Hoist with His Own Teaturd

I’m not sure tribble-topped presidential aspirant Rand Paul recovers from this:

In a variety of campaign appearances that were captured on video, Paul repeatedly compared Reagan unfavorably to Carter on one of Paul’s top policy priorities: government spending. When Paul was a surrogate speaker for his father, then-Rep. Ron Paul (R-Texas), during the elder Paul’s 2008 presidential quest, his sales pitch included dumping on Reagan for failing to rein in federal budget deficits. Standing on the back of a truck and addressing the crowd at the Coalition of New Hampshire Taxpayers picnic in July 2007, Rand Paul complained about Reagan and praised his father for having opposed Reagan’s budget…”

David Corn’s Mother Jones article linked above includes six video clips of Baby Doc slagging on Reagan as a spendthrift as the younger Paul campaigned for his daddy. What Paul says about Reagan exploding the debt is all true, of course.

And it’s not wise to underestimate the Republican base’s capacity to ignore facts and focus on shiny objects: That’s how they came to deify the folksy, addled, debt-exploding Z-grade actor as an exemplar of fiscal rectitude in the first place.

But imagine the field day Paul’s primary opponents will have parading this heresy before the cameras at every debate. The message that Reagan actually was a profligate spendthrift won’t sink in, but the fact that Paul unfavorably compared Baby Jeebus Reagan to Satan’s Valet Carter sure will.

Complexity is costly — PA Medicaid Expansion

Pennsylvania is currently a limited Medicaid eligibility state.  The governor, Republican Tom Corbett, has filed an 1115 waiver application with Health and Human Services for the Arkansas style ‘private option’ expansion.  The expansion would give individuals who make less than 138% of Federal Poverty Line (FPL) subsidies to cover the full cost of their cost-sharing assistance Silver plans (96% actuarial value) while current Pennsylvania Medicaid has close to a 98% actuarial value.  The original waiver filed last month has the following conditions on eligibility:

  • Income determined once a year
  • Premiums of$25 for a single adult or $35 for married couple for households over 100% FPL.
  • Wellness program
  • Job Search requiremetns with termination from coverage as a sanction (p.36 of the waiver)

As I said yesterday, HHS is quite willing to grant significant flexibility for Medicaid expansion waivers as long as there is no poor shaming and everything in the waiver has some logical connection to either health quality or health costs.

The last requirement for job search with termination of coverage if an individual fails to meet the requirements does not meet the WHAT THE FUCK test for health quality or health costs.

The Corbett Adminstration seems to have been quietly hit with a clue stick, and they’re proposing a new alternative that is structured as an incentive instead of a punishment.  Newly enrolled individuals would be able to see their premiums reduced if they worked.

  • 40% off for full time work
  • 25% off for 20 to 29 hours of work per week
  • 15% off for either less than 20 hours of work per week or job search participation.

If this is approved ( I don’t think it will be), then this will be an expensive fiasco.  It is an added layer of complexity to an already complex population base.  Complexity costs money in general, and the job search step-function of eligibility and benefit design means claims will have to be regularly manually re-processed.  That is expensive.

I’ll explain the details below the fold.

Read more

Taking a Hatchet to healthcare (Pt. 3)

The first two parts of this series have looked at the private market for health insurance and the government programs.  Medicare is essentially unchecked while Medicaid gets a whole lot stingier.  The private market is allowed to exclude and underwrite in some circumstances while the federal government backs away from a lot of regulation. 

The most fascinating part is the financing mechanism.  Obamacare expanded coverage through a combination of generous tax credits and Medicaid expansion.  The CBO scored that this expansion was paid for by a combination of cutting down on Medicare Advantage payments and a wide variety of taxes such as the medical device excise tax, the Cadillac plan tax, sun tanning tax, the reinsurance tax and income tax surcharges on high income individuals and families.  The Hatch plan repealed Obamacare and all the taxes (interestingly, it also repeals a major student loan reform package, no mention of what is supposed to replace that system) but it claims to be deficit neutral so it has to pay for its limited subsidies somehow.

And the way it does is a doozy that immediately shows how politically not viable this proposal is:

Section 601: Capping the Exclusion of An Employee’s Employer-Provided Health Coverage

our proposal caps the tax exclusion for employee’s health coverage at 65 percent of an average plan’s costs. The value of employer-sponsored health insurance would be capped and indexed to grow at an annual rate of CPI +1.

So what does that mean? 

My health insurance just got a whole lot more expensive for me.  That is the short story.  My health insurance according to box 12DD cost $13,000 last year to cover my entire family.  That is 100% pre-tax dollars.  This proposal would make some of that post-tax dollars.  If average means average family plan, the average was $16,351 in 2013.  65% of that means $10,600 would be tax deductible.  The remaining $5,800 for the average person in an average family plan would be taxable.   Personally, I would be paying taxes on an additional $2,400 worth of compensation.  Some people with expensive plans would be paying taxes on a new $7,000 or $10,000 compensation that they don’t see in cash.  Most people would be paying taxes on significantly larger chunks of previously untaxed compensation. 

Furthermore, in the out years, the value of the exclusion gets weaker as either the health plan stays within the budget constraint of CPI+1 by significantly paring back coverage, or the average health plan costs increase and all of those increases shift to taxed compensation.   Again, this fits with the basic Republcian diagnosis of the “problem” that Americans have it too easy and too good and don’t have to worry about bankruptcy every time they blow out their knee while looking for their cat. 

From a build the system from scratch perspective, this is not a bad idea.  However, we aren’t building a system from scratch.  We’re tweaking a legacy system.  And given previous decisions, this translates into a massive tax increase for anyone who gets decent coverage through work and in the long run much lower acturial value of work provided coverage.

Using a bigger net

Right now, one of my company’s competitors is running a series of radio ads.  The ads tout that in the small and medium group market segments, 90% of their groups renewed last year.  The implication is that 90% of their customers/decision makers are happy, so your small company should buy their product.

Being an employee of a major competitor what I hear is 10% of their customers are pissed off enough to engage in the very expensive, time consuming, disruptive no-fun task of changing insurance companies, but hey, that is just me. 

As a policy blogger, I also hear the reasoning why so many preventative care procedures weren’t covered in the pre-Obamacare world.

The theory of change for preventative care as a cost control measure is that wide spread but small costs to treat a population in order to prevent a small number of people from that population from requiring very expensive treatment leads to a net cost reduction.  There were two problems with this idea from a pre-Obamacare insurance company business model perspective.  Read more

The Difference Between Democrats and Republicans

In California, a Democratic Party-run state:

Dozens of workers at a call center in the Sacramento suburb of Rancho Cordova began fielding calls after a countdown to 8 a.m. Tuesday, the time the state’s health exchange opened for business. The agency that runs the exchange, Covered California, reported on Twitter that more than 30,000 telephone calls were received during the first 90 minutes of operations. Another 1,200 were on hold and about 4 percent had hung up.

Peter Lee, executive director of Covered California…said Tuesday was just the starting point, and it was evident that exchange officials had work to do after the website and phone system were hit with a crush of inquiries.

Gov. Jerry Brown, meanwhile, announced he had signed a package of bills to help implement the new law and expand the state’s Medi-Cal program for those who are too poor to pay for the subsidized insurance.

“While extreme radicals in Washington shut down our government, here in California we’re taking action to extend decent health care to millions of families,” Brown said in a statement, referring to the impasse in Congress that has led to a partial shutdown of federal government operations.

Meanwhile, as a result of the government shut down triggered by those GOP extremists, there’s this news:


At the National Institutes of Health, nearly three-quarters of the staff was furloughed. One result: director Francis Collins said about 200 patients who otherwise would be admitted to the NIH Clinical Center into clinical trials each week will be turned away. This includes about 30 children, most of them cancer patients, he said. (From behind the WSJ paywall via the Atlantic) (h/t a tweet from science writer extraordinaire Steve Silberman aka @stevesilberman.)

So there you have it:  Democrats strive to get sick people care (and the well, protected), and labor to fix  the bits that don’t work.

Republicans leave kids with cancer on the street.

Update:  H/t commenter Baud, it turns out   that Americans in those (GOP-led) states that have chosen to abandon their responsibility to their citizens actually do twant healthcare from the Feds (via TPM):

Nearly three million people have visited the federal health insurance marketplace created by Obamacare on its first day, according to the U.S. Department of Health and Human Services.

Since midnight, 2.8 million people have visited the website, which will serve consumers in more than 30 states, and 81,000 have called the marketplace’s call center. Those numbers were current as of late Tuesday afternoon.

Image:  Cecil Beaton, A mother resting her head on her sick child’s pillow in the Canadian Mission Hospital in Chengtu, 1944.