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Michael Olenick: Obamacare Pits the 50% Against the 49%

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By Michael Olenick, a regular contributor on Naked Capitalism. You can follow him on Twitter at @michael_olenick

Buried on CNN’s website is a story about an early Obamacare success, Jessica Sanford, a court reporter in Washington State. Jessica was so elated to receive an initial quote for $198 for a gold plan that covered her and her son she wrote to Obama, who quoted her.

Later, it turned out that thanks to software mistakes she actually faced a much higher premium for a worthless bronze plan. Now, Jessica says convincingly, she will have to remain uninsured. That’s because the state website provided estimates showing that she would receive a subsidy but she has since gotten a letter that says the opposite. So she has said she will pay a tax penalty that she believes will be $95.

I hate to be the bearer of even worse news but she’s the penalty is actually 1% of her income, which means she must make at least a frothy $62,040 a year (400% above poverty for a family of two). Clearly this woman is rolling in dough – a regular Donald Trump sans the bankruptcies – and deserves to pay jacked up prices for lousy insurance to subsidize those less well off than she is.

This is the sorry state of the Affordable Care Act, the ultimate betrayal of the self-employed middle class who are supposed to magically produce income to single-handedly support those who are uninsurable. As I demonstrated in prior articles this promise, when objectively judged, borders on sadistic. Politicians must have looked towards the student loan system for inspiration and forgotten to tell the public this was their goal. In that system students from families of about the same “rich” income bracket – in Jessica’s case a high-flying $62,000 a year for a family of two – are forced to take out loans so those slightly poorer can go to school for free, or to skip school altogether. There is another alternative that would require the genuinely rich to pay taxes like the rest of us but that’s obviously a non-starter.

One surprising reaction to my prior piece on Obamacare, or even to the article about Jessica, is the visceral response to people who qualify for a low subsidy or none at all. “Cry me a river for families making four times the poverty level,” was one literal response. These comments, presumably from those who are either flat-broke or who have employer provided care that does not require subsidies for those uninsurable, seem to be bringing out the very worst in us. Forget Republican screeches of class warfare when anybody questions why Lloyd Blankfein pays the same 15% tax rate on carried income that wages slaves do on social security and self-employment tax alone; this is the 50% against the other 49%. More than that, the 1% will look on amused as these awful overpriced plans seem almost calculated to bring about a Republican landslide in the next election.

ACA proponents argue unconvincingly that the law exempts people from the mandate who cannot afford it. Let’s check that out: this exemption is for situations where “the applicable individual’s required contribution .. for coverage for the month exceeds 8 percent of such individual’s household income…” 124 Stat. 247(A). So if a family’s premium for insurance uses 8% of their income, which is $533.33/month. for a family earning, say, $80,000, they are subject to the fine. Checking that figure against the 132 plan spreadsheet I prepared, a grand total of three have premiums just under that $533.33 level. However, these plans also carry deductibles that average $11,633 and out-of-pocket maximums that average the same. Therefore, these plans – which are so affordable that not buying one carries a penalty – cost $17,675/yr., which is $1,472/mo., before these plans start to pay anything. They’re really not worth much until families pay $18,675 per year with premiums, or $1,556/mo. I haven’t heard Obama nor anybody else explain how demanding 23% of gross household income is affordable, and at this point I don’t expect to.

I noticed the President’s decision to allow people to keep non-ACA plans so, before he changes his mind, we applied to purchase one. I had many options, with an online configurator that changed premiums in response to my decisions and my family’s health. After adjusting everything we ended up with a plan that costs just under $400/mo., less than the cheapest ACA plans with better coverage. Ordinary maternity is not covered, but the “low-cost” ACA plans only pay just $1,040 of $7,450 so the lower premium more than makes up for the difference. Doctors visits are covered with a $35 copay and no deductible, as are ordinary generic drugs, an inexpensive “upsell” you’d think the ACA would have managed (OK, looking at the website maybe you wouldn’t think).

ACA supporters – among whom I counted myself until I saw the policies – oftentimes cite the “better” coverage but the facts of the real policies just don’t support this. Mandating residential drug treatment may help some people doing so at the cost of making more mundane medical events affordable is just not fair. Maybe I’m more old fashioned than I thought but jacking up the price for a visit to cure strep throat, to subsidize a person’s seventh stay in drug rehab, seems unethical.

Perhaps the meanest comment I read from the kneecap-cracking make-them-pay pro-ACA crowd was in the New York Times comments area where somebody suggested those who do not purchase ACA plans should be turned away from emergency rooms. This streak of vindictiveness from ACA supporters, who I assume are “liberal” Democrats, makes the Tea Party look outright empathetic. Maybe it’s easy to decimate the budgets of anonymous families, like those psych experiments where people kept pressing a button to shock anonymous test subjects. We’re inching steadily closer to a Dick Cheney mindset with hardly a peep in the national discussion.

Instead of using political capital to push through Medicare for All, charitably ssuming that’s what the political class wanted, it’s become clear what we got instead is using insurance buyers as financial human shields. We’re foaming the runway again, this time for a healthcare industry that costs more and delivers less than in every other advanced nation and plenty of so-called developing countries. We were led to believe that the political cost of the ACA was high, that Obama spent a lot of progressive chips to get it. Yet we ended up with something that is arguably worse than the current system.

In the wake of the financial crisis anything seemed possible. Obama enjoyed nearly endless political capital assuming he had the cojones to wield that authority. In this he failed miserably, assuming he at least intended trying to fulfill some campaign promises in good faith. Obama could have passed virtually anything and we ended up with this convoluted, unfair, dishonest, and divisive mess. Medicare for All is clearly better than the ACA but, based on what we’re seeing, there is a legitimate question about whether the current 2013 era system is better than Obamacare. It is time that Democrats honestly open this debate before Republicans gain such a large majority that their voices no longer matter.

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108 comments

    1. Ditto

      Resubmit

      The thing about Michael is that he misses the point.

      Yes, both his family and mine will be subsidizing others under ACA.

      That’s the nature of all insurance. Insurance is risk pooling. Pointing this out misses the problem.

      No, the real problem here is that we could be making the system work at a lower cost that Michael’s family and my family could afford, but the legislation makes it more expensive for all.

      Medicare for all would eliminate his concerns as well as those he rightfully attacks.

      Its a win win in the class war

      Even most businesses would win outside of the health finance industry

      http://www.forbes.com/sites/rickungar/2012/04/06/a-dose-of-socialism-could-save-our-states-state-sponsored-single-payer-healthcare-would-bring-in-business-jobs/

      http://www.pnhp.org/facts/singlepayer_myths_singlepayer_facts.php

      http://www.publicintegrity.org/2011/05/31/4766/analysis-frustrated-small-business-owners-among-single-payers-biggest-fans

      http://www.fool.com/investing/general/2013/07/21/how-much-could-medicare-for-all-save-you.aspx

      The reason to support single payer or Medicare opt is not fairness (yes that’s nice too). The reason to support it is plain old fashion self interest.

      1. Yves Smith Post author

        Michael has said clearly in past posts that he favors single payer.

        What he is objecting to here is that the risk sharing is actually not one big pool, it’s the self-employed (who are uninsured or the ones insurers can cherry pick among easily and dump the more costly top half on to Obamacare) plus the uninsured. Except of THAT pool, the under 26 year olds are often out (by virtue of being on their parents’ plans) and a lot of the rest will choose to pay penalties. Americans who have insurance now for the most part are not in this pool and won’t be in it for a long time.

        So you have a pool that is disproportionately people with existing conditions being insured by itself and the other un or irregularly insured, and those are mainly self-employed folks.

        1. Bridget

          BINGO!!!!

          Pretty much every person with health insurance in this country receives government assistance and subsidies of one form or another. The only exception being those ,largely self employed small business people, who have traditionally purchased in the individual market. Now, not only will they be tapped to do the heavy lifting in subsidizing the uninsurable…..they will be doing so out of their own pocketbook . No subsidies or tax credits for most of them. Not only is it grossly unfair, but it also wrecks the only aspect of the healthcare market in which there has been any consumer cost consciousness whatsoever.

          1. paulitus

            Being self-employed is the antithesis of the liberal dream…namely that everyone should work for the government, or at least depend on the government for their well-being. I have been self employed for thirty years, have had Kaiser coverage for most of that time. Is it wonderful? No. Do they nicjel-and-dime me? Yes. Is it expensive? I suppose. But I am happy with what I have, pay for it from my own pocket, and am content.

            1. Yves Smith Post author

              No, that’s not correct. The Democratic party made a decision in the 1960s to support the emerging professional/technological elite and minorities over its former mainstay, labor. Dem leaders are not only finding out that it gave the insurers the keys to the store in Obamacare, they are also throwing one of the big bases of Dem support under the bus. I was early to predict the Dems will take big losses in 2016.

              The Dems hate everyone but the rich who are big political donors as much as the Republicans. They just pretend otherwise and throw the peons some crumbs now and again.

              1. Cocomaan

                Yves,
                “The Democratic party made a decision in the 1960s to support the emerging professional/technological elite and minorities over its former mainstay, labor.”

                I think you’re right, that the emphasis changed, but the person you are responding to is pointing to a very interesting byproduct of the “keep your plan” debacle: that this is another effort at destroying the self employed entrepreneur.

                The cost of making your own way as a self employed individual, if only to escape wage slavery, was already high. I’ve read plenty of horror stories from people trying desperately to start their own business, only to face tens of thousands in up front costs and insane taxes, then having to compete with multinationals benefitting from federal government corruption. I haven’t really seen much discussion of the fact that the entrepreneur is being strong armed, whether its through an unfair tax structure or Obamacare, into working for someone else.

                1. Ditto

                  The idea of the self made man or woman who goes it alone is mostly unrealistic

                  By obsessing over the self employed as you are doing you are just engaged in another distraction away from what would help to make health care affordable for Michael and others

                  He’s politically without power just as every wage earner is

                  The attach isn’t just against him

                  This is divide and conquer or death by different poison is really what you are describing

                  Here its the self employed

                  Elsewhere its the employed by others

                  To make sense of affordability here means relating Micharel or my story to a wider need for real systemic change

                  The way you do that is by showing how all can benefit

                  Not just the self employed or the poor or employers by others divided up

                  Single payer and rethinking how its understood is the solution to each groups self interest

                  1. Bridget

                    Um, I believe that Michael IS one of the self employed. Which is why he’s in the predicament he ‘s in. Free lance journalists, artists, dog walkers, hair stylists, and lots of other people who don’t necessarily spring immediately to mind when one thinks of the self employed are, in fact, self employed.

              2. Joh Yard

                You nailed it in the head. The liberal/labor alliance is long dead, replaced by the liberal/ethnic minority alliance. It is a dichotomy similar to the Republican capital/evangelical alliance.

                It is hard to see how the excessively high cost of healthcare can be addressed without threatening the status of relatively highly paid healthcare workers, who are part of this Democratic party alliance. This is a basic contradiction of Obamacare.

              3. Banger

                Exactly, labor as such woke up too slowly to the reality you describe.

                JFK was the last PRez to stand up to the corporate elite. DP party pols who were pro-labor continued to stand up for labor until the major sea-change I in 1978.

            2. from Mexico

              paulitus says:

              Being self-employed is the antithesis of the liberal dream…

              Being self-employed may be “the antithesis of the liberal dream,” but it is the holy grail of the neoliberal dream. As the neoliberal curse takes hold of a nation, the percentage of workers who are “self-employed,” that is who work in what is known as “the informal sector,” increases.

              Here’s how Alberto Daniel Gago explains the phenomenon:

              Government is essential to the coordination of transnational production systems, in terms of managing the overall mode of regulation, and promoting the location of large transnational corporations which play the central role in…production. [These firms] relate among themselves, belong to the same lobby groups, and promote similar interests…. This process of globalization is further accelerated by state reforms and deregulation.
              …Small scale firms are at a disadvantage, caught in a vicious circle: they cannot attract innovative managers, invest in the modernization of plant and equipment, or implement new technological advances. Then they are relegated to a battle for survival in the informal sector, facing continuously deteriorating conditions of unemployment and marginal self employment.

              http://www.progressive-economics.ca/2013/11/13/the-staple-theory-50-alberto-gago/

              Since the “developed” nations are currenlty only beginning to experience the initial, nascent, and incipient stings of neoliberal policies, and Latin America has been at this game for a long time, much more research on the phenomenon has been done in Latin America.

              Researchers at the University of Guadalajara, for instance, conducted an elaborate study on the effects of neoliberal policies on those with formal employment vs. those who are self-employed. While neoliberal policies weigh heavily on the formally employed, their effect on the self-employed is nothing short of devastating. What the study concluded is that:

              1) As neoliberal policies take hold, the percentage of the economically active population that is self-employed increases.

              2) Most, although not all, of the people who are self-employed are not self-employed by choice, but are self-employed because they were forced out of or could not find formal employment.

              3) “The informal economy has converted into one of the biggest brakes for the fulfilment of the nation, and has become so large that it impacts upon the entire economic sector of the country.”

              – ADRIÁN JOAQUÍN MIRANDA CAMARENA and SOLEDAD RIZO OROZCO, “Aspectos Generales de la Economía Formal”

              A much more recent study concludes that:

              • In informal employment, in general, the conditions are more precarious and are concentrated in the service sector (vendors, resteraunts, domestic workers)
              • Informal employment has diverse implications:

              ♦ Agravated human costs

              ♦ Reduced lifetime income

              ♦ Repercussions for social conditions and health

              ♦ Threatens the potential human capital of current and future generation of workers

              http://www.inegi.org.mx/eventos/2011/encuentro_genero/doc/20-06S4-03ElenaCardero-UNAM.pdf

            3. jrs

              I could care less what the liberal dream is, but the dream of any left worth having is the empowerment of labor. True other political issues are very important (may even more so) as well, but that’s the essense of leftism – empowerment of labor.

              Self-employment is one way of empowering labor (if they don’t have to work for wages it does increase their bargaining power) but it’s not the whole of it. Your enemies are actually corporatists, the multinationals that control the government. Sure they’ll toss you under the bridge as a self employed small businessperson, like they’ve tossed working people under the bridge for decades. I do worry that any government that really works for them won’t even be any good in providing jobs even if it started a jobs program (I mean they don’t want good jobs – they wan’t a desperate labor market), but if it actually managed despite all that to employ more people it would probably help your business and the conditions of working people.

            4. Ira Zipkin

              My mom had Kaiser for decades. When she had post-op hip pain, the doctor–on a 15-minute clock–prescribed OxyContin for her. Further visits led to nothing more than increased dosage. Yes, a woman in her mid 80s was addicted to a nasty drug by her Kaiser docs. Finally, a neurologist on duty at a local non-Kaiser ER sat down with her for a twenty-minute exam and chat. “There’s nothing clinically wrong with her”, he reported. Within a few months, he had weaned her completely off the drug, and she reported no hip pain.

        2. Ditto

          I wasn’t questioning that he supported it

          I was emphasizing that there are good and bad types of risk pooling as far as economic affordability is concerned

          While it may be too much to contrextuslize every time, comoare and contrast certainly brings home the point that the problem here is the risk pooling is not good risk pooling

          More importantly comparison offers a rebuttal to critics

          That their claim that his argument is about not caring about others is a false choice and political manipulation bc actually the goal of helping others does not require sacrificing Michael

          Pols are throwing Michael under the bus bc they believe him powerless, not bc they want to help since there are choices that could help

  1. John

    Michael – I like your posts but they are fraught with content without explanation. It also helps to break paragraphs down when discussing the complex nature of the costs, paid premiums, deductions, etc. It makes it easier to read/understand. Keep in mind the reading audience is not always up to speed on the ACA machinations. Some of us need a bit of handholding.

    Having said that, yes, the Dems handed a juicy gift to the insurance companies. Many Americans will be shocked to find they will not be able to afford Affordable Care Act policies. Obviously, the crowd who are defending the program have not gone on the website to (try) apply for a policy.

    1. Michael Olenick

      I suspect the defenders are employed by government or businesses so large that they’re shielded from the effects of the steep prices their employers are paying, plus they don’t have to subsidize the uninsurable; only the self-employed do.

      I try to use raw figures to illustrate issues rather than just jumping to the conclusion. This can produce prose that is either really dense or really long and I’ll take the feedback to continue trying to find a middle ground. Most economic writers jump to “obvious” conclusions which is oftentimes not supported by data. But the alternative, facts and figures from data sets so large they cannot be skewed, may be something that reads more like an academic article than a blog post. There has to be a middle ground there somewhere though and we’ll continue looking for it; the Internet is good for this type of iterative feedback loop.

      For everybody else I’ve clarified in prior articles I strongly support Medicare for All with government using their bulk buying power to aggressively negotiate prices, just like everywhere else. I believe the current system is better than Obamacare but that neither are sustainable for much longer. Insurers say they love the “free market,” though it isn’t really free thanks to legal collusion, but Mr. Smith’s invisible hand both taketh and giveth away. It’s only a matter of time until that hand reaches in and starts to inflict pain to force lower prices; the question is whether we want that to happen in a managed way or do we want a wholesale meltdown like we saw with housing prices.

      1. NotTimothyGeithner

        I disagree. The supporters of Obama-Care are cultists or addicts. They drive the messaging which reaches low information voters who are being promised by friendly faces things are going to get better because of super genius Obama.

        Material results are irrelevant to these people. Calling someone a racist is not a light thing, and the Obots called racism at every suggestion or hint that Obama wasn’t on the level. They accused people of chasing unicorns or not understanding politics while demonstrating a remarkable ignorance. Relationships were burned over devotion to the President. The Obots behaved like Republicans in the post 9-11 years. The supporters of Obama-care are doing what they can do to make sure to convince themselves that they kool-aid they drink wasn’t a mistake because to admit otherwise makes them morally culpable and destroys their hopes things will magically get better. This isn’t a mere case of being wrong. The legislation was available. The criticisms were written about. Like Sanford, they aren’t going to wake up until they reach rock bottom, and even Sanford’s new complaint is that the Administration screwed up, not that she made the mistake of not holding the Administration accountable. I don’t think the issue is material comfort anymore.

        Some people aren’t affected directly and don’t follow politics, so they think, “yeah, healthcare for 25 year olds is good,” and leave it that, but they are driven by the messaging which is still dominated by the GOP and the Obots.

        1. Marcie

          I think missing from the conversation of the ACA is that mainstream medicine as it was, was irreparably broken. Pharmaceutical companies and medical device and equipment manufacturers control treatments in this country and abroad and it doesn’t seem to matter regarding the delivery of the healthcare system; we were all screwed with the status quo because we were considered profit centers by the provider profit machines that relied too heavily on rigged clinical trials and drugs, treatments and scans that maim and kill. I have news for you; it isn’t safe in our hospitals and if you have to go make sure you have someone that can advocate on your behalf 24/7. And what could Obama do about the profits before patient safety paradigm? Should he have handed over even more power to corporations though the single-payer system? You do understand corporations own the NIH, the CDC and the FDA? Just like the TBTF banks, Big Pharma has its tentacles in every aspect of treatment you are provided and because treatment is motivated by profits you can kiss your health goodbye.

          1. OIFVet

            How would single payer hand even more power to corporations? Please explain, and if possible point to examples of single payer systems in any country which has one. Thank you.

            1. Marcie

              Disclosure: I was poisoned by GE’s product Omniscan and Bayer’s product Magnevist. They are gadolinium based contrasting agents (GBCAs) that cause a new man-made disease called nephrogenic systemic fibrosis. Millions of doses of these toxic products have been injected into the patient population without their knowledge as to the toxicity. I point to this example because I have personal knowledge of it. But examples are many. Join the Patient Harm Facebook group run by ProPublica and see for yourself. No one on there is complaining about the ACA, they know it isn’t the problem, profits and greed are the problem.

              Pharma is poisoning with impunity and they are doing it around the globe no matter the healthcare delivery system. The UK is a socialist system and the government owns the hospitals. However I know a few patients from there that could not get help with this disease because Pharma controls medicine here and abroad. I have two doctors I trust now. I stay away from all other healthcare providers.

              1. OIFVet

                I am sorry about what you have had to go through Marcie. I will note though that you did not answer my question. Single payer, when properly done, is about the patient. I will give you an example from my personal life: I am enrolled in the VA system, single payer if you will. I did have what some pharmaceutical companies would call high cholesterol. My primary care physician at the VA would not prescribe me statins though. The reason: he kept up with research and knew that my cholesterol level did not justify it, and more to the point the pharmaceutical companies were pushing these drugs on people who do not need them. In the links section from November 13th Yves provided a link to an article on the issue (see http://www.nakedcapitalism.com/2013/11/links-111313.html). Well, apparently my physician is correct not to have prescribed statins, and I am quite happy about it. His prescribed dietary changes worked just fine. In my old civilian hospital the doctors would have had me take statins instead, whether or not they kept up with research, because many of them do receive kickbacks from the manufacturers. So, how could a properly designed and executed single payer system give these a$$holes more power?

                1. Marcie

                  @OIF Vet. Arguably Medicare is a single-payer government sponsored program however the waste, fraud and abuse are rampant. Unneeded treatments are the norm and the prescription drug racket within in the Medicare program would be laughable if it wasn’t so costly for taxpayers. Pharmaceutical companies are laughing all the way to the bank with their billions.

                  You are a Vet so you likely know that some VA clinics have been privatized. I know of one case where the patient is not a happy customer because of it and he sees them frothing at the mouth to treat him so they can bill the government. Look this happens in almost every industry (e.g. Promontory Consulting foreclosure reviews). Corporations, put simply, control our country. Until we get it through our heads that patients are profit centers to greedy pharmaceutical companies and medical device and equipment manufacturers that will always put profits before patient safety we will never solve the problem. It is where we have to start, square one if you will. Conceptually single payer is an ideal model but it won’t work because of corruption and the current predatory healthcare environment. But if the insurance companies are smart they will scrutinize every single treatment, drug and scan and make sure they are getting their money’s worth and preventing harm. Otherwise large employers and insurance companies will not survive because the current mass poisoning of the patient population is unsustainable.

              2. Banger

                I think you bring up something important. If the state provides the care what’s to stop it from giving monopolies to private companies or, say, using patients to test drugs or untested procedures etc. I prefer the Continental systems of a mixed regulated system.

                The final problem, of course, is that the modern version of medicine is highly variable and tends to view the human body as a machine rather than a living thing and likes to ignore alternative medicines that usually cost much less. Like most of our institutions today the medical profession is also very corrupt.

                1. Marcie

                  @Banger that is exactly my point. And in the UK pharmaceutical companies have as much control over treatments over there as they do here. The system fails in both counties. It is business for Big Pharma and they have infiltrated every aspect of our health and left unchecked they will destroy our bodies like the banks have destroyed our economy.

      2. jrs

        Those employed by others aren’t sheilded nearly as much as that. Sure it’s better than having to pay the entire cost yourself I guess, but when insurance costs go up by 1000s of dollars every year and rasies are completely non-existent (not even COLAs), the average working person watches their standard of living go down the tiolet of rising healthcare costs and is screwed as well and knows it.

        1. JTFaraday

          Well, they’ve been awfully slow to come to this realization if you ask me, “I got mine” being the operant mode in the US ever since the government and corporate and union central planners did their level best to attach all social welfare benefits to the condition of corporate or government employment– so as to punish the lazy and the dissenters and the weirdos (and the women and N-ers, who were more or less left hanging completely, doing the sh*t work without benefits).

          Ezra Klein, of all people, used to write about this lovely brand of public policy decision making before he took his better paying job as neoliberal apologist at the Washington Post.

          I don’t know if his blog is still up over at The American Prospect or if he hid the evidence.

          1. JTFaraday

            “Lovely brand,” meaning deliberately exclusionary.

            When people complain about where they are today, they should probably ponder why that is.

  2. middle seaman

    There are decent solutions for expanding health care insurance coverage short of a universal single payer one. The way ACA was arrived at was not top down, the way to enforce an abiding philosophy on the coverage; it was arrived at by the Chinese proverbial million cuts. Namely, the senate was designing the solution. That is a cry for distortion, cruelty and discontinuity.

    The results are uneven, selective, and punitive at times, with terrible options such as the Bronze that shouldn’t exist. Obama wanted an achievement; health care was secondary. He wanted to surpass Clinton’s failure, but Obama failed to grasp the difficulties and the peculiarities. He also failed to lead.
    Hopefully, sometime in May or April healthcare.gov will be fully functioning. At that time corrections, extensions and adaptations will start to be applied.

    1. Hugh

      Actually, I disagree. The great healthcare debate lasted about a year. During this time, there was an enormous amount of toing and froing, but at the end of it, Obama got pretty much everything he wanted: an insurance, not a healthcare system, run by and for the corporations, benefits to Big Pharma, the mandate, no public option, expanded Medicaid, and pushing the young and self-employed into exchanges to balance sicker buyers, and oh yes, as this post outlines, crap insurance too expensive to use.

      1. Banger

        I agree. But we need to apportion blame broadly here. First, Obama ran on reform and, as most politicians to, brought us a complex system with a million loopholes for hustlers to take advantage of as per biz as usual in Washington. Second, almost the entire left hypnotized itself to project a reformer in Obama largely because he spoke English and was a dark color which guaranteed, from their simplistic POV, that he would bring truth and light to Washington (as if such a thing were possible). Third, we forgot that the Democratic Party itself is hopelessly corrupt. Fourth, the mainstream media chose to misinform and misdirect the public such that the whole “debate” was fact-free. Fifth, the “people” contented themselves with fictions on both sides of the political fence and flat out refused to do their due-diligence in informing themselves on the issues.

        1. from Mexico

          Banger says:

          But we need to apportion blame broadly here…. [T]he “people” contented themselves with fictions on both sides of the political fence and flat out refused to do their due-diligence in informing themselves on the issues.

          I’m calling bullsh*t on that one:

          Along with partisan sniping, Washington, D.C. sure creates a lot of paper. And the Affordable Care Act is really adding to the pile. The nearly 11,000 pages of regulations for this one law alone would reach three feet high if you made the mistake of printing it.

          http://www.usatoday.com/story/opinion/2013/10/23/affordable-care-act-pages-long/3174499/

          1. Banger

            Of course you do. Do you think I don’t know the size of the bill or many other bills? I know from personal experience the drill on the Hill when it comes to important legislation.

            So did citizens inform themselves or not on this critical issue? You didn’t have to read the whole bill to know it was based not based on reason, facts, data or anything else. If you had simply taken the time to read the broad outline of the bill and compared it to other systems out there in Europe, Latin American, Asia and Canada you would have understood that this bill was BS.

            For a sane HC reform the left should have taken it upon themselves to inform the public that the wheel was more efficient when it was some version of round rather than some version of a polygon. It stands to reason that there is a whole world out there but Americans, in general, ignore it because they prefer to live in a world of illusions because reality is too painful. Not that Americans are the only ones to do that–all of us have a propensity for that.

        2. Benedict@Large

          There were plenty of people who did due diligence, and they did so from both the left and the right. These people however were hounded into effective silence as the dirt bags in the media allowed the stupidity of the Tea Party theatrics (Keep the guverment out uv Medicare!) to suck the air out of the media cycle. The Tea Party in fact (and unknown to the dupes within it) was created exactly to suck the air out of the media cycle, and to prevent any informed voices from gaining the public’s attention.

        3. anon y'mouse

          http://www.truth-out.org/progressivepicks/item/19815-media-control-and-indoctrination-in-the-united-states

          “Yesterday was May Day. I happened to get a letter in the morning. A ton of email comes in—one of them was from a friend in Brazil who told me that she wouldn’t be going to work that day because it’s a holiday, a labor holiday. In fact, it’s a labor holiday all over the world, except in the United States where nobody knows what it is. I happened to be giving a talk at Harvard in the afternoon and this came up. I asked the big audience of Harvard graduate students, “What do you think May Day is?” And some people said, “You mean dance around the May pole,” or something like that. It’s not only a labor holiday. It’s a labor holiday that was initiated in support of American workers who were struggling for an eight-hour day and who were among the most oppressed in the industrial world.

          So here’s this holiday—you know, big demonstrations everywhere, and all kinds of celebrations and so on, and here nobody knows what it is. That’s a sign of extremely effective indoctrination. It’s the kind of thing that we just have to work our way out of. Here there are some small celebrations. Maybe Occupy might have had a May Day march or something. And it’s kind of interesting the way the press treated it. Usually they just ignore it. But if you take a look at the New York Times the next day, it had an article that said demonstrations were in support of labor or something. But it was datelined “Havana,” and there was a picture of a huge mob of Cubans marching and some commentary. It was clear what the implication is: This holiday is some kind of commie business; it’s got nothing to do with us. I don’t know if it’s conscious or if it’s just so internalized that the journalists don’t even see what they’re doing. But the message was, “Forget it, it’s some alien thing.”

          It’s like breaking up the harmony in your town when the union organizers come in; it’s kind of that imagery. And here, strikingly, we do have a Labor Day, but notice what day it is. It’s the day when you go back to work, not the day when you struggle for your rights. The success of indoctrination in the United States is really amazing.”

          1. cripes

            @ anon y’mouse

            Yup. I’ve long marveled at the fact that Labor Day, founded in the US to commemorate the Haymarket Massacre and workers rights, is observed all over the world on it’s actual day, May 1st. Here, of course, president Grover Cleveland, scared of the labor movement, officially made Sept 1 Labor Day, as it is in Canada also.

            So, ignorant Americans mainly think it has something to do with barbecues and end of summer vacation.

            If you don’t know your past, you’re doomed to repeat it.

            1. anon y'mouse

              just ribbing the guy that likes to blame the little man about being ‘unwilling to do the due diligence’ (paraphrase.

              armed with 11k document in one hand, talking heads on the teevee remote in the other, and the local newspaper completely mute on the subject who does the ‘little man’ turn to for proper info.

              this is why we need to determine the fiduciary duties of our gov’t representatives as agents acting on our behalf, and kick the crap out of them (legally) when they violate them. misrepresentation of policies and available choices would be a violation in my book.

    2. Benedict@Large

      LobbyCare doesn’t need “corrections, extensions and adaptations”. It’s a piece of trash written completely by and for the insurers. It needs to be heaved whole into the garbage can, and will be so heaved. Unfortunately, its completely unusable “insurance” will kill several hundred thousand before that happens.

  3. Hugh

    The 50% against the 49% is class warfare. Class warfare is about the rich setting everyone else against each other so that they are so angry and preoccupied that they don’t unite to take back the wealth the 1% has looted from them.

    I agree the language in this post is unclear. Medicare for All would cover everyone. The money currently going to pay premiums/deductibles/copays as well as the tax dollars that fund programs like Medicare, Medicaid, Tricare, and the VA would be pooled. Using its power of only purchaser, Medicare for All could set low, reasonable prices for drugs and services, and run the system as Medicare does now with minimal overhead costs. The result would be, as countries with single payer plans like Australia and France have shown, per capita costs would decline and health outcomes would improve.

    1. from Mexico

      Hugh says:

      Using its power of only purchaser, Medicare for All could set low, reasonable prices for drugs and services, and run the system as Medicare does now with minimal overhead costs.

      But therein lies the problem.

      According to the tenets of free market fundamentalism and its priestly caste — that is our senators, congresspersons, bureaucrats, and president — the only people who matter, in order of importance, are:

      1) Insurance companies

      2) Big pharm, and

      3) Healthcare providers (e.g., hospitals, the AMA, universities which keep doctor enrollments low so as to stunt the supply of doctors, manufacturers of healcare equipment, etc.)

      To suggest cutting the largess lavished upon any of the above is an apostacy of the most venail sort. And apostacy in our Judeo-Christian tradition is no small matter. As a 15th-century cardinal put it:

      The Catholic Church holds it better that the entire population of the world should die of starvation in extreme agony…than that one soul, I will not say should be lost, but should commit one single venial sin.

      Quoted by William Manchester, A World Lit Only by Fire

      How do you propose revamping our current social, political and economic order when God the market says otherwise?

      1. JGordon

        Any large, heirarchical organization, especially governments, is prone to corruption and decay. In fact, by looking at history one could generalize that corruption and decay is the normal state of affairs, although there are admittedly brief outbreaks here and there of enlightenment and justice.

        Therefore, any system interested in having the veneer of legitimacy (a system to be equitable and fair, representing the will and best interests of the citizenry) ought to have legal and easily accessable escape hatches for people to exit the system on the off chance that it becomes intolerably corrupt and oppressive. As an example of one such needed (and now existant) escape hatch, is an alternative monetary regime to the centralized fiat regime of the central state; if the state chooses to mismanage its currency for whatever reason, people should (and will) be able to switch to another one with relatively little pain or inconvenience. And the fact that people do not switch will become strong evidence as to the legitimacy and competency of the state–so having such alternatives is a win-win, both for freedom-minded individuals who despise the union of corporate/state power, and the magic money tree theorists who idolize and glorify corporate centralized control of currency creation and the consequent corporate domination of the political/social structure of a country.

        1. from Mexico

          JGordon says:

          Any large, heirarchical organization, especially governments, is prone to corruption and decay.

          Why “especially governments”? When it comes to the provision of healthcare, your assertion is patently, demonstrably false.

          For instance, the government of the UK provides healthcare for between 1/3 and 1/2 the per capita cost that the US’s private provisioners do, and the UN’s measurable metrics score its quaity at almost 2x that of US healthcare.

        2. from Mexico

          And I’ll give you another counterfactual to your anti-government theology.

          In 1938 President Lazaro Cardenas, with a rather masterful head fake to the Nazis, was able to nationalize Mexico’s oil industry. He formed the state-owned national oil company known as PEMEX.

          PEMEX is the favorite whipping boy of the bastions of right-wing and left-wing media giants like the Wall Street Journal, the NY Times, Washington Post and the Guardian. The charges of “corruption” and “decay” are almost non-stop.

          And yet, if we take a look at actual performance, the efficiency — the percentage of the revenues from oil production which actually accrue to the nation — it tells a very different story. In 2010, PEMEX paid the Mexican government 70.4% of the firm’s total gross sales, a sum of 649,494,900 pesos (approx. $54 billion usd) which represented 51.1% of the Mexican government’s total gross revenues that year ( http://www.jornada.unam.mx/2011/02/25/economia/033n1eco ).

          Now, let’s compare that 70.4% to our neighbor to the north, Canada, consistently lauded as one of the least corrupt places on the planet, with its privately-owned petroleum industry:

          Staple analysis also focuses on the fiscal linkage. How much rent is generated by the staple, and where does the rent go? These are important questions that address both the contribution of the staple to development – which is a function of the proportion of rent reinvested back into the staple region relative to the proportion leaked – as well as the equity questions of who gains and who loses from staple development. Maximizing the contribution of the staple requires collecting rent and distributing it equitably to the owners of the staple; in the case of oil and gas, this is the public in the producing regions.

          Again, available evidence suggests that a large proportion of rent is foregone by the public owner and retained by private sector oil and gas companies as a surplus return above normal returns to private capital. Plourde (2010) estimates that the private sector retains between 38% and 65% of the rent even under the new more aggressive Alberta royalty regime. A more recent study by the oil sector using a different methodology concludes that the private sector retains 65% of the revenue from an oil price increase (Egglington et al. 2012), while a cost-benefit analysis of a major project estimates rent retained by the private sector is in the range of 35% (Joseph et al. 2013). Given that 47% of the profits to the oil and gas sector accrue to foreign owned companies (StatsCan 2012), most of the rent retained by the private sector is ultimately leaked to foreign owners.

          http://www.progressive-economics.ca/2013/11/05/the-staple-theory-50-thomas-gunton/

          So PEMEX, the government-owned and operated company universally condemened as being corrupt, returns 70.4% of revenues to the public treasury. But Canada’s highly vaunted private oil industry returns only 35% to 65% to the public treasury. Furthermore, of the 35% to 65% rent retained by the private sector, 47% of that leaves the country.

  4. Bravo

    Short of a single payer system, if the objective is to provide coverage for the low income and uninsured in this country, the pool of those financing that coverage should have included a contribution by the 90% of the country that is currently covered through an employer plan or Medicare. If we must include the insurance companies in order to affect a political solution, modify ACA to include a tiny ACA payroll tax on the employed, and a tiny tax on the AGI of those receiving Medicare. Then reprice the currently unaffordable Obamacare plans that have put the burden of carrying the low income and uninsurable solely on middle income self-employed people. The ACA design was flawed from the beginning.

    1. Bridget

      There is, I believe, a $68 tax on most employer provided plans. This tax is intended to provide “reinsurance” to the insurers for any losses exceeding. $60,000 per patient. What does it tell you about the willingness of the well -insured to help shoulder the cost of Obamacare to learn that the unions, who helped cram this thing down , are trying to weasel out of the measly $68 bucks ?

      1. lylejames

        For my family of three, that’s $63 times three for a total of $189. That’s my “weasel out” for the privilege of having an employer-backed policy which has gotten worse and worse each year — higher premiums, higher deductibles, higher co-pays. And for what is my family paying this extra $189 on top of our own costs? As Michael makes absolutely clear, to line the pockets of insurers which the ACA allows to suck more money from the system while offering virtually no coverage for most.

  5. DakotabornKansan

    Anything seemed possible, Obama enjoyed nearly endless political capital, but now…

    According to Gallup’s annual Health and Healthcare poll:

    “The 56% of U.S. adults who now say it is not the federal government’s responsibility to make sure all Americans have healthcare coverage continues to reflect a record high. Prior to 2009, a clear majority of Americans consistently had said the government should take responsibility for ensuring that all Americans have healthcare…Americans who feel healthcare coverage is not the federal government’s responsibility have been in the clear majority the past two years.”

    “The continuing implementation of the ACA over the coming months and years will surely continue to shape Americans’ attitudes toward the federal government’s role in this area. It is not clear how the ACA’s troubled rollout to date will affect attitudes over the next year. But as the debate about the implementation of the new healthcare law has unfolded, Americans have become less likely than ever to agree that the federal government should be responsible for making sure that all Americans have healthcare.”

    http://www.gallup.com/poll/165917/majority-say-healthcare-not-gov-responsibility.aspx

    Ah, the wisdom of the masses and treachery of the elites.

    Make Obamacare a Trojan horse for conservative health-care reform!

    “Obama has quietly introduced regulatory decisions that have made the exchanges a viable market for high-deductible, health-savings-account-eligible health plans… Far from being driven to extinction, high-deductible, HSA-eligible plans have an opportunity to capture significant new market share on the exchanges.”

    http://www.bloomberg.com/news/2013-11-18/a-conservative-cure-for-obamacare.html

    Don McCanne MD:

    “Many conservatives have been attacking Obamacare as being a Trojan horse that will open up health care to single payer, even though actually it has taken us further in the wrong direction to a private insurance-dominated market. This article from the Manhattan Institute more accurately describes Obamacare as a Trojan horse taking us to high-deductible, health-savings-account-eligible health plans, often referred to as consumer-directed health plans…

    “What is particularly disconcerting is that it always was intended that the exchange plans be high-deductible plans, simply to control premium costs. Also, employers are now rapidly converting to high-deductible plans for the same reason. The consumer-directed advocates no longer need to hide in a Trojan horse since the deductibles are already highly visible. Right before our eyes, it has been the Trojan army of deductibles that has been conquering our health security, placing those with health care needs in servitude.

    The Trojan horse came, and the neo-liberals pretend they didn’t even see it.”

    http://pnhp.org/blog/2013/11/18/obamacare-is-the-trojan-horse-for-what/

    Michael says, “It is time that Democrats honestly open this debate before Republicans gain such a large majority that their voices no longer matter.”

    The Gallup Poll would seem to indicate that the Republicans are indeed playing chess while the Democrats are in the nurse’s office because once again they glued their balls to their thighs.

    1. Banger

      The Democratic Party is thoroughly corrupt by almost any definition of the term with the exception of a few on the margins and even they, because of the corruption, have to play along in order to survive. Obama and his people never had the slightest intention of going up against the Big Boys that run the HC system in this country even those who believed in real reform. All they wanted to do is to appear to do it since they knew that the American people are easily bamboozled because they (on the whole) want politicians to whisper sweet nothings in their ears. Americans want to believe they have the best health-care system in the world despite the obvious facts.

      What the left should have focused on was to make sure that the facts were presented–because nearly all Americans have no clue about how the rest of the world has solved the HC deliver problems, I repeat no clue. I have, periodically, appealed to activists to make the American progressive movement about pragmatism, fact, reason, science as well as compassion. You don’t have to push particular policies rather push for dialogue made up of something in the vicinity of common-sense reality rather than myth and illusion. That would begin to chip away at the tendency in the culture to deny reality and live in fictional virtual worlds.

      1. jrs

        Maybe if there was overwhelming popular support. Then again there was overwhelming popular support against TARP and well. The question is whether even it would overcome the fact that the politicians are bought and paid for. Maybe the point should first be ending that.

      2. different clue

        Where should the left have presented those facts? In the Class Enemy MSM? You think the Class Enemy MSM would permit
        any such fact onto their pages or airtime?
        Anyway, it was the Obot left itself which propagated those sweet nothings on all the fringe/marginal outlets the Obot left controlled or overwhelmed by swarm.

    2. NotTimothyGeithner

      I caught a bit of CNN this morning and saw updates over Gillenbrand’s proposed changes to how sexual assaults or rape in the vernacular are being reported in the military. The Democratic elite are doing everything they can to keep the old system in place where rape is rampant.

      The Gillenbrand Ammendment is a slam dunk politically and the minimum for moral behavior. The Democratic Party like the Catholic Church and Penn State is more interested in not upsetting personal relationships than protecting people from rape.

      Its not incompetence as much as the Democratic Party is an organization dedicated to putting a new shade of lipstick on a dead pig’s anus.

    3. human

      “Do you think it is the responsibility of the federal government to make sure that all Americans have healthcare coverage, or is that not the responsibility of the federal government?”

      This is a leading question that I would refuse to answer. There is no option to note a responsibility of the federal government to its’ citizens health without the use of “healthcare coverage.” There is no way to answer that poses health care, two words, as a right.

  6. sleepy

    I am genuinely ignorant as how the yearly out-of-pocket caps work in Obamacare. I understand of course that those yearly caps do not include the premium costs.

    The OP states that the out of pocket for deductibles for the family earning $80,000/yr would be $17,000 plus before the insurance kicks in.

    Are there out of pocket caps at all? Or do they just not apply to at that income level?

    1. Michael Olenick

      $12,600 for a family, the same as the deductible for most bronze plans. But that’s after paying premiums, which are about $550/mo on the low end. So pay about $6,600/yr. in premiums + $12,600 out-of-pocket = $19,200 a year. There are lots of ways to balance the premiums, copays, and deductibles to get a slightly lower figure so I try to use the lower figures to keep things honest (these plans are awful enough there’s no need to make them worse). See last week’s article for a more comprehensive explanation and a spreadsheet of all the plans, http://bit.ly/1fymFKL.

      1. Dromaius

        The out of pocket caps are apparently another ruse because the government does NOT regulate what insurers have to include in them. And based on this quote, I would say there is no effective out of pocket max at all even in-network:

        Some health insurance or plans don’t count your copayments, deductibles, coinsurance payments, out-of-network payments, or other expenses [for example?] toward this limit

        http://www.correntewire.com/obamacare_clusterfuck_you_know_how_the_obots_keep_yammering_about_obamacares_limit_on_out_of_pocket

  7. DIno Reno

    Obama’s genius move was the grand bargain he made with the insurance companies. He gave them a government mandate that says everyone must buy health insurance and in exchange the insurance companies gave up underwriting. Nothing else matters in terms of costs and coverage to this administration. Fairness is not an issue either.

    The consumer/citizen is the last thing on their minds, as evidence the web site. The only thing that matters is that the insured have no way out. They must somehow get insured or suffer the consequences of taxes, fines or penalties.

    For insurance companies, this is the holy grail. Everyone must turn to them who can afford to pay or be punished by the most powerful nation on earth. It permanently cements them as the middle men in nation’s health care. Participation is mandatory. For this, and only this, they gave up the their most sacred possession: Underwriting.
    Obama sees this as a massive win for him and the companies. For the insured, not so much. He threw them a bone, one that had been chewed and buried and dug up and served up on a crummy web site.

    Only problem is this crummy web site, along with the cancellation letter going out to underwritten customers, seems on the verge of blowing up the grand bargain if exceptions are made to the original game plan. For it to work, there must be no exceptions and no underwriting. Allowing either, destroys the pooling that is the foundation of the ACA.

    Since both exceptions seems likely to occur, the Democrats will have to out run this thing or suffer oblivion. Chaos is only months away. They will need to lead the charge to repeal this bill before the fall elections or suffer a huge defeat.
    Ironic, no?

    1. different clue

      And of course this grand bargain was what the Roberts Court was determined to uphold, for just this reason.

      Perhaps the Cruz bill forbidding outright goverment bailouts to insuracos if “too few” people sign up would be worth passing over Obama’s veto, if enough Republicans can be elected in 2014 and 2016. Then again, how many of those Republicans would simply be Catfood Democrats in disguise?
      Anyway, if Cruz’s “no TARP for Big Insura” bill got passed, then a vast and massive Young Peoples’ Boycott of the exchanges could tear Obamacare all the way down.

  8. Jim Haygood

    ‘… a healthcare industry that costs more and delivers less than in every other advanced nation and plenty of so-called developing countries.’ — Michael Olenick

    This is the brutal fact of life which makes an oxymoron of the words ‘ACA’ and ‘reform’ in the same sentence. When it comes to cost-effective health care delivery, the world’s largest economy can’t even compete with shambolic Third World dustbins.

    A petrified political duopoly that’s ruled for 150 uninterrupted years has a lot to do with enabling rent extraction on such a colossal scale.

    Meanwhile, ACA’s victims are getting restless. A poll released this morning shows 37% approval for Obama (his lowest yet), and 31% for ACA.

    http://www.scribd.com/embeds/185695292/content?start_page=1

    Mister President … tear down this website!

  9. R Foreman

    Ok don’t hold back on us Michael.. just come on out and say what you’re really thinking about :)

  10. diptherio

    Typo: “Mandating residential drug treatment may help some people doing so at the cost of making more mundane medical events affordable is just not fair.”

    Should read: “Mandating residential drug treatment may help some people, but doing so at the cost of making more mundane medical events un-affordable is just not fair.”

    1. Jim Haygood

      When mundane medical events become unaffordable, self-administered residential drug treatment starts to look good.

      Vaporizer technology has advanced far more rapidly than health care delivery know-how.

  11. Massinissa

    To paraphrase robber baron Jay Gould, you can always pay one half the poor to kill the other half…

    Or at least bitch at them incessantly…

    The poor being in this case the 99%…

  12. Dan Lynch

    Just a quick note to thank Michael Olenick for this article.

    FYI I am below poverty level in a red state so I get NOTHING except I may have to pay a penalty.

    However, my state is considering PRIVATIZING expanded Medicaid, which presumably would throw poor people into subsidized bronze plans, and presumably would seize the poor person’s assets to recover his health care costs as per standard procedure for Medicaid.

    http://www.spokesman.com/stories/2013/nov/19/medicaid-gets-idaho-association-of-commerce-and/

  13. SK Graham

    I do have to disagree with one point here:

    “These comments, presumably from those who are either flat-broke or who have employer provided care that does not require subsidies for those uninsurable, seem to be bringing out the very worst in us.”

    Lots of people work for larger companies to provide insurance for themselves or a family member who is effectively uninsurable in the private market. These companies have to eat these medical expenses, and the costs push up insurance costs and push down employee pay and benefits.

    And employer provided group plans are not cheap. Based on my W-2, the plan for me and my wife, (with both my contribution and the employer contribution), was over $9800 last year. And we burned through $2500 in a Medical Spending Account.

    If someone at my company makes $30,000 a year after health insurance, their total compensation is $39,800, and they’re paying about 25% of their total income for health care (before copays and deductibles!) And that’s considered “affordable” because my employer “subsidizes” a significant part of it.

    So I’m not surprised at, worst case, out of pocket costs of $10-$15K, as that’s what people with “good” group insurance pay (directly or indirectly.)

    Healthcare is 16% of GDP. That’s a huge chunk out of everyone’s paycheck. (And yes, the ACA does very little to address cutting that in half…)

  14. Benedict@Large

    Back during the writing of the ACA, CATO came up with something they referred to as the effective marginal tax rate of ObamaCare. This looked at the mandated premium minus the ObamaCare subsidy as part of the income tax, and then figured out what marginal rate this would correspond with over the range to which the subsidies applied. (I checked their calculations in pretty good detail. They were accurate.) The results were pretty spectacular, and probably would have killed the ACA if everyone hadn’t been completely distracted by the Tea Party theatrics at the time. (I actually suspect these theatrics were intentional; that they were being staged exactly so people WOULDN’T pay attention to the real bill.)

    As calculated, and over the range to which the subsidies applied, the effective marginal tax rate for a married couple was about 75%, while the effective marginal rate for singles was 50%. This means that starting around $25K and going through $75K annual salary, a family would see as net 25 cents out of every dollar raise they earned. Viewed elsewise, a $50K raise for a couple making $25K would net that couple (after ObamaCare payments) a paltry $12.5K.

    Talk about KILLING the middle class.

    [NOTE: I don't have the link to this anymore, but I'm sure CATO still has this stuff in their archives.]

  15. BondsOfSteel

    *sigh*

    Once again, Michael’s confusing the subsidies, which are a government plan… with the cost of the premiums, which are paid to private insurance companies.

    The subsidies are funded by an increase in taxes for people who make > $200,000/year. The premiums go to cover the cost of medical care… not subsidies!

    The only people that the woman making $62,040 might be helping cover are the sick, not the poor.

    1. Yves Smith Post author

      Wow, you managed to miss that Olenick got insurance much cheaper, NOW, for his very same family than he can get from Obamacare? And did you manage to miss that Obamacare having even OK premiums depends on getting “young invincibles” to sign up?

      So the pricing of policies offered under Obamacare is based on a risk poll that the insurers had to guesstimate about. They get to raise premiums next year based on actual experience. And they are certain to, based on the low signup rate of young and healthy people and the high signup rate for the people with existing conditions.

      But even before THAT happens, Olenick is seeing much higher prices for him and his family, which is not old and not unhealthy.

      That means he IS paying for the sicker and the formerly uninsured in his pool (and the lower income groups that will get subsidies are likely to be rated worse too. Health tends to correlate with income. For instance, you see more obesity in lower income people which means more heart disease risk and more diabetes).

      So Olenick is correct.

      So then the question becomes: do you really not get this or are you deliberately muddying the water? You’ve been very consistent in defending Obamacare, and this isn’t the first time your argument, to put it politely, has been strained.

      1. BondsOfSteel

        I guess I really don’t get this.

        I’m not saying his insurance cost (or health costs) will be lower. I believe they will be higher. He might be getting more coverage. (Actually he is because he said he didn’t have mental or substance abuse coverage.)

        The two major post I’ve disagreed with are the ones he talks about the subsidies and their relation to the premiums. I keep pointing out there is no relation.

        For example above, he says the woman (W) making $62,500 is paying “jacked up prices for lousy insurance to subsidize those less well off than she is.” I do not believe that is true.

        For an example we’ll call the less well off, LWO. If W is say paying say $400 for the lousy insurance plan… than everyone on that plan w the same age, smoking status, and geo location is contributing $400 too. W will pay it directly, and LWO pay part and the government will pay part. The insurance company gets $800 and must spend >= $680 (800 * .85) on medical care. W’s premiums are not subsiding LWO because of their income bracket because they both will pay the same as premiums. I don’t think Michael understand this.

        You mentioned that the healthy were subsiding the sick. I mentioned that too. That is happening… but is a whole different moral argument.

        You might have a point that lower income people tend to be more sick. That too is another moral argument. I’d suggest we get more data to see if that will be true once more people have access to preventive healthcare.

  16. Yancey Ward

    I hate to be the bearer of even worse news but she’s the penalty is actually 1% of her income, which means she must make at least a frothy $62,040 a year (400% above poverty for a family of two)

    Not knowing the entirety of her circumstances, you can’t be sure that she makes 400+%PL. For most people in the US, the subsidies actually will drop to zero before you get to 400%PL. It is entirely possible to make 200-300% of PL and not qualify for a subsidy. The calculation involves the price of the 2nd least expensive Silver plan, and that is different from zone to zone. It is just one more mechanism of the Rube Goldberg device.

    1. Michael Olenick

      Good information: I didn’t know that! So she can be making less than $62K/year, for her family of two, and still be considered so wealthy that she must subsidize those making less. It can’t be much less though because, with taxes and healthcare costs taken into account — don’t forget the self-employed are already paying double for social-security and medicare — there’s not much discretionary income left. If Republican’s had focused on building a serious opposition movement, rather than a bunch of Tea Party clowns led by literal entertainers (Palin, Limbaugh, and other radio/tv personalities), they’d potentially be looking at political dominance similar to what Democrats enjoyed for decades. Of course, like my grandma used to say, if the queen had balls she’d be king so instead of trying to make strong arguments they’ll go on rambling harangues while the country suffers.

      1. Yancey Ward

        Someone on another site linked a short analysis of this issue that laid it out in detail, and I have been trying to find to to link here- I read it several weeks ago. The way it works is that the buyer is expected to pay a certain percentage of his/her income for a plan, if that amount is higher than the cost of the 2nd least expensive Silver plan available in the buyer’s area, it is adios subsidy regardless of the income. People vulnerable to this phase out tended to be younger (i.e. the silver plans had a lower cost for such people making them more likely to fall under this expected cost bearing #), and had incomes between 250-and 400% of PL, making the cost bearing # higher.

        Pretty damned pernicious, if you want my opinion.

  17. PeonInChief

    The whole problem would be solved if Congress just lifted the cap, allowing everyone to get a subsidy for any amount over 9.5% of income. True, we would be subsidizing some small number of people with large incomes, but I suspect that most of the 1% already has really good insurance. Health insurance is so expensive relative to incomes that it would make sense for the self-employed who need insurance to reduce their incomes.

    Second this should teach everyone that the poverty line is a convenient work of fiction–even 400% of same isn’t very much income.

    1. CaitlinO

      “Health insurance is so expensive relative to incomes that it would make sense for the self-employed who need insurance to reduce their incomes.”

      Reduce or move it off the books. It looks like one of the unintended consequences of this incredibly badly thought through plan will be to make income hiding much more rational.

      1. PeonInChief

        Income-fiddling is nothing new in our “insurance” system. Some mothers used to claim higher income to get their children into Healthy Families, as opposed to Medicaid. And they had good reason to do do. For very small premiums the children got much better insurance, and mothers were willing to pay the cost. Indeed people in the states that are expanding Medicaid will have to look at the cost of Obamacare vs the reduced benefits paid by Medicaid, and then think about what their incomes really are.

  18. kaj

    When I look at Medicare, it is an ok system, riddled with high fees for physicians, hospitals, drugs, the whole ball of wax. Physician fees alone, are based upon a unit system devised by colleagues, which the Washington Post recently researched and found to be very lax in favoring physician and surgeons. Surgeons for example performed the procedures in half the time or less! Physician charges for office visits and such are overmarked timewise.

    Pharmaceuticals have the similar problems in that Medicare is not allowed to buy at the least expensive prices by negotiating a price and pre-specifying a list of acceptable drugs from which detracting has to be pre-approved as they do in Germany and other developed economies.

    It is best to specify a physician top salary as they do in Canada and run with a similar system. In the interim, a better devised Medicare system is probably the more acceptable choice.

  19. Barmitt O'Bamney

    Only the Democrats could conceive of a social benefits program that the beneficiaries of the program, who are by definition people without sufficient money to cover their necessities, are expected to fund themselves.

    1. Barmitt O'Bamney

      I have to correct myself. Originally, Republicans (Heritage Foundation) conceived it, not the Democrats. But of course their plan was merely a tactical response offered in bad faith to Hillarycare. Republicans conceived the plan of the middle classes and near poor subsidizing the poor, and probably as a poison pill to make the middle class hate the poor and the hand of government in their pocket. But Democrats actually thought, Hey this is a good idea! The funny thing about all this is how liberal Democrats always smirk among themselves about much smarter they are than Republicans.

      1. Yancey Ward

        You can’t blame this on the Heritage Foundation. Their idea wasn’t to make the healthier and younger subsidize the older and the sicker with a mechanism like this. Their plan was to make people buy mandated coverage with premium support. The sicker and the older would have been subsidized to a greater degree without trying to cross subsidize over generations.

        Democrats took this path because to do otherwise would have required a bigger and broader tax increase to pay for the higher explicit subsidies in the exchanges. See the comment from BondsofSteel immediately above.

  20. Eric377

    An omlette was attempted without breaking enough eggs I think. The desire to leave as much alone as possible kept employer plans and their risk pools mostly intact. Everyone else was expected to make their way to the exchanges and those risk pools. The individual market was previously quite treacherous and lots of people had to enter into it anywhere they might afford and hope that they did not seriously test their insurer’s willingness to pay big claims. Insurers took a lot of care to keep the risk pools as healthy as possible, so for a good percentage of the insured their foray into insurance with low premiums was worthwhile – at least for the period they experienced. Such people now definitely think they are in a worse situation as the promise of better coverage seems hollow. Proving it is better coverage is going to be the “sez who?” kind of argument, but paying more premium is 2nd grade subtraction. Employer plans were generally much more comprehensive (since employers cannot easily stand the disgruntlements created in the ranks when X is covered but Y isn’t and a couple of folks come down with Y) and while they mostly had something like the general populations health profile, they are not now getting a sudden influx of people who are probably skewed unhealthy, especially if young folks feel aggrieved by the process and notice that it is darn hard for the government to even collect the penalty plus there is always the next enrollment period (or so they may think). A mess, but a mess that seems more likely to demand even more public dollars that if it actually worked. Opponents need to take some caution perhaps that if by their opposition the federal role has to grow still larger to see to it the intended beneficiaries get anything out of it at all.

  21. Waking Up

    “Perhaps the meanest comment I read from the kneecap-cracking make-them-pay pro-ACA crowd was in the New York Times comments area where somebody suggested those who do not purchase ACA plans should be turned away from emergency rooms. This streak of vindictiveness from ACA supporters, who I assume are “liberal” Democrats, makes the Tea Party look outright empathetic.”

    What is the definition of “liberal” these days? When Michelle Obama was on the board of the University of Chicago Medical Center, she helped create a program to divert poor patients away from the emergency room to underfunded clinics. The “neo-liberals” are just as destructive as the “neo-conservatives”. Different terminology, same agenda.

    1. OIFVet

      UofC alum here, and I still reside in Hyde Park. You have only scratched the surface of the neoliberal hotbed that is the University of Chicago. This year there were incidents of university police brutality eerily similar to the one in UC-Davis and the suppression of Occupy in general. Police state on the campus of a suppossed not-for-profit, subsidized by our tax dollars. In January, community and student groups protesting the lack of a South Side trauma center were arrested and some of them beaten (the black kids only of course). See http://chicagomaroon.com/2013/01/28/four-arrested-in-trauma-center-protest/ and http://chicagomaroon.com/2013/01/28/police-blues/. In march, the protest by these same groups was infiltrated by an undercover officer, see http://chicagomaroon.com/2013/03/01/undercover-ucpd-detective-infiltrates-protest/. There have been other instances of undercover university officers infiltrating campus protests, I can’t dig up the links. The University response to the demand for trauma center has been to f*ck off, despite their taxpayer subsidized prosperity and multi billion dollar endowment, and despite the fact that the lack of trauma center in the middle of a veritable urban battlefield costs lives. So why would anyone expect anything different from the Obamas? They know who butters their bread and who put them where they are today. Hyde Park, in general, has become a police profiling heaven. Not a day goes by that I don’t see 2-3 CPD cars joined by another 1-2 UCPD cars stopping and frisking. The subject has always been a minority male in my experience. This in Obama’s neighborhood, a supposed hotbed of “progressives”. In Chicago, they don’t call these folks “Lakefront Liberals” for nothing.

  22. Karen

    I live in Washington State. This article/blog entry does not ring true. Unfortunately, it does not give enough information about Ms. Sanford and her son to allow a definitive truth-check.

    (1) What are her and her son’s ages?
    (2) Which county do they live in?
    (3) Are either of them smokers?
    (4) What is her household income? (needed only for info about subsidies)

    Even without subsidies, there are reasonably-priced plans available on the individual exchanges in WA state. For example:

    Me: 51 years old, nonsmoker, resident of King County, comfortable income (not eligible for subsidy).

    My chosen plan: $328.86/month, $4,000 deductible, $6,350 out-of-pocket limit, Health-Savings-Account compatible. Preventive care free, not subject to deductible. Plan name “HealthPays HSA Bronze,” from Group Health Cooperative.

    My definition of “reasonably priced” is not the same as “easily affordable for everyone,” but that is NOT because of Obamacare. The unreasonably high and escalating cost of health care in this country is a problem we have had for a long time that cannot be blamed on Obamacare.

    If Obamacare causes more families to price-shop for routine care (and to go to urgent-care clinics instead of hospital emergency rooms for non-life-threatening conditions) because they have high-deductible health plans, that will be to the good on costs, but unfortunately will not help with the outrageous cost of things like chemotherapy drugs.

    1. Waking Up

      You just tried to make a case for pushing poor people from hospital emergency rooms to underfunded clinics….big fail.

      But, at least you let people know your mind-set.

      1. Karen

        My husband and I have been purchasing high-deductible individual health insurance since I stopped working as a full-time permanent employee and went freelance in 2000 (he has his own small business as well and had been on my health insurance prior to that).

        I’ve exceeded my deductible in only one year (and then only by a couple of hundred dollars) and he has never exceeded his deductible, so we’ve been paying cash for virtually all our healthcare.

        We choose urgent-care clinics over emergency rooms whenever possible. In our experience the care has been perfectly competent and the costs MUCH more reasonable. More importantly, the costs are communicated upfront instead of being a black box until well AFTER it’s too late to change our minds.

        I went to an urgent care clinic for what turned out to be a doozy of a muscle spasm in my back (my first ever, frightening because I didn’t know what it was and it didn’t manifest until 2 days after the physical exertion that brought it on).

        When my husband sliced his knee open we called the nearest urgent care clinic, but they said we should go to the hospital because of the risk of a compromised meniscus.

    2. NotTimothyGeithner

      I’ve long held Obots and most fans of the great orator of our age never actually listened to Obama but were more impressed by the symbolism and spectacle. The above comment demonstrates the complete failure of Obots to ever listen to the President beyond “let me clear.” It must be a marketing phrase to turn brains off.

    3. splashoil

      You will find more reassuring fluff and pom poms over at Kos. A plus is your ability to silence any dissent with the HR system of reinforcement. Good luck.

    4. Lambert Strether

      If I had cancer, and had to shop for those drugs, I’d probably use a stronger word than “unfortunately.”

      But then, I’d be one of the unterbussen, and who care about them?

  23. n

    I have no choice but Obamacare as my coverage through PCIP.gov is ending. (btw Urgent care clinics are either unworkably expensive for many of us or don’t do much for genuine problems.) So Obamacare has to do something for me. But I won’t apply until I have to.

  24. Lune

    Michael-

    I have to ask: while you might be able to get a cheaper plan right now under the old system, what do you think would happen to you (under the old system) if you or a family member got really sick? You’d almost certainly become uninsurable, and probably go bankrupt before finally qualifying for medicaid or medicare. So is your current insurance plan really all that great?

    You’re absolutely right that the ACA pits the young & healthy against the older & sick, but at the end of the day, *every* person in the first group will find themselves in the second group. And that’s where the current insurance plans fail. The minute you get sick, your affordable, nice plan with low deductibles and generous coverage will be dropped, you will likely be offered a high deductible, high co-insurance plan with your new pre-existing conditions completely excluded, at a price 5-10x your current premium, at just the time that you might lose your job due to your illness. In other words, you will likely become uninsured. That’s the effect of the current system…

    1. Splashoil

      On what universe are you residing? Do you honestly feel the new skinny narrow Obamacare provider networks will keep you from bankruptcy if you get cancer or need gall bladder surgery? Please do the math and look at the included hospitals and doctors before projecting your foolish optimism.

      1. Lune

        Do you honestly feel that that narrow-network plan is worse than having no plan, or a plan that automatically excludes your gallbladder surgery anyway because 5 years ago you had a stomach ache?

        I’m not being optimistic about Obamacare (heck, if you’ve seen my posts you’ll know I never liked it). I’m just exceedingly pessimistic about the current system. Will Obamacare be better? I don’t know. But I do know the devil we have right now. Low-cost, low-deductible gold-plated comprehensive plans are a fantasy. The minute you need it, they’re gone.

  25. Richard Thompson

    The 50 % vs the 49 % and the 1% couldn’t be happier.It ‘s not Obamacare ..it is wannabe progressive journalists who are fueling the class war.The 1% eats the sushi and the 49%ers and 50%ers fight each other over the table scraps.Michael,you’ve fallen into the trap.

      1. Richard Thompson

        I believe in MediCare for all….I’m on MediCare and love it. But I also believe that the oligarchs and their political servants have figured out that the best way to preserve their status is to get the rest of us fighting with each other and I think Michael is helping with their plan by focusing on the class issue. As for MediCare for all…it’s like waiting for Santa to come down the chimney .It ain’t going to happen any time soon and will never happen if crazy Ted gets the ACA repealed.Paul Ryan will introduce his grand plan for medical coverage and we’ll all pay much more than the ACA will ever cost us.

  26. Roy Stacey

    Medicare for all!!

    Supported by a $1 a gallon gas tax a $1 a gallon beer tax and a $1 a gallon booze tax, tobacco too $1 a pack (unless your state is ahead on this).

    How’s that we screw the industries that drive up the costs of healthcare!

    Every family pays flat fee by size:
    1 person what an elder pays
    2 people what 2 elders pay
    Dependents are added at the expense of 50% of their current TAX DEDUCTIONS

    No, not perfect, but a lot fairer. WHERE are these rich people anyway?

  27. Ziad K Abdelnour

    These people (no, not the man-animals, I’m talking about the cultural elitists, the Ivy League snobs, the ones who profess to only watch PBS, listen to National Public Radio and read The New York Times) refuse to accept professional and even collegiate sports as legitimate businesses, because they wish to attack and destroy the concept of achievement and specifically of male achievement. This is nothing less than an attempt to reorder the entire concept of achievement, of worth, and even of gender roles. It is a stone thrown in the battle to define men punitively and solely along the terms favorable to women (and certain women at that, mind you), terms defined by women and used only by women.

  28. Jim Shannon

    Why not do the MATH!
    Is it because journalists flunked at math!
    Oo is it something else!
    Try dividing the Nations Expentiture on Health Care by yhe population and then write about that number!
    NO ONE does because NO ONE in AMERICA can handle that truth!
    Including the Journalists!
    And EVERYONE wants someone else to PAY!!!!!!!!!!!!!

    1. Jim Shannon

      … Oh and I forgot to metion – Even if you think your insured – wind up with the need for round the clock ICU level care for the rest of your miserable existence and you’ll find out your Insurance poicy is not worth the paper its written on as the death squads move in to finish you off!

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