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  • Why Gruber has to lie

    Posted by Michael Kennedy on December 10th, 2014 (All posts by )

    The left does not do economics. They do politics and elections and lying to get past the “stupid voters” but, when pressed, nothing they do qualifies as numerically or mathematically sound. Social Security worked until everyone found the queue and until Congress raided the trust fund in the 90s.

    Obama and the Democrat leaders knew that Hillary made enemies of the insurance companies in 1992. The insurance companies funded devastating TV ads with “Harry and Louise” that cost the Democrats Congress in 1994. Therefore, they had to do what was necessary to get the insurance companies “inside the tent pissing out and not outside the tent pissing in” in Lyndon Johnson’s immortal words.

    Insurance companies have considered health insurance a loser for 25 years now. What they prefer is becoming “Administrative Service Organizations” which administer self funded health plans by employers.

    Corporate benefits include- organizing/ negotiating health insurance, group dental, STD, LTD, life, etc.

    The plan the Democrats came up with, with Gruber’s help, was to make the government the funding entity and pay the insurance companies to run the program. That way everybody is happy, except, of course, the taxpayer. The taxpayer does not like tax increases which would be needed to pay the bills. Therefore the taxpayer has to be fooled.

    The excise tax on high-cost health plans was among the many fees and taxes proposed as offsets to help slow the rate of growth of health costs, particularly premium growth, and finance the nationwide expansion of health coverage. When the Affordable Care Act was signed into law in March 2010, its coverage provisions were estimated to cost more than $900 billion over the next decade, from 2010 to 2019, and were to be paid for by fees and taxes on both individuals and businesses. At the time the health reform bill passed, the excise tax on high-cost plans was estimated to raise roughly $32 billion in revenue over the next decade, or by 2019.

    Without the taxes to pay the bills, the whole plan collapses. At its base, Obamacare is Medicaid for everyone. The employer mandate has been, contrary to the text of the law, postponed as the flaws in implementation appear. If it were to be enforced, there would be a revolution. Basically, Obamacare will destroy the health care plans of the 85% of the population who are satisfied with what they have to enroll everyone in a new program that approximates what Medicaid does. The reason for this is that our betters in Washington have decided that we spend too much on health care. That may even be true. One way to deal with this would be to use a market-based approach that resembles how health care was paid for 60 years ago. I have previously discussed how this worked and how it might be restored.

    Today, the vast majority of Americans get health insurance as a benefit from their employer. How this developed has been discussed at length and began during World War Two. In 2008, John McCain proposed a possible way to disconnect employment, alleged to create “Job Lock” but he lost the election. A hostile analysis of his proposal is here. The McCain campaign’s description is here.

    What became Obamacare is the work of the Democrat staff of Congress when the Democrats had filibuster proof majorities in both houses. The election of Scott Brown in a reaction to the impending passage of the health plan forced them to rush the bill through without amendments before Brown was sworn in January 2010.

    The taxes to fund Obamacare were hidden as “fines and penalties” until exposed by the Supreme Court in its 2012 decision on the constitutionality of Obamacare. All penalties are now taxes. The largest are on employer-funded plans.

    The funding from employee plans is called “The Cadillac Tax which is an excise tax on employer plans that exceed the benefits of Medicaid. The “exchange plans” are increasingly looking like Medicaid, especially in the narrow networks of providers, as doctors are now called.

    As health coverage expands to tens of millions of Americans–through Medicaid expansion in states and the new state health insurance exchanges that will soon begin selling individual health coverage–some Americans with employer-sponsored health coverage are seeing their benefits decrease.

    One of the most significant, and controversial, provisions of the Affordable Care Act is the new excise tax on high-cost health plans proposed to both slow the rate of growth of health costs and finance the expansion of health coverage. The provision is often called the “Cadillac” tax because it targets so-called Cadillac health plans that provide workers the most generous level of health benefits. These high-end health plans’ premiums are paid for mostly by employers. They also have low, if any, deductibles and little cost sharing for employees.

    If this is ever implemented, the Medicaid-for-all nature of Obamacare will become obvious. That’s why it will not happen. The fundamental premise behind Obamacare is not viable. That is why it will fail and the numbers do not add up.

    Gruber can’t say this. All he can do is obfuscate.

     

    22 Responses to “Why Gruber has to lie”

    1. dearieme Says:

      If I understand correctly, your government runs three health services viz Medicare, Medicaid and VA. Surely all it need do is run those three services so well that they become bywords for efficiency, economy, and courtesy. Then everyone would be prepared to listen to government suggestions about how health insurance might be funded.

    2. Veryretired Says:

      Obamacare isn’t supposed to work, it’s supposed to destroy the existing medical insurance system in order to grease the slide into a complete national health service totally run and paid for by the government.

      All the bizarre aspects of the plan make sense as soon as that goal is recognized as its true purpose.

      Similar to many other policies of the current regime, the seeming negatives become understandable if they can be recognized as positives to the policy makers.

    3. David Foster Says:

      Dearieme…just a few years ago, people *were* talking about how well the VA was run…turned out to not quite live up to the advertising.

    4. Christopher B Says:

      Dearieme

      I think it’s also important to understand (maybe you do and the details were left out of the comment) that Medicare, Medicaid, and the VA health system are very different.

      In reverse order, and to the best of my understanding and ability to describe.

      The VA system (as opposed to Tri-Care which, if I understand it correctly, is similar to employer provided health insurance for active duty military and their dependents) is a complete health care delivery organization that with the goal of providing ‘last resort’ health care to military veterans. I believe it serves exclusively veterans, not dependents, and I believe it is also distinct from the military health care system that serves wounded active duty personell. It is not insurance, it employes doctors and provides facility directly at no cost to the veterans.

      Medicaid is best thought of as ‘health care welfare’. It is available at no cost to the participants who must meet income restrictions. The funding comes primarily from the federal government though the program is administered and funded to a degree at the state level. It reimburses health care organizations for providing care at a pre-defined reimbursement level, and the providers are not allowed to seek additional reimbursement, nor are the particpants allowed to offer additional payment if they could. It is open to any resident of any state who qualifies and is intended to provide health care to those who can’t afford conventional insurance.

      Medicare is a quasi-insurance program primarily for people of and beyond retirement age. People are automatically enrolled in the program, and the premiums are deducted from their Social Security benefits. Additional funding is provided by direct payroll taxes. It has some of the same features as Medicaid (fixed reimbursement rates primarily) except that people can elect to purchase additional insurance offered by private insurance providers at their own expense. These plans must fit into certain guidelines set by the government.

      My main point is that none of these plans is anything like the system commonly refered to as ‘Obamacare’, and the ability of the government to run any or all of these plans efficently, economically, and with courtsey would say little about their ability to make Obamacare function.

    5. bbthevidiot Says:

      “The left does not do economics.” That is all that need be said. But you did do a good service explaining what they tried to do and how they did it. They screwed us, and they meant to. Utopia will never exist, but try telling a statist that without them screaming “greedy racist, sexist, misogynist, homophope”, all to shut you up.

      But…

      “The fundamental premise behind Obamacare is not viable. That is why it will fail and the numbers do not add up.”

      So, what’s next?

    6. Grurray Says:

      “The excise tax on high-cost health plans was among the many fees and taxes proposed as offsets to help slow the rate of growth of health costs, particularly premium growth, and finance the nationwide expansion of health coverage”

      One such tax was the ridiculous and enormously unpopular medical device tax. There’s bipartisan support to repeal it, but the only snag is Obama is insisting on some other tax or fee to offset.

      Little thought went into what this tax was supposed to do or supposed to be

      Excise taxes have traditionally been collected for distributional effects, as benefit taxes (gasoline taxes which are used for highway construction and maintenance), and to discourage consumption (such as taxes on alcohol and tobacco). Some of these arguments might be applied to justify the medical device excise tax. It is not the first tax to be imposed for purposes of reducing a one-time profit, as the windfall profits tax of the 1980s was in the form of an excise tax on oil.

      Some version of the benefit principle (that is, impose taxes on those who benefit from the spending financed by the taxes, as is the case with the gasoline tax) might apply as well. Almost all of the revenue sources in the Affordable Care Act were related to health. As a package, then, an argument may be made that taxes collected overall from consumers of health care might be appropriate to offset new as well as existing health insurance subsidies. Almost all individuals benefit from health care-related subsidies including existing benefits (from not taxing the value of employer provided insurance and Medicare, along with existing subsidies for Medicare and Medicaid) plus new benefits in the health law. The connection between the taxes and benefits, however, is very loose compared to the link between gasoline taxes and highway construction or taxes on firearms and ammunition and wildlife preservation. Some parts of the provision of healthcare services are not facing new taxes. It is difficult to explain the rationale for the tax based on
      the benefit principle. Health care may be over consumed by individuals with health insurance who may face little or no
      cost of treatment, and often rely on doctors (who recognize there is little cost) to make these decisions. A tax might reduce this effect. The difficulty with this last argument is that the evidence suggests such taxes will be ineffective; they are not likely to alter the weak price signals that occur because consumers rely in part on decisions about their medical care and treatment made by physicians and other health professionals, and because that most of the cost is paid by insurance. This argument may be applied with the most justification to the “Cadillac” tax on excessive health insurance coverage.

      There are also cases where more health care might be desirable, for example in lower income families where even a deductible or copayment might be unaffordable given competing demands on the budget. Thus the efficiency case for the tax appears weak and the tax may increase inefficiency.

      The tax is too small to make a dent in paying for Obamacare and too narrow in its application to change any practices of behavior. Large companies like Johnson & Johnson can shrug it off, but since it’s a tax on revenue not profit, small to medium sized companies are disproportionately harmed. Start ups that don’t make a profit for several quarters or years are finding it’s better to just move overseas altogether. It needs to be repealed as soon as possible.

    7. Anonymous Says:

      If Obamacare enforcers choke resisters, Obamacare will work. Choking also cuts medical costs.

    8. bbthevidiot Says:

      Grurray says

      “Little thought went into what this tax was supposed to do or supposed to be”.

      Wrong, much thought went into it. It was exactly designed to do what it was supposed to do, help destroy the world’s best health care system. The ACA was never about health care. I will be PO’d if congress decides to remove this pissant little rule. 36,000 freaking pages? I’ll pay a medical device tax to get rid of the other 35,999 stupid crap yours and my congressman have to put up with. The Bible and the Constitution of the United States didn’t take this much paper.

    9. Mike K Says:

      A couple of responses to Dearieme.

      1) The VA was actually quite innovative 20 years ago and I adopted some of their ideas in This grant proposal to improve the care of the elderly in assisted living homes.

      The Iraq and Afghan wars have overloaded them and, in true bureaucrat fashion, they have mucked up any response. Bureaucracies don’t scale up well.

      2) Medicaid (MediCal in California) is combined federal-state funded and several rich states, like New York and California, have wildly expanded benefits, without however paying the providers for them. For one example, I used to inject spider varicose veins and, at one time was the only surgeon doing this in my area. When I was new in practice, I accepted MediCal out of sympathy for the poor. My office staff finally convinced me to give up this idea by showing me how much it cost us. A varicose vein injection was paid by MediCal $6.00 and the check usually came about 2 years later. We figured out we lost about $30 per patient visit.

      Later, I would accept these patients from doctors I knew and when we started the trauma center. Many of the primary care docs in our community, a prosperous one, did not bill MediCal at all since the billing cost more than the reimbursement for office visits and the like. Another common MediCal cost saving tactic was to reject claims as being “too late in filing.” We would try to send them registered mail to prove when they were submitted but MediCal would not accept registered mail.

      3) Medicare is not only for the elderly but has become the source of health care for the “disabled,” which includes, for example, 25% of the children of Kentucky who have been registered as disabled by their parents as ADHD and learning disabled so the parents can collect Social Security on behalf of the child.

      Medicare is also rife with fraud, much as a result of weak claims review and lousy reimbursement that drives ethical doctors away. The original law was intended to provide only 80% of payment as a control on utilization. “MediGap insurance” appeared quickly and pays the other 20%. The French system includes the old insurance companies in the same way.

      If Medicare would allow “balance billing,” so that doctors could bill patients above the “allowed amount,” there would be a market mechanism to reduce utilization. Instead, reimbursement is being cut every year and that drives away a lot of good doctors and leaves the field to the crooks.

      Many of the best orthopedic surgeons in Los Angeles do not accept any insurance. They are cash only and this is a growing trend.

      Politicians are long on promises and short on performance. The Space Program is another example.

    10. Ginny Says:

      What strikes me is that it isn’t that the American voter that Gruber postulates is stupid about economics – generally that voter is close enough to markets to know what works, what encourages innovation, what saves money. They understand Hayek at gut level if not always with the vocabulary of a college economist.

      If you doubt that, notice the fact that the country rose up in a strong voice against Obamacare, the Tea Party (nonviolent and neat, knowing more about American history than other demographic groups) voted in 2010, became distracted in 2012, and voted again in 2014 (and 2012 wasn’t exactly a banner year for Democrats, despite their claims that elections count.) Against a remarkably organized opposition they remain.

      And they were never “fooled” by Gruber’s tactics – not the Republicans who voted against Obamacare consistently but the Democrats, not the Tea Party or even merely conservative legislators but the radical ones.

      The Lloyd Doggets, neither the Cornyns nor Cruzes bought the free lunch line. Nor did those who voted them in. Which governors didn’t buy into it – from blue states or red ones? You can’t fool grounded people; you can those who follow Elizabeth Warren or Hillary Clinton. They begin fooled.

      Whether the party of envy and hate wants to purposefully put every American at the mercy of the government for health care and how much they just have Obama/Gruber/Jarrett/Clinton/Udalll’s arrogance and conceit, I’m not sure. It doesn’t hurt for the time being – conscious or unconscious, they are destroying a system that has made giant breakthroughs in longevity, the happiness that comes with mobility and less pain, fewer young deaths and more older health.

    11. fiona Says:

      To me it appears that we have here a collision between two theories, political/economic. The “rational ignorance” theory says people are too busy to learn what they need to vote sensibly. The left puts forward the “trust in tech experts” as a role model. Mr. Gruber shows us where that leads.
      Between the Internet, where actual practicing experts debunk irrational ones, and the Tea Party, which has more people with knowledge of and interest in the American History no longer taught in school, we are making some progress disseminating truth, although still at a disadvantage to the press. The stubborn problem is that so many of our fellow citizens are still too lazy to think things out for themselves, or are happy to have the wool pulled over their eyes so that they don’t have to be unhappy over the way the world works. This last can only happen in a society so rich and safe that carelessness and delusion don’t trigger an existential outcome.

    12. Michael Hiteshew Says:

      >>they are destroying a system that has made giant breakthroughs in longevity, the happiness that comes with mobility and less pain, fewer young deaths and more older health.

      Democrats & Leftists never let real world consequences impact their ideology.

    13. Death 6 Says:

      The progressives have historically wanted a government single-payer health system. Veryretired is correct on this. In order to move the ball along the Lyndon Johnson pissing strategy was brilliantly employed along with the Gruber faux analysis-complexity-back room strategy. There has always been a gradualist strategy to further the conditioning of the citizens to the idea that government regulation, funding and control of health care (and most other things in life) are proper functions. This breeds dependency and rational ignorance since individuals are powerless to influence the nameless, faceless operators of the apparatus that grows to serve the concentrated special interests inside the tent. Since central planning can only lead to inefficiency, control, dead weight costs and dependency, it will eventually cause the system to spiral downward to collapse. At which point, the government single-payer system may well appear to enough voters as the only viable alternative. That will only be a temporary prop.

      Obamacare is not as isolated aberration of the increasing concentration of power by a nanny state promoting elite. It has to be seen as just one major advance toward creating an election proof majority of those dependent on significant government transfers to keep the progressives in power. The progressive ideologues will believe that their control over individuals is far superior to allowing the ignorant masses to screw up their lives by making choices they do not approve. They view the huge economic rents they and their fellow travelers (crony capitalists, labor unions, academics, government funded or subsidized non-profits, etc.) are will be reaping are be richly deserved.

      It’s true, they don’t do economics; they do politics for power and personal wealth and they have no respect for individual sovereignty or free markets. They are a self-proclaimed, entitled aristocracy. At some point the citizens they intend to increasingly rule by government force will attempt to demote them to cultural outcasts, either peacefully through the political process if that option exists at the time or through a second American revolution. What happens in the areas of health care and illegal immigration in the next several years will likely signal whether peaceful or violent revolution will be the outcome.

      I appreciate the insightful discussion in this thread. Since a national public opinion poll reported by Fox News today shows 58% oppose Obamacare, perhaps there is hope that it can be dismantled. Doing so before the narcotic of dependency takes hold is a question of which I have doubts.

      Mike

    14. Mike K Says:

      One example of the Democrats’ ignorance on economics is the gas tax. Gasoline taxes were a user tax to fund roads and bridges since the war. For other reasons, environmentalism, enmity to oil companies that are viewed as rapacious, and the global warming hoax, auto efficiency has been a preoccupation of the “Ruling Class,” not just Democrats, since the 1970s.

      Peak Oil has been an enduring myth pushed by the left since the oil embargo of the Iran Revolution period.

      Amazingly, there are many people who believe in peak oil, but are not particularly aware of the history of the theory and its evolution. (Among there many other shortcomings.)

      Here’s the situation: there have long been warnings of scarcity, going back to the 19th century, primarily reflecting pessimism about petroleum resources which was rather unusual, given the relatively poor understanding of the geology at that type. A combination of hubris and Malthusian bias would seem to explain it. Read the rest.

      Anyway, for all these reasons, the gas tax is not funding roads and bridges that we need. Democrats are alarmed and want to either raise the tax, which is already close to the price of the product taxed in places like California, or establish another tax on vehicles.

      They don’t understand these things. Policemen are sent to arrest a man for selling cigarettes that are untaxed or come from a lower tax entity and kill him trying to wrestle him to the ground. It is Democrat tax policy, not racism that killed him.

      Don’t expect to read that in the NY Times.

    15. Michael Hiteshew Says:

      So I guess that President of Smith College Kathleen McCartney should have emailed “All Taxes* Matter!” instead of “All Lives Matter.” Then she’d be a Leftist Heroine.

      *Except those owed by Charlie Rangel (D) or Timothy Geithner (D) because they’re big-time Dems, in which case shut up and move along.

    16. Mike K Says:

      The tax champ is Al Sharpton.

    17. wallsingham Says:

      If congressional committees used the CIA Enhanced Interrogation Techniques on witnesses, men and women like Gruber would stop telling lies. All that’s needed is a scaffold instead of a witness table on which the witnesses could be hung or water boarded.

      Imagine – all the lost IRS emails could be found. Witnesses would have perfect memories and would speak easy to understand sentences. Also TV coverage would be fascinating.

    18. Michael Hiteshew Says:

      Daniel Hannan recently argued against the UK re-subscribing to the EU anti-terrorism law on the grounds that what was supposed to be power used only in extraordinary circumstances is now being used routinely against citizens. Who could have seen that coming?

    19. Michael Hiteshew Says:

      Fiona wrote:
      The stubborn problem is that so many of our fellow citizens are still too lazy to think things out for themselves, or are happy to have the wool pulled over their eyes so that they don’t have to be unhappy over the way the world works. This last can only happen in a society so rich and safe that carelessness and delusion don’t trigger an existential outcome.

      So true. Very well said.

    20. Death 6 Says:

      So, really Gruber spoke truly, citizens are economically challenged in basic issue (like free lunches, market operations, capture theory of regulation, etc.) and disengaged from the political processes that will ultimately stifle their economic and political freedom. He is being criticized for speaking that truth when he should be hammered for his ideological goals of making us slaves of the ruling class in a statist system by using this disengaged ignorance to manipulate the political process.

      No doubt some of the so called elite are also very ignorant about such issues as third party effects, central planning inefficiency, short and long term market adjustments to intervention, factors in economic growth, productivity and labor markets, and wealth creation (goods and services, not monetary), but Gruber isn’t likely to be one of those. His sin is using this understanding to corrupt the processes for his own short term gain and implementation of his own ideological preferences for centralized control hopeful that he will be a power welder.

      We conservatives are playing their game. The issue is that government can only have limited functions and size or power elites will form and control it while most citizens will be rendered less politically powerful and thus personally less free. The more people become powerless, the more ignorant they will choose to become. Most people are pretty knowledgeable about making decisions in their own lives, even if others don’t like these decisions. Many have come to the conclusion that the part of their life significantly controlled by government is beyond their control so any efforts they make is to mitigate or game these controls rather than change them. Rational ignorance results.

      I actually read through the house version of the ACA because I was angry enough to spend a day on it. I understood less than half of it because of the insider bureaucratic and legal terminology which is never defined and the predominance of referencing preexisting programs, statutes and regulations of which I have little detailed knowledge. It was not a complete waste of time as I did pick up a number of key points that were not stressed in the public debate.

      The primary result of the effort was to confirm my belief that I didn’t need to be a subject matter expert (such as Gruber thinks he is) to know it was terrible public policy. All I needed to know was that it was a government program intended to limit individual economic choices in health care, that health care is not a legitimate governmental responsibility, and finally, it was based on wealth transfer. The 58% of Americans who currently oppose Obamacare know the much same and they undoubtedly have not read the law. They are not ignorant.

      The tale will be told by what happens to the ACA going forward.

      Mike

    21. Joe Wooten Says:

      Anyway, for all these reasons, the gas tax is not funding roads and bridges that we need.

      Mike,

      A large chunk of the state and federal gasoline taxes (except for at least Texas) is being used to fund mass transit projects and operations. There would be a LOT more money for infrastructure if the congresscritters would quit using it in non-essential transportation pork. I would like to see the federal gasoline tax done like it’s done in Texas. Most of it goes into a fund that cannot be used for ANYTHING else but road projects and the legislators cannot touch it for anything else.

    22. Mike K Says:

      “A large chunk of the state and federal gasoline taxes (except for at least Texas) is being used to fund mass transit projects and operations.”

      Yes, a lot of that is true in California. Still, it is only a fraction of 10% or so. Orange County passed a sales tax ten years ago that widened the big interstates to the LA County line. Now traffic moves along well until you reach LA County. They are finally doing something about widening but most of California has poor roads and they were the best in the nation when I came here 60 years ago.