Merely a flesh wound

When the right wing faux brouhaha blew up on keeping crappy plans for another year, I thought the proposed set of Democratic work-arounds would work in defusing the political issue with minimal long term damage to the risk pools:

  1. Date change of grandfather status from day of PPACA being signed into law to 12/31/13 for individual only plans.

  2. No new enrollment allowed into individual plans

This is an elegant kludge…

The key item as to why this is not serious damage to the risk pooling mechanism is point #2….

If this passes, the risk pool is a little bit older, and a little bit sicker than it would otherwise be in the Exchanges.  That is okay,  there are numerous risk and cost transfer mechanisms built int the law.  A slightly sicker and more expensive risk pool in 2014 that normalizes as the grandfathered individual plans lose members in 2015 and 2016 would work out fine.

Reuters is reporting that this is basically how it is playing out.  The people who were on medically underwritten individual insurance aren’t flocking to the Exchanges (yet), so the risk pool is a little bit sicker than projected:

Health insurer Humana Inc said on Thursday that it projected its enrollment mix in private plans through the exchanges created by President Barack Obama’s healthcare law will be, “more adverse than previously expected.”

Humana attributed the enrollment trend to regulatory changes allowing people to remain in previously existing plans not sold on the exchanges.

The risk corridors are the back end transfer mechanisms in the first three years that allows insurance companies to take a risk to see what the population that enrolls actually looks like.  If a company guesses wrong, there is some federal money coming their way.  These transfer and risk corridors are the only reason so many companies have been willing to jump into a new market segment in the first year.

These corridors and transfers are in conservatives’ sights as the next angle to take a bite out of Obamacare implementation.   Krauthammer laid out the right wing argument last week:

First order of business for the returning Congress: The No Bailout for Insurance Companies Act of 2014.

Make it one line long: “Sections 1341 and 1342 of the Affordable Care Act are hereby repealed…”

First, Section 1341, the “reinsurance” fund collected from insurers and self-insuring employers at a nifty $63 a head. (Who do you think the cost is passed on to?) This yields about $20 billion over three years to cover losses.

Then there is Section 1342, the “risk corridor” provision that mandates a major taxpayer payout covering up to 80 percent of insurance-company losses.

Never heard of these?…

I am vaguely surprised that Section 1341 was not the Senate Republican demanded pay-for for unemployment insurance.  But these two sections will be targeted this year and next.  After that, it won’t matter too much past the end of 2015 as the pools should be close to predictable by then.

 

BTW — I’ve joined Twitter at bjdickmayhew

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43 replies
  1. 1
    NotMax says:

    I’ve joined Twitter at bjdickmayhew

    You may want to reconsider the bjdick part.

    Just sayin’.

  2. 2
    Baud says:

    @NotMax:

    I’d reconsider the Mayhew part and just leave it at bjdick.

  3. 3
  4. 4
    Raven says:

    I’m sitting outside at the bakery choking on my fuckin bagel!

  5. 5
    Baud says:

    First, Section 1341, the “reinsurance” fund collected from insurers and self-insuring employers at a nifty $63 a head.

    Next up, repeal FDIC insurance in the “No Bailout for Banks Act of 2014.”

    Then there is Section 1342, the “risk corridor” provision that mandates a major taxpayer payout covering up to 80 percent of insurance-company losses.

    Is that accurate? 80% does seem high, but I’m not taking CK at his word.

  6. 6
    Baud says:

    @Raven:

    You still with us? I hope that wasn’t your epitaph.

  7. 7
    Raven says:

    @Baud: I’m here, I was choking from laughing!

  8. 8
    JPL says:

    @Raven: The county north of me has a tornado warning and the county just west of me has a severe thunderstorm warning. It’s sixty degrees though.

  9. 9
    Baud says:

    @Raven:

    Be careful. Reading BJ while eating bagels can be hazardous to your health!

  10. 10
    mai naem says:

    Keep in mind this is Charles Krauthammer who’s a quadraplegic who you can pretty much count has contributed to a massive loss for whoever his insurer was pre-medicare and now medicare. And, chances are, he lives in some northeast state protected by state laws similar to O-care so that Krauhammer was even insurable. More of GOP O got mine, FU.

  11. 11
    mai naem says:

    Ariel Sharon died. Didn’t care for the guy but I wouldn’t wish his method of death on anybody. Six years in bed as a vegetable with tubes keeping you alive. Ugly ugly way to go.

  12. 12
    Elizabelle says:

    @mai naem:

    Yeah. I was wishing Ariel Sharon died years ago.

  13. 13
  14. 14
    JPL says:

    @Raven: The storms are moving through pretty fast. You should make sure you’re home about thirty minutes from now. I didn’t have heavy winds but two children are trapped in a mobile home about thirty minutes west of here.

  15. 15
    Amir Khalid says:

    @gnomedad:
    Alas and, in addition, alackaday: thy link hath led me to a 403 Forbidden error.

  16. 16
    HinTN says:

    @gnomedad: These authoritarian fvcks believe in whatever authority says things they like.

  17. 17
    raven says:

    @JPL:
    it will quite a bit longer before they hit here.

  18. 18
    HinTN says:

    @JPL: We got inches dumped on us around 0400 Central. Grey skies, 50°F, birds singing now.

  19. 19
    Baud says:

    OT: Still getting ads here to join Rand Paul’s NSA suit, which he still hasn’t filed.

    I wonder if he’ll file next week when Obama puts forward his reform plan, or if Paul will keep up this particular grift beyond that.

  20. 20
    Baud says:

    @gnomedad:

    I’m sure libertarians like Rand Paul will set Ted Cruz straight

  21. 21
    Elizabelle says:

    Saw “Nebraska” last night.

    Liked it even more than I thought I would. B&W film with Bruce Dern as aging codger who believes he’s won a million dollars, Will Forte as son. Director is Alexander Payne.

    Audience laughing out loud throughout; it’s very funny, as well as touching.

  22. 22
    Kropadope says:

    @Baud: Basically all my friends are libertarians and the “support for local government unless they’re doing something I don’t like” strain of thought is very prevalent among this group (See water fluoridation).

  23. 23
    Ken says:

    I suspect the bill is a no-starter, since the insurance companies will oppose it. But it will give the Republicans a chance to alienate those companies, so I hope they try to push it through.

  24. 24
  25. 25
    JPL says:

    @HinTN: Another system moved through at four and woke me. Now we are having the system that woke u up move through. I didn’t have heavy winds but west of me there is suppose to be lots of trees down and power outages. There is a fourteen year old girl trapped in her mobile home. They are trying to lift a tree off of her. ugh

  26. 26
    Amir Khalid says:

    @OzarkHillbilly:
    That one works. Thanks.
    The man’s just a hunka hunka burnin’ hypocrisy, isn’t he? Somehow, I can’t see him being unhappy if the Federal authorities were to choose to defer to Texas law.

  27. 27
    Botsplainer says:

    @Ken:

    I suspect the bill is a no-starter, since the insurance companies will oppose it. But it will give the Republicans a chance to alienate those companies, so I hope they try to push it through.

    You kidding? The Chamber of Commerce is still so wedded to the GOP and crushing Democrats that they may be irritated, but won’t abandon the GOP lest a liberal policy be enacted. Used to be that there would be an effort to work cooperatively with both with about a 65-35 money split that would occasionally shift, but now that they’re so completely partisan in their donations they feel like they have zero leverage.

    The Russian nobility and bourgeoisie made this similar mistake in 1916-1917.

  28. 28
    Chyron HR says:

    First order of business for the returning Congress: The No Bailout for Insurance Companies Act of 2014.

    What a cunning plan! Once the health insurance companies are driven out of business, socialized medicine will be vanquished forever!

  29. 29
    OzarkHillbilly says:

    Question: Doesn’t it make sense for Dems to propose a tax on the finance industry (and their bonuses) to pay for the extended unemployment insurance of the long term unemployed? I mean, they caused the recession to begin with.

    It would never pass, but it sure would put a whole lot of butt hurt on the Repubs.

  30. 30
    Baud says:

    @Kropadope:

    But Cruz is talking about marijuana, which is supposed to be a libertarian cause celebre and another reason Obama has failed us.

  31. 31
    Baud says:

    @OzarkHillbilly:

    They’ve proposed closing loopholes and raising taxes in the past. I haven’t seen people have their backs because of it.

  32. 32
    RaflW says:

    Cabbagehammer: “Who do you think the cost is passed on to?”

    What the fuck do you think insurance is, derp-wad? Everyone pays in, and some people get a big payout in any given year. Ultimately, all the costs of medicine “get passed on” to the people. Otherwise the insurer goes broke.

    The stupidity embedded in this rotting tool of cruciferousness is legendary.

  33. 33
    RaflW says:

    @gnomedad: Nothin’ personal, but holy crap, four popup ads including one with audio and one of those fake “clean your Mac now?” system-dialog-esque ads after clicking.

    LGF might be desperate for money, but I’m not goin’ back after that assault of low-rent internet crap.

  34. 34
    Kropadope says:

    @Baud: This just goes back to a libertarian being a Republican who likes marijuana.

  35. 35
    Kropadope says:

    @Kropadope: Well, the noisy ones that dominate the libertarian conversation (with Republican manufactured talking points) are. I have a tough time thinking of them as libertarians, though. No one actually concerned with liberty would go anywhere near a Republican politician, even (especially?) the Pauls.

  36. 36
    Elizabelle says:

    Gotta love K-Thug’s blogging this morning.

    North Carolina is an interesting place these days, and I mean that in the worst possible way.

    http://krugman.blogs.nytimes.c.....xperiment/

    Following up on his previous excellent post on the bluegrass state: A Hammock in Kentucky?

    National Review has an actually interesting report by Kevin Williamson on the state of Appalachia, providing a valuable portrait of the region’s woes — plus an account of how people turn food stamps fungible by converting them into soda. But the piece also has a moral: the big problem, it argues, is the way government aid creates dependency. It’s the Paul Ryan notion of the safety net as a “hammock” that makes life too easy for the poor.

    But do the facts about Appalachia actually support this view? No, they don’t. Indeed, even the facts presented in the article don’t support it.

  37. 37
    pseudonymous in nc says:

    Krugman’s picking up on data that’s slowly starting to percolate across state media in NC: the GOP got their cruel little social experiment and it turns out to be a failure. This year, for their next trick, they’re going to push towards abolishing the state income tax to become a proper southern state.

  38. 38
    Ken says:

    @Botsplainer: Sure, the CoC is a no-starter. But not all political donations from corporations funnel through the CoC, especially not the ones from the FIRE sector. Those donors still have leverage.

  39. 39
    Lurking Canadian says:

    @Elizabelle: the Kentucky report is good news for Republicans. They can now respond to charges of racism by pointing out that they hate poor white people, too!

  40. 40
    Tom Levenson says:

    and now @TomLevenson is following you.

  41. 41
    gogol's wife says:

    @Elizabelle:

    I love Bruce Dern! I’ve been a fan of his since he was “second cowboy on the left,” or whatever the phrase is. One of his masterpieces is an Alfred Hitchcock episode called “Night Caller.” And his performance in Hitchcock’s Family Plot is sheer brilliance. But I’ve been too lazy to get out to see Nebraska, assuming it has ever come to my one-horse town. I think it may have been here for a couple of days.

  42. 42
    Elizabelle says:

    @gogol’s wife:

    Nebraska was so good. You should see it on a big screen. Does justice to the vast countryside. With cows.

  43. 43
    Fair Economist says:

    An interesting effect of the ironclad opposition to Obamacare is that the Republicans are driving the health insurance industry to support the Democrats. Health insurance was already starting to collapse as a business and the industry needs the mandate and its associated supports like the corridors in order to exists. So now any attack on Obamacare becomes an attack on the health care industry, cutting its short term profits and endangering its long term existence.

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