Tuesday, November 12, 2013

The nightmare continues

Sam Baker at the National Journal researches whether President Obama can make the sort of "fix" he claims to want to help those whose insurance plans were cancelled due to his signature law. The conclusion is that there is little that he can do administratively.
That's partly because these plan cancellations are not a side effect of the Affordable Care Act. The administration knew they were coming, and they were an inevitable part of the reforms the law makes to the market for individual insurance policies.

Weakening the regulations that led to plan cancellations might not make any difference at all, or might undermine the basic structure of the law. And trying to simply offer more assistance to people losing their plans would require congressional approval—which, of course, Obama wouldn't get.
The reason that people are getting these cancellations is because the administration designed a regime in which people who had lower cost plans needed to be paying more in order to subsidize health care for those with pre-existing conditions.
So, leaving those healthy customers on their old plans just to solve a political headache might only help prop up the two-tiered system Obamacare was designed to end.

Even if the administration could find a middle ground, weakening or delaying certain regulations might not make much difference.

Insurance companies have already set their premiums for 2014, so the higher prices some consumers are experiencing aren't going to change this year. And insurers' business models already account for moving people into the health care law's new insurance marketplaces.
This explodes the deception behind Obama's supposed apology last week. They not only knew that people would lose their plans; they planned for it to happen. It's a feature, not a bug. But somehow they didn't think that people would be upset about having to pay hundreds or thousands of dollars more per year for a plan with a higher deductible. I guess they thought that everyone would just be happy to pay more if it helped others get their insurance. Obama might be sorry that people are unhappy and making their anger public, but he's not sorry about what his law planned in the first place.

Throwing people out of their previously acceptable plans was an intended consequence of how they crafted their laws. Democratic senators up for election next year may want to support some sort of nice-sounding law that allows them to tell voters that they're out too help them, but it isn't going to work.
Here again, complex insurance contracts take months to plan financially and negotiate with providers. They could be renewed for maybe a few months but not forever, which is why the Landrieu bill is simply a new mandate ordering insurers to continue offering these plans. But the hard business truth is that these plans are already gone. The only way to solve the problem is a time machine to go back to 2010 when HHS published its deliberately restrictive rule on "grandfathering."

The Shaheen and Landrieu proposals are merely ploys for these Democrats to distance themselves from ObamaCare while still embracing it. But they can't have it both ways. Either they can vote to take down the whole regulate-subsidize-mandate apparatus for a year and propose major reforms to prevent a reprise of the last six weeks. Or else they will be enablers of the current and future disruptions, cancellations and limited health choices
And the Democrats running next year should get used to their panic since, as Ed Rogers writes, it will only get worse for them.
The White House will tighten its messaging, and it will fix the Web site, but that won’t change the underlying fact that this bill will negatively affect a huge portion of Americans, and superficial fixes aren’t the answer. Half-apologies and a refusal to hold anyone accountable are causing only more distress within the Democratic Party. A lot of Democrats are beginning to think a little panic is in order. The worst is yet to come.
Pete Suderman explains how the worst case scenarios are going to be the new reality.
This could still be turned around, perhaps even soon. But it’s time to start considering the worst-case scenarios: that the exchanges continue to malfunction, that plan cancellations go into effect, that insurers see the political winds shifting and stop playing nice with the administration, and that significant numbers of people are left stranded without coverage as a result. Rather than reforming the individual market, which was flawed but did work for some people, Obamacare will have destroyed it and left only dysfunction and chaos in its wake.
And my senator, Kay Hagan, is going to fool voters that her votes didn't help bring us this mess by now calling for an investigation into why the rollout went so miserably. Sure, they didn't intend for the website to be such a failure, but many of the other problems coming to light were built into the law that she voted for. And remember, it passed by exactly 60 votes in the Senate. So any one of those senators cast the vote that made this nightmare come true.

These consequences were the intended consequences of the poorly designed law. And then there are the intended consequences. Jonathan Last describes the way that the website can reveal people's personal information.
All of these privacy problems are technical in nature, the result of both poor design and poor execution. Yet the biggest privacy concern is systemic: By sending your information hither, thither, and yon​—​from HealthCare.gov to the state exchanges to individual plans, each of which will use third-party applications​—​users have geometrically increased the exposure of their information. And not just to hackers. As Michael Astrue put it in The Weekly Standard when he first sounded the alarm:
With HHS’s convoluted patchwork of contractors, including the data centers of “the cloud,” tens of thousands of people have now gained access to our personal data. The churning of marginal employees through the lowest bidders of “the cloud” particularly increases the risk of massive disclosures like those that Edward Snowden recently inflicted on the intelligence community and Bradley Manning inflicted on the military. Our greatest vulnerability may not be the hardware or the software, but the integrity of the contractors who use these tools.
There is a saying in the programming world: With 10,000 eyes, all bugs are shallow. This little Zen koan gets at one of the immutable rules of writing code: If you have enough testers and programmers, you can untangle any mistake. HealthCare.gov may be the exception that proves the rule.
And the New York Times covers how con men are already finding ways to prey on the confusion over the law.
With millions of Americans frustrated and bewildered by the trouble-prone federal website for health insurance, con men and unscrupulous marketers are seizing their chance. State and federal authorities report a rising number of consumer complaints, ranging from deceptive sales practices to identity theft, linked to the Affordable Care Act.
Tori Richards at Reason covers another perhaps unintended consequence of the law by explaining how the way that the law was written, doctors and hospitals are left on the hook if people choose to default on paying their premiums.
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.
Lawyers getting involved and people getting something for nothing? Perhaps not such an unintended consequence after all.

And now James O'Keefe has done some more of his guerrilla journalism to demonstrate how navigators who are supposedly helping people sign up for insurance are encouraging people to lie on their applications.
“You lie because your premiums will be higher,” one navigator advises an investigator for O’Keefe’s Project Veritas, who tells the worker he sometimes smokes. “Don’t tell them that. Don’t tell ’em.”

The investigator then poses as a low-income worker at a university who has unreported cash income on the side, worrying about how that might affect his premium subsidies. That’s no problem for a navigator, who says, “Don’t get yourself in trouble by declaring it now.”

“Yeah, it didn’t happen,” another navigator says. One more chimes in: “Never report it.”
And they're also working with Democratic organizations to connect their health care work to groups mobilizing to elect Democrats. What a surprise. As John Fund writes,
The law’s problems are coming from more sides than a pentadecagon. But one of the most serious things undermining its credibility is the Obama administraion’s seemingly complete indifference to corruption within one of the key groups tasked with its implementation. We’ll have to see just how much worse it gets.
And now we're hearing that fewer than 50,000 people have enrolled in health plans using Healthcare.gov. So about 5 million people have lost their insurance and 50,000 have gotten new policies on the federal site. That's why the Obama administration is expanding their definition of someone who has enrolled in a health plan to include those who have filled out the forms, but not yet paid. And we don't know yet, but we have lots of hints that the people buying those policies are not the "young invincibles" that insurance companies need to buy policies to subsidize those who are older and sicker.