Open Thread: Classy College Sports, Rutgers Edition

As it’s described in the Washington Post:

…. The award for this year’s biggest flap goes to Rutgers University, which in the past few days has fumbled its response to the school’s commencement speaker replacement. It started Saturday when Condoleezza Rice, just two weeks before the ceremony, backed out of giving the graduation keynote after faculty and students protested her Iraq War involvement while serving as George W. Bush’s secretary of state. By Monday afternoon, Rutgers seemed to have resolved the mini-crisis by announcing that former Gov. Thomas Kean would step in.

But it wasn’t resolved. Later that night, former Rutgers football player Eric LeGrand — who was paralyzed in 2010 and has become a popular inspirational speaker — tweeted that he too was asked to be Rutgers’ commencement speaker but that the offer had been rescinded. After the issue exploded in the media on Tuesday, Rutgers president Robert Barchi issued a statement saying that LeGrand would speak at the event after all, and that “it was never our intention that Eric would be the only speaker.”…

David Roth, for SB Nation, explains:

This all begins with idiots and their awful dreams. Rutgers, New Jersey’s state university, is one of the few institutions in the state that can broadly be said to work very well, and has survived the fat-fingered kleptocrats and reptiles and backslapping sociopaths that have attempted to loot or compromise it from the governor’s mansion… Read more



Open Thread: Summer Re-Run — The Great Lewinsky

monica cant find a job rall

It’s the Silly Season, when entertainment television goes on hiatus and Hollywood roots around the back lots for earlier years’ failed tentpole productions. Occasionally they discover a cult classic that might be remade on the cheap in hopes that a new generation might be charmed by the vintage-osity of it all…

Here’s NYMag’s Maureen O’Connor on “the Righteous Good Girl” (if we’re talking tv, should that be ‘the good side piece’?)

… Sixteen years after Interngate, technology has managed a neat trick: It’s now possible to have a sex scandal that’s simultaneously more chaste in its execution and far sleazier in its aftermath. Anthony Weiner never got laid, but the woman who sank his mayoral campaign nevertheless made and marketed a Weiner-themed porno….

Capitalizing on notoriety is easier than ever. During Monica’s decade of silence, it actually became a viable career: In the aftermath of Tiger Woods’s sex scandal, porn star Gina Rodriguez founded a PR company dedicated to monetizing what she called “mistresses,” a catch-all term connoting not sexual contact but mere sexual notoriety. For clients ranging from Weiner’s sexters to Woods’s prostitutes to the adultery partners of Mel Gibson and Jesse James, Rodriguez has organized “mistress” nights at strip clubs, “mistress” photo opportunities, and dating-website endorsements

Some of Monica’s relative classiness may, in fact, be a matter of class. When employment was hard to come by, Lewinsky writes that she fell back on “loans from friends and family.” She was, after all, the kind of twentysomething who worked at the White House, a distinction nobody in Gina Rodriguez’s “mistress” club can boast…

Now 40, Lewinsky is no longer a naïf playing at stardom. She’s one of the first adults to have gone through the modern gauntlet of mass sexual scrutiny. The impetus for her essay, she says, is a desire to aid the victims of cyberbullying and to help dismantle America’s “culture of humiliation.” I believe she is genuine in that desire (in the depths of her misery, Lewinsky says she contemplated suicide), but I also can’t help but marvel at what may be That Woman’s savviest self-branding decision yet: In the age of Sydney Leathers, she is aligning herself with Tyler Clementi. Monica’s legacy will be about sexual politics, not celebrity…



And now that is a caveat

538 has probably the best caveat regarding the efficient market hypothesis in a discussion about the NFL draft:

The efficient-market hypothesis states that — with certain caveats — markets are informationally efficient. Since any one investor theoretically operates with the same set of information as any other,2 the EMH claims that no individual can consistently achieve risk-adjusted returns in excess of the market-wide average. This conclusion, most notably proposed by University of Chicago professor Eugene Fama in the 1960s, isn’t perfect (it can’t explain speculative bubbles, for instance), but it’s a testament to the power of an ideal market. [emphasis is mine]

Other than saying that the biggest two fianncial stories  (dotcom and housing bubbles) of the past fifteen years can’t happen, this is a solid predictive hypothesis

Not quite a “how was the play Mrs. Lincoln” but still a damn impressive caveat.



Catastrophic price shocks in 2015

Premium shocks will occur next year for catastrophic plans.

Wonk Blog explains why:

The high-deductible plans, which aren’t eligible for subsidies, were only supposed to be available to people under 30 or people who were unable to afford other coverage. Then the controversy over canceled health plans erupted last fall, and the Obama administration said anyone with a canceled plan can purchase catastrophic coverage.

At the end of February, young adults (ages 18-34) had accounted for 91 percent of all people picking catastrophic plans. By the end of enrollment, though, young adults accounted for 83 percent of all catastrophic plans. So that suggests that some people who had canceled plans did sign up for catastrophic coverage near the end of enrollment, but still a relatively small amount. Just about 89,000 people in all chose catastrophic plans in the federal exchange states.

The catastrophic plans that were sold in 2014 were priced for only 18 to 29 year olds.  That is the healthiest and cheapest group to cover and even then, there is significant age based variance.  Looking at Healthsherpa.com,  the cheapest catastrophic plan in my zip code for a 29 year old is 80% more expensive than the same plan for a 19 year old.  Adding a bunch of comparatively expensive middle aged adults to an already small risk pool in each state means the pricing model will blow up completely for at least several states.  Risk corridor and reinsurance will help, but the models were built with a certain set of assumptions that weren’t seen in reality. 

This is not the fault of the insurance companies, they followed the regulations and planning guidance in effect at the time the plans were submitted for regulatory approval.   

 



Four is more than three

I know this is almost nutpicking, but the Wall Street Journal editorial page either can’t do basic subtraction or is suffering from amnesia:

The health-care law was generated by an administration promoting government as the solution to inequality, yet the greatest irony of ObamaCare is what will undoubtedly follow as a long-term, unintended consequence of the law: a decidedly unequal, two-tiered health system. One will be for the poor and middle class, and a separate system will be for those with the money or power to circumvent ObamaCare.

With the Affordable Care Act, the government has dramatically expanded its authority as final arbiter over health insurance and consequently over access to medical care. After the law’s Medicaid expansion and with the population aging into Medicare eligibility, the 107 million under Medicaid or Medicare in 2013 will skyrocket to 135 million five years later, growing far faster than the ranks of the privately insured.

Besides the fact that I love how he elides the aging of the population into Medicare as a bad thing, the thing I love about this excerpt is the assumption that the United States had a one tier system of healthcare pre-Obamacare. 

Bullshit. 

We had a four tier system with some caveats and carveouts in 2009.  We are moving towards a three tier system with some caveats and carve-outs under Obamacare.

In 2009 and 2014, the first tier was the tier for the rich and very well insured.  Senator Ted Cruz’s $40,000/year family policy that his wife is the primary contract holder for is an example of this tier.  He can go to whatever provider he wants without worry, and his wait times will be minimal.  If he blows out his elbow while pulling his head out of his ass, the distinguished Senator from Texas can go to Dr. James Andrew, the Tommy John specialist for a repair.  If his kids get cancer, they can go to whatever clinic they want to in the United States and get top line treatments that cost more than my family’s annual income for an extra three or four months of life.  This type of insurance is fundamentally the same between 2009 and 2014.  The big difference is that some of the premiums will be taxed in the near future due to Obamacare instead of being entirely tax free.

The second tier of 2009 coverage was solid employer provided group insurance and solid individual coverage.  It was possible to have solid individual coverage, you just had to be lucky.  This tier of coverage has some limitations, it has some deductibles and co-insurance and it is the most common tier of coverage.  Employer provided insurance also has massive explicit (employer provider) and implicit (tax advantages) subsidies.  In 2009, this tier was a shrinking share of coverage even as it is the dominant share of coverage for people under 65.  Now the Exchanges and the threat of the employer mandate is growing this tier of solid, private market coverage.

The third tier in 2009 was government insurance provided through a variety of programs. The big programs are Medicare, Medicaid, CHIP and the VA.  Medicaid was income, asset, and “deserving” poor status limited.  Working adults without insurance and low incomes were out of luck in most states for Medicaid. CHIP had expanded but was not all inclusive for all kids.  Medicare and VA were functioning reasonably well. 

Now, Medicaid in half the states is neither asset nor “deserving” poor status dependent; it is just income dependent.  CHIP was expanded in the winter of 2009.  VA has not been significantly altered.  Medicare’s drug benefit has been enhanced, and Obamacare is equalizing the risk adjusted payment rates for traditional fee for service Medicare and Medicare Advantage as well as engaging in massive experimentation on new payment models.

The fourth tier in 2009 was the “You’re on your own” tier.  This was for people who either had no insurance or had insurance that was so skimpy it could not protect people from financial ruin from a moderate size medical event much less a major medical problem. 

The fourth tier is being phased out in half the states.  The long run goal is for most of the people in this tier to move to either the third tier via Medicaid or CHIP or the second tier by enabling community rated non-medically underwritten policies to be sold on the Exchanges. The first tier will shrink due to the Cadillac excise tax, and the fourth tier is larger than it should be due to the sadists on the Supreme Court and sociopaths in the Republican Party, but the long term goal and program design is to move towards a three tier instead of four tier system. 

 



Asshole of the week

And the winner is: Michael Cannon as he discusses ways to game PPACA open enrollment restrictions:

the Affordable Care Act creates so many incentives for enrollees to drop their coverage that maintaining those enrollment numbers may start to resemble something like pushing millions of people up a greased poll.

For Obamacare to work, people must enroll and stay enrolled. An estimated 20 percent of those who signed up have yet to pay their first premium, and as many as 5 percent stopped paying after the first month. If too many drop out, premiums could climb until the exchanges collapse.

Got to love “health policy experts” commenting on the individual market who don’t know shit about the individual market.  Traditionally the individual market is a very high churn market.  Most people only go on the individual market until something “better” comes along.  That something better is either employer sponsored insurance, government insurance such as CHIP, Medicare or Medicaid, or getting on someone else’s plan. 

Obamacare even more dramatically reduces the downside of going uninsured. For example, suppose the day after you cancel your health insurance, you receive a serious diagnosis like diabetes, or cancer. Pre-Obamacare, you would not be able to buy coverage for that illness. Under Obamacare, however, insurers are required to cover you at the same premium they charged when you were healthy. You may have to wait until January for that coverage to take effect, but even so the downside risk of going uninsured is much smaller.

If you’re young and invincible, it is likely that you’ll need major medical care from an accident than a big diagnosis.  I don’t know about you, but I don’t plan on getting into a car accident this afternoon or being shot by an asshole who was until a moment ago a “very responsible gun owner”(tm) who does not know how to unload his weapon before cleaning it.  Even for a big diagnosis that does not require care this afternoon, Mr. Cannon’s “ideas” are asinine or fraud:

  • If you live in one of the 25 or so states implementing Obamacare’s Medicaid expansion, you can get coverage immediately by reducing your income below 138 percent of the federal poverty level ($16,102 for a single adult). You can then restore your income when you enroll in an exchange plan in January — or even earlier, depending on how often your state verifies eligibility.

Impoverish your family (especially since his “advice” is for people who make too much for subsidies) instead of paying for insurance.

  • If you don’t live in a Medicaid-expansion state, you can move to one, as this Idaho family did.

Uproot your family and potentially commit fraud as some states have at least a thirty day period before residency is established.  And it has been (thankfully) a while since I’ve moved, but I remember it to be a stressful and non-instaneous event.  There is something about finding an apartment, signing a lease, and then getting the keys from a landlord.  If I have a major diagnosis, this is time spent gaming the system where I am either not getting treated or I’m running up massive bills paying out of pocket. 

The long form version of his “argument” has the sham marriage angle:

Newly married couples can enroll in an Exchange plan on their wedding day, with coverage starting on the first day of the following month, or even sooner. Happily married couples have been known get “Medicaid divorces” to qualify for Medicaid’s nursing-home coverage; we may soon see quickie “Obamacare marriages” formed solely to qualify people Exchange coverage. Websites could offer to arrange marriages between singles who share a sudden need for health insurance. Couples could divorce when they re-enroll in January.

Sure there is always the Vegas wedding route.  However, if I remember correctly, marriage has a massive set (like 1,000 or more) of  obligations, benefits, privileges and responsibilities bundled to that simple legal act.  This only works if the sick person is single AND can trust the sham marriage partner.  There is quite a lot of value of being the spouse of someone who has a good enough job and assets where they think it is cheaper to go naked than to get covered, and the divorce court judge would love to hear the explanation as to why alimony or support should not be given to the spouse as the marriage was intended to be just an open enrollment enabling sham.  Before I met my wife, I had a long, beer fueled conversations with a college friend about being mutual back-ups/green card marriage partners if we were both single in our late 30s.  That is a conversation worthy of college and good beer, not as a serious health policy. 

The converse is also true — Obamacare divorces are a costly, and dramatic.  A divorce, even if it is purely a sham, is time consuming.     An individual receiving a diagnosis on Tuesday won’t be divorced on Friday and coverage won’t start anyways until at least the 1st of the following month anyways.  There is a minimum 2.5 week gap between eligibility and coverage starts.  In some cases, there is a 6 week gap. 

Most states have a “cooling-off” period and even those that don’t, the courts don’t move that fast for amicable divorces.    The Britney Spears 55 hour marriage before annullment due to diminished mental capacity and reduced decision making is not the norm. Furthermore, assuming there are either kids or common property involved AND the two people want to stay involved in each others lives, the non-marriage replication of rights and responsibilities through powers of attorneys, advanced directives, living wills etc is, as gay couples living in bigot states can attest, expensive, time consuming, and not guaranteed to work.   So again, the divorce run-out period is time spent either not getting treated or running up massive out of pocket charges. 

And then finally there is this gem:

Alternatively, you could fill the gap with …. the money you saved on premiums; credit cards; or by relying on friends, family, or the kindness of strangers.

The  cheapest premium for a non-smoking 29 year old in one of the most expensive markets in the country (Southern Georgia) is $150/month for a Bronze plan.  So going naked through-out your 20s and using Mr. Cannon’s “advice” saves an individual no more than $15,000 (as a 21 year old is cheaper to insure than a 29 year old).  If that 29 year old lived in the cheapest markets in the country, their premiums would be 50% less.  $15,000 is enough to get you in the door at a cancer center for the first round of treatment if you are paying out of pocket and are lucky. $7,500 in cash will be laughed at a major cancer center.   And what is the probability that a 23 year old will put consistently put $1,000 a year into a HSA instead of spending it on rent, food, student loan debt or beer?  Or the other option is to go into life crushing debt and beg to be considered the “deserving poor”

Mr. Cannon, you sir, are the Asshole of the Week.



Rural Hospitals, DSH payments, and Vegas hotels

A commenter asked why so many rural hospitals in Georgia are closing.  It is a good question, and a decent chunk of the explanation is PPACA via the asshole Chief Justice et al and the remainder of the explanation is the economics of running a hospital or a Vegas hotel.

Let’s start with the Vegas hotel.  I mentioned in September that hospitals have very high costs to open up the doors.

 Time Magazine in August had a good piece on Las Vegas’s hotel and gambling industry that has an interesting nugget of explanation for hospital pricing:

A 5,000-room casino hotel that runs 24/7 has high operating costs, and it’s the gambling action that has covered them. The magic of a casino hotel is that once the costs are covered, profit mounts prodigiously–in accounting jargon, this is a business with very high operating leverage.

Hospitals and most other medical practices are the same way. Just opening the doors is extremely expensive as the fixed costs are very high. However, the marginal cost of treating the next patient for most situations (high end drug treatments excluded) are not that high. Hospitals with high census or heads in beds counts are able to use the high usage of their facilities to cover fixed costs and then operating costs.

A recent article on a hospital in Georgia closing illustrates this point:

Lower Oconee Community Hospital in southeast Georgia has closed due to financial problems, becoming the state’s fourth rural hospital to do so in the past two years.

The 25-bed “critical access” hospital in Glenwood, in Wheeler County, is looking to restructure, its CEO said in a statement….

The Wheeler County area had a 23 percent uninsured rate, and 10 percent of citizens are unemployed, according to the County Health Rankings from the University of Wisconsin and the Robert Wood Johnson Foundation.

Forty-one percent of the county’s children live in poverty.

“We just did not have sufficient volume to support the expenses,” O’Neal told WMAZ. “It’s a terrible situation, and it’s tragic, the loss of jobs and the economic impact.”

So how did this hospital survive so long despite serving a very poor and underinsured area? Read more