Topic: Health Care & Welfare

The New York Times and The Boston Globe Unload on ObamaCare

Aside from one necessary clarification (see far below), it would be difficult to improve on what the New York Times, the Boston Globe, and the enrollees they interview have to say about ObamaCare.

First, from yesterday’s New York Times article, “Many Say High Deductibles Make Their Health Law Insurance All but Useless”: 

But for many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage.

“The deductible, $3,000 a year, makes it impossible to actually go to the doctor,” said David R. Reines, 60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. “We have insurance, but can’t afford to use it.”…

“We could not afford the deductible,” said Kevin Fanning, 59, who lives in North Texas, near Wichita Falls. “Basically I was paying for insurance I could not afford to use.”

He dropped his policy…

“Our deductible is so high, we practically pay for all of our medical expenses out of pocket,” said Wendy Kaplan, 50, of Evanston, Ill. “So our policy is really there for emergencies only, and basic wellness appointments.”

Her family of four pays premiums of $1,200 a month for coverage with an annual deductible of $12,700…

Alexis C. Phillips, 29, of Houston, is the kind of consumer federal officials would like to enroll this fall. But after reviewing the available plans, she said, she concluded: “The deductibles are ridiculously high. I will never be able to go over the deductible unless something catastrophic happened to me. I’m better off not purchasing that insurance and saving the money in case something bad happens.”

“While my premiums are affordable, the out-of-pocket expenses required to meet the deductible are not,” said [Karin] Rosner, who makes about $30,000 a year…

“When they said affordable, I thought they really meant affordable,” [Anne Cornwell of Chattanooga, Tenn.,] said.

And from today’s Boston Globe article, “High-Deductible Health Plans Make Affordable Care Act ‘Unaffordable,’ Critics Say”:

“We can’t afford the Affordable Care Act, quite honestly,” said Cassaundra Anderson, whose family canvassed for Obama in their neighborhood, a Republican stronghold outside Cincinnati. “The intention is great, but there is so much wrong. . . . I’m mad.”…

The Andersons’ experience echoes that of hundreds of thousands of newly insured Americans facing sticker shock over out-of-pocket costs…

“This will be an issue at least one more time in the 2016 election. It could absolutely still hurt Democrats,” said Robert Blendon, a professor of health policy and political analysis at the Harvard School of Public Health. “Polls about the Affordable Care Act have a considerable amount of middle-income people who say either the program has done nothing for them or actually hurt them.”…

“Unfortunately, what we are headed toward now is universal crappy health insurance,” said Dr. Budd Shenkin, a California pediatrician…“It’s just not a good deal for people,” he said.

“We’re in the process of looking at going without insurance,” [Cassaundra Anderson] said, calculating that the family will be better off financially just paying the $2,000 tax penalty for not abiding by the law’s mandate. “What am I even paying these insurance people for? Why should we reenroll?”…

“I cannot get anything with this insurance. Nothing,” said [Laura] Torres, who avoids seeking treatment for her thyroid condition and high blood pressure because of cost. “I just pay my monthly payments, try to take care of myself, go to work, and hope something serious doesn’t happen to me.”…

Amete Kahsay, 53, works as a temporary warehouse packer in Columbus. The Affordable Care marketplace is her only option for health insurance. She and her husband, an airport shuttle driver, pay $275 a month for a “bronze” plan with a $13,200 deductible.

Shortly after they signed up for insurance last year, her husband rushed her to the emergency room when she experienced dizziness. The visit, which included a CT scan of her brain, cost $1,700. She paid the charge from her savings, then returned to her native Ethiopia, where care is cheaper, to consult a neurologist and seek follow-up care.

“I support Obamacare. Without it, I wouldn’t have any type of insurance. But I’m not sure it’s worth the money,” said Kahsay, a US citizen who is registered as an independent voter. “Now, unless I get very, very sick, like only if it’s life-threatening, I won’t go to the doctor. I just lay down and take a rest.”

The necessary clarification is that these people are not complaining about high-deductibles in a market system. In a market system, consumers who choose high deductibles save money on their premiums and therefore have more resources to help them pay their out-of-pocket expenses. ObamaCare, on the other hand, manages to pair high deductibles with higher premiums, stripping many people of this benefit of high-deductible plans and leaving them unable to pay their medical bills. 

Progress in the Fight against Leukemia and Other Positive News

In this installment of positive news, we look at tiny 3D cameras that could revolutionize brain surgery, a new way of growing large quantities of red blood cells and progress in the fight against Leukemia. 

NASA’s 3D Camera Could Improve Brain Surgery 

Tiny 3D cameras developed by NASA may revolutionize the way doctors practice brain surgery. A device, known as MARVEL (short for Multi-Angle Rear Viewing Endoscopic Tool), is a 0.2 inch diameter camera that is attached to an endoscope - a snaking instrument used to examine the inside of the human body. NASA officials claim that MARVEL could make brain surgery quicker and cheaper, with less recovery time required. Before this technology can reach the operating room, the team needs to develop prototype for the FDA’s approval.  

Scientists Have Found a Way to Make Red Blood Cells 

The global blood supply remains in a state of constant shortage, a precarious situation for patients undergoing intensive surgery. Promisingly, a group of scientists have discovered a new way of producing large quantities of red blood cells, which perform the critical oxygen-ferrying duties of blood. The scientists identified a particular gene within stem cells and modified it so that these stem cells mature into red blood cells in greater numbers. 

These Are the Genes Linked to Aging 

New research has pinpointed 1,500 genes responsible for human aging. Scientists examined blood samples amongst 14,983 aging adults of European ancestry, and measured levels of RNA—the genetic product that our genes produce when they’re active. One caveat to these finding is that while individuals with Hispanic or Native American ancestry largely matched these markers, the RNA crossover dropped to only 27 percent in populations with African ancestry. 

New Kind of ‘Designer’ Immune Cells Clear Baby’s Leukemia 

A baby in London has been cleared of a previously incurable form of Leukemia thanks to an experimental cell therapy that creates ‘designer immune cells.’ After all other treatment options had failed, the doctors injected the baby with genetically edited cells in a tiny 1-milliliter intravenous infusion. The therapy works by adding new genes to healthy immune cells known as T-cells. The T-cells are rendered invisible to a powerful leukemia drug that would usually kill them and reprogramed to only fight leukemia cells. 

Yes, the Senate Can Repeal ObamaCare’s Regulations with 51 Votes

The Hill reports the Senate GOP is trying to decide how much of ObamaCare to repeal via the budget-reconciliation process:

[Senate Majority Leader Mitch] McConnell only needs 51 votes instead of the customary 60 because he is moving the repeal measure under a special budgetary process known as reconciliation. The downside of the strategy is that that package can only include provisions designed to impact the budget deficit.

As a result, popular parts of the law, such as the prohibition against discriminating against pre-existing conditions and allowing young adults to stay on their parents’ health plans until age 26, cannot be included.

First of all, ObamaCare’s most enduring myth is that its pre-existing conditions provisions are popular. This myth is based entirely on misleading poll questions that ask about only the (presumed) benefits of those regulations. When pollsters ask about not only the benefits but also the costs of those regulations, 2-to-1 public support flips dramatically to 5-to-1 opposition. Second, that last part is a matter of debate, not fact.

As the Heritage Foundation’s Paul Winfree and I explain (in The Hill, as it happens):

A full-repeal bill…would recognize that ObamaCare creates a single, integrated program of taxes and subsidies that work in concert to expand coverage, and would eliminate that entire program as a whole. Its primary effect would be budgetary. According to the Congressional Budget Office (CBO), full repeal would eliminate $1.7 trillion of spending and “would reduce deficits during the first half of the decade.” Retaining ObamaCare’s spending cuts would ensure that repeal reduces deficits in perpetuity.

With respect to the opinion, held mostly by Democrats, that The Hill portrays as fact, we write:

Opponents will try to argue that repealing ObamaCare’s health-insurance regulations (e.g., community rating) would have only an incidental effect on the budget. Yet those regulations are merely part of that larger, integrated program to expand coverage: community rating taxes the healthy to subsidize the sick; the individual mandate enforces those transfers by making part of that implicit tax explicit; additional regulations further enforce that implicit tax; explicit premium subsidies reduce those implicit taxes, and supplement the implicit subsidies, for low-income taxpayers; and the employer mandate imposes an implicit tax on workers that both reduces and offsets direct spending on premium subsidies.

Every relevant authority has held these provisions were designed to create a single, integrated program of taxes and transfers, and has rejected attempts to isolate those regulations from other parts of that program.

Winfree and I then cite former Senate Majority Leader Harry Reid (D-NV), former House Speaker Nancy Peolosi (D-CA), the Obama administration, and the Supreme Court, all of whom fell over themselves to argue that those regulations are part of a single, integrated program. As a result:

To treat ObamaCare’s health-insurance regulations as separate from that larger scheme is to renounce the Supreme Court’s King ruling and everything ObamaCare’s authors have said about how the law works. It would amount, to quote the Obama administration, to “seizing on isolated phrases [and] giving them a meaning divorced from statutory context [to] advance a radically different conception of the Act’s operation.”

Thus, “Congress may repeal those regulations via reconciliation just as it can repeal rules regulating any other government spending Congress zeroes-out through that process.”

Read the whole thing.

Vermont Official Foresaw Collapse of ObamaCare Co-Ops

The Daily Caller has an excellent article recounting that it wasn’t just opponents who saw trouble ahead for ObamaCare’s health-insurance cooperatives, of which more than a dozen have now collapsed. 

Susan L. Donegan was commissioner for Vermont’s Division of Insurance in 2013 when she refused to issue a license to the proposed Vermont Health CO-OP, saying it failed to meet state standards. Her action barred the Obamacare non-profit from selling health insurance in the state…

Today, she looks like a prescient state official who likely saved thousands of Vermonters from buying their health insurance from a doomed insurer.

That’s because 13 of the 24 co-ops set up under Obamacare have collapsed, costing the federal treasury $1.3 billion. More than 800,000 co-op customers now find themselves without health insurance coverage and are scrambling to find new policies due to the co-op failures. 

Turns out that some of the biggest problems she identified two years ago in her state also doomed co-ops across the country…

Denying a license to the health co-op was not an easy decision for Donegan, who first joined Democratic Gov. Peter Shumlin’s administration as a deputy insurance commissioner in 2010.

First, she already knew when the co-op’s application arrived at her her office that federal officials in Washington, D.C., had pre-approved the co-op’s plan and allocated to it $33 million in taxpayer funds.

Second, she knew the co-ops were an important part of President Obama’s signature health reform effort. Obama is extremely popular in Vermont, having garnered 67 percent of the vote in his 2008 and 2012 campaigns…

Donegan sensed trouble as soon as she read the co-op’s application. There were optimistic and questionable forecasts, a board filled with friends, sweetheart deals, high salaries, deep conflicts of interest and a staff with little business expertise.

The failure of more than a dozen other ObamaCare co-ops suggests these problems were not limited to Vermont’s proposed co-op. Yet regulators in those states, not to mention CMS, nevertheless approved them.

One might even say the rule is that government regulators either were unable to spot these co-ops’ looming insolvency, or worse, allowed political considerations to trump their judgment; and Vermont is the exception, where regulators both identified the problem and had the courage to pay the political cost of denying that carrier a license. Something to keep in mind when contemplating the costs and benefits of government regulation of insurance-carrier solvency.

Any count of failed ObamaCare co-ops should be sure to include Vermont’s.

H/T: Greg Scandlen.

Go Ahead, Have a Lasik!

This morning, I saw a TV ad for Lasik eye surgery and that got me wondering, “What’s happened to the price of Lasik since I had my procedure 10 years ago?” We hear a lot about the rising cost of healthcare. (By the way, how is that Obamacare working out for you?) But, what about medical procedures that patients pay for themselves? And so I called the ophthalmologist who performed my Lasik operation (with superb results, I might add) to find out the details. 
 
Back in 2005, he charged $3,500 for fixing nearsightedness and astigmatism in both eyes, or $4,264 in 2015 dollars. Today, he charges $3,000. That amounts to a real price reduction of 30 percent. In the meantime, average hourly earnings of production and nonsupervisory employees (a close approximation to the quintessential “blue collar worker”), rose from $15.91 in January 2005 to $20.80 in January 2015. So, an ordinary American needed to work for 220 hours to afford a Lasik surgery in 2005. S/he needs to work 144 hours to afford the same procedure today. That’s a 35 percent decrease in terms of work time.
 
And, as my doctor reminded me, the price was not the only thing that has changed. Lasik machines today are significantly more precise, achieving 20/20 vision with greater regularity for nearsightedness, farsightedness and astigmatism. They are much safer and disastrous complications, such as the loss of sight, have become even rarer (i.e., Lasik has been a very safe procedure for a very long time). The doctors performing the operation are more experienced and the screening of potentially problematic patients has improved. 
 
Candidly, my doctor has admitted that the prices could come down even more. One reason for Lasik prices being what they are is that only ophthalmologists are allowed to perform Lasik operations. Optometrists, however, are banned. And, of course, draconian immigration rules make it super difficult for foreign doctors to work in the United States.
 
Still, relative to 10 years ago, today a prospective Lasik patient enjoys the benefits of better and safer machines, and a price/time reduction of 35 percent. Not bad, not bad at all. Please visit HumanProgress and search for “cost of cosmetic procedures” to see how other elective medical procedures have become cheaper over time.
 

 

About Those Social Security ‘Promises’

In the Republican debate last night, former Gov. Mike Huckabee of Arkansas criticized calls for Social Security reform, saying “people paid their money. They expect to have it,” and that the country needs to honor its promises to seniors. There are problems with this line of argument: the Social Security payroll taxes a person pays are not tied to the benefits they receive in a legal sense, and the ‘promises’ made by Social Security are, and always have been, subject to change.

Congress has had the authority to alter Social Security since its inception. Section 1104 of The Social Security Act of 1935 explicitly says: “The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress.”

Not only does Congress have the right to make changes, it has done so multiple times in the past. Sometimes these changes are smaller things, like a technical correction to the indexation formula, but there were also larger reforms that were part of attempts to address the programs solvency issues.

The Supreme Court revisited the issue of Social Security’s promises in Flemming v. Nestor, in which Nestor, who had paid into Social Security for 19 years and begun to receive benefits, was then deported for previous ties to the Communist Party. Nestor tried to appeal the termination of his benefits, citing his previous contributions, but the Supreme Court upheld it, saying:

To engraft upon the Social Security system a concept of ‘accrued property rights’ would deprive it of the flexibility and boldness in adjustment to ever changing conditions which it demands… It is apparent that the non-contractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.

The other aspect Huckabee touches on is the link between the taxes paid in and the benefits a person ultimately receives, implying that a worker’s contributions are kept in some kind of silo to be paid out to them at a later date. As another Supreme Court case found, this is not true.

In Helvering v. Davis (1937)the Court held that Social Security was not a contributory insurance program in the sense that  “[t]he proceeds of both the employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way.” Despite how Huckabee and his fellow defenders of the status quo describe the program, the payroll tax payments a person pays into Social Security have no direct link to the benefits that they receive in a legal sense: they  are subject to future changes made by Congress and dependent on the program having sufficient revenue.

Huckabee doesn’t need to familiarize himself with these decades-old Supreme Court cases or the Social Security Act to be able to understand the problems with his invocation of the program’s ‘promises’. Anyone, including Huckabee, can see this for themselves in the Social Security Statement that the Social Security Administration periodically sends to workers:

Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time.

The ‘promises’ with Social Security always came with an asterisk, and beneficiaries are not entitled to a certain amount because they have contributed payroll taxes. In the past the law has been altered to change the deal facing beneficiaries, and there will undoubtedly have to be more changes in the future if Social Security is to remain viable. If we maintain the status quo and do nothing, benefits will have to cut by 23 percent across the board when the combined trust fund is exhausted in 2034. There can be disagreements about the best way to reform Social Security, but when it is facing trillions in unfunded obligations and the certainty of drastic cuts in the future absent reform, doing nothing is not a feasible option.

Wave of Health Insurance CO-OPs to Shut Down in Latest ACA Failure

Hundreds of thousands people will lose their insurance plans as a raft of health insurance cooperatives (CO-OPs) created by the Affordable Care Act will cease operations. Just last week, CO-OPs in Oregon, Colorado, Tennessee and Kentucky announced that they would be winding down operations due to lower than expected enrollment and solvency concerns (although the one in Colorado is suing the state over the shutdown order).  They join four other CO-OPs that have announced that they would be closing their doors. In total, only 15 out of the 23 CO-OPs created by the law remain. These closures reveal how ill-advised this aspect of the ACA was both in terms of lost money and the turmoil for the people who enrolled in them. The eight that have failed have received almost $1 billion in loans, and overall CO-OPs received loans totaling $2.4 billion that might never get paid back. In addition, roughly 400,000 people will lose their plans.

Sources:  Sabrina Corlette et al. “The Affordable Care Act CO-OP Program: Facing Both Barriers and Opportunities for More Competitive Health Insurance Markets,” The Commonwealth Fund, March 12, 2015; Erin Marshal, “8 Things to Know About Insurance CO-OP Closures,” Becker’s Hospital Review, October 20, 2015. Created using Tableau.

Notes: Hawaii and Alaska not shown. Neither state had a CO-OP. CoOportunity Health served both Iowa and Nebraska.