Where do we go now ?

I don’t want to wear out my welcome with posts but this is a topic that has interested me for many years. When I retired from practice, I spent a year at Dartmouth trying to learn how we can improve health care delivery and reduce cost without reducing quality.

The Obamacare web site now has lost its happy photo of the Obamacare girl. The fact that she is a non-citizen seems appropriate. The web site is supposed to be fixed by November 30. Will that happen ? Well, maybe not.

On Friday, the man tasked with the digital fixes said the site “remains a long way from where it needs to be” as more and more problems emerge.

“As we put new fixes in, volume is increasing, exposing new storage capacity and software application issues,” Jeff Zients told reporters on a conference call.

And at Tuesday’s White House Press Briefing, Press Secretary Jay Carney again said there was “more work to be done” on repairing HealthCare.gov.

Carney, along with Zients and other administration officials, have repeatedly said the November 30 deadline is to get the health care website working for a “vast majority” of Americans looking to enroll in the Obamacare exchanges.

So, what happens December 2, the Monday after the “glitches” are fixed ? First, they won’t be fixed. The contractor that designed the program, not just the web site, has a terrible record.

CGI Federal’s parent company, Montreal-based CGI Group, was officially terminated in September 2012 by an Ontario government health agency after the firm missed three years of deadlines and failed to deliver the province’s flagship online medical registry.

The online registry was supposed to be up and running by June 2011.

Officials at the U.S. government’s Centers for Medicare and Medicaid Services awarded six technology contracts worth $87 million to CGI Federal for Obamacare website work, according to the U.S. Government Accountability Office.

So, assuming the program isn’t working, what next ?

First, Democrats are jumping ship already.

Sen. Dianne Feinstein (D-Calif.) has decided to co-sponsor legislation from Sen. Mary Landrieu (D-La.) that would require insurance companies to continue offering their existing health care plans, becoming the most high-profile non-red state Democrat to buck party lines on the Affordable Care Act.

I don’t think that approach will work.

the “Keeping the Affordable Care Act Promise Act” would “grandfather” in all health insurance plans that existed as of Dec. 31, 2013, not March 23, 2010, meaning that insurers could continue to offer a number of plans that they have been forced to cancel under the Affordable Care Act.

The insurance industry is not going to change all this for a temporary and uncertain law change.

Even Bill Clinton is jumping ship, no doubt in the interest of Hillary’s 2016 campaign. I doubt that will help except among her most devoted followers. After all Hillarycare is the grandmother of Obamacare.

I have previously speculated on what might come next and that was early in the disastrous rollout, which I anticipated. I wasn’t the only one.

Moreover, data from existing surveys indicates that employers are quickly moving to high-deductible plans with health savings accounts, away from more expensive plans with high premiums, but low deductibles and co-pays. Notably, when employees are offered a “defined contribution” – a fixed amount of money from their employers with which to shop – they also (although not always) opt for more high-deductible options.

I think this may be the way the country copes with the ongoing disaster of Obamacare. Allow the system of high deductible insurance and health IRAs to expand. Legislation can do this. No Congress can bind another Congress.

What to do about those with pre-existing conditions ? Well, maybe the problem was slightly exaggerated.

12 million people purchased private direct purchased health insurance on the eve of Obama Care. Insurance industry studies show that one in eight applicants for private health insurance have preexisting conditions that affect their eligibility or premiums. This gives a total of 1.5 million Americans who were denied health insurance or paid higher premiums due to pre-existing conditions.

The Washington Post, of course, bought the Obama administration lie without a blink.

But must we change our whole health care system to handle a problem that affects one half of one percent? If we gave a $10,000 subsidy to each person denied coverage or paying a higher premium, we could keep our existing health-care system and solve pre-conditions for one tenth the projected cost of Obama Care.

There are other questions about motives.

You tout the Affordable Care Act as a triumph over special interests, but the stock prices of the insurance industry have enjoyed a huge run-up. Isn’t this because your program, boiled down, just throws more tax dollars at an unreformed health-care system that every analyst, including you, says spends resources inefficiently?

Insurance companies have never been enthusiastic about health insurance. I’ve worked in the insurance industry. They were co opted by Obama because they were promised (with a wink and a nod) that they would be administering a government funded program and would have “no skin in the game.” That’s what the employer health plans are and that’s what they understood to be the plan. The recent vilification of insurers risks some getting off the reservation.

Later, in discussing how he would pay for expanding health-insurance coverage, he alluded to his plan to cut the subsidy payments private insurers receive for administering Medicare advantage plans. “I would rather be giving that money to the young woman here who doesn’t have health insurance than giving it to insurance companies that are making record profits”

Then, a man who said he makes a living selling individual health-insurance plans asked Obama, “Why is it that you’ve … decided to vilify the insurance companies?”

We know he was lying. His lips were moving.

What about the poor ? Most of those signing up on the exchanges are, in fact, signing up for Medicaid.

More than 55,000 people in Washington state enrolled in health coverage in October — most in Medicaid . In fact, almost all of the people who have “signed up” for Obamacare have signed up for expanded Medicaid. They will not contribute to the risk pool; they will only draw more tax payments. Is Medicaid the best choice for the poor ? Avik Roy doesn’t think so. I have reviewed his book on the site and disagree with his proposed solution but his data is correct.

I have previously suggested the French system as a model for us. France is a large country, larger than most of the other European examples, and its system, unlike the British NHS, works well. It has been put under enormous pressure by the French unemployment problem but it still does a better job than any other I know of. The German system is older and more bound up in German traditions.

I doubt that this sort of reform is an option any longer. I think the catastrophic insurance and health IRA is the best choice for a transition now.

11 thoughts on “Where do we go now ?”

  1. I agree, actually – you being the Boyz with the most expertise in this matter. Catastrophic insurance and a health IRA … lord knows, it probably works out to be cheaper for most everyone who can afford to pay, one way or the other.

    This year, my daughter went to a great deal of trouble to get a health insurance plan through Humana, which she can afford, as a healthy (other than the chronic military damage for which she gets a VA payment) – amounting to about $87 a month. The Obamacare-complaint plan amounts to double that and a bit, which she can’t afford in the least. Never mind about posting all that personal information to the O-care website. That’s a non-starter.

    So much for ‘If you like your plan, you can keep your plan.’ That outright lie, and the cost of the increased ‘Obamacare-Approved’ plans will sink this whole scheme faster than the Titanic.

  2. Sgt Mom,

    Obamacare is going to be so obstructive that nothing beyond the collapse of the American healthcare insurance system will happen.

    The end result of it will be that we will have neither single payer nor private healthcare insurance when we are done.

    I expect Obamacare to be repealed after the Democrat primaries, but before the general election, in 2016 over Pres. Obama’s veto.

  3. On the tech side I really recommend this analysis by

    Money quotes:
There are 51 state Medicaid/CHIP systems (add DC) to interface with, half a dozen federal data systems such as the IRS and SSA (to name two), and 26 state Exchanges each implementing a subset of the Federal Exchange. That totals about 85 major and complex interfaces to work the ‘glitches’ out of.  Not to mention the hundreds of insurance companies trying to get valid data out the back end.

    The arrogance of such an endeavor is mind boggling. Tie together 85 data systems that are all independently  developed and implemented? Just mapping the data model across these would take 2 years! Each data system uses some ID to identify some attribute (e.g., name, given name, first name,  etc). All this information has to be collated in the exchange so that it can be used to calculate what options each individual has. But of course, it is not just individuals, it is families too, so don’t think one individual per application.
This is an enormous undertaking with lots and lots of moving parts. Each of the external systems is under independent development, many are legacy systems. You cannot use an Agile SW Process to tackle this job.  First and foremost you need to define all interfaces and get them on a coherent schedule.  Then you have to model all state and federal sources of data (i.e., define how each one labels common information and create a Rosetta stone to related each existing label in those data sources to a common definition, like “first name”) and then you need to model all data products (each state and each insurer in the state has unique definitions for data as well). Just understanding the format for “DOB” or “Date Of Birth” in terms of whether the day or month comes first is tedious, time consuming work.  But it must be CHECKED and verified if you want to get it right from the applicant’s input through onto the insurance enrollment form.

  4. My problem is that I never believed Obamacare was intended fix anything or help anyone. I’ve always seen it as an attempt to take over a large, necessary, money saturated piece of the economy by the political class. I’ve always seen it as a power grab.

    People losing their insurance was designed in, it’s not an accident. It is supposed to do that. There’s a reason no one was given time or opportunity to review or debate this bill. There was a reason Nancy Pelosi famously said we need to pass it to see what’s in it.

    No one seriously interested in fixing problems would have taken this approach. And this is just the debut. Wait till they determine they need control of the pharmaceutical companies in order to get costs under control.

    Damn the consequences, they want the power to impose their hare-brained schemes on us, and they want access to that enormous slush fund of money. Look at the post office, look at Detroit, look at government schools. Do results and outcomes matter to these people?

  5. “I think the catastrophic insurance and health IRA is the best choice for a transition now.”

    That’s what I always wanted. That is, if the insurance was individual, not group, and the IRA and wholly belonged to me with no strings attached. That way I would have been in control and could carry my resources with me. I think it is even more appropriate with the economy the way it is: part time jobs and service jobs.

  6. Just to support what Gina said. The Washington state site has been up and working.

    However, thousands of people who signed up were promised much higher subsidies than they will actually receive. Why? Because the state site sent monthly income estimates to the federal site, rather than yearly estimates.

    They say they don’t know how the mistake was made. Neither do I.

  7. What shouldn’t be surprising is the fact that so many people are signing up for Medicaid. I can tell you from experience that having a chronic condition makes it extremely difficult to work. People who do not work have low incomes….

    The risk pools might be O.K. even if they don’t get as many young people as expected. CA wants me to sign up for Medicaid but I have plenty of savings so I’m trying to see if I can game it. Don’t think I can without incurring legal risk down the road.

  8. I agree that Barry is looking for a way to deflect the responsibility to the state insurance regulators and the insurance companies with his panic decision to administratively allow expanded grandfathering and reinstatement of current individual plans. I think that the incentives to reinstate cancelled plans and to continued current non- complying plans isn’t there and an administrative/accounting bridge too far at this late date. Secondly, such action dilutes the exchange risk pools so that the approved premium schedule is far too low. While the lack of young and healthy in the exchanges will reduce some subsidy costs, the ACA requires the feds to make up for the losses on the low premiums for those older, sicker exchange enrollees. This won’t be a wash as they hope, so the next year government costs will be significantly over estimates.

    Any slowing of collapsing the individual market into the exchanges over the next 12 months is probably not politically beneficial to those who supported the ACA. The delay in the employer mandate compounds the effect for the next elections. Any chance to significantly reform the ACA to something less statist would depend on veto proof majorities in both houses. Conversion of those who supported it in the first place for fundamental change of ACA will be minimal. The bandaids being proposed are likely largely symbolic and intended to provide cover for 2014.

    This is the time to roll out a bill that incorporates the good ideas proposed on this forum and by the GOP. Such things as expanded health savings/IRA accounts, catastrophic coverage only, tort reform, cross state shopping, deregulation, defined coverage for chronic serious health care, etc. Such approaches need to be prominently out there to counted the “Well what alternative do you propose?” narrative. I think the only reason that the numbers favoring repeal of ACA are only 55% is that there is no real discussion of the alternatives based on choice to deal with the coverage and cost issues of healthcare as we have it now.


  9. Think Progress is considering solutions. Here is one:

    Plan to fix Obamacare

    1-seize all insurance companies, arrest their boards and give very long and punitive sentences
    2- arrest their lobbyists and politician co conspirators, regardless of party
    3- universal single payer health care
    4- profit
    All of this doable under existing laws, and ample public evidence of criminal activity

    I would not be surprised to see more of this from the left as the crisis expands.

  10. The evaluation of Obamacare at this link sounds right.

    See this article link:

    However, very few Private Health Care Insurers will voluntarily finance Pres. Obama’s “Save the Democratic Senate in 2014” administrative fix. Nor will many of the so-called “Healthy Rich” (by the Obamacare subsidy eligibility definition) sign up in any case as:

    1. They are young and won’t voluntarily spend their own money health care they don’t need, and

    2. They don’t have enough money to make Obamacare work even if they did, because as a class they lack the necessary income.

    The business regulatory state caused by Obamacare means the young/healthy in the American economy are too under/unemployed to finance Obamacare.

    A Death Spiral delayed is a Death Spiral intensified.

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