costs to administer. My wife has been on permanent disability for over twenty years at a Medicare cost of over $2 million not counting the enormous cost of administering her claims --- http://faculty.trinity.edu/rjensen/Erika2007.htm 

    Erika now has special-alloyed metal from her hips to her neck that costs more than the metal in a Mercedes. I tease her by trying to figure out what I could get on eBay by selling her as scrap. She jokes back that I’m worth zero in the scrap market.

    By the way, I disagree with you regarding quality of care at U.S. hospitals and surgeons and home therapy. I can’t think of any other nation where I would want to send her for better care from year-to-year.

    If we leave health insurance out of the debate, there is evidence that privatization has led to many innovations and efficiencies in various, but not all, industries. Certainly not much good in the way of innovation tends to come from private or public monopolies that do not have to maintain a competitive edge in terms of effectiveness and efficiency.

    Heads of state in other nations are frequently sent to the U.S. for medical treatments that are just not as good in their own nations. The U.S. has advanced medical services more than any other nation. And many poor people have access to the best services, especially people of all ages and income declared permanently disabled that automatically get Medicare coverage. The problem is making the best services available to everybody at price they can afford.

    I'm tempted to say that being declared permanently disabled and getting Medicare at a young age is a ticket to heaven. But that's probably going a bit too far. Certainly there's a lot of fraud where people are declared disabled who are not in the least disabled. They simply managed to game the system. Others like Erika live in constant severe pain and have no bowel or bladder control.

    One media myth is that that the cost of having to cover preconditions must be picked up by fat cat health insurance companies. Since so many employers are now funding (177 million workers under this 1974 Erisa provision of the law) their own employee health insurance, the employers themselves will have to absorb the expensive precondition costs such as the need for organ transplants. State universities can pass these costs along to their states, but small private universities will have to cover the possibly huge costs with higher tuition and appeals to benefactors. I fully anticipate that some private colleges will go out of business because of changes in the health insurance law.

    Certainly employers will move more and more into a part-time labor force because of changes in the health insurance law. This, in turn, will force more and more “ weary workers” with three or four part time jobs into the government’s insurance plan. The tragedy is that they can't get full time jobs because of potential employers would be paying far more on average for workers' family medical coverage, especially with precondition coverage, than for the labor cost per se.

    Health care will have to be rationed no matter what --- http://www.nytimes.com/2009/07/19/magazine/19healthcare-t.html?pagewanted=1&em
    I'm reminded of a former colleague with advanced bone cancer who was given two hip transplants just weeks before he died. This made no sense to me since he was in more misery after the transplants as he was before the transplants.

    In Canada the average Canadian is willing to give 40% tax revenues a National Health Care Plan, where taxpayers at nearly all levels pay substantially for health care thereby restricting the number of free riders in the system. This is the only way to go in the U.S. for either a nationalized health plan or a nationalized insurance plan. The current proposal of taxing less than three percent of the people of for government insurance for the other 97% is absurd.

    The most absurd situation is to keep borrowing trillions of dollars and passing the bills along to future generations. That will bankrupt the entire United States. Welcome to Zimbabwe!

    It will be painful, but even people earning minimum wage must give up a significant portion of earnings to pay for health care. Illegal immigrants must pay a large portion of their earnings toward health care that is now free to them in emergency rooms. Middle income people must pay about 50% of their total earnings for health care. That’s the only way it will be a sustainable system.

    Perhaps 50% won’t even be enough!

    We need a better system. I think socialized medicine is the answer with high taxes and no private insurance companies. It will be rough for a while with 30% or higher unemployment for a time due to tax rises, but with Democrats in monopoly control of Congress now is the time to bite the tax bullet.

    Taxes Must Increase On Average (for everybody) Nearly 50% to Balance the Federal Budget
    (that does not include added taxes for  universal health care and carbon capping legislation trillion dollar costs)
    (that does not include added taxes for unbalanced state budgets)
    And if you think high taxes are bad, wait until you experience Zimbabwe-like inflation?
    "The Real Era of Big Government," by Robert Samuelson, American Issues Project, July 13, 2009 --- Click Here

    Bob Jensen

    PS
    One added worry about moral hazard that is extremely controversial.

    Another moral hazard will be when a worker’s family member in any nation has an expensive medical precondition. If the worker sneaks into the U.S., the entire family is eligible for the House version of the universal health care plan ---
     http://townhall.com/columnists/MichelleMalkin/2009/07/22/obamacare_for_illegal_aliens

    In other words a foreign worker who would not otherwise sneak into the U.S. to become an illegal alien is motivated to do so just for the health insurance coverage of very expensive procedures such as organ transplants and neurosurgeries. The family might then return to their own home country after beating the U.S. health care system.

    One thing that is not clear to me is how private insurance will survive since, under the proposed House Bill, employers can opt out of providing health insurance for workers by paying an 8% penalty to the government. For virtually all employers this 8% option is by far the cheapest alternative and is much less that virtually all employer insurance benefit programs will cost when pre-condition health needs are factored into the coverage.

    I’m beginning to think the 8% parameter in the House Bill is really a blatant bait and switch fraud designed to only obtain passage of the legislation in 2009. After universal health care insurance is mandated the government will in no way be able, at least for the next couple of decades, to administer health insurance for hundreds of millions of worker families plus the families of all unemployed persons plus the illegal immigrants and their families.

    The bait and switch will be to increase the 8% employer-penalty parameter dramatically to something like 50% such that, even when paying for precondition coverage, employers have little choice but to cover full-time workers. The adverse externality here, however, is that employers will increasingly shift from full-time to part-time workers where part-time workers have little choice but to enroll in the government insurance plan. Full-time employees will then not be allowed into the government insurance program and are left with zero choice other to enroll in the employer’s plan (which will be funded in most instances by private insurance companies making a profit).

    Of course the government will not make a profit on health insurance. It will be quite the opposite because government will have to cover both fraud and tens of millions of unemployed and very low income people who can only get part time jobs. The government plan eventually will add trillions of dollars to deficit spending in spite of what Obama is promising unless covered people at all levels of income share the pain of health care insurance taxation. But a huge increase in taxation for health care may permanently inhibit economic recovery in the United States.

    The only answer in the long run will be inferior health care which is all this nation can afford if it wants universal health care in the presence of its $100 trillion unfunded entitlement programs before passing universal health care legislation. We all can expect waiting rooms filled to capacity that spill out into hallways while weary physicians dispense with assembly-line medicine limiting each patient to five minutes. Expensive procedures such as organ transplants and neurosurgeries will be dispensed by lottery so that the system is indeed fair to one and all.

    But the system will never be fair to one and all. The rich will simply pay for excellent medical care offshore. Medicine will become a booming business in places like Sweden, France, India, and yes even Cuba.

    And in the long run fewer foreigners will be sneaking into the U.S. because the medical system in the U.S. will become too inferior relative to alternatives in their own countries. Then again a foreigner might sneak in just to take a chance on the health care organ transplant and neurosurgery lottery.

    The crazy thing is that all of these negatives will not make me vote against some form of universal health care. The current system is just too unjust and inefficient. Perhaps we need to sacrifice quality for quantity at this juncture. But then I only have to worry about all this for two more decades or less. And if need be I can afford a trip to Cuba.

    I’m really glad I’m not young any more.

    July 20, 2009 message sent to Trinity University on July 20, 2009

    I forget who said “there are lies and then there are damned lies.”
    Whoever said this is absolutely correct with respect to media coverage of the health care debate that seldom, if ever, mentions the huge adverse impact of the changed rules of the game such as new rules for preconditions and new rules for how big the self-insured insurance pool would have to become to continue self insurance like Trinity presently uses to fund health care coverage.

    Everybody at Trinity should read the “Repealing Erisa” article below, because Trinity University still has (I think) Erisa-enabled self insurance with a major medical kick-in. It will virtually impossible for Trinity to continue an Erisa-enabled health plan if the present House Bill is not revised to make it easier to keep such plans. But keeping such plans is probably out of the question anyway because of the risks of frequent and large precondition claims.

    In order to keep its present health coverage plan, I think that the universal health care legislation will have to exclude coverage of preconditions (as is the case under Trinity’s present coverage). Secondly, the universal health care legislation would have to encourage rather than discourage Erisa-enabled plans. I don’t think this Congress will save Erisa-enabled plans for organizations the size of Trinity University. It might be possible to save such plans if governmental insurance picks up the precondition claims.

    Actually Trinity will be between a rock and a hard place, because going back to coverage by large insurance companies will be much more expensive even if preconditions are excluded. Adding on premium costs for preconditions will make employer medical insurance premiums out of sight. I anticipate a huge migration to part-time employees at Trinity.

    An employee at Trinity University asked, in a private response, why doctor shortage is not being raised as a huge issue in the health care debate.

    Doctor shortage has been one of the enormous problems encountered in the Massachusetts Universal Health Care Plan initiated by, then, Gov. Romney. People line up in emergency rooms because they cannot find primary care physicians. Another problem is that Boston’s leading hospital is now suing the State because the cost of providing minimal health care to poor people greatly exceeds what the hospital is being paid by the State under the MUHCP.

    But doctor shortage is a “no-no” in the health care debate. The legitimate argument is that the poor should have equal opportunity access to the limited supply of doctors. The irony here is that the proposed reduction of fees paid to doctors reimbursed by Medicare (and presumably the forthcoming government insurance fund for others) will drive more doctors out of participating in the plans. This exacerbates the doctor shortage problem. But such fee reductions are necessary as another ruse to cost-justify the proposed universal health care plan.

    Unless we bite the bullet and move entirely to a Canadian-style nationalized health care program, anything less will be an absolute disaster.

    There’s one factor Trinity University should plan for is the likely impossibility of continuing its self-funded health insurance plan under Erisa. Partly due to required coverage of preconditions, it will be very, very hard for organizations the size of Trinity to fund its own Erisa-allowed claims (backed by a major medical kick-in for enormous claims).

    Trinity officials involved in health care alternatives should carefully read the following article:

    “Repealing Erisa,” The Wall Street Journal, July 21, 2009
    http://online.wsj.com/article/SB10001424052970203946904574298661486528186.html#mod=djemEditorialPage

    One by one, President Obama’s health-care promises are being exposed by the details of the actual legislation: Costs will explode, not fall; taxes will have to soar to pay for it; and now we are learning that you won’t be able to “keep your health-care plan” either.

    The reality is that the House health bill, which the Administration praised to the rafters, will force drastic changes in almost all insurance coverage, including the employer plans that currently work best. About 177 million people—or 62% of those under age 65—get insurance today through their jobs, and while rising costs are a problem, according to every survey most employees are happy with the coverage. A major reason for this relative success is a 1974 federal law known by the acronym Erisa, or the Employee Retirement Income Security Act.

    Erisa allows employers that self-insure—that is, those large enough to build their own risk pools and pay benefits directly—to offer uniform plans across state lines. This lets thousands of businesses avoid, for the most part, the costly federal and state regulations on covered treatments, pricing, rate setting and so on. It also gives them flexibility to design insurance to recruit and retain workers in a competitive labor market. Roughly 75% of employer-based coverage is governed by Erisa’s “freedom of purchase” rules.

    Goodbye to all that. The House bill says that after a five-year grace period all Erisa insurance offerings will have to win government approval—both by the Department of Labor and a new “health choices commissioner” who will set federal standards for what is an acceptable health plan. This commissar—er, commissioner—can fine employers that don’t comply and even has “suspension of enrollment” powers for plans that he or she has vetoed, until “satisfied that the basis for such determination has been corrected and is not likely to recur.”

    In other words, the insurance coverage of 132 million people—the product of enormously complex business and health-care decisions—will now be subject to bureaucratic nanomanagement. If employers don’t meet some still-to-be-defined minimum package, they’ll have to renegotiate thousands of contracts nationwide to Washington’s specifications. The political incentives will of course demand an ever-more generous “minimum” benefit and less cost-sharing, much as many states have driven up prices in the individual insurance market with mandates. Erisa’s pluralistic structure will gradually constrict toward a single national standard.

    Yet a computer programming firm, say, and a grocery store chain have very different insurance needs, and in any case may not be able to afford the same kind and level of benefits. Innovation in insurance products will also be subject to political tampering. Likely casualties include the wellness initiatives that give workers financial incentives to take more responsibility for their own health, such as Safeway’s. Some politicians will claim that’s unfair. High-deductible plans with health savings accounts are also out of political favor, therefore certain to go overboard. If you have one of those and like it, too bad.

    The new Erisa regime will be especially difficult to meet for businesses that operate with very slim profit margins or have large numbers of part-time or seasonal workers. They may simply “cash out” and surrender 8% of their payroll under the employer-mandate tax. A new analysis by the Lewin Group, prepared for the Heritage Foundation, finds that some 88.1 million people will be shifted out of private employer health insurance under the House bill. If those people preferred their prior plan, well, too bad again.

    The largest employers—though not all—may clear the minimum bar, at least at first. But in addition to the “health choices” administrative burden, the cost of labor will rise because the House guts another key section of Erisa. Currently, lawsuits about employee benefits are barred under the law, allowing large employers to avoid the state tort lotteries in disputes over coverage. No longer. As a gratuity to the trial bar, Democrats will now subject businesses to these liabilities in the name of health “reform.”

    So when Mr. Obama says that “If you like your health-care plan, you’ll be able to keep your health-care plan, period. No one will take it away, no matter what,” he’s wrong. Period. What he’s not telling the American people is that the government will so dramatically change the rules of the insurance market that employers will find it impossible to maintain their current coverage, and many will drop it altogether. The more we inspect the House bill, the more it looks to be one of the worst pieces of legislation ever introduced in Congress.

    Jensen Comment
    Several people responded with questions or comments about universal health care in Massachusetts (that was enacted in 2006 under the guidance of Governor Mitt Romney) which I will refer to here as MITT. Firstly I would like to note that danger lurks in comparing the MITT with any universal health care plan being proposed at the Federal level. Firstly, none of the 50 states has the power to simply print money to pay its bills, as is being done on a relatively small scale by the U.S. Treasury at the moment to pay for its excesses. Secondly, MITT is not universal in that it is restricted to low income residents of the state. Thirdly, MITT survives heavily on Federal subsidies, whereas nobody will subsidize any Federal health care plan from above, although a small number of wealthy people may one day make benevolent contributions toward universal health care. Thus far Bill Gates and Warren Buffett have been focused more on Africa's health issues such as TB and polio.

    An excellent, albeit brief, summary of MITT is provided at http://en.wikipedia.org/wiki/Massachusetts_health_care_reform
    Health coverage is very limited in scope and the number of insured has increased substantially. But many uninsured poor people still manage to slip through the cracks.

    An enormous problem has been the shortage of primary care physicians such that those with newly-acquired MITT insurance cannot find a primary care doctor. Most specialists refuse to treat patients who are not referred to them by a primary care physician. Hence, there were and are long lines at Emergency Rooms both before and after MITT was enacted even though many in those lines have MITT coverage. The lines could be worse. MITT will not cover many costly procedures.

    The MITT program is in deep financial stress at the moment and has had to make cuts in scope of coverage and in amounts paid to doctors and hospitals during the current economic crisis ---
    http://liveshots.blogs.foxnews.com/2009/07/17/massachusetts-universal-health-care-cuts/
    Hospitals complain that the promised coverage is far from sufficient to cover their costs. Some, including the huge Boston General Hospital, are now suing or plan to sue the State to recover some of their losses under MITT.

    Under financial stress hospitals in Massachusetts have had to take huge budget cuts. Rather than spread those cuts across the board to all departments, some hospitals have decided to concentrate on dropping the most money-losing departments. You probably can guess the leading candidate for being eliminated --- the obstetrics department.

    My neighbor down the road has a second home up here in the White Mountains. However, he still practices cardiology in a Boston suburb. He says that obstetrics departments are leading candidates for elimination, in large measure, because of the high cost of malpractice insurance covering obstetrics services.

    Lawyers file cookie-cutter lawsuits against doctors, nurses, and hospitals for every defective baby irrespective of the facts in any given case. The reason is the tendency of sympathetic juries to make multimillion dollar awards to a mother of a defective baby irrespective of the facts in the case. Many juries feel that fat cat insurance companies owe it to the unlucky woman (and her lucky lawyers) who must nurture and raise a severely handicapped child. Juries make such awards even when the doctors, nurses, and hospitals performed perfectly under the circumstances. Paul Newman showed us how to love it when lawyers beat the medical system in favor of the "poor and powerless" in The Verdict --- http://www.youtube.com/watch?v=zVZFlBJftgg

    But fat cat insurance companies adjust rates based upon financial risks. The rates became so high for obstetrics that across most of the U.S. (less so in states that cap punitive damages) thousands of gynecologists dropped the obstetrics part of their services. And under MITT in Massachusetts some strained hospitals dropped obstetrics services.

    Health Care Reform Will Indeed Be Universal --- Tort Lawyers Are Fully Covered
    This raises the whole issue of costs of malpractice insurance in the entire health system of the United States. Although a few states like Texas have managed to put some restraints on punitive damages, President Obama wants no such restraints placed on the tort system for virtually any legislation under his term of office. Obama is a lawyer, and he can attribute much of his political success to the financial and other support from tort law firms across the land. He owes them and most of our legislators are themselves lawyers. As a result there's virtually zero chance that any restraints will be placed upon the number of malpractice lawsuits and sizes of awards in any universal health care legislation. In fairness the U.S. Congress and some states years ago put some restraints on runaway malpractice claims --- http://www.redorbit.com/news/science/2593/house_passes_medical_malpractice_limits/
    But in 2009 in Washington DC there is no sentiment for putting further malpractice insurance cost restraints into the forthcoming universal health care legislation.

    In 2009 lawmakers in Washington DC are taking no lessons from malpractice stinginess in the Canadian National Health Plan. Perhaps stinginess is what comes with national health care plans that eliminated private insurance company fat cats.
    "Why 98 percent of Canadian Medical Malpractice Victims Never Receive a Penny in Compensation," by John McKiggan ---
    Click Here

    "What Massachusetts Got Right," by Robert Scheer, The Nation, January 20, 2010 ---
    http://www.thenation.com/doc/20100201/scheer

    Of course, the public is right. In the midst of the worst economic crisis in seventy years, why waste enormous political capital battling to pass a healthcare plan that is modeled on a proven failure in Massachusetts, as voters there clearly registered? Meanwhile, the president has dropped the ball in the effort to make bankers act responsibly by forcing them to forego outrageous bonuses and help homeowners stay in their homes. Again quoting the message of that Wall Street Journal/NBC poll: "The president's focus on health care amid heightened job concerns could be hurting his ratings. At the one-year mark of his presidency, 35 percent of Americans said they were 'quite or extremely' confident he had the right priorities to improve the economy, down from 46 percent at midyear." The Journal noted that a majority disapproved of the government's response to the financial crisis, adding, "The related problem for Mr. Obama is the public's lingering anger about the bailouts of 2008 and 2009, which helped boost bank profits even as unemployment grew--a toxic political problem."

    "The Massachusetts Insurance Blackout:  Insurers go on strike after Deval Patrick imposes price controls," The Wall Street Journal, April 9, 2010 ---
    http://online.wsj.com/article/SB10001424052702304198004575171782805022028.html#mod=djemEditorialPage_t

    This week it became impossible in Massachusetts for small businesses and individuals to buy health-care coverage after Governor Deval Patrick imposed price controls on premiums. Read on, because under ObamaCare this kind of political showdown will soon be coming to an insurance market near you.

    The Massachusetts small-group market that serves about 800,000 residents shut down after Mr. Patrick kicked off his re-election campaign by presumptively rejecting about 90% of the premium increases the state's insurers had asked regulators to approve. Health costs have run off the rails since former GOP Governor Mitt Romney and Beacon Hill passed universal coverage in 2006, and Mr. Patrick now claims price controls are the sensible response to this ostensibly industry greed.

    Yet all of the major Massachusetts insurers are nonprofits. Three of largest four—Blue Cross Blue Shield, Tufts Health Plan and Fallon Community Health—posted operating losses in 2009. In an emergency suit heard in Boston superior court yesterday, they argued that the arbitrary rate cap will result in another $100 million in collective losses this year and make it impossible to pay the anticipated cost of claims. It may even threaten the near-term solvency of some companies. So until the matter is resolved, the insurers have simply stopped selling new policies.

    A court decision is expected by Monday, but state officials have demanded that the insurers—under the threat of fines and other regulatory punishments—resume offering quotes by today and to revert to year-old base premiums. Let that one sink in: Mr. Patrick has made the health insurance business so painful the government actually has to order private companies to sell their products (albeit at sub-market costs).

    One irony is that Mr. Patrick's own Attorney General and his insurance regulators have concluded—to their apparent surprise—that the reason Massachusetts premiums are the highest in the nation is the underlying cost of health care, not the supposed industry abuses that Mr. Patrick and his political mentor President Obama like to cite.

    On top of that, like ObamaCare, integral to the Massachusetts overhaul are mandates that require insurers to cover anyone who applies regardless of health status or pre-existing conditions and to charge everyone about the same rates. This allows people to wait until they're about to incur major medical expenses before buying insurance and transfer the costs to everyone else. This week Blue Cross Blue Shield reported a big uptick in short-term customers who ran up costs more than four times the average, only to drop the coverage within three months.

    Last July, Charlie Baker detailed similar gaming at Harvard Pilgrim, the health plan he used to run. Between April 2008 and March 2009, about 40% of its new enrollees stayed with it for fewer than five months and on average incurred costs about 600% higher than the company would have otherwise expected.

    Mr. Baker is almost certain to be Mr. Patrick's GOP opponent in the fall election. The Governor's lurch toward price controls is obviously part of a bid to tar the former CEO as an industry villain. David Plouffe, the architect of Mr. Obama's Presidential campaign, has signed on as a Patrick 2010 consultant. These kinds of collisions between politics and health care are going to occur constantly across the country as ObamaCare kicks in.

    "What Difference Has RomneyCare Made?" by John C. Goodman, Townhall, July 9, 2011 ---
    http://townhall.com/columnists/johncgoodman/2011/07/09/what_difference_has_romneycare_made

    . . .

    On paper, it looks as though the state has made major progress in insuring the uninsured. From 6.4% of the population in 2006, the uninsured hover around 2% today. However, one study found that nearly all of the newly insured are either on Medicaid, in a state-subsidized plan or in an employer subsidized plan. Only 7% of the newly insured, or about 30,000 people, are directly paying their own way. It’s relatively easy to get people to sign up for insurance when coverage is free or almost free. And it’s not very expensive if you pay for the subsidies using money you would have spent anyway on free care for those who can’t pay their medical bills.

    But aside from moving money from one bucket to another, have any real problems been solved? The evidence isn’t positive.

    There are three major problems in health care all over the world: cost, quality and access. Since nothing in the Massachusetts reform addressed the problems of rising costs and less than adequate quality, those problems have remained more or less unchanged. What about access to care? Surely, newly insured people have more options in the medical marketplace.

    The trouble is that almost all of the newly insured are in health plans that pay doctors and hospitals a lot less than what private insurance pays. Like other places around the country, Massachusetts Medicaid (called MassHealth) pays providers so little that patients often turn to hospital emergency rooms and community health centers for their care when they can’t find doctors who will see them. People in the newly subsidized private insurance plans aren’t faring much better because these plans pay only slightly more than what Medicaid pays.

    The only solid analysis of what has actually happened to patients at this point is a study by Sharon Long and Paul Masi published in the journal Health Affairs. According to the study:

    • There has been no significant change in the number of Massachusetts patients seeking care in hospital emergency rooms since the reform was implemented, and there has actually been an increase in emergency room use by people with incomes below 300% of the poverty level.

    • There has been an increase in doctor visits but no change in visits to specialists and an actual decrease in “medical tests, treatment and follow up care,” which I assume is care for the chronically ill.

    • There has been no change in the percent of the population reporting a failure to “get needed care for any reason within the past 12 months” and remarkably that includes one-third of those with incomes below 300% of the poverty level.

    The problem with counting up doctor visits is that a visit is not always a visit. Nationally, in the state children’s health insurance program (CHIP) doctors have responded to an increase in the demand for their services by scheduling more appointments, but spending less time with patients. Also, you would think that the Massachusetts reform would shift health care resources from the general population to those with less income. But there is no evidence that has happened. On measures of access, the gap between the poor plus the near poor and everyone else appears not to have changed at all!

    Ask yourself why you care whether other people have health insurance? The most likely reason is that you want people to have access to health care. But lack of access to care is a huge problem in Massachusetts right now. As I previously reported more than half of all family doctors and more than half of all internists are not accepting new patients. The wait is more than a month before a new patient is able to see a family doctor, and the wait to see an internist averages 48 days. The average wait in Boston to see a family doctor is more than two months.

    What I am now reporting will be different than what you may have read in the newspapers or at other health blogs. MIT Professor Jon Gruber calls Massachusetts an unqualified success, citing some of the very same studies I am citing. But since Gruber was one of the architects of the Massachusetts health reform, this is like a student grading his own exam.

    What about elevating the Massachusetts reforms to the national level in the form of ObamaCare? As I have previously reported, ObamaCare is likely to result in less access to care for our most vulnerable populations: the disabled and the elderly on Medicare, the poor on Medicaid and the near poor in newly subsidized private insurance. But that is only the beginning.

    ObamaCare threatens a federal takeover of the practice of medicine. It threatens to cost millions of people their jobs. It threatens to cause a wasteful restructuring of American industry in a way that will make us less efficient and less competitive in the international marketplace. It will cause millions to lose their employer sponsored insurance. And it threatens to create health plans with perverse incentives to underprovide care to the patients most in need of the miracles of modern medical science.

    ObamaCare will be anything but benign.

     


    "What The Health Care Bill Actually Says," by Professor John David Lewis (Duke University), August 6, 2009  ---
    http://sweetness-light.com/archive/what-the-health-care-bill-actually-says


     

    Jul 29, 2009 01:23:57 PM, sorg@stny.rr.com wrote:

    It is almost unbelievable that this Bill could have any chance of being adopted, but Obama is working hard to have the Federal Government dictate all matters relating to our health care.  Since so much money is spent on the elderly toward the end of their lives and on special needs children these persons are considered to be expendable under this Bill.  Their helth care will be rationed.  However, illegal immigrants will be well taken care of.  What a disaster this administration is.  They want to take over every aspect of our lives.    



     

    Subject: Health Care or confiscation (H.R.  3200 - All 1017 Pages)

     

    Must be widely circulated.  Extremely frightening!!!!

    -----

    Absolutely incredible...it is difficult for me to comprehend that this could have any possibility of being put into place......


     


     

    H.R.  3200 America's Affordable Health Choices Act of 2009
    Full House Bill --- http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.  3200.IH:

    Introduced in the House on July 14, 2009

    Subject: Fwd: Health Care or confiscation (H.R.  3200 - All 1017 Pages)

     

     

    Attached is the H. R. 3200 - all 1017 pages with comments by Peter Fleckstein.  He has only covered the first 500 pages so far.

     

     

    Peter Fleckstein (aka Fleckman) is reading it and has been posting his findings on Twitter. This is from his postings (Note: All comments are Fleckman’s).

     

    Pg 22 of the HC Bill

     

    MANDATES the Govt will audit books of ALL EMPLOYERS that self insure!!

     

    Pg 30 Sec 123

     

    THERE WILL BE A GOVT COMMITTEE that decides what treatments/benefits you get

     

    Pg 29 lines 4-16

     

    YOUR HEALTHCARE IS RATIONED!!!

     

    Pg 42

     

    The Health Choices Commissioner will choose UR HC Benefits for you. You have no choice!

     

    PG 50 Section 152

     

    HC will be provided to ALL non US citizens, illegal or otherwise

     

    Pg 58

     

    Govt will have real-time access to individual's finances & a National ID Healthcard will be issued!

     

    Pg 59 lines 21-24

     

    Govt will have direct access to your banks accts for electronic funds transfer

     

    PG 65 Sec 164

     

    Is a payoff subsidized plan for retirees and their families in Unions & community orgs (ACORN).

     

    Pg 72 Lines 8-14

     

    Govt is creating an HC Exchange to bring private HC plans under Govt control.

     

    PG 84 Sec 203

     

    Govt mandates ALL benefit packages for private HC plans in the Exchange

     

    PG 85 Line 7

     

    Specs for of Benefit Levels for Plans = The Govt will ration your Healthcare!

     

    PG 91 Lines 4-7

     

    Govt mandates linguistic approp services. Example - Translation for illegal aliens

     

    Pg 95 Lines 8-18

     

    The Govt will use groups i.e., ACORN & Americorps to sign up individuals for Govt HC plan

     

    PG 85 Line 7

     

    Specs of Benefit Levels 4 Plans. #AARP members - Your Healthcare WILL be rationed

     

    PG 102 Lines 12-18

     

    Medicaid Eligible Individuals will be automatically enrolled in Medicaid. No choice

     

    PG 124 lines 24-25

     

    No company can sue GOVT on price fixing. No “judicial review” against Govt Monopoly

     

    PG 127 Lines 1-16

     

    Doctors/ #AMA - The Govt will tell YOU what you can make.

     

    Pg 145 Line 15-17

     

    An Employer MUST auto enroll employees into public opt plan. NO CHOICE

     

    Pg 146 Lines 22-25

     

    Employers MUST pay for HC for part time employees AND their families.

     

    Pg 149 Lines 16-24

     

    ANY Employer with payroll 400k & above who does not provide public opt. pays 8% tax on all payroll

     

    PG 150 Lines 9-13

     

    Business with payroll between 251k & 400k who doesn't provide public opt pays 2-6% tax on all payroll

     

    Pg 167 Lines 18-23

     

    ANY individual who doesn't have acceptable HC according to Govt will be taxed 2.5% of income

     

    Pg 170 Lines 1-3

     

    Any NONRESIDENT Alien is exempt from individual taxes. (Americans will pay)

     

    Pg 195

     

    Officers & employees of HC Admin (GOVT) will have access to ALL American's financial/personal records

     

    PG 203 Line 14-15

     

    “The tax imposed under this section shall not be treated as tax” Yes, it says that

     

    Pg 239 Line 14-24

     

    Govt will reduce physician services for Medicaid. Seniors, low income, poor affected

     

    Pg 241 Line 6-8

     

    Doctors, doesn't matter what specialty you have, you’ll all be paid the same

     

    PG 253 Line 10-18

     

    Govt sets value of Doctor’s time, prof judg, etc. Literally value of humans.

     

    PG 265 Sec 1131

     

    Govt mandates & controls productivity for private HC industries

     

    PG 268 Sec 1141

     

    Fed Govt regulates rental & purchase of power driven wheelchairs

     

    PG 272 SEC. 1145.

     

    TREATMENT OF CERTAIN CANCER HOSPITALS - Cancer patients - welcome to rationing!

     

    PG 280 Sec 1151

     

    The Govt will penalize hospitals for what Govt deems preventable readmissions.

     

    PG 298 Lines 9-11

     

    Doctors, treat a patient during initial admission that results in a readmission - Govt will penalize you.

     

    PG317 L 13-20

     

    OMG!! PROHIBITION on ownership/investment. Govt tells Doctors what/how much they can own.

     

    PG 317-318 lines 21-25,1-3

     

    PROHIBITION on expansion- Govt is mandating hospitals cannot expand

     

    PG 321 2-13

     

    Hospitals have option to apply for exception BUT community input required. Can you say ACORN?!!

     

    PG 335 L 16-25 Pg 336-339

     

    Govt mandates establishment of outcome based measures. HC the way they want. Rationing

     

    PG 341 Lines 3-9

     

    Govt has authority to disqualify Medicare Adv Plans, HMOs, etc. Forcing peeps into Govt plan

     

    PG 354 Sec 1177

     

    Govt will RESTRICT enrollment of Special needs people! WTF. My sis has down's syndrome!!

     

    Pg 379 Sec 1191

     

    Govt creates more bureaucracy - Telehealth Advisory Committee. Can you say HC by phone?

     

    PG 425 Lines 4-12

     

    Govt mandates Advance Care Planning Consultant. Think Senior Citizens end of life

     

    Pg 425 Lines 17-19

     

    Govt will instruct & consult regarding living wills, durable powers of atty. Mandatory!

     

    PG 425 Lines 22-25, 426 Lines 1-3

     

    Govt provides approved list of end of life resources, guiding you in death

     

    PG 427 Lines 15-24

     

    Govt mandates program for orders for end of life. The Govt has a say in how your life ends

     

    Pg 429 Lines 1-9

     

    An “adanced care planning consultant” will be used frequently as patient's health deteriorates

     

    PG 429 Lines 10-12

     

    “advanced care consultation” may include an ORDER for end of life plans. AN ORDER from GOV

     

    Pg 429 Lines 13-25 -

     

    The govt will specify which Doctors can write an end of life order.

     

    PG 430 Lines 11-15

     

    The Govt will decide what level of treatment you will have at end of life

     

    Pg 469

     

    Community Based Home Medical Services=Non profit orgs. Hello, ACORN Medical Svcs here!!?

     

    Page 472 Lines 14-17

     

    PAYMENT TO COMMUNITY-BASED ORG. 1 monthly payment to a community-based org. Like ACORN?

     

    PG 489 Sec 1308

     

    The Govt will cover Marriage & Family therapy. Which means they will insert Govt into your marriage

     

    Pg 494-498

    Govt will cover Mental Health Services including defining, creating, rationing those services

    You can read the following at http://www.defendyourhealthcare.us/houseandsenatebills.html

    Here are a few one liners from the House health bill:

    Pg 22 of the HC Bill MANDATES the Govt. will audit books of ALL EMPLOYERS that self insure!!

    Pg 30, Sec 123 of HC bill - THERE WILL BE A GOVT. COMMITTEE that decides what treatment you get.

    Pg 29, lines 4-16 - YOUR HEALTH CARE IS RATIONED!!!

    Pg 42, of HC Bill - The Health Choices Commissioner will choose YOUR Health Care Benefits for you. YOU HAVE NO CHOICE!

    PG 50, Section 152 - Health Care will be provided to ALL NON-US CITIZENS, ILLEGAL OR OTHERWISE!

    Pg 58, - Govt. will have real-time access to individual's finances & a National ID Healthcard will be issued!

    Pg 59, lines 21-24 - Govt. will have direct access to your bank accounts for electronic funds transfer.

    PG 65, Sec 164 is a payoff subsidized plan for retirees and their families in Unions & community organizations (ACORN).

    Pg 72, Lines 8-14 - Govt. is creating a Health Care Exchange to bring private Health Care Plans under Govt. control.

    Pg 84, Sec 203 HC bill - Govt. mandates ALL b enefit packages for private Health Care Plans in the Exchange.

    Pg 85, Line 7 - Specifics for Benefit Levels for Plans = the govt. will ration your Health Care!

    Pg 91, Lines 4-7 - Govt. mandates linguistic appropriate services, i.e, translation for illegal aliens.

    Pg 95, Lines 8-18 - The govt. will use groups, i.e., ACORN & Americorps, to sign up individuals for govt. HC plan.

    Pg 85, Line 7 - Specifics of Benefit Levels for Plans. AARP members, your health care WILL be rationed.

    Pg 102, Lines 12-18 - Medicaid Eligible Individuals will be automatically enrolled in Medicaid. NO CHOICE.

    Pg 124, lines 24-25 - No company can sue GOVT. on price fixing. No judicial review against Govt. Monopoly.

    Pg 127, Lines 1-16 - Doctors/AMA, the Govt. will tell YOU what you can make.

    Pg 145, Line 15-17 - An Employer MUST automatically enroll employees into public option plan. NO CHOICE.

    Pg 126, Lines 22-25 - Employers MUST pay for Health Care for part time employees AND their families.

    Pg 149, Lines 16-24 - ANY Employer with payroll 400k & above who does not provide public option pays 8% tax on all payroll.

    Pg 150, Lines 9-13 - Businesses with payroll between $251k & $400k who doesn’t provide public opt pays 2-6% tax on all payroll.

    Pg 167, Lines 18-23 - ANY individual who doesn't have acceptable Health Care according to the govt. will be taxed 2.5% of income.

    Pg 170, Lines 1-3 - Any NONRESIDENT alien is exempt from individual taxes. (Americans will pay.)

    Pg 195, HC Bill - officers & employees of HC Admin. (GOVT) will have access to ALL Americans' financial and personal records.

    Pg 203, Line 14-15 - The tax imposed under this section shall not be treated as tax. (Yes, it says that!)

    Pg 239, Line 14-24 - Govt. will reduce physician services for Medicaid. Seniors, low income, poor will be affected.

    Pg 241, Line 6-8 - Doctors, it doesn't matter what specialty you have, you’ll all be paid the same.

    Pg 253, Line 10-18 - Govt. sets the value of a doctor's time, professional judgment, etc. Literally, the value of humans.

    Pg 265, Sec 1131 - Govt. mandates & controls productivity for private Health Care industries.

    Pg 268, Sec 1141 - Federal Govt. regulates rental & purchase of power driven wheelchairs.

    Pg 272, SEC. 1145 - TREATMENT OF CERTAIN CANCER HOSPITALS. Cancer patients, welcome to rationing!

    Pg 280, Sec 1151 - The Govt. will penalize hospitals for what the Govt. deems preventable readmissions.

    Pg 298, Lines 9-11 - Doctors, if you treat a patient during initial admission that results in a miss read, the Govt. will penalize you.

    Pg 317, L 13-20 - OMG!! PROHIBITION on ownership/investment. Govt. tells Doctors what/how much they can own.

    Pg 317-318, lines 21-25,1-3 - PROHIBITION on expansion. Govt. is mandating that hospitals cannot expand.

    Pg 321, 2-13 - Hospitals have an opportunity to apply for exception BUT community input is required. Can you20say ACORN?!!

    Pg 335, L 16-25 Pg 336-339 - Govt. mandates establishment of outcome based measures. HC the way they want it. Rationing.

    Pg 341, Lines 3-9 - Govt. has authority to disqualify Medicare Advantage Plans, HMOs, etc., forcing people into the Govt. plan.

    Pg 354, Sec 1177 - Govt. will RESTRICT enrollment of Special needs people!

    Pg 379, Sec 1191 - Govt. creates more bureaucracy; Telehealth Advisory Committee. Can you say HC by phone?

    Pg 425, Lines 4-12 - Govt. mandates Advance Care Planning Consultations. Think Senior Citizens end of life (assisted suicide).

    Pg 425, Lines 17-19 - Govt. will instruct & consult regarding Living Wills, Durable Powers of Attorney. Mandatory!

    Pg 425, Lines 22-25, PG 426, Lines 1-3 - Govt. provides approved list of end of life resources, guiding you in death.

    Pg 427, Lines 15-24 - Govt. mandates program for orders for end of life. The Govt. has a say in how your life ends.

    Pg 429, Lines 1-9 - An Advanced Care Planning Consultation (assisted suicide) will be used frequently as patient's health deteriorates.

    Pg 429, Lines 10-12 - Advanced Care Consultation may include an ORDER for end of life plans. AN ORDER from YOUR GOVERNMENT!!

    Pg 429, Lines 13-25 - The govt. will specify which Doctors can write an end of life order.

    Pg 430, Lines 11-15 - The govt. will decide what level of treatment you will have at the end of YOUR life.

    Pg 469 - Community Based Home Medical Services are Non-profit organizations. Hello, ACORN Medical Services here!

    Pg 472, Lines 14-17 - PAYMENT TO COMMUNITY-BASED ORG. One monthly payment to a community-based organization. Like ACORN?

    Pg 489, Sec 1308 - The govt. will cover Marriage & Family therapy. Which means they will insert govt. into your marriage.

    Pg 494-498 - Govt. will cover Mental Health Services, including defining, creating, and rationing those services.

     


    H.R.  676 --- http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.  676.IH:
    United States National Health Care Act or the Expanded and Improved Medicare for All Act
    Introduced in House on January 26. 2009


    Links to H.R.   676 in the House of Representatives ---
    http://faculty.trinity.edu/rjensen/Health.htm#HR676

    More facts about Obamacare sent to me by my good neighbors

    New Health Plan From Obama

     

    TOP TEN INDICATORS THAT YOUR EMPLOYER HAS CHANGED TO OBAMA'S HEALTH CARE PLAN.

    (10)  Your annual breast exam is done at Hooters.

    (9)  Directions to your doctor's office include "Take a left when you enter the trailer park."

    (8)  The tongue depressors taste faintly of Fudgesicles.

    (7)  The only proctologist in the plan is "Gus" from Roto-Rooter.

    (6)  The only item listed under Preventive Care Coverage is "an apple a day..."

    (5)  Your primary care physician is wearing the pants you gave to Goodwill last month.

    (4)  "The patient is responsible for 200% of out-of-network charges," is not a typographical error.

    (3)  The only expense covered 100% is "embalming."

    (2)  Your Prozac comes in different colors with little M's on them.

    AND THE NUMBER ONE SIGN YOU'VE JOINED A GOVERNMENT HEALTH CARE PLAN:

    (1)  You ask for Viagra and they give you a Popsicle stick and Duct Tape.

     


    Hi Zafar,

    By now I'm used to your innuendos and  insults of my intelligence. My issue with medical malpractice lawyers has zero to do with political party affiliation. I have two issues with lawyers. One is political in the sense that they traditionally vote in laws favorable to themselves whenever they dominate state and federal legislatures --- which most of the time.


    My second issue with medical malpractice lawyers is that they prefer to work on a contingency fee basis in the punitive damages legal lottery. These same lawyers then play to the sympathies of judges and/or juries to award multimillion dollar sympathy settlements even when the medical service providers did absolutely nothing wrong. This, in turn, unfairly damages their reputations and in some instances drives them out of the medical service business such as when obstetricians either quit altogether or drop obstetrics from their OB/GYN combined practices.If you want one absurd case with a lot of skin in the game (even the plaintiff's lawyer conceded the initial $60 million awarded for loose skin was absurd) go to
    http://www.chicagomedicalmalpracticelawyerblog.net/2011/08/court-lowers-60-million-medica.html 


    The above two issues is at the heart of my disagreement with lawyers.
    Firstly, lawyer-legislators made the legal system so complicated that in order to file a malpractice claim into the legal system you need to employ a lawyer.


    Secondly, the lawyers prefer to be paid on a contingency fee bases such that in states like Texas that took the punitive damage legal lottery out of malpractice lawsuits, the lawyers must now charge on an hourly basis rounded upward by the week.


    Insert Figure 1


    When the lawyers charge on an hourly basis instead of playing a legal lottery, this hurts poor people who cannot afford even a few hours of law firm time. Hence, when the punitive damage, contingency fee lottery was taken out of the equation by constitutional amendment in Texas, many poor people cannot afford to file medical malpractice lawsuits.


    Here's where I differ from Jagdish

    I differ from Jagdish on the basis of who determines the settlements. In Finland and other parts of Europe, professional medical boards determine the settlements rather than the legal system.


    Jagdish wants to leave lawyers in the malpractice claims business either on a contingency fee or hourly fee basis. I want to cut lawyers and the legal system out of the claims filing process and have the medical system deal directly with malpractice claims, thereby making it possible for poor people to file claims even when the state or nation does not have a punitive damages legal lottery.


    My model is the malpractice claims process that modifies the Canadian process

    In both Texas and Canada the punitive damages are severely capped to a point that the punitive damages legal lottery is taken out of the equation. But both systems require even poor people to pay up front investigation costs and filing fees.


    I think investigation and filing fees should be paid for by the medical system as a shared cost spread among all medical service billing fees (which in Canada ultimately spreads it among taxpayers). There should be no up front cost for filing a claim, although the system might impose penalties of some sort for claims found to be fraudulent or frivolous.


    This is not entirely the way it works in Canada at the moment.

     

    "Canadian Malpractice Insurance Takes Profit Out Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
    Click Here
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890  

    The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

    A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

    A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

    Why the difference?

    In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.

    In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.

    In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.

    Canadian Medical Protective Association

    Here’s how it works.

    Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium

    "We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.

    If a doctor is sued, the group pays the claim and provides legal counsel.

    In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.

    "We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''

    But the importance of limiting jury awards may not play into the big picture on health care reform.

    Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.

    Major Difference

    In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.

    In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.

    A bad outcome in itself is not the basis of a lawsuit.

    The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.

    In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.

    In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.

    Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”

    For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.

    2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.

    In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”

    Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #



    Read more:
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP

     


    November 12. 2010 message from Ramesh Fernando 

    Prof. Jensen,
    While it's true our spending on health-care is much lower than the US in terms of percentage of GDP and we don't have the level of malpractice suits as in the USA there are severe problems with the healthcare system. The federal government has a guaranteed I think 6% accelerator, much higher than inflation, transfer payment to the provinces for health care. I doubt the federal government can guarantee that kind of spending in the next negotiations between the provinces and the federal government.

    Then again federal government transfers amount to only about 15-20% of most provincial health spending and provinces spend about 40-50% of their budget on the health budget and growing larger as the boomers age. Provinces especially Ontario and Quebec but even Alberta with it's oil and natural gas royalties will not be able to keep this up,

    Ontario has a bigger deficit at $21 billion Canadian than California I think and Ontario only has 12-13 million people. Quebec which is usually a very socialist province, has actually liberalized the private element of health care services the most, there are many Ontarians who go to Quebec to get treated including private MRI scans etc. British Columbia is also following Quebec and has allowed private clinics to serve patients.

    There are two cures for reducing the deficits of the provinces, one is to stop the increase in health spending so per capita spending goes down along with co-payments for superficial emergencies like colds and coughs to the doctor or emergencies. Other is to create a two tier system with a fully private one along with the public system. All three federal parties, even the governing Conservatives who are most similar to your Republicans and the Bloc Quebecois (the Quebec nationalists-separatists) are against a private system but there is a lot of support for it from the more conservative elements in Canada, including Preston Manning, the former leader of the populist Reform and former Conservative premier of Ontario Mike Harris.

    They wrote a couple booklets published by the Fraser Insitute
    "A Canada Strong and Free"
    URL http://www.fraserinstitute.org/research-news/display.aspx?id=1277  and

    "Caring for Canadians"
    URL http://www.fraserinstitute.org/research-news/display.aspx?id=12928 
    which basically noted the problems with the Canada Health Act.

    Note I am not saying I agree with them or disagree with either way but they do have some valid points.

    Regards,
    Ramesh Fernando
    CMA Candidate
    Ottawa, Ontario, Canada

     

     


     

    International comparison (personal income tax)

    Comparison of taxes paid by a household earning the country's average wage (as of 2005), including social security contributions paid by employer  

     
    Country Single
    no children
    Married
    2 children
    Country Single
    no children
    Married
    2 children

    Australia 28.3% 16.0% Korea 17.3% 15.2%
    Austria 47.4% 35.5% Luxembourg 35.3% 12.2%
    Belgium 55.4% 40.3% Mexico 18.2% 18.2%
    Canada 31.6% 21.5% Netherlands 38.6% 29.1%
    Czech Republic 43.8% 27.1% New Zealand 20.5% 14.5%
    Denmark 41.4% 29.6% Norway 37.3% 29.6%
    Finland 44.6% 38.4% Poland 43.6% 42.1%
    France 50.1% 41.7% Portugal 36.2% 26.6%
    Germany 51.8% 35.7% Slovakia 38.3% 23.2%
    Greece 38.8% 39.2% Spain 39.0% 33.4%
    Hungary 50.5% 39.9% Sweden 47.9% 42.4%
    Iceland 29.0% 11.0% Switzerland 29.5% 18.6%
    Ireland 25.7% 8.1% Turkey 42.7% 42.7%
    Italy 45.4% 35.2% United Kingdom 33.5% 27.1%
    Japan 27.7% 24.9% United States 29.1% 11.9%

    Source: OECD, 2005 data

    To this we must add other taxes such as a corporate capital tax, corporate income tax, VAT tax, personal and general sales taxes, and "taxes" collected that are dedicated for specific purposes such as health care and unemployment taxes.

     

    Provincial and federal sales tax rates at the retail level on goods and some services are as follows ---
    http://en.wikipedia.org/wiki/Taxation_in_Canada

    Province↓ HST GST PST Total Tax
    Alberta   5%   5%
    British Columbia 12%1     12%
    Manitoba   5% 7% 12%5
    New Brunswick 13%     13%
    Newfoundland and Labrador 13%     13%
    Nova Scotia 15%2     15%
    Ontario 13%1     13%
    Prince Edward Island   5% 10% 15.5%3,5
    Québec   5% 8.5%4 13.925%3,5
    Saskatchewan   5% 5% 10%5

    1 in British Columbia and Ontario, the PST and GST was integrated into a federally-administered HST on 1 July 2010
    2 in Nova Scotia, the HST was increased to 15% on 1 July 2010
    3 in Québec and PEI, PST is calculated on the total price including GST
    4 in Québec the PST was increased to 8.5% on 1 January 2011 and will increase to 9.5% on 1 January 2012
    5 Since the PST is applied first, then the GST to the subsequent amount, the PST is also being taxed. This results in a tax being taxed which calculates to more than the Total Tax amount indicated in the table above, depending on the amount being taxed.

    Payroll Taxes in Canada
    http://en.wikipedia.org/wiki/Taxation_in_Canada

    Ontario levies a payroll tax on employers, the "Employer Health Tax", of 1.95% of payroll. Eligible employers are exempt on the first $400,000 of payroll. This tax was designed to replace revenues lost when health insurance premiums, which were often paid by employers for their employees, were eliminated in 1989.

    Quebec levies a similar tax called the "Health Services Fund". For those who are employees, the amount is paid by employers as part of payroll. For those who are not employees such as pensioners and self-employed individuals, the amount is paid by the taxpayer.

    Premiums for the Employment Insurance system and the Canada Pension Plan are paid by employees and employers. Premiums for Workers' Compensation are paid by employers. These premiums account for 12% of government revenues. These premiums are not considered to be taxes because they create entitlements for employees to receive payments from the programs, unlike taxes, which are used to fund government activities. The funds collected by the Canada Pension Plan and by the Employment Insurance are in theory separated from the general fund. It should be noted that Unemployment Insurance was renamed to Employment Insurance to reflect the increased scope of the plan from its original intended purpose.

    Employment Insurance is unlike private insurance because the individual's yearly income impacts the received benefit. Unlike private insurance, the benefits are treated as taxable earnings and if the individual had a mid to high income for the year, they could have to repay up to the full benefit received.

     

    Americans at all levels of income should have to agree to much higher taxes
    The average Canadian family spends more money on taxes than on necessities of life such as food, clothing, and housing, according to a study from The Fraser Institute, an independent research organization with offices across Canada. The Canadian Consumer Tax Index, 2007, shows that even though the income of the average Canadian family has increased significantly since 1961, their total tax bill has increased at a much higher rate.

    The Fraser Institute, April 16, 2007 --- http://www.newswire.ca/en/releases/archive/April2007/16/c5234.html
    Jensen Comment
    Canadians control health care costs much better than the United States. Canadian health care claims and payments costs are negligible whereas in the United Sates a vast private and public bureaucracy exists just for accounting purposes. Malpractice coverage and government fraud is greatly controlled relative to the United States. Canada greatly restricts the number of free riders in the system and negotiates much lower prescription drug prices relative to insurance companies and Medicare in the United States. Malpractice awards in Canada are tightly controlled.

    Canada's heath care costs and services vary by province such that there is no single national service. In general the system is much more equitable for lower income citizens but often delays virtually all claims for elective procedures such as knee replacements. Relative to the United States, Canada has a much lower cost to bear for illegal immigrants in terms of welfare support and medical services. This, however, also means that Canada has a much lower population of illegals to exploit in low-wage occupations such as maid services, construction trades, and migrant farm workers.

    Although taxes are higher in Canada, the Canadians are more on a pay-as-you go system whereas the U.S. now has deficits of over $1.5 trillion per year that we are adding to close to $100 trillion in entitlement obligations that we're forcing upon future generations ---
    http://faculty.trinity.edu/rjensen/Entitlements.htm

     

     

    International comparison (personal income tax)

    Comparison of taxes paid by a household earning the country's average wage (as of 2005), including social security contributions paid by employer  

     
    Country Single
    no children
    Married
    2 children
    Country Single
    no children
    Married
    2 children

    Australia 28.3% 16.0% Korea 17.3% 15.2%
    Austria 47.4% 35.5% Luxembourg 35.3% 12.2%
    Belgium 55.4% 40.3% Mexico 18.2% 18.2%
    Canada 31.6% 21.5% Netherlands 38.6% 29.1%
    Czech Republic 43.8% 27.1% New Zealand 20.5% 14.5%
    Denmark 41.4% 29.6% Norway 37.3% 29.6%
    Finland 44.6% 38.4% Poland 43.6% 42.1%
    France 50.1% 41.7% Portugal 36.2% 26.6%
    Germany 51.8% 35.7% Slovakia 38.3% 23.2%
    Greece 38.8% 39.2% Spain 39.0% 33.4%
    Hungary 50.5% 39.9% Sweden 47.9% 42.4%
    Iceland 29.0% 11.0% Switzerland 29.5% 18.6%
    Ireland 25.7% 8.1% Turkey 42.7% 42.7%
    Italy 45.4% 35.2% United Kingdom 33.5% 27.1%
    Japan 27.7% 24.9% United States 29.1% 11.9%

    Source: OECD, 2005 data

    To this we must add other taxes such as a corporate capital tax, corporate income tax, VAT tax, personal and general sales taxes, and "taxes" collected that are dedicated for specific purposes such as health care and unemployment taxes.

     

    Provincial and federal sales tax rates at the retail level on goods and some services are as follows ---
    http://en.wikipedia.org/wiki/Taxation_in_Canada

    Province↓ HST GST PST Total Tax
    Alberta   5%   5%
    British Columbia 12%1     12%
    Manitoba   5% 7% 12%5
    New Brunswick 13%     13%
    Newfoundland and Labrador 13%     13%
    Nova Scotia 15%2     15%
    Ontario 13%1     13%
    Prince Edward Island   5% 10% 15.5%3,5
    Québec   5% 8.5%4 13.925%3,5
    Saskatchewan   5% 5% 10%5

    1 in British Columbia and Ontario, the PST and GST was integrated into a federally-administered HST on 1 July 2010
    2 in Nova Scotia, the HST was increased to 15% on 1 July 2010
    3 in Québec and PEI, PST is calculated on the total price including GST
    4 in Québec the PST was increased to 8.5% on 1 January 2011 and will increase to 9.5% on 1 January 2012
    5 Since the PST is applied first, then the GST to the subsequent amount, the PST is also being taxed. This results in a tax being taxed which calculates to more than the Total Tax amount indicated in the table above, depending on the amount being taxed.

    Payroll Taxes in Canada
    http://en.wikipedia.org/wiki/Taxation_in_Canada

    Ontario levies a payroll tax on employers, the "Employer Health Tax", of 1.95% of payroll. Eligible employers are exempt on the first $400,000 of payroll. This tax was designed to replace revenues lost when health insurance premiums, which were often paid by employers for their employees, were eliminated in 1989.

    Quebec levies a similar tax called the "Health Services Fund". For those who are employees, the amount is paid by employers as part of payroll. For those who are not employees such as pensioners and self-employed individuals, the amount is paid by the taxpayer.

    Premiums for the Employment Insurance system and the Canada Pension Plan are paid by employees and employers. Premiums for Workers' Compensation are paid by employers. These premiums account for 12% of government revenues. These premiums are not considered to be taxes because they create entitlements for employees to receive payments from the programs, unlike taxes, which are used to fund government activities. The funds collected by the Canada Pension Plan and by the Employment Insurance are in theory separated from the general fund. It should be noted that Unemployment Insurance was renamed to Employment Insurance to reflect the increased scope of the plan from its original intended purpose.

    Employment Insurance is unlike private insurance because the individual's yearly income impacts the received benefit. Unlike private insurance, the benefits are treated as taxable earnings and if the individual had a mid to high income for the year, they could have to repay up to the full benefit received.

     

    Americans at all levels of income should have to agree to much higher taxes
    The average Canadian family spends more money on taxes than on necessities of life such as food, clothing, and housing, according to a study from The Fraser Institute, an independent research organization with offices across Canada. The Canadian Consumer Tax Index, 2007, shows that even though the income of the average Canadian family has increased significantly since 1961, their total tax bill has increased at a much higher rate.

    The Fraser Institute, April 16, 2007 --- http://www.newswire.ca/en/releases/archive/April2007/16/c5234.html
    Jensen Comment
    Canadians control health care costs much better than the United States. Canadian health care claims and payments costs are negligible whereas in the United Sates a vast private and public bureaucracy exists just for accounting purposes. Malpractice coverage and government fraud is greatly controlled relative to the United States. Canada greatly restricts the number of free riders in the system and negotiates much lower prescription drug prices relative to insurance companies and Medicare in the United States. Malpractice awards in Canada are tightly controlled.

    Canada's heath care costs and services vary by province such that there is no single national service. In general the system is much more equitable for lower income citizens but often delays and rations virtually all claims for elective procedures such as knee replacements. Relative to the United States, Canada has a much lower cost to bear for illegal immigrants in terms of welfare support and medical services. This, however, also means that Canada has a much lower population of illegals to exploit in low-wage occupations such as maid services, construction trades, and migrant farm workers.

    Although taxes are higher in Canada, the Canadians are more on a pay-as-you go system whereas the U.S. now has deficits of over $1.5 trillion per year that we are adding to close to $100 trillion in entitlement obligations that we're forcing upon future generations ---
    http://faculty.trinity.edu/rjensen/Entitlements.htm

     

    Dr. Anne Doig (incoming President of the Canadian Medical Association) says patients are getting less than optimal care and she adds that physicians from across the country - who will gather in Saskatoon on Sunday for their annual meeting - recognize that changes must be made. "We all agree that the system is imploding, we all agree that things are more precarious than perhaps Canadians realize,"
    Jennifer Graham, "Overhauling health-care system tops agenda at annual meeting of Canada's doctors," The Canada Press, August 15, 2009 --- Click Here

    Video:  Canadian Brain Surgery --- http://www.freemarketcure.com/brainsurgery.php

    Of course it's also possible to find horror stories of medical service denial/rationing in the United States, especially for people with too much income for Medicaid coverage and too little income for a decent private medical insurance plan. Since Medicare does not pay for nursing home coverage, there are also many horror stories of care for the elderly in U.S. long-term care nursing homes. I think Canada provides better nursing care of its long-term disabled citizens.

    Video:  ABC's John Stossel Destroys/Pulverizes/Crushes Obama's anti-American 'Health Care' Plan
    What's not so hot about Canada's national plan ---
    http://www.youtube.com/watch?v=q9GMKK_fWKg&feature=email


    "Canadian Malpractice Insurance Takes Profit Out Of Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
    Click Here
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890  

    The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.

    A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.

    A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.

    Why the difference?

    In the U.S., private for-profit insurance companies extend medical malpractice coverage to doctors.

    In Canada, physicians are covered through membership in a nonprofit. The Canadian Medical Protective Association offers substantially reduced fees for the same coverage, especially considering that their payout is limited by caps in Canada just as in some U.S. states.

    In 1978, the Canadian Supreme Court limited pain and suffering awards to just over $300,000, circumventing the opportunity for a jury to decide on an award depending on the case before them.

    Canadian Medical Protective Association

    Here’s how it works.

    Fees for membership vary depending on the region of the country in which the doctor works and their specialty. All neurosurgeons in Ontario will pay the same, for example. The number of claims they have faced for medical malpractice does not figure into their premium

    "We don't adjust our fees based on individual experience; it's the experience of the group,'' says Dr. John Gray, the executive director, "That's what the mutual approach is all about, and it helps keep the fees down for everyone,” he tells the St. Petersburg Times.

    If a doctor is sued, the group pays the claim and provides legal counsel.

    In the U.S., the push has been on for limiting claims, no matter how egregious the medical malpractice. President Obama was booed in June when, before the American Medical Association, he said he would not limit a malpractice jury award.

    "We got a crazy situation where Obama is talking about the cost of medicine but he said, 'I don't believe in caps,' " complains Dr. Dennis Agliano, past president of the Florida Medical Association. "If you don't have caps, the sky's the limit and there's no way to curtail those costs.''

    But the importance of limiting jury awards may not play into the big picture on health care reform.

    Malpractice lawsuits amount to less than one percent of both the Canadian and the U.S. healthcare system, meanwhile between 44,000 and 98,000 Americans die each year due to medical errors in hospitals alone, while 16 times as many suffer injuries without receiving any compensation, reports the group Americans for Insurance Reform.

    Major Difference

    In Canada, an injured patient is often required to pay for the initial investigation into his case. In the U.S. the contingency fee basis, usually in the range of 30 percent, allows the injured party to proceed without a financial downside.

    In both the U.S. and Canada, the definition of medical negligence is that a duty of care was owed to the patient by the physician, there was a breach h of the standard of care and the patient suffered harm by the physician’s failure to meet that standard of care.

    A bad outcome in itself is not the basis of a lawsuit.

    The Canadian Medical Protective Association insures virtually all of the country’s 76,000 doctors, as opposed to the U.S. where private for-profit insurance companies cover physicians for medical malpractice.

    In Canada, the median damaged paid in 2007 was $91,999 and judgments favored patients 25 times, doctors 70 times.

    In the U.S., many physician groups are requiring patients to waive their rights to a jury trial, even though malpractice litigation accounts for just 0.6 percent of healthcare costs.

    Public Citizen, the consumer group, charges that the facts don’t warrant the “politically charged hysteria surrounding medical malpractice litigation.”

    For the third straight year, medical malpractice payments were at record lows finds the group in a study released this month. The decline, however, is likely due to fewer injured patients receiving compensation, not improved health safety.

    2008 saw the lowest number of medical malpractice payments since the federal government’s National Practitioner Data Bank began compiling malpractice statistics. In 2008, payments were 30.7 percent lower than averages recorded in all previous years.

    In the report titled, The 0.6 Percent Bogeyman, the nonprofit watchdog group states, “between three and seven Americans die from medical errors for every 1 who receives a payment for any type of malpractice claim.”

    Public Citizen previously reported that about five percent of doctors are responsible for half of the medical malpractice in the U.S. that can result in permanent injury or death. #



    Read more:
    http://www.injuryboard.com/national-news/canadian-malpractice-insurance-takes-profit-out-of-coverage.aspx?googleid=267890#ixzz0W0Z71JOP

     


    "4 Reasons The American Dream Will Be Over Unless We Act," by John Hawkins, Townhall, November 10, 2009 ---
    http://townhall.com/columnists/JohnHawkins/2009/11/10/4_reasons_the_american_dream_will_be_over_unless_we_act

    "Make no mistake about it, this generation is a generation of thieves and the people who stole their parents and their children’s money to make their own lives cushier are at it again. This time the target is their grandchildren." --
    Evan Sayet

    Throughout American history, generations of our countrymen took pride in leaving the country better than the one they grew up in. Their attitude about sacrifice was summed up by this classic quotation from Tom Paine:

    "If there must be trouble, let it be in my day, that my child may have peace."

    That is no longer the spirit that animates our leaders or much of our country. Today, it's,

    "If there must be trouble, let our children and grandchildren handle it, so that I am not inconvenienced."

    History is full of great nations that have fallen from their lofty perches back into the ranks and the United States is likely to be among them unless we change our attitude about the following issues:

    1) Takers Vs. Producers: "In 1985, just 16.5% of filers paid no income tax." Today, "roughly 120 million Americans40 percent of the U.S. population – are outside of the federal income tax system."

    Meanwhile, the top 50% of income earners pay 97% percent of the income taxes. "In 1945, 41.9 workers supported each (Social Security recipient), while today only 3.3 workers support each retiree." That number will continue to shrink.

    In other words, we're developing into a two-tiered society. Some people like to think of it as the "haves" and "have nots." However, it would be more apt to describe it as the people who pay the bills and the people who live off of the fruits of their labor.

    This is an extraordinarily dangerous development for our country. It makes us overly dependent on workers and entrepreneurs who may flee the country or simply stop working as the burden on them grows. It also leads to class warfare, with the producers becoming increasingly resentful of an ever more demanding class of sows dining at the government troth.

    Of course, it's easy to be demanding when you don't have to pay the full value of the services you receive. It's also easy to be resentful when you don't get your money's worth in government services and are treated as selfish for wanting to keep more of the money you earned for yourself. This is not a recipe either for societal stability or for long-term prosperity.

    2) A degenerating society: America's success has been because of our people, not because of our government. It is almost impossible to overestimate the value our country has gotten out of having a hard working, honest, charitable, patriotic, culturally homogenous population.

    Yet, the cultural elements that have made this a great nation are under attack on every level. The stigma for taking government assistance is fading, government is taking over the role of charity, many liberals mock the idea of patriotism, divorce rates have grown perilously high, support for gay marriage has increased, the percentage of the population that's Christian is dropping, and multi-culturalism and even dislike of America is replacing the idea of the Melting Pot.

    The culture of a nation often tends to be more resilient than people realize, but that doesn't mean it can be taken for granted. If the bonds that hold us together disintegrate or the fundamental decency of the American people is no longer a given, our nation will no longer be great. As Samuel Adams said back in 1779:

    "A general dissolution of principles and manners will more surely overthrow the liberties of America than the whole force of the common enemy. While the people are virtuous they cannot be subdued; but when once they lose their virtue then will be ready to surrender their liberties to the first external or internal invader."

    3) Mounting debt: There's no peril greater to this country's future than our rapidly increasing debt. We have no idea how to pay for our Social Security and Medicare obligations, we seem to be running larger and larger deficits every year, and neither political party has the guts to make significant cuts in spending. Meanwhile, the politicians in DC are so irresponsible that they're obsessed with adding yet another cripplingly expensive entitlement program on top of the others we already have now, despite the objections of the American people.

    Could this lead to hyperinflation that dramatically lessens the worth of a dollar? Could it, over the long haul, give nations like China so much economic leverage over us that it would be difficult to refuse them? Could the amount of money we have to pay in interest on the debt become so odious that it could dramatically reduce economic growth? Sadly, all of these scenarios are becoming more plausible by the day.

    4) Nuclear proliferation: If we don't have the will to stop a "death to America" chanting terrorist regime run by religious fanatics from getting nuclear weapons, then we don't have the will to stop any nation. That's how it will be read across the Middle-East and across the world as well if Iran gets nukes. Mahmoud Ahmadinejad and company wouldn't be alone either. If they get nukes, we should expect at a minimum Egypt, Iraq, Kuwait, Saudi Arabia to also build nuclear weapons. Once that genie is out the bottle, it'll never be put back in and the United States will suffer horribly as a result.

    That's not just because of the much greater potential for nuclear war and nuclear blackmail, but because the strongest of all nations will always have a target on its back. Imagine terrorists smuggling nuclear bombs into Los Angeles, DC, Chicago, and Houston and then, after the explosion, not even being able to determine which rogue nation produced the weapons that killed millions of Americans. That's the future we're headed towards unless Iran is stopped and the consequences will be more devastating than most Americans can imagine.

    Continued in article

    Reinventing the American Dream ---
    http://faculty.trinity.edu/rjensen/2008Bailout.htm#AmericanDream


    "The Real Pending Crisis: Public Pensions," by Bruce Bialosky, Townhall, November 2, 2009 ---
    http://townhall.com/columnists/BruceBialosky/2009/11/02/the_real_pending_crisis_public_pensions 

    President Obama often states that the federal budget cannot be balanced without health insurance reform. Even if that were true, the real crisis that exists already and will only worsen over time comes from the horrendous obligations taken on by state and local governments for public employee pension plans.

    Keith Richman caught on to this problem while a California Assemblyman. He has formed the non-profit California Foundation for Fiscal Responsibility to educate elected officials and the public on the looming budget disaster. Fortunately, he is not the only one touting this pending mess. Ron Seeling, the Chief Actuary for CalPERS (the California public employees’ retirement program), has stated the plan is unsustainable. CalPERS represents state employees and 1,500 local governmental entities.

    Some would say the pension problem starts with the unionization of public employees. In California, the major catalyst was SB400, signed by Gray Davis in his first year in office, 1999. The bill lowered retirement age for public safety employees to 50 years old and to non-public safety employees to 55 years old. We are in an era when people are living on average until around 80 years old.

    The law gives the employee pension benefits of 3.0% of their final income for each year of service. It also made the 3.0% amount retroactive to the beginning of their employment period. That means if you work 20 years you receive a pension benefit equal to 60% of your final income. The problem was compounded by how they calculated the income on which to base the pension.

    Everything including the kitchen sink adds to the final income level. Things such as auto allowance and bonuses boost the final number. If the employee did not use vacation pay or holiday pay for the prior 10 years that adds to the base salary to determine the income. Understanding that in most private sector jobs when you do not use your vacation, you lose your vacation, the ability to accumulate vacation time opens up the system for vast manipulation. Peter Nowicki, the Moraga Orinda fire chief, retired at age 50. His final salary was a whopping $185,000, but small compared to his annual pension benefit of $241,000. Making that matter worse, Nowicki was hired as a consultant to the fire department for an additional $176,000 per year -- on top of his retirement benefit.

    This is not an isolated case. In Los Angeles County there are over 3,000 people receiving greater than $100,000 per year in pension benefits. In San Francisco, it was found that 25% of employees’ income spiked up over 10% in the final year of their work. The San Francisco grand jury found that amount cost the city $132 million.

    Some would argue why not game the system? Let’s say you start working for the government when you are 30 years old and work for 25 years. Your final income with all the fancy calculations ends up at $120,000. That means you would receive $90,000 plus full health care benefits. You can either live on that very nice retirement or you are free to get another position. After all, being 55 years old, you are still in your prime earnings years. Where in the private sector are there comparative opportunities?

    These kinds of retirement ages and benefits are why the estimated unfunded liability is soaring. California has estimated unfunded pension and health care liabilities ranging from $100 to $300 billion. The school systems operate under their separate pension program – CalSTRS. The Los Angeles Unified School System estimate for unfunded retiree benefits comes in at about $10 billion. That is one school system, be it the largest, in one state. Estimates show that the LAUSD will soon carve out 30% of its budget for combined retiree health and pension benefits.

    California may be the worst example, but not the only example of deplorable financial planning by governmental entities. The original justification for rich benefits for public employees centered on lower salaries, but that no longer rings true. A recent analysis by the U.S. Bureau of Economics shows that federal employees receive compensation that is double the average of the private sector. Other studies have shown state and government employees to be receiving like levels of compensation.

    The genesis of this pending disaster comes from the right of public employees to unionize. This was not always so. The first opportunity occurred in 1958 in New York City under Mayor Robert Wagner. President Kennedy instituted the right for federal employees to unionize in 1962. Since then the right for public employees to unionize has spread, but is not universal. States that have more restrictive laws have blocked public employee unions and thus have not suffered the consequences.

    In states like California, the public employee unions fund huge political campaigns. To most observers, the unions have a stranglehold on the state legislature, Los Angeles and San Francisco city governments, and most if not all of the school districts in the state. When the employees control the employers, the results are uncontrollable obligations.

    A recent report stated that children born today will live an average life span of 100 years. With public employees retiring at 50 or 55 years of age, it doesn’t take a deep thinker to extrapolate that these retirement benefit programs are unsustainable.

    Private sector employees now receive less annual income than their public counterparts. Private sector employees will have to work well into their seventies to pay for these public sector employees’ retirement benefits which far exceed what the private sector offers. The public will, little by little, become aware of this upside-down arrangement. Heroes like Keith Richman are sacrificing to make the public aware of this coming debacle. Our elected officials need to heed his warnings.

    U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

    IOUSA (the most frightening movie in American history) ---
    (see a 30-minute version of the documentary at www.iousathemovie.com ).

    Bob Jensen's threads on the entitlements crisis ---
    http://faculty.trinity.edu/rjensen/entitlements.htm

     


    Jensen Choice
    Given all the heated debate and in spite of my conservative philosophy on most matters, I actually lean toward Bill Bradley's recommendation and hope that it would eventually make the U.S. health insurance system more like that of Canada.

    From Former Liberal Senator Bill Bradley
    The bipartisan trade-off in a viable health care bill is obvious: Combine universal coverage with malpractice tort reform in health care. Universal coverage can be obtained in many ways — including the so-called public option. Malpractice tort reform can be something as commonsensical as the establishment of medical courts — similar to bankruptcy or admiralty courts — with special judges to make determinations in cases brought by parties claiming injury. Such a bipartisan outcome would lower health care costs, reduce errors (doctors and nurses often don’t report errors for fear of being sued) and guarantee all Americans adequate health care. Whenever Congress undertakes large-scale reform, there are times when disaster appears certain — only to be averted at the last minute by the good sense of its sometimes unfairly maligned members. What now appears in Washington as a special-interest scrum could well become a triumph for the general interest. But for that to happen, the two parties must strike a grand bargain on universal coverage and malpractice tort reform. The August recess has given each party and its constituencies a chance to reassess their respective strategies. One result, let us hope, may be that Congress will surprise everyone this fall.
    Bill Bradley, "Tax Reform’s Lesson for Health Care Reform," The New York Times, August 30, 2009 ---
    http://www.nytimes.com/2009/08/30/opinion/30bradley.html?_r=1

    At the same time taxpayers at all levels of income and wealth should be forced to pay heavy taxes for such national health insurance. The poor should not get a free ride since they burden the health system as much or more than everybody else.

    And much greater effort must be made to prevent fraud. Not enough is being done at the moment to prevent fraud in the system, especially in Medicare and Medicaid where heirs siphon off granny's wealth and then dump her on taxpayers.

    Lastly there must be tight controls preventing illegal immigration that is motivated primarily to obtain our taxpayer-subsidized health care. At most illegal immigrants should obtain minimal services much like they now receive in emergency rooms. If a citizen of Mexico can sneak across the border just to get a lens transplant or dialysis or liver and kidney transplants in El Paso then we might end up will half of South American lined up in hospitals in El Paso and elsewhere in the U.S.


    Bumper Stickers


    Video:  Jack Webb on Health Care and America ---
    http://pubsecrets.wordpress.com/2009/09/05/just-the-facts-barack/


    Old Butch

    John was in the fertilized egg business. He had several hundred young layers (hens), called 'pullets,' and ten roosters to fertilize the eggs.

    He kept records, and any rooster not performing went into the soup pot and was replaced.

    This took a lot of time, so he bought some tiny bells and attached them to his roosters.

    Each bell had a different tone, so he could tell from a distance, which rooster was performing.

    Now, he could sit on the porch And fill out an efficiency report by just listening to the bells.

    John's favourite rooster, old Butch, was a very fine specimen, but this morning he noticed old Butch's bell hadn't rung at all!

    When he went to investigate, he saw the other roosters were busy chasing pullets, bells-a-ringing, but the pullets, hearing the roosters coming, could run for cover.

    To John's amazement, old Butch had his bell in his beak, so it couldn't ring.

    He'd sneak up on a pullet, do his job and walk on to the next one. John was so proud of old Butch, he entered him in the Renfrew County Fair and he became an overnight sensation among the judges.

    The result was the judges not only awarded old Butch the No Bell Piece Prize but they also awarded him the Pulletsurprise as well. Clearly old Butch was a politician in the making. Who else but a politician could figure out how to win two of the most highly coveted awards on our planet by being the best at sneaking up on the populace and screwing them when they weren't paying attention.


    Forwarded by Maureen

    The Perfect Solution to Senior Health Care

    While discussing the upcoming Universal Health Care Program with my friend the other day, I think we have found the solution. I am sure you have heard the ideas that if you �re a senior you need to suck it up and give up the idea that you need any health care. A new hip? Unheard of. We simply can't afford to take care of you anymore. You don't need any medications for your high blood pressure, diabetes, heart problems, etc. Let�s take care of the young people. After all, they will be ruling the world very soon.

    So here is the solution. When you turn 70, you get a gun and 4 bullets. You are allowed to shoot 2 senators and 2 representatives. Of course, you will be sent to prison where you will get 3 meals a day, a roof over your head and all the health care you need! New teeth, great! Need glasses, no problem. New hip, knee, kidney, lung, heart? Well bring it on. And who will be paying for all of this. The same government that just told you that you are too old for health care. And, since you are a prisoner, you don't have to pay any income tax.

    And if we all do our part we can end up in the same prison and have one hell of a social life.

    I really think we have found a Perfect Solution!

     

     


    Mary Putnam Jacobi and the Politics of Medicine in Nineteenth-Century America by Carla Bittel (University of North Carolina Press; 2009, 352 pages; $40). A biography of the New York physician, educator, and feminist (1842-1906).

    Practice Under Pressure: Primary Care Physicians and Their Medicine in the Twenty-First Century by Timothy Hoff (Rutgers University Press; 2009, 235 pages; $72 hardcover, $24.95 paperback). A sociological analysis of the primary-care system in the United States; pays particular attention to three groups coming to dominate the practice: female physicians, young physicians, and international medical graduates.

    Who's in Charge? Leadership During Epidemics, Bioterror Attacks, and Other Public Health Crises by Laura H. Kahn (Praeger Publishers; 2009, 235 pages; $49.95). Examines "leadership confusion" during five public-health emergencies, beginning with the anthrax attacks in 2001.
     


    "TOP TEN MYTHS OF MEDICARE," by Richard L. Kaplan, The Elder Law Journal, Vol. 20, No.1, 2012 --- 
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2111535

    In the context of changing demographics, the increasing cost of health care services, and continuing federal budgetary pressures, Medicare has become one of the most controversial federal programs. To facilitate an informed debate about the future of this important public initiative, this article examines and debunks the following ten myths surrounding Medicare: (1) there is one Medicare program, (2) Medicare is going bankrupt, (3) Medicare is government health care, (4) Medicare covers all medical cost for its beneficiaries, (5) Medicare pays for long-term care expenses, (6) the program is immune to budgetary reduction, (7) it wastes much of its money on futile care, (8) Medicare is less efficient than private health insurance, (9) Medicare is not means-tested, and (10) increased longevity will sink Medicare.

    Jensen Comment
    I don't agree with every conclusion in this paper, but it is one of the best summaries of Medicare that I can recommend.

    Waste, Fraud, and Abuse:  The gap between payments and payees in Medicare makes it a criminal's piñata

    It should be emphasized at the outset that this contention is not about the ever-present specter of “waste, fraud, and abuse” that haunts governmental programs generally. That Medicare is targeted by scammers and schemers of all sorts is both indisputable and hardly surprising. As the famed bank robber, Willie Sutton, reportedly replied when asked why he robbed banks: “That’s where the money is.”101 Indeed, Medicare is where the money is—specifically $509 billion in fiscal year 2010 alone.102 Any program that pays out this amount of money to a wide variety of service providers in literally every county in America will be very difficult to police. That reality notwithstanding, such violations of the public trust as are encapsulated in the phrase “waste, fraud, and abuse” should be ferreted out whenever possible and eliminated. No one excuses these leakages, just as no one has a sure-fire solution to stem them once and for all.
    Kaplan, Page 19

    One thing to think about is why Medicare may be losing hundreds of billions of dollars relative to the national health care plans of Canada, Europe, etc. The obvious thing to pick on is that Medicare is a third party payment system where medical services, medications, equipment such as battery-powered scooters and home hospital beds, and medical care centers are not directly managed by the government. This opens the door to millions of fraudulent claims, often by extremely clever criminals, unscrupulous physicians, etc. The gap between payments and payees in Medicare makes it more vulnerable to abuse and waste.

    This and other articles make a big deal about how administrative costs of Medicare are significantly less that the administrative costs of private insurance carriers like Blue Cross. However, what this article and related articles almost always fail to mention is that the major component of administrative cost to companies like Blue Cross lies in operating controls to prevent waste, fraud, and abuse.

    National plans like those in Canada have both lower administrative costs and less waste, fraud, and abuse because the government provides most of the services directly without the moral hazards that arise from the gap between funding and delivery of services. Personally, I favor national plans. Of course, in some nations like Germany  there are premium alternatives where people that can afford it can pay for premium services not covered in the national plans.
    http://faculty.trinity.edu/rjensen/Health.htm

     

    Futile Care Waste:  My former University of Maine colleague was given thirty days to live (because of Stage Four bone cancer) received two new hips but never walked again and died in less than two weeks

    But the issue of “futile care” is very different from “waste, fraud, and abuse.” The claim that Medicare should not pay for pointless medical interventions presumes that funds were indeed spent on actual medical procedures. The issue is whether those procedures should not have been done for reasons of inefficacy or insufficient “bang for the buck.” It is certainly true that Medicare spends a disproportionate amount of its budget on treatments in the final months of its beneficiaries’ lives. Some twenty-eight percent of the entire Medicare budget is spent on medical care in enrollees’ final year of life,103 and nearly forty percent of that amount is spent during a patient’s last month. The critical issue, of course, is whether these expenditures are pointless.

    In one respect, it is not surprising that the cost of a person’s final medical episode is unusually expensive. That person’s presenting condition must have been especially severe because he or she did in fact die during or shortly after treatment. Moreover, when circumstances are particularly bleak, more intensive and often much more expensive procedures, tests, and interventions seem appropriate. After all, the patient was literally fighting off death at that point, so medical personnel try everything in their armamentarium to win what was ultimately the patient’s final battle. Only after the fact does one know that the battle in question was indeed the patient’s last episode. Does that mean that the effort expended, and the attendant costs, were wasted?

    This question is more difficult than some might suspect. A recent study of Medicare claims data examined the association between inpatient spending and the likelihood of death within thirty days of a patient’s being admitted to a hospital.It found that for most of the medical conditions examined, including surgery, congestive heart failure, stroke, and gastrointestinal bleeding, a ten percent increase in inpatient spending was associated with a decrease in mortality within thirty days of 3.1 to 11.3%, depending upon the specific medical condition in question. Only for patients who presented with acute myocardial infarction was there no association of increased inpatient spending and improved outcomes. Thus, the authors concluded, “the amount [of waste] may not be as large as commonly believed, at least for hospitalized Medicare patients.” To be sure, the results might not be as encouraging in non-hospital settings, but Medicare does not cover the cost of nursing home patients who are lingering at death’s door while receiving “custodial care.”In any case, hospital costs represent the single largest component of Medicare’s expenditures— fully twenty-seven percent in the most recent year for which such data are available.

    That is not to say that some of Medicare’s expenditures near the end of beneficiaries’ lives provide insufficient benefit to justify their cost. But the tough questions are how to determine those wasteful expenditures in advance and who should make that determination. Such considerations are beyond the scope of this Article,but suffice it to note that end-of-life care discussions are extraordinarily contentious and easily demagogued. After all, former Vice Presidential candidate Sarah Palin effectively scuttled a rather benign effort to include payment for end-of-life counseling in Medicare’s newly provided “annual wellness visit[s]” by contending that such counseling was a first step to rationing health care by “death panels” run by government bureaucrats. Thus, while patients can individually indicate in advance how much treatment they want at the end of their lives, any comprehensive effort to root out Medicare’s wasteful expenditures on “futile care” might face serious political opposition.

    In any case, an authoritative analysis published in The New England Journal of Medicine concluded that “the hope of cutting the amount of money spent on life-sustaining interventions for the dying in order to reduce overall health care costs is probably vain.” The authors noted that “there are no reliable ways to identify the patients who will die” and that “it is not possible to say accurately months, weeks, or even days before death which patients will benefit from intensive interventions and which ones will receive ‘wasted’ care.” That leaves age-based rationing of care or more precisely, denial of medical services on the basis of chronological age, as the only easily implemented pathway to eliminate what some might regard as inefficacious expenditures of medical resources. Such age-based rationing of health care is practiced in other national health care systems, even though studies of prognostic models have demonstrated that “age alone is not a good predictor of whether treatment will be success ful.” In any case, polls of Americans have shown little support and significant opposition to the concept. One survey undertaken in late 1989 sought agreement with the following statement: “Lifeextending medical care should be withheld from older patients to save money to help pay for the medical care of younger patients.” Only 5.7% of respondents under age sixty-five strongly agreed with this statement while 38.3% of that group strongly disagreed with it.120 Interestingly, among respondents who were themselves age sixty-five and older, the gap between these opposing viewpoints was narrower: 8.8% strongly agreed with the statement in question while 35.4% strongly disagreed.

    Whether results would be substantially different today when the range of medical interventions has increased significantly and when the nation’s budgetary situation has worsened considerably is an open question. Yet, when the 2010 health care reform legislation created an Independent Payment Advisory Board to reduce Medicare’s expenses, the enabling statute was explicit that this Board may not make proposals that would “ration health care.” Clearly, the prospect of eliminating Medicare expenditures that are medically futile will not be an easy task to accomplish.
    Kaplan, pp. 19-22

    Jensen Comment
    My former Unive
    rsity of Maine colleague on Medicare was given thirty days to live (because of Stage Four bone cancer) received two new hips but never walked again and died in less than two weeks. I don't think he would've received those two useless and very expensive hips on any of the national plans of Canada or Europe.

     

    Where Did Medicare Go So Wrong?
    Medicare is a much larger and much more complicated entitlement burden relative to Social Security by a ratio of about six to one or even more. The Medicare Medical Insurance Fund was established under President Johnson in1965.

    Note that Medicare, like Social Security in general, was intended to be insurance funded by workers over their careers. If premiums paid by workers and employers was properly invested and then paid out after workers reached retirement age most of the trillions of unfunded debt would not be precariously threatening the future of the United States. The funds greatly benefit when workers die before retirement because all that was paid in by these workers and their employers are added to the fund benefits paid out to living retirees.

    The first huge threat to sustainability arose beginning in 1968 when medical coverage payments payments to surge way above the Medicare premiums collected from workers and employers. Costs of medical care exploded relative to most other living expenses. Worker and employer premiums were not sufficiently increased for rapid growth in health care costs as hospital stays surged from less than $100 per day to over $1,000 per day.

    A second threat to the sustainability comes from families no longer concerned about paying up to $25,000 per day to keep dying loved ones hopelessly alive in intensive care units (ICUs) when it is 100% certain that they will not leave those ICUs alive. Families do not make economic choices in such hopeless cases where the government is footing the bill. In other nations these families are not given such choices to hopelessly prolong life at such high costs. I had a close friend in Maine who became a quadriplegic in a high school football game. Four decades later Medicare paid millions of dollars to keep him alive in an ICU unit when there was zero chance he would ever leave that ICU alive.

    On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
    "The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/  

    What is really sad is the way Republicans are standing in the way of making rational cost-benefit decisions about dying by exploiting the "Kill Granny" political strategy aimed at killing a government option in health care reform.
    See the "Kill Granny" strategy at --- www.defendyourhealthcare.us

    The third huge threat to the economy commenced in when disabled persons (including newborns) tapped into the Social Security and Medicare insurance funds. Disabled persons should receive monthly benefits and medical coverage in this great land. But Congress should've found a better way to fund disabled persons with something other than the Social Security and Medicare insurance funds. But politics being what it is, Congress slipped this gigantic entitlement through without having to debate and legislate separate funding for disabled persons. And hence we are now at a crossroads where the Social Security and Medicare Insurance Funds are virtually broke for all practical persons.

    Most of the problem lies is Congressional failure to sufficiently increase Social Security deductions (for the big hit in monthly payments to disabled persons of all ages) and the accompanying Medicare coverage (to disabled people of all ages). The disability coverage also suffers from widespread fraud.

    Other program costs were also added to the Social Security and Medicare insurance funds such as the education costs of children of veterans who are killed in wartime. Once again this is a worthy cause that should be funded. But it should've been separately funded rather than simply added into the Social Security and Medicare insurance funds that had not factored such added costs into premiums collected from workers and employers.

    The fourth problem is that most military retirees are afforded full lifetime medical coverage for themselves and their spouses. Although they can use Veterans Administration doctors and hospitals, most of these retirees opted for the underfunded  TRICARE plan the pushed most of the hospital and physician costs onto the Medicare Fund. The VA manages to push most of its disabled veterans onto the Medicare Fund without having paid nearly enough into the fund to cover the disability medical costs. Military personnel do have Medicare deductions from their pay while they are on full-time duty, but those deductions fall way short of the cost of disability and retiree medical coverage.

    The fifth threat to sustainability came when actuaries failed to factor in the impact of advances in medicine for extending lives. This coupled with the what became the biggest cost of Medicare, the cost of dying, clobbered the insurance funds. Surpluses in premiums paid by workers and employers disappeared much quicker than expected.
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

    A sixth threat to Medicare especially has been widespread and usually undetected fraud such as providing equipment like motorized wheel chairs to people who really don't need them or charging Medicare for equipment not even delivered. There are also widespread charges for unneeded medical tests or for tests that were never really administered. Medicare became a cash cow for crooks. Many doctors and hospitals overbill Medicare and only a small proportion of the theft is detected and punished.

    The seventh threat to sustainability commenced in 2007 when the costly Medicare drug benefit entitlement entitlement was added by President George W. Bush. This was a costly addition, because it added enormous drains on the fund by retired people like me and my wife who did not have the cost of the drug benefits factored into our payments into the Medicare Fund while we were still working. It thus became and unfunded benefit that we're now collecting big time.

    In any case we are at a crossroads in the history of funding medical care in the United States that now pays a lot more than any other nation per capita and is getting less per dollar spent than many nations with nationalized health care plans. I'm really not against Obamacare legislation. I'm only against the lies and deceits being thrown about by both sides in the abomination of the current proposed legislation.

    Democrats are missing the boat here when they truly have the power, for now at least, in the House and Senate to pass a relatively efficient nationalized health plan. But instead they're giving birth to entitlements legislation that threatens the sustainability of the United States as a nation.

    In any case, The New York Times presents a nice history of other events that I left out above ---
    http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html

    "THE HEALTH CARE DEBATE: What Went Wrong? How the Health Care Campaign Collapsed --
    A special report.; For Health Care, Times Was A Killer," by Adam Clymer, Robert Pear and Robin Toner, The New York Times, August 29, 1994 --- Click Here
    http://www.nytimes.com/1994/08/29/us/health-care-debate-what-went-wrong-health-care-campaign-collapsed-special-report.html

    November 22, 2009 reply from Richard.Sansing [Richard.C.Sansing@TUCK.DARTMOUTH.EDU]

    The electorate's inability to debate trade-offs in a sensible manner is the biggest problem, in my view. See

    http://www.washingtonpost.com/wp-dyn/content/article/2009/11/19/AR2009111904053.html?referrer=emailarticle 

    Richard Sansing

    The New York Times Timeline History of Health Care Reform in the United States ---
    http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
    Click the arrow button on the right side of the page. The biggest problem with "reform" is that it added entitlements benefits without current funding such that with each reform piece of legislation the burdens upon future generations has hit a point of probably not being sustainable.

    Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
    Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1

    . . .

    In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.

    . . .

    Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.

    Continued in article

    This is now President Obama's problem with or without new Obamacare entitlements that are a mere drop in the bucket compared to the entitlement obligations that President Obama inherited from every President of the United States since FDR in the 1930s. The problem has been compounded under both Democrat and Republican regimes, both of which have burdened future generations with entitlements not originally of their doing.

    Professor Niall Ferguson and David Walker are now warning us that by year 2050 the American Dream will become an American Nightmare in which Americans seek every which way to leave this fallen nation for a BRIC nation offering some hope of a job, health care, education, and the BRIC Dream.

    Bob Jensen's threads on health care ---
    http://faculty.trinity.edu/rjensen/Health.htm

    Bob Jensen's threads on entitlements ---
    http://faculty.trinity.edu/rjensen/entitlements.htm


    U.S. National Debt Clock --- http://www.usdebtclock.org/
    Also see http://www.brillig.com/debt_clock/

    Question
    Should we keep increasing the government spending deficit and the national debt every year ad infinitum?

    Answers
    Although in these down economic times, the liberal's Keynesian hero and Nobel Prize economist, Paul Krugman, thinks recovery is stalled because the government is not massively increasing spending deficits. But he's not willing to commit himself to never reducing deficits or never paying down some of the national debt. Hence, he really does not answer the above question ---
    http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html

    So let's turn to a respected law professor who advocates increasing the government spending deficit and the national debt every year ad infinitum?

    "Why We Should Never Pay Down the National Debt (even partly)," by Neil H. Buchanan George Washington University Law School), SSRN, 2012 ---
    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2101811

    Abstract:
    Calls either to balance the federal budget on an annual basis, or to pay down all or part of the national debt, are based on little more than uninformed intuitions that there is something inherently bad about borrowing money. We should not only ignore calls to balance the budget or to pay down the national debt, but we should engage in a responsible plan to increase the national debt each year. Only by issuing debt to lubricate the financial system, and to support the economy’s healthy growth, can we guarantee a prosperous future for current and future citizens of the United States.

    Student Assignment

    Since many of the most liberal economists are not quite willing to assert that "we should never pay down the national debt," what questionable and unmentioned assumptions have been made by Neil H. Buchanan that need to be addressed?

    Are some of these assumptions unrealistic in any world other than a utopian world?

    Bob Jensen's Answers ---
    http://www.cs.trinity.edu/~rjensen/temp/NationalDeficit-Debt.htm


     

     


     


    Video tutorial on the President's strategy and the legislative process for passing health reform legislations --- http://www.kaiseredu.org/tutorials/reformprocess/player.html

    U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

    Bob Jensen's threads on the so-called "bailout" ---
    http://faculty.trinity.edu/rjensen/2008Bailout.htm

    Bob Jensen's threads on pending economic disaster ---
    http://faculty.trinity.edu/rjensen/Entitlements.htm

    Bob Jensen's Threads --- http://faculty.trinity.edu/rjensen/threads.htm

    Bob Jensen's Blogs --- http://faculty.trinity.edu/rjensen/JensenBlogs.htm
    Current and past editions of my newsletter called New Bookmarks --- http://faculty.trinity.edu/rjensen/bookurl.htm
    Current and past editions of my newsletter called Tidbits --- http://faculty.trinity.edu/rjensen/TidbitsDirectory.htm
    Current and past editions of my newsletter called Fraud Updates --- http://faculty.trinity.edu/rjensen/FraudUpdates.htm
    Bob Jensen's past presentations and lectures --- http://faculty.trinity.edu/rjensen/resume.htm#Presentations