Tag Archives: obamacare

An Inquiry into Healthcare.gov’s “Special Enrollment Periods”

So here we are, the first day the Obamacare exchanges or marketplaces or whatever are open for business.  I think of it more as the day America stepped across the threshold to possibly inescapable socialism.  That’s just me.

I had a rough day as I realized an error in my last post and had to insert an update and correction to my assertion that guaranteed issue would allow waiting to buy health insurance until the onset of serious illness.  This still could be true but only if it would occur in a subsequent open season, the part I had missed.  Even though I had remembered hearing talk of no limits, the open season requirement went past me because I went with what I thought I had heard without checking it out.  Confession.

I should have questioned this because employer provided insurance is provided guaranteed issue and they generally limit enrollment to open seasons, with exceptions for certain life events.  I knew this.  Of course with employers there is an initial screening based on who they hire so they are never looking at people too unhealthy to work or apply for the job.

In my ensuing gloom I decided to poke around the Healthcare.gov website.  I was just visiting to see what it looked like and learn what I could.  Sure enough I stumbled on this part about not missing the open enrollment period:


Just as with an employer there was the exception for “qualifying life event” and, being curious, I clicked the link and found this:


That example “moving to a new state” jumped off the page.  I sensed fun with that one!  In seconds I hopped on the phone and dialed the toll free number at the bottom of the page.  After a surprisingly short dance through options and with almost no wait I was speaking to a live representative.

My question was brief and to the point.  According to what I had seen, could I choose to remain uninsured, pay out of pocket and then, if I experience a serious illness, simply move to another state to buy a policy outside the open season?  If I could just cross that state line would I be good to go?  These sound like silly questions, and my gut tells me that this exclusion would only apply if I had owned a policy before moving.

The representative though, did not explain or answer my question to satisfy my gut.  His response was, what I can only guess, outside the box of his training.  “Well, I guess so, if that’s what it says,” was his answer!  Duh!

And no, I still cannot believe this representative’s response was correct, because if it was then I should further revise and update “Is Paying the Obamacare Tax a Better Choice for the Young and Healthy“, my last post to this blog.

Screen grabs were off of the Healthcare.gov website.

Note: This post was shared to WatchdogWire-Pennsylvania

Is Paying the Obamacare Tax a Better Choice for the Young and Healthy?

Urgent Update and Correction:

Just as with this article at Business Insider, I missed the fact that enrollment in the exchanges is limited to open enrollment periods.

This does change the risk dynamics of paying the tax rather than buying the insurance.  Any confusion caused by this oversight is regretted.  Even still, those with either few assets to lose or those with sufficient assets to carry them to the next enrollment period, may still want to take the risks as presented in the original post.  The availability of sensible catastrophic true high deductible “real” insurance that Obamacare prohibits and has not been offered in the states would be the answer to this dilemma.

Original Post (with slight unrelated edits):

The following discussion is in no way intended as specific advice as everyone’s situation is different and unique to them, but only as a guide to uninsured young and healthy individuals to understand their choice in whether to buy health insurance on an Obamacare exchange to avoid paying the tax or paying the tax to relieve them of the obligation to purchase the insurance.  The only mandate for the uninsured is to make this choice, not to do one or the other.

The other purpose here is to counter biased government efforts that will insist the only choice is which insurance exchange plan to buy and how to sign up for it, ignoring the possible benefit of paying the tax instead.  This government effort is substantial, as here in Pennsylvania alone, over $6 million of taxpayer money is being directed to one critical thing Obamacare success is dependent on, enrolling as many young and healthy people as possible.  According to Enroll America-Pennsylvania, on July 10, 2013 “health centers in Pennsylvania were awarded a total of $4,196,333 to provide outreach and enrollment assistance.”  They also indicate that an additional $2,071,458 is coming soon to organizations that will act as “Navigators” who will likely never discuss the non-insurance option that is also important for the young and healthy to understand in making their choice.

Young people need to know a few facts of Obamacare at the outset.  Because the law limits charging the old and less healthy more than three times what the young and healthy pay, this shifts more burden to the young.  Offsetting this are premium subsidies to make the insurance choices seem affordable, but as the young advance their careers and their earnings these subsidies fade.  Another important consideration is that shortsighted bureaucrats designed Obamacare to allow no exclusion for previously existing conditions, giving the opportunity to purchase insurance after the onset of a serious illness, even from a hospital bed. Update: Still true, but only if during a subsequent open enrollment period.

The pay-the-tax choice may be useful for young and healthy people who have the discipline to put aside the difference (compared to paying exchange premiums) for their basic normal medical needs, and especially if they then find one of a growing number of physicians offering much lower prices by casting off third party payment for a cash practice.  It must be understood that this choice is not without the risk of an occurrence of a sudden and severe medical condition causing total incapacitation.  This extremely rare event could prevent them from signing up for insurance on an exchange until they are sufficiently recovered to do so.  Update: So long as it is within or until the next open enrollment period.

Putting the sudden-and-severe risk in perspective though is important.  Everyday young healthy people take on huge amounts of student loan debt, with no guarantee of acquiring a job sufficient to easily pay it back, even as student loan debt obligations saddle the borrower for life because  they are not dischargeable in bankruptcy.  Medical debts, on the other hand, can be eliminated through bankruptcy should the highly unlikely occur.  This is where an option to pay the tax and buy a very low cost non-Obamacare compliant policy that pays nothing up to perhaps a $10,000 or even $15,000 deductible, then covers everything above that, would be so useful, but no such thing exists.  Such a plan would be good enough to prevent bankruptcy in most cases and leave substantially less obligation than many young people have willingly taken on with student loans.

It is thus important for young healthy people to see the big picture, understand all their options, then act in their best interest, in reaction to the rules presented to them by the Affordable Care Act.  This discussion has been meant as a guide in starting the navigation of that process.  Additionally, there is a wonderful new resource blog, The Self -Pay Patient, that unfolds a myriad of already available but little known alternatives to insurance, and I highly suggest a visit for anyone serious about learning the many other options available to them, since no government navigator will ever mention any of it.

Note: This post was shared to WatchdogWire

REINS Revolution as Ransom for Budget Resolution?


Herd mentality on issues is not something unique to the political Left or the political Right, but in either case populist tendencies can be downright dangerous, leading to unintended consequences.  No matter how good an idea seems at the outset, it is always good to ask what could go wrong.  Zealotry interferes with this basic question and places pressure on those who may doubt the wisdom of an idea, risking indignation from those they consider allies,  to remain silent.  Principled people will resist this temptation to go along to get along, making known their objections, explaining why, then letting the chips fall where they may.

We currently see herd movement on the Conservative side, with the attempt to defund Obamacare by making it ransom for cooperation in passage of a continuing budget resolution in order to keep the Federal government functioning past September 30.  Looking around, there appears to be unanimity among the grassroots on this issue.  Freedom Works, Heritage Action, Tea Party Patriots are all on board, being led by Senators Ted Cruz and Mike Lee among others.  Ads on Hannity and Rush and the Blaze are all promoting defund.  A rally at the capitol has been planned for September 10 and busloads of protestors will be making the trek.  “Exempt America from Obamacare” is the cry.  Yet there are a small handful of dissenters, myself among them, warning of the potential foolishness of this approach.

Jennifer Stefano, head of the Pennsylvania chapter of Americans for Prosperity, minced no words in her August 9 op-ed for the Patriot-News and Pennlive.com.  She boldly said that those “pushing the ‘defund Obamacare or shut down the government’ fight are wrong.  One hundred and ten percent wrong” and to conservatives, “your government shutdown approach has got to stop.”

Following that, on August 14 Avik Roy of the Manhattan Institute, and one of the foremost opponents of Obamacare and defenders of market based healthcare reform solutions, published an op-ed in National Review Online.  Wasting not a second, his title read, “Obamacare’s Shutdown Shock-Jocks  Ted Cruz and Mike Lee have a plan-to make Obamacare permanent.”

Neither Stefano nor Roy suggest anything that might confound the atrocity of Obamacare is a bad idea.  Both do suggest, however, that tying defunding to the budget resolution has the potential to backfire big time.  They both point to polls showing little public support for shutting down the government.  Supporters try to say that it would be Democrats and Obama shutting down the government, not them.  Obama and the Left, of course, along with a complicit media, will rail against the Republicans and Conservatives in particular.  With the current political realities, a festering shutdown deadlock in the face of unfavorable polls would be  the likely outcome.  The implications of this would then likely carry a price, perhaps a heavy one, going into 2014.

So back to political leverage in connection with allowing the federal government to continue operating past the end of September: There is one thing on which conservatives could only win.  Tie any budget cooperation to passage of the REINS Act.  The what?  Exactly!  Use it as ransom for cooperation.  There are no illusions REINS would actually pass, and backing away short of a government shutdown would be necessary, but after weeks in the spotlight, everyone who pays even a small amount of attention to politics would have a good understanding of a brilliant concept, of which too many conservatives are still unaware.  That alone could be a huge victory.

Briefly, the REINS Act would put limits on an out of control trend toward legislation by regulation (or regulation as legislation), whereby departments and agencies can make things up as they go, despite the economic impact on those who must comply.  Under REINS any regulation with implementation impacts greater than $100million (including Obamacare) would require the consent (and accountability) of Congress.  This puts REINS in a very special class of ideas that seek to step away from an overly powerful central government, rather than stepping further into it!  In that respect it is a revolutionary tool of disengagement from bloated central authority.  Promoting such a concept, showcasing the REINS Act, would define and position the GOP going into 2014 as the party of limited central government in a way that may force a discussion the Left would rather not have or expect.  Contrast this approach with the risks of tying defunding Obamacare to the continuing resolution, especially when defund or delay can still be pursued (and should be) via general orders apart from any budget resolution.

Additionally, the Obamacare mess has been speaking badly for itself lately, to the extent that, along with parts that have already been delayed, even Democrats and disenchanted labor unions may find total delay palatable before long.  Avik Roy pointed out, because defund, even if possible, would extend only one year or the length of any budget resolution, it and delay are really the same.

A wonderful description and  history of REINS, followed by examples of federal government excesses that demand it, can be found in Phil Kerpen’s 2011 book Democracy Denied.

Originally introduced in the 112th Congress, REINS has been reintroduced in the current Congress as HR 367.  It passed the House on August 2, 2013 by a 232-183 vote.

The Insidious Non-Optional Medicaid Expansion That Further Clouds the Future for States

So much about Obamacare has been “by any means necessary”, from the legislative gymnastics to get the bill through Congress to the current mandatory expansion of Medicaid that is here now even though largely unnoticed.  Here now?  But wasn’t Medicaid expansion optional?  Some yes and some no as it turns out.  This almost unknown stealth expansion was required of the states and imposed on them despite the Supreme Court ruling because it is being funded 100% by the Federal Government, but only for two years 2013 and 2014, after which, funding abruptly ends.  Because a strong constituency is being created (or bought) that will demand this expansion be continued past 2014, and no one can predict the outcome of those likely demands, further possible complications and risks arise for those states that decide to embrace the optional Medicaid expansion.  Allow me to explain.

Because of current constraints to participation by medical professionals both by low reimbursement rates, 1800+ pages of cumbersome rules, and audits that go beyond financial fraud to interfere in actual treatment decisions, there are at present not enough willing doctors to adequately serve those now eligible for Medicaid benefits.  Realizing this, and attempting to avoid making the optional expansion to 133% of poverty and influx of new eligibles a disaster, “any means necessary” was once again deployed.

On November 6, 2012 (surprisingly not a Friday) CMS published a Final Rule to go forward.  146 primary care Medicaid services identified by the ACA would, by regulatory proclamation, be compensated at the higher Medicare rate, starting with 2013 but only for two years.  Since Medicaid reimbursement rates relative to Medicare reimbursements vary tremendously from state to state, the percentage increase covered by Federal funding varies accordingly.  At one extreme are two states that surprisingly pay higher Medicaid fees for the covered services than they do for Medicare.  These states will receive no additional Federal funding.  At the other extreme is Rhode Island, where Medicaid fees will increase 198%.  Five other states will receive boosts of over 100%.  Pennsylvania is number seven on the list and doctors will be compensated an additional 96% to equal the higher Medicare rates.  On average across the nation Medicaid fees for the ACA primary care services will rise 73% at an estimated cost of $11.9 billion, all in an attempt to keep willing physicians on board, expand their willingness, and attract newcomers.

The problem, of course is what happens after 2014.  It is unimaginable that doctors enjoying the higher reimbursements for two years will do anything but lobby stridently to extend the increases and indeed have them made permanent.  Realizing, otherwise, the carrot to participation would no longer exist, this outcome can be considered probable.  The mystery is who would then pay?  Would the increase be included in the ultimate 10% state funding under optional expansion to 133% of poverty or even some formula that would require states to pay more? Would the increases fall to each individual state or be averaged over all the states?  The point is that today no one knows.  While perhaps not being the main reason to avoid the optional Medicaid expansion, especially those states with the greatest percentage “temporary” increases need to consider the possibility of very serious consequences in the aftermath of this two year attempt by the Federal government to buy a loyal constituency for implementation and avoidance of massive failure.  It is also interesting that the current reimbursement increases were only applied for two years, as estimates for the cost of Obamacare have been made over a ten year period, allowing more, for now, to remain hidden from view.

The two main sources used for this post were a policy brief from the Henry J. Kaiser Family Foundation and an article in American Medical News published by the American Medical Association.  More details can be found at these two locations.  Also used was a recent article written by the President of the Texas Medical Association.

Note: This post was shared to WatchdogWire-Pennsylvania on Sep 24, 2013.

The Argument Against Selling Health Insurance Across State Lines

A popular idea tossed around in the search for effective healthcare/insurance reform is the notion of selling insurance across state lines.   Along with malpractice reform, this often tops the list of solutions, especially from Republicans, even as the main culprit, unnecessary third-party payment, is not even mentioned.  At a recent debate for an open seat in the US House in the district where I live all five GOP candidates spoke in favor of this concept.  Yet is it a good idea or possibly the source of more trouble, and are there other means to attack the existing problem?

On the surface it would seem like a fantastic idea and with good reason.  The argument goes that more competition would bring down prices.  After all, the opportunity to purchase a health plan from a company not doing business in a particular state would now be available.  More importantly, because insurance is separately regulated state by state, it would now be possible to circumvent excessive mandates and regulations that much more dramatically affect price than the number of company choices available.  Both the number of coverage mandates and the nature of them varies greatly from one state to another.  In a few states simply requirements for community rating and guaranteed issue have made the individual market so expensive as to all but destroy it.  In this sense, so long as there are at least three or four company choices anyway, the ability to purchase insurance regulated and approved in another state would change the nature of the competition from one of price to that of determining the least amount of expensive regulation and mandates the buyer felt was needed for their protection.  So far, so good.  What is not to like?

The problem and basis for the argument against what would seem like such a good idea on its surface is the Commerce Clause of the US Constitution, or rather more correctly, the modern perverted interpretation of it.  What began as a provision to facilitate exchange among the states has over time become an excuse for the Federal Government to impose all manner of meddling and micro-management to anything bought or sold across state lines.  The fact that insurance is not bought and sold across state lines should serve as a defense against such federal meddling and against the imposition of Obamacare itself.  In this regard, providing for such interstate commerce would open the door to the legitimate intrusion of the federal government and surrender of the defense that exists without it.

The origin of state control of insurance was the McCarran-Furgeson Act of 1945 which exempted insurance from federal anti-trust laws and left regulation to the states.  Right up to today this has kept federal regulators mostly out of the picture, with the exception being health insurance.  Even there federal intrusions have been few and limited until the passage of Obamacare.  The fact that they went unchallenged by the states was absolutely a mistake by the states, but the extent and nature of the intrusions was of limited scope and never sparked challenges that should have occurred.  Now with the passage of Obamacare the federal government has become the bull in the china shop, seeing no limit to its authority, even though a reasonable defense against it still remains so long as we do not move to purchase across state lines.

Two possible alternative solutions come to mind.  The first makes the most sense and leaves little doubt as to its effectiveness.  Those states that have ruined their health insurance market by excessive and abusive mandates and regulation need to fix their problem internally.  Rolling back that which has caused the problem will eliminate it and do for its citizens exactly what providing the opportunity for circumvention would do.  The second solution is more problematic and questionable.  That would be to possibly keep the federal government out by the formation of compacts among states that want to provide for the purchase of each other’s health insurance plans.  Since compacts must be approved by congress and the internal solution would work as well, this approach would not be suggested.

The bottom line here is that what seems like a great idea to solve a known problem may simply cause even more trouble, give away a reasonable defense, and end up being in the category of “be careful what you wish for”.

The Unspoken Barrier to Real Healthcare/Insurance Reform

I often say “I blame conservatives for Obamacare” or even write it on signs to provoke discussion.  Oh, it is not anything I’ve ever seen conservatives do.  This is purely an act of omission that is part of a much greater deception that has befallen perhaps three-quarters of our population.  There are two things that reveal the depth of the deception and provide the basis for the direction of my thoughts.

First, in the debate prior to Obamacare, one lame conservative rebuttal went like this: “Surveys show that >80% of Americans like the Healthcare they have!”.  In the first place they really meant Insurance.  This was repeated over and over, and was a major red flag of misunderstanding.  Second is the fact that adoption of High Deductible Health Plans with Health Savings Accounts remains only a small portion of the market share (<10%) after 9 years of availability, being another sign that the issue is poorly understood.

So just what is this deception or misunderstanding?  Quite simply we have embraced a product and approach that encourages massive overuse and benefits no one greater than whoever sold it to you.  Any attempt to “insure” the everyday, the expected , or that within the ability to pay otherwise is a fool’s game that always does insure one thing, that the incentivized overuse of others will be in your premium.  That most young people face a greater unexpected risk to their finances by a major car repair than health issues still does not make the purchase of recent attempts to sell car repair insurance a good idea for most who buy it.  Yet Obamacare seeks to build on this fallacious and flawed approach,  aided immensely by the many who’ve already bought into it by accepting low deductible, cover everything, third-party prepayment schemes and calling it insurance.

To this day the gold standard of research, a brilliant piece written in 1994 is as relevant today as it was then.  CATO Policy Analysis No 211 Why Healthcare Costs Too Much by Stan Liebowitz examines the effects of what happens when we create the illusion of free or almost free with low or non-existent deductibles or small copay amounts.  His study put a staggering estimate on the cost of the overuse this causes.  The amount was $300 billion in overuse plus $33 billion in associated administrative costs, for a whopping total of 1/3 of a Trillion Dollars in 1994!  Notably Liebowitz suggested as a remedy the greater use of high deductible insurance and health savings accounts.   In the time since 1994, into this toxic soup has been stirred more and more state mandated coverages providing even more opportunities to overuse.  Some of these are as silly as marriage counseling or massage therapy, things that should be questioned as whether they are healthcare at all, yet they are in our policies and premiums with billing codes to support them and schools to train the billing coders.  Where does it stop?

Conservatives need to recognize the powerful truths that have been hiding in plain sight and promote the simple solutions that are at our feet.  In addition to the Liebowitz study and others we have the results of a real world example in the state of Indiana that gets too little mention.  By only offering a choice to their 30,000 state employees and then getting behind it with education, Governor Mitch Daniels in his March 1 2010 op-ed in the Wall Street Journal revealed the results of getting >70% of their state employees to elect a high deductible health plan by their choice.  He said that Indiana in 2010 would save at least $20 million as satisfaction was high with only 3% switching back to the traditional PPO plan after having discovered the high deductible approach.

The times when Obama did provide an opening by saying he wanted to see better plans if they were out there, the ammunition was at hand.  Somehow we got caught up in their argument and never went full-bore into what does work and why it works.  It is no more difficult than the restoration of a functioning free market that comes from increasing direct payment and limiting third-party payment to its rightful place in the shadows of absolute necessity.  The low deductible cover almost everything approach is an expensive false comfort accepted by too many and why this illusion stands as a barrier to meaningful reform.  Folks do not like to admit how wrong they have been.  By peeling away politics and legalities and emotion and lately religion, and getting to basic choices on the Smart vs. Stupid Scale, based on facts and then the constant promotion of these truths, real reform may yet be achieved.  The role of education should be obvious.  Let’s get on with it.

Note: This post shared to WatchdogWire-Pennsylvania