4/10/13 Obamacare’s Dismantling

It looks like Obamacare is on the way to a dismantling by HHS directive, Congressional limitation, State refusal to participate in exchanges and Medicaid expansions, and will likely suffer a lingering death, or most likely, dis-corporate itself after an apparent suicide. What will replace it will likely be worse, not better.

HHS Secretary Kathleen Sibelius announced that the implementation of state exchanges will be delayed simply because the government is not able to have them in place by the 2014 deadline. This has occurred because of the number of states refusing to put them in place themselves, which, apparently, HHS was counting on. So far, twenty-seven states declined, much to the chagrin of HHS and the Obama administration.

Many states are also declining the expanded Medicaid coverage, all of which is initially funded by the Feds. They could clearly see the carrot dangling before their nose and decided not to pull that wagon because the cost of the program rapidly shifts the burden of funding away from the Federal Government to the states. After looking that gift horse in the mouth, states simply said, “Thanks, but no thanks!” Exacerbating this was the Supreme Court ruling that prohibits the Federal Government from holding existing state-directed Medicaid money hostage to a particular state’s participation in the new, expanded coverage. States, unlike the Federal Government, cannot print their own money, and most are required by their own constitutions to balance their budgets. They had nothing to gain and everything to lose. “Shift it to the states,” some HHS operative must have said in some off-site, catered meeting at a first-class resort in Maui. “They’ll jump on the bait money, and never even pause for an instant to see if there’s a hook in there somewhere. Let the states raise taxes on their own people. Once they’ve bitten, we’ll set the hook, adjust the drag, and begin to reel them in.” Lots of governors saw the hook before the bait ever hit the water and declined to show any interest in it, no matter how much finesse was used in its presentation. I’ve known some bass who behaved in the exact same manner. I’ve also known some who bit at the first thing that looked good to eat. Guess which one ended up as a filet on my dinner plate.

The CLASS Act portion of Obamacare, that offered benefits for long-term care, was repealed by congress as being fiscally unsustainable. The promises that we would see our insurance premiums come down by as much as $2,500 dollars per year has not materialized, and it looks like it won’t, since insurance premiums are headed higher, by $2,500 and more. This isn’t exactly what the bill’s authors had in mind. We are also unsure that we will get to keep our current health care insurance if we like it, or get to see our current health care providers. We can’t keep our current health care plan if it no longer exists, or if we can no longer afford it, and we likely can’t continue to see our chosen health care providers if they declare, “Nope!! Insurance not accepted. Cash on the barrel-head, only!”

The growing number of companies that are entirely eliminating coverage for spouses and dependents, having found a legal way to control their costs by forcing spouses and dependents onto the exchanges, is not what the government had in mind. Being able to keep my no-longer-minor children on my health-care plan until they are 26 is not much of a benefit if my employer eliminated spousal and dependent care coverage entirely. The government also did not consider how many companies on the cusp would actually trim their payrolls of full time workers so that they were the beneath the threshold of compliance. It is one of the side effects of laws . . . there are always loopholes, since no matter how we humans try to use language to say exactly what we mean, hopefully eliminating any chance of internal exclusions and variables such as these, language is imprecise, and our ability to envision every scenario is limited. Perhaps this is why Obamacare has grown from its original 2,000 plus pages to include nearly 9,000 pages of additional regulations.

The government is going to try to control the costs of Medicare and Medicaid by relying on (surprise!!) their ability to force doctors and hospitals to take less money for the services they provide. I wonder why the government expects this model to work, since they have tried this ever since the inception of the programs and it has not worked yet. What are they planning to do differently? I’m sure that many studies show how the government has used these methods to successfully control the rate of growth in the programs, which have grown alarmingly, but would perhaps have grown so that they consume all of the GDP had cost control measures not been implemented. This is similar to congress and the administration saying that that have introduced significant cuts in spending, when in fact all they have produced are cuts in the rate-of-growth in spending. You, like me, may have often wondered why we hear that this new cost-saving program will save taxpayers $100 billion over the next ten years, starting with no savings the first six, but being instituted precipitously over the final four. Wonder no more! That’s three election cycles for a Congressman, and one for a Senator. The voters should reject these types of savings forecasts as beyond consideration of one who has any sort of brain. Apparently there are politicians who really think that our being capable of our own analysis is not a significantly large enough segment of the voters for them to be concerned about. They might be right.

There is still the issue of waivers that were granted mostly to Unions and (remarkably) insurance companies who engage in the business of selling health care insurance. Those waivers are set to expire in 2014. I expect they will be extended after dire warnings of immediate huge increases in premium costs. The culprit here? Obamacare’s elimination of annual coverage limitations, which are currently $2,000,000 if you haven’t been waived, and will go to unlimited in 2014. The chances of this occurring are slim or none. It is one of the only things in Obamacare that would have benefited me. This benefit has been waived, and I expect it will continue to be waived. We’ll see.

Obamacare will prove to be so unworkable that there will be a replacement coming down from the halls of congress. It will be called “The Single Payer System.” I think this is what Obamacare supporters wanted all along. I think this is what we will get.

I will not make light of the one thing I think Obamacare did which helped to stop abuses by insurers, particularly on those who purchased individual care policies on their own. The ability of an insurance company to drop you from coverage simply because you developed a serious illness was an unconscionable breach of ethics by health care insurers. We all buy insurance before we need it, pay the premiums based on what actuaries predict their risks and exposure to be, and expect it to be there when we do need it. Unfortunately, it was perfectly legal for health-insurers in many states to drop an individual at any time, based on nothing more than its arbitrary decision to do so. Some states would not allow that, but forced insurers to cancel the entire class of policy. States could have addressed this issue, as some have, or the Federal Government could have done so by simply passing a law that said, “No health insurance provider shall cancel any individual health insurance policy that is currently in force, upon which the premiums are being paid as they are due, or are paid within a thirty day grace period.” This way, your health insurance would work like your life insurance, since life insurers cannot single you out by canceling your current policy without canceling the entire class of policies. They can deny you coverage to begin with, but once issued, if one pays one’s premiums, the policy will stay in force. Who would buy life insurance under any different terms? Why did we ever allow health insurance to be any different? Successful lobbying, I suppose. I think it’s shameful.

Remarkably, it did not take 2,000 pages to say that. It only took thirty-six words, and not a single taxpayer funded position for boards, navigators, or tax enforcement officials was created. It may have resulted in health care premiums being higher, but, aren’t they higher anyway?

Navigators!! Obamacare navigators!! Thousands and thousands of “trained” Obamacare Navigators. The salaries and benefits of this new class of Federal employee may run the cost of an already increasingly expensive Obamacare exponentially beyond redemption. The number of abuses and incompetencies that will be inflicted by navigators on those who employ them and those they were employed to serve will be the stuff of future legends. The navigator will know the tricks on how to help a friend get that liposuction they desperately want, but don’t need, by knowing just which doctor to send them to for evidence as to why this cosmetic procedure is really medically necessary. That same navigator will be the one who could tell you, “A carotid bypass is not necessary, really. We’ll just have them remove your failed stints and insert some new ones, just as soon as you recover from your recent stroke.”

Every tried to get a reliable answer from the person on the other end of the IRS toll-free help line? I rest my case.

I am currently spending some of my $100,000 per year annual limitation to try to get down to the causes of some problems I am experiencing. No test has been conclusive, yet. I hope there is some money left for treatment after all the expensive tests are done. If I can just make it through to 2014, everything will be fine, since the waiver I am under will expire.

For some reason, I have no real confidence in that. I hope beyond hope that you will be able to point to this and remind me that I was wrong, but I’ll give 7 to 1 odds that I’m right, and I’ll almost be certain that no insurance actuary would dare take that bet.

They are pretty good at calculating the odds, those actuaries. Ever talked to one? They tend towards introverted, live in a mysterious world of statistics and probabilities, having almost no social skills, since they are always trying to predict your behavior. If you are a gregarious, affable insurance actuary, then I apologize . . . I was merely using the personal statistics I have compiled from actuaries I have known, and former bosses who owned insurance companies who dealt with actuaries on a daily basis.

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