Obamacare: Complexity and Crapification Mean Rescission Abuses Are Alive and Well

Yves here. Obamacare is proving to be a graduate-level course in the study of craponomics. What distinguished good old fashioned mere shoddiness from crapification is that crapification is institutionalized and on its way to becoming systemic. And as this discussion illustrates, one often-used ploy is unnecessary product complexity, so that what Elizabeth Warren called “tricks and traps” can be characterized as consumer neglect and error, meaning they and not the sneaky, misleading vendor are at fault.

We were early to point out that Obamacare would do nothing to eliminate the widespread practice by insurers of canceling coverage when policy-holders submit large claims, meaning when they expect the insurance to act like insurance. The reason was that it continues to allow insurers to cancel policies for fraud, and the definition of fraud is astonishingly broad. As we wrote in January 2010:

Notice that the big concession that the industry supposedly made was its stand on pre-existing conditions. But the bill has a giant loophole: insurers can continue to cancel policies in the case of “fraud or intentional misrepresentation” as they do now. Readers have no doubt hear of or read about how low the permitted bar is now for insurers to rescind policies. And when are insurers most likely to look to find grounds not to pay for treatment? When you most need it, of course, when you have a serious, expensive ailment.

It would be helpful if readers could tell us of their experiences with submitting large claims under Obamacare, since the rescission out looks to be a deliberate point of failure.

By Lambert Strether. Originally published at Corrente

Rescission is the retroactive cancellation of individual health insurance policies when the policy holder makes a claim; before ObamaCare, it was “amazingly common”, and ObamaCare is said to have ended it. We have multiple anecdotes to show that’s not true (and that’s all we have, because our famously free press doesn’t cover the story). The way the insurance companies work the scam is this: When you make a claim, and especially a big one, they go through your forms with a fine tooth comb, and look for the smallest mistake, even an innocent one, and then deny your coverage; could be that you didn’t list a hangnail treatment; could be you got a birthdate wrong; could be you said your eyes are blue when they’re blue-green. Whatever! As I wrote in 2009:

[T]he advocates of the 1000 page public option bill, HR3200, will tell you that rescission won’t happen under HR3200. But that’s not the burden they have to meet. What they have to show is that there’s no way the insurance companies can game their complex, unproven, and Rube Goldberg-esque system to make sure the practice doesn’t continue under another guise — because the health insurance companies are profit-driven (and it’s the fiduciary responsibility of the CEOs to make that profit).

Medicare for All advocates, of course, don’t have to show that. The “Everybody in, nobody out” policy prevents rescission by definition.

Now read this post and tell me the insurance companies aren’t writing their policies to game the system:

A recent article in the New York Times made the point that there is a large ‘learning curve’ to effectively navigate Obamacare coverage. …

The ‘learning curve’ at issue is the ins and outs of Obamacare insurance coverage— premiums, subsidies, co-payments, deductibles and out-of-pocket expenses, along with the intricacies of health care networks where health care providers may deal with hundreds of different insurers and know very little of what is covered by any specific insurance plan. In an effort to minimize costs insurers are creating ‘narrow networks’ that limit who provides covered health care— e.g. specific hospitals, doctors and labs. For example: if (non-emergency) surgery is needed the person having the surgery must make sure that the hospital where the surgery is to take place is ‘in network,’ that all doctors involved in any aspect of the surgery are in network, that all diagnostic tests are done through ‘in network’ labs and that all drugs prescribed are ‘approved’ within the network. Failure to know any and all of these details and to make sure that everyone involved— hospital employees, doctors, nurses and administrators, both understand and act on policy limitations, will result in bills for medical services that the people Obamacare was nominally designed to serve can’t afford to pay. Additionally, if you become sick and lose your income you either go on Medicaid if you live in one of the twenty-six states that expanded Medicaid coverage or you are on your own—no matter how many years you have been paying insurance premiums for.

Here Wall Street and Obamacare start to come together. The issue of the complexification of health care, forcing people to know and to competently navigate every aspect of insurance contracts, medical consultation and health care provision or suffer adverse consequences, is related to Wall Street strategies of issuing mortgages that only those with a Ph.D. in math and a lot of time to waste on contractual minutiae can understand. The variable rate mortgages of the housing boom / bust were sold as ‘affordability products,’ as an accommodation to borrowers for their (the borrower’s) benefit. What they were is age-old predatory lending. The most complicated mortgages were issued to the least sophisticated borrowers. In the case of Obamacare, complexification works in the interests of insurers. The more difficult it is for the insured to know what costs they are ‘responsible’ for the easier it is for insurers to force the costs of health care onto them. And even if one assumes honest motives, forcing people to devote their lives to the minutiae of health insurance policies is a uniquely American form of torture. [See note on neo-liberalism below]

The delusional premise of Obamacare is that making health care less costly will make it affordable. This has been the Republican fantasy behind health insurance ‘vouchers’ for the last three decades— give everyone a three-hundred dollar tax break to buy insurance and everyone will have health care. Obamacare is set up to give the poorest bottom-half of the country a choice between buying food, paying the rent and ‘buying’ health care. This ‘better than nothing’ approach dissuades people from getting health care until they have no other choice. Decades of experience from actual health care systems suggests that health care— keeping people healthy, is socially and economically less costly than treating people once they are sick. The second-order fantasy at work is that individuals can control health care costs by selecting health insurers that in turn select competent low cost health care providers. The amount of information needed to make the informed choice between policies that might actually accomplish this is beyond the ability of everyone likely to be touched by Obamacare. (Quick: what is the probability that an in network anesthesiologist will be available on any given day? Congratulations, you are one ten-thousandth of your way to making a decision).

In other words, the ObamaCare marketplace is a lemon market. By design.

Democrat shill and mainstream economist Paul Krugman argues that California, where Medicaid was expanded under Obamacare, points the way toward a single payer health care system. The first problem with this is that Medicaid is a program of minimal health care provision for the very poor— any effort to conflate Medicaid with the functioning health care systems of other ‘developed’ countries is as pathetic as it is disingenuous. The second problem is that for all of the theorized political feasibility of Obamacare half of the states have refused its most important element— Medicaid expansion, meaning that unless these state governments quickly change their minds Mr. Obama’s ‘pragmatic’ compromise looks a lot like what it is widely perceived to be— a cynical sell-out to the sick-care industry. Speculation that there will be a more propitious time to implement real health care reform— single payer, than when Mr. Obama first took office and Democrats held both houses of Congress, derives from the same failed ‘pragmatics’ that now leaves half of the states without Medicaid expansion. [indeed] The third problem is that unless complexity is resolved people are going to despise Obamacare once they realize that they must devote their lives to insurance company minutiae to get the health care they are now being forced to pay health insurance premiums for. If Mr. Krugman, or any other Democrat Party shill, really wants to sell the idea that ‘Medicaid for all’ is the way forward let them say so clearly so that we know what the Democrat plan really is.

I’ve probably quoted too much, but the takedown is so delicious I just couldn’t stop.

Now, translate “learning curve” into “opportunity for mistakes” and “opportunity for mistakes” into “opportunity for rescission,” and you’ll see what I’m getting at. Eh?

NOTE There is also the issue that ObamaCare is exemplary neo-liberal public policy: Shopping is always good, no matter how long it takes. Naked Capitalism, quoting Corey Robin:

Corey Robin, appalled by the complexity and difficulty of selecting Obamacare policies, made a fundamentally important point about neoliberalism:

Aside from the numbers, what I’m always struck by in these discussions is just how complicated Obamacare is. Even if we accept all the premises of its defenders, the number of steps, details, caveats, and qualifications that are required to defend it, is in itself a massive political problem. As we’re now seeing….

In the neoliberal utopia, all of us are forced to spend an inordinate amount of time keeping track of each and every facet of our economic lives. That, in fact, is the openly declared goal: once we are made more cognizant of our money, where it comes from and where it goes, neoliberals believe we’ll be more responsible in spending and investing it. Of course, rich people have accountants, lawyers, personal assistants, and others to do this for them, so the argument doesn’t apply to them, but that’s another story for another day.

The dream is that we’d all have our gazillion individual accounts—one for retirement, one for sickness, one for unemployment, one for the kids, and so on, each connected to our employment, so that we understand that everything good in life depends upon our boss (and not the government)—and every day we’d check in to see how they’re doing, what needs attending to, what can be better invested elsewhere. It’s as if, in the neoliberal dream, we’re all retirees in Boca, with nothing better to do than to check in with our broker, except of course that we’re not. Indeed, if Republicans (and some Democrats) had their way, we’d never retire at all.

In real (or at least our preferred) life, we do have other, better things to do. We have books to read, children to raise, friends to meet, loved ones to care for, amusements to enjoy, drinks to drink, walks to take, webs to surf, couches to lie on, games to play, movies to see, protests to make, movements to build, marches to march, and more. Most days, we don’t have time to do any of that. We’re working way too many hours for too little pay, and in the remaining few hours (minutes) we have, after the kids are asleep, the dishes are washed, and the laundry is done, we have to haggle with insurance companies about doctor’s bills, deal with school officials needing forms signed, and more…

One more account to keep track of, one more bell to answer. Why would anyone want to live like that? I sure as hell don’t know, but I think that’s the goal of the neoliberals: not just so that we’re more responsible with our money, but also so that we’re more consumed by it: so that we don’t have time for anything else. Especially anything, like politics, that would upset the social order as it is.

I suspect the neoliberals’ beliefs are somewhat different: that markets are so inherently wonderful at solving problems that they can take over a lot of the problems and issues that were formerly fought over in the political arena. And people like shopping, right?

Well, I’m one of those people who hates shopping and regards it as a tax on my time, even in settings where effort has been made to make it pleasurable. .. [W]ho enjoys buying financial products? Even in the best of circumstances, you are making a bet on your future in some way (what do I think the markets will do? How much of this risk should I insure). Unless you have nerves of steel or a crystal ball, it’s hard to suppress the feeling of anxiety that events can play out in a way that will prove your choice to have been a lousy one.

And as we see, “learning curve” = “tax on time,” as well. And for those who can least afford it, who don’t have accountants or personal assistants or grad students; who can’t say “I have people for that.”

UPDATE Here is healthcare.gov on rescission:

Rescission
The retroactive cancellation of a health insurance policy. Insurance companies will sometimes retroactively cancel your entire policy if you made a mistake on your initial application when you buy an individual market insurance policy. Under the Affordable Care Act, rescission is illegal except in cases of fraud or intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage.

Well, clearly a mistaken birthdate, as in the Amber Smith case with Nevada Healthlink, is a case “of fraud or intentional misrepresentation of material fact.” Right? Because otherwise denying the Smith’s coverage couldn’t have happened. And ha ha, I just noticed: It’s the terms of the plan or coverage that define what “intentional misrepresentation of material fact” actually is. Which nobody has the time to read, even if they could understand what they read. I rest my case.

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108 comments

  1. James Arnold

    This is a good example of the perversion of our law system. Under common law, both parties to a contract must understand the contract, and relief is available where this is not the case (deception by one side). We live under the crushing complexity of law merchant. Each of us citizens is treated as an expert in commerce, insurance, law, and very detailed contracts. This is a tragedy of the grandest proportion.

    1. Ed

      This is another topic, but “ignorance of the law is no excuse” is another idea that has to go. It contributes to the government creating ever more complex laws and regulations, that are impossible to understand or follow, that enables the powerful to evade their responsibilities, and to put the powerless to be put into legal jeopardy pretty much at will.

    2. fresno dan

      Its a very good point you raise, but I will see your point and raise you another point: What the hell do you do if you actually read the entire document and understand the entire document? Every other insurance document (I would bet) is going to have the same type of evasions, caveats, double dealing, and weasling out provisions in it…

      1. Carla

        You don’t sign up.

        Insurance is a criminal industry. Obamacare is not better than nothing. It is much worse than nothing. There is no way that HEALTH care will ever be a profit-making enterprise. De-frauding people, yes. Sickening people and billing for it, yes. Prescribing unnecessary or toxic drugs and performing unnecessary or fatal surgeries, yes. Those practices and many more can be quite profitable. But actually providing HEALTH care? CARING for people? Never. Can’t be done.

        F**ing A**holes.

  2. scott

    If your plan is canceled because they entered your birthdate incorrectly into their computer, do you get a refund of the premiums you paid? I would think not.

      1. mellon

        Lambert! Stop falling for the diversionary story! People should be SCREAMING about the trade deals that GIVE AWAY OUR RIGHT TO EVER HAVE SINGLE PAYER, WHICH WORKS. Like the Brits are.

        OF COURSE its not in the media. 5 corporations control the entire US media. Ignore the BS in that media. Thats fake, this is real. The global privatization of all public services. A global power grab. People have to literally scream it from the rooftops, because the US media isn’t going to, at all.

        YES, they scam people out of money and don’t pay. THATS WHAT THE INSURANCE INDUSTRY DOES. Thats THEIR game. We can’t win, ever. The biggest way they dump people is by means of huge, unexpected costs when the person gets sick, with added bills. The poor wont be able to go to the doctor if there is any chance they have anything- but that will be hidden, because preventative care is free, so idiot poor people will go to the doctor and not tell them about the potential cancer eating away at them because they can’t afford a $2000 bill. If there is a devil, that’s the devil at work, Lambert. They are 20 years ahead of us.

        And you talk about “Obamacare”. And not the FTAs which are BUSILY stealing our health care future while we bark up the wrong tree. Shame on you!

        Also, Lambert- strike the word “public option” from your vocabulary. That was a scam, a bait for a bait and switch. The government can never implement any real public insurance of any kind, that works, because THAT would be prohibited by the GATS. There are almost no exceptions possible. The free trade agreements- are ONE WAY streets. Each and every free trade agreement- does that, a point Brits understand, but Americans are deliberately ignoring. Fake single payer, Multi payer is okay, as long as its designed to fail, like in Vermont. Read up on what they wanted in the failed FTAA “agreement” in 2005. Their wish list as of that time.

        Read the small print. Its only the AFFORDABLE PUBLIC health care that gets rid of insurance complexity and wields huge bargaining power, that will save lots of money. God forbid they eliminate the complexity, they would never allow that because it would work, so that’s prohibited. So, everything else is a guaranteed failure. One little fact they are overlooking to tell us is that single payer with no tiers, has to be free to the end user. Because everybody is in. Everything else is tiered, and will not save a penny. Multi-payer plan of last resort will actually cost lots more money! Sick people aren’t profitable. That’s all important, but they gloss over it. Read Nick Skala’s paper and SEE THIS VIDEO.

        Why aren’t you writing about the FTAs and the NHS, and how that applies to us too? The Brits realize that each of the FTAs TPP, TTIP (TAFTA in the USA, confusingly), and especially TiSA, makes it progressively “more impossible” to have public healthcare, and that by giving away the policy space what we’re leading to is taxation without representation. A Fake government which can’t DO anything, its hands are tied. Lambert’s own state Maine, discovered that in 2006. Why wont they discuss it/ Because Democratic politicians WANT TO BE ABLE TO MAKE EMPTY BULLSHIT PROMISES TO GET VOTES BY PRETENDING TO BE PUSHING FOR SOMETHING THEY HAVE MADE IMPOSSIBLE, SECRETLY. Single Payer.

        IS it the same way – the same thing with NGOs and Their donors money?

        The most radical addendum to GATS, which the US led in pushing, the part that makes “trade liberalisation” happen silently by default, stands in their way NOW. Understanding on Commitments in Financial Service – General Agreement on Trade in Services Soon, three additional FTAs, all modeled after the GATS “understanding”, and NAFTA, an invisible ratchet against democracy, like a bear trap, will “ratchet” into place. Thats the way they are designed, please recognize this. THREE MORE will stand in our way. And then, rates will rise and the things in the ACA like limits on profits and limits on medical underwriting will be struck down by the trade tribunals.

        The exchange the Maine Dirigo Health people had with people on the USTR staff is illuminating.
        They will take our taxes but politicians will be nothing other than paid actors, their ability to legislate any new laws severely constrained by ISDS and standstill. Without our knowledge. Welcome to a healthcare hell where every year brings more belt tightening, to maintain the obscene complexity and profits, and its only going to get worse, Lambert, never better. The US must never go public. It would destroy their finely crafted meme that privatization is the only possible future. That’s what standstill is all about. Anything that adversely effects corporations is banned. So, things can only get worse, BY LAW, never better. Everything else is a diversion. ACA is a diversion. Not a solution, it shouldn’t even be talked about because that’s its entire point, to waste years of time and energy in a diversion from the real issue. OUR ABILITY TO HAVE AFFORDABLE HEALTHCARE AFTER SOME FUTURE ELECTION IS BEING TAKEN AWAY NOW, DISHONESTLY.

        OF COURSE its going to suck badly. It has to. We can’t be given any kind of deal. That’s its goal. Its ENTIRE POINT is to show the people in the GROWING economies, where the money is, that privatization is IT, that there is no better deal possible, ever.

        Americans health will be sucked away and we’ll be wasting tons of money and YEARS of time and CPU cycles arguing about THE WRONG THINGS. Barking up their wrong, finely crafted fake tree while the fox escapes out of the woods!

        1. Yves Smith Post author

          Your criticism is not warranted. This site regularly attacks the pending trade deals. Each post can’t be a theory of everything.

          And you are simply wrong that the preservation of rescission, in and of itself, isn’t an important topic for a stand-alone post. That was one of the big selling points of Obamacare, when you could see before the law was passed that it was another Big Lie. But if you read the press, it’s full of articles trying to depict that Obamacare is working, meaning a good deal for consumers, when it was always about the rents to insurers.

          1. mellon

            After i wrote that I realize that Lambert had written this some time ago, so you’re right, it was not completely warranted in that context, however, everything I said was true. I think the most likely scenario under which recission might be able to occur now would be somebody lying about their age (or perhaps residence?) The misrepresentation I think would have to be material to the extent that they saved a nontrivial amount of money, I think, to stand up in court, it it was taken to court, which might not even be possible.

            One thing which I think rarely gets as much attention as it should however, is the way costs are structured in Obamacare, making it likely that if somebody suddenly is diagnosed with a serious illness, suddenly they are going to be hit by big bills. Thats par for the course with high deductible health plans but I think it was a really terrible thing to do in this context because the people who buy these plans are poor, by definition many of them are poor, if they are not poor they are self employed and probably among the most vulnerable self employed. Obamacare really requires that somebody keep a substantial amount of money in the bank to revent being dumped if something happens, many people wont have that money and they will lose their coverage just as surely as if they had been “rescissed” (or whatever the right word is) . (although it wont be retroactive.).

            In my opinion, Obamacare is what happens when a secret, arguably extremist neoliberal ideology and free trade negotiation arguing positions on things like pharmaceutical purchasing and privatization, is driving policy, but that core agenda can’t be discussed. Ideology is driving these decisions and its being elevated above practical common sense and decency. The worst thing is that its likely to lock us in to this hellish situation very soon if we let it. The FTAs are designed to do that.

            Basically, the Australian AMA feels the same way- it seems. http://www.bilaterals.org/?ama-warns-on-risks-lurking-in-tpp

            Again, Lambert, I’m sorry.Its summer and the lack of news is probably because everybody in Europe seems to take a long vacation this time of year and a lot shuts down. I wish I wasn’t stressing out so on this.

        2. Lambert Strether

          The bill I was describing in the 2009 quote had a “public option” clause in it, so I could hardly have left the words out, or re-edited my past post.

          For those who came in late, these are the two authoritative posts on the so-called “public option,” to which I regularly cite: This, and this.

        3. Nathanael

          GATS is dead on arrival. The neoliberal lunatics don’t really understand what they’re dealing with.

          We’ve already hit the point where some of our laws are so lunatic that they are discrediting the judges, rather than the “lawbreakers”. Keep going in that direction long enough and it leads to revolution. GATS is too far already; thankfully it will be killed by absolute refusal of pretty much every country in the world.

    1. mellon

      They get a refund of the money they paid out on your behalf from providers. That’s what rescission means, cancelling back to the beginning. I don’t think the person would be refunded premium money, no. Also, the services would be rebilled at a much higher non-discounted rate. For example, looking at KFF’s document on maternity care under “consumer driven” health plans (HDHPs, similar to Obamacare) a ectopic pregnancy with temporary gestational diabetes spread over two plan years would have cost $287,000 in 2009 with insurance before discounting was applied. So, it would be higher than that just for that event. What a great way to start a family out, eh?

      This is why ACA is a trap.

    2. Ronald Pires

      You’re being cynical here. Of course you get a refund. And you get to apply that couple of thousand dollar refund on the million dollar bill they just jilted you over.

      Good luck with the repo man.

  3. John

    For us sitting across the pond understanding Obamacare has been a challenge. The little bit of news we get on it makes it sound like things are working as planned. For example, Time (Jul 11, 2014) stated the number of uninsured Americans has dropped sharply as a result of ACA (but wasn’t that the point?). They quote a CommonWealthFund study which found many Americans felt better off as a result of having the new program.

    Of course, getting coverage does not solve much in a for profit environment. The study clearly did not touch on outcomes.

    Don’t feel bad. You are not the only ones. Switzerland has a lot in common with the ACA. They show us what happens when government mandates private healthcare insurance. Rates rise, care is slashed in order to fill executive coffers. Executives become all powerful and stand ready to smash any change to the business model. Switzerland’s insurance program is an outlier compared to the rest of Europe.

    http://www.swissinfo.ch/eng/health-insurance-needs-to-be-more-democratic/40543166

    1. mellon

      As I said many times, Obamacare is a scam, a diversion from the real issues. Of course its going to fail to be affordable, that’s its whole point, to keep the profits rolling again against all odds. Of course its going to be horrible, the US insurance companies and drug companies, whose focus is on EXPORT GROWTH demand that it be that way, you see. We can’t be given any special deals because of the FTAs. The big lie started with the WTO services agreement- GATS, which mandates that public services be privatized. That’s the US’s hard core ideology in the trade arena. So of course, ACA was going to be private and whatever crumbs it temporarily throws to spring the trap must not compete for profit and not compete in any way with private for profit companies or ‘take their customers’.

      Lambert should be up in arms about GATS, standstill, ratchet and ISDS, which are the real issues poisoning US health care. As they must be inserted NOW, there is no second chance, we should be demanding explicit CARVE OUTS in these 3 negotiations RIGHT NOW. Because as we speak, three FTAS, TPP, TTIP, and the worst of all, TiSA- are being negotiated by an army of 600 lobbyists and not a single citizen representative. They are huge power grabs that will trap us in guaranteed worsening health care deals forever, which of course, crucially, irreversibly give away our right to change that in some future election, even if we get rid of the corruption. The ultimate control fraud. If this is not TAXATION WITHOUT REPRESENTATION, what is?

    2. Carla

      Things are working exactly as planned.

      I hope that doesn’t make y’all across the pond feel better.

  4. Jay Jay

    This looks like a garden variety instance of insurance bad faith, a common and particularly valuable form of tort. Bad faith cases have been the backbone of high end plaintiffs’ practices for several decades. The ACA language you quote makes clear that Amber Smith’s insurer will have to persuade a jury that the error on the application was material, that is , that they would not have issued the policy if they had known the correct date of birth. Good luck with that! The jury will be angry, and anger is the basis of big tort verdicts, where punishment takes the form of extra zeros on the verdict . Now it may be a shame that a person can’t collect a big insurance claim without litigation but that has been the case since the inception of insurance. Obamacare may have failed to fix the problem, but it did not cause it.

    1. mellon

      Doesn’t ERISA Section 514 preempt a great many of these lawsuits, making it impossible to sue insurers for most reasons? Even grossly wrong behavior.

      1. Yves Smith Post author

        ERISA has nothing to do with health insurance. Health insurance is regulated on a state level. That’s the reason for the nutty federal law/state implementation feature of Obamacare.

  5. Gerard Pierce

    “Medicare for All advocates, of course, don’t have to show that. The “Everybody in, nobody out” policy prevents rescission by definition”.

    That’s almost true. Medicare has it’s own set of tricks and traps. They are built into the system and announced in advance. The only surprise is when they happen to you or a member of your family. The following has been truncated but is mostly accurate.

    My wife (separated) died about a month ago. She was admitted to the hospital with an inability to breathe. During that hospital stay, she suffered two collapsed lungs, and a couple of heart attacks. She received excellent treatment in the intensive care ward. Prior to entering the hospital she had had problems walking and had been receiving home rehabilitation.

    Her followup care was something of a disaster. The first skilled nursing facility was skilled in providing as little care as possible. The were replaced with a facility that was doing a much better job and she was gaining ground through their physical therapy. In a few weeks, she went from barely able to stand to walking 20 paces at the start of each therapy session.

    At that point, her treatment coverage ran out. In order continue at that facility, she would have had to come up with $150 per day.

    There were a number of options for continuing help, all of which cost more that she could afford with her SSI. Her application to switch to Medicaid had been submitted by the social worker in charge and the status was “pending” at the time she had to leave.

    The best source of support was a Hospice organization. They were very good and very supportive, but their mission requires that they provide NO aggressive medical care. Hospice receives a lot of money from the Medicare system.

    With a lot of effort it’s possible to work around their limitations, but other outpatient treatment is drastically limited by the standard Medicate co-pays. Hospice provided what they were supposed to, but she went from gaining ground to losing ground, and this continued for a couple of months. She died a month ago. It’s not definite that more aggressive care would have made a difference, but when she was receiving that care, she gained ground. When she stopped receiving that care she lost ground and died.

    The pathetic part was that the cost of her hospital care was close to $250.000. (This is a totally bogus number, but if she had been billed, that is what it “cost” to save her life.) Having spent the money to preserve her life, the system then dumped her and allowed her to die while paying still more money to Hospice. Some of the Hospice people admitted that her case was borderline. (Others would claim that the fact that she died was proof that she belonged in the program).

    Technically, none of this is “rescission”, but it amounts to the same thing. And you can’t even complain that they broke the rules. The rules led to exactly the result that happened. It happened the way it was supposed to happen.

    At the moment, I find it hard to care about a battle that was lost. If I ever regain the psychic energy, I may have to recall the advice of a fictional sci-fi character (by Richard Morgan) called Quellcrist Falconer.

    1. Steve H.

      I would like to know what that advice is.

      It seems to me that the transition from depression to acceptance, in the ‘stages of grief,’ is what leads us “to accept with serenity the things that cannot be changed.”

      1. Gerard Pierce

        The short version of Falconer: “The personal, as everyone’s so f-cking fond of saying, is political. So if some idiot politician, some power player, tries to execute policies that harm you or those you care about, take it personally…” Acceptance is a different thing entirely and applies to different circumstances..

        1. Lambert Strether

          Ha ha. “Make it personal.” Just what I was going to add, then I refreshed the screen and saw that you got the same place. Now that I’ve reached a certain age, how to do that has been a veiled topic of conversation. The Rostenkowski Scenario, you might call it. Except more kinetic. Fantasy, no doubt. But still.

    2. mellon

      Gerard, the Medicare for All kind of healthcare, public healthcare is already prohibited (arguably since 1995) by the standstill clause of GATS, the WTO services agreement and as we speak three new FTAs, TPP, TTIP and the really bad TiSA all will include language that makes it progressively more impossible. They try to privatize healthcare irreversibly in all countries that sign them. We need to demand explicit carve outs or the junking of the agreements entirely. The US is pushing them aggressively. Politicians don’t want to talk about it because they still want to make bullshit promises they can’t keep, and perhaps NGOS want donors money, to pursue impossible activism. But the fact is, the store is being given away. Every moment spent talking about ACA is a moment wasted while the real future is stolen in the FTA negotiations. We should look at the debate in the EU on this now and realize, it all applies to us too! of course. Affordability is irrelevant. Read up a bit on their core concepts, how they work.

      1. Ed

        I don’t think treaties that say in effect “you can’t pass this type of domestic legislation” are really a barrier toward passing legislation in the public interest. You just start inserting a clause in all legislation that says “if enforcement of this law requires withdrawal from a treaty, then we withdraw from that treaty”. I think the use of treaties to change domestic policy says more about the elites’ love of these over-complex, triple bankshot ploys.

        1. trish

          “You just start inserting a clause in all legislation that says “if enforcement of this law requires withdrawal from a treaty, then we withdraw from that treaty”
          Good luck with that. Maybe I’m getting too cynical, but…

        2. mellon

          Google “GATS Article 21 Procedure”

          An appopriate name for this process might be manumission. As it would be thr price for us to be freed from slavery. By all accounts, its designed to be almost impossibly expensive. I would expect the cost to the US of trying to withdraw from an FTA after a foreign insurer had invested in our market would be huge. Really, really huge. because we would have to pay them for the loss of the potential market. not the actual market. not the actual sum they had invested. No.. A huge amount designed to be so large no country is ever going to be foolish enough to do it.

          Unless its a scam- Like the S&L scams, various bailouts, etc. They do have that quality.

          1. Nathanael

            Pffft. Bush just repudiated an arms control treaty. It’s completely trivial for the US to repudiate any clause of GATS. Nobody’s going to stop us.

            Free trade agreements are dead anyway. They’re dying worldwide. The withdrawals are coming fast now. Nobody thinks they’re a good idea, and nobody’s going to pay the phony “charges” for leaving, and there’s no way to enforce them without gunboats, which nobody’s going to send to the US.

      2. Gerard Pierce

        I can make a pretty good case that much of Medicare has already been privatized. Most of skilled nursing is in corporate hands.

        Twenty or so years ago, hospice care was performed by a few charitable organizations. When corporate medicine noticed that there was a buck on the table they went for it and today, about 70% of hospice care is provided by corporations.

        If you leave a hospital, there is a group of business managers and social workers whose mission in life seems to be to decide which corporation will provide the followup care. (I call them the “Medical Mafia”). Some want the best for the patient. Some want to help their friends who are brokers and salesmen for these corporations. You can’t tell who the good guys are because they all wear gray hats.

        Your family physician has been mostly put out of business by hospital and group medical practices that get 1.75 times the money for providing the same services.

        Corporate America does not want to get rid of Medicare – they simply want to get paid the most money for the least service. They are perfectly willing to support reduced Medicate payments as long is the reductions come out of someone else’s pocket.

    3. Lambert Strether

      Yes, I wrote that passage on Medicare back when I hadn’t fully realized how badly it had been hit by a neo-liberal infestatation: Complexity and crapification in terms of fees, levels of eligibility, layers of administration etc.

      1. Carla

        Well, Lambert, how could you have known? Medicare has been steadily (and stealthily) crapified over the last five years, thanks to the “ACA” and all of our wonderful Democrat “friends.” I started to type “fiends” — maybe I should have let that typo go…uhm, perhaps it ain’t a typo at all…

        Medicare used to be a pretty good program. But now we only advocate for “Expanded, Improved Medicare for All.”

    4. scraping_by

      The battle is never lost. The free marketers and neoliberals learned long ago to keep up the pressure, and some day, usually through inattention, they get their way., They of course can hire full time pressurizers, while the rest of us have lives to live.

      The Federal programs have been under pressure to ‘be more business-like’ for decades. When they began, it was just a matter of bookkeeping and document tracking. Now, living with the echoes of the Reagan Revolution, under the slogan of ‘individual responsibility’, the copays and upper limits ration care under arbitrary rule-making.

      The alternative of using the monopoly power of the commons to make sick-care less expensive and more successful is expressly forbidden by law. Yet, that’s the only power that will ever work considering the hospitals, physicians, and pharma all cooperate against the patients. As long as that asymmetry is the rule, absurd medical bills are the rule, not the exception.

      Once again, ‘can’t do nuthin” is bad advice and is objectively untrue. That attitude is part of the medical industry’s power, so improvement starts by freeing yourself from it.

        1. Nathanael

          The US can simply abrogate the free trade agreements. Nobody’s going to stop the US, because nobody’s going to send gunboats to enforce the FTAs. The only reason other countries have to worry about them is, yes, US gunboats.

          There were masses of these treaties before WWI. Afterwards, they were all gone! Poof!

    5. IdiocracyIsAlreadyHere

      Kudos on the reference to Richard Morgan and Quellcrist Falconer. I read his novel “Woken Furies” a few months ago and it was the best inclusion of class issues within a sci-fi context I had read in a long time. I would advise all NC readers who enjoy reading sci-fi that it is highly worth picking up.

      1. Gerard Pierce

        I first read Richard Morgan about 10 years ago. I recently reread “Altered Carbon” and “Broken Angels”. It’s not as good a novel, but NC readers might enjoy “Market Forces” – one of the better and more cynical stories of neo-liberalism in action.

    6. Benedict@Large

      Do note the essential feature here. Your wife had $250,000 worth of coverage. No matter whether this was money in a bank account, medical insurance, or some government program; the outcome is the same. The system is built to allow that $250,000 to be extracted, and then to let your wife die. As it went on, you or whomever else was trying to look after her care, were allowed to go through some street theater to make it look like there might be more; that it all just wasn’t some cynical effort to extract the $250,000, but in the end, that’s all it was.

      1. Gerard Pierce

        It’s not quite that rational ,and the $250,000 is just a cwag estimate on my part – based on items like the guy who was recently charged $7000 for a bandage on his finger.

        When you are an inpatient in a hospital, medicare covers whatever it takes. You can’t throw someone out of intensive care based on some arbitrary cost – at least not so far. Much of the guesstimated $250,000 is actually a subsidy to the hospital. The real world cost of inpatient care is considerably less, and the excess goes to cover things like emergency room care for the uninsured.

        Once the person stops being an inpatient, the rules change and the limitations on care come into effect. Probably the only reason the limitations are applied to skilled nursing and long term care is that they can get away with it. Politically, it’s not the same as evicting someone from intensive care.

        Remember that a lot of this system is simply insane. It doesn’t make sense because it doesn’t have to make sense. The “rules” are just a hodgepodge put together by the medical “experts” in our Congress.

        1. run75441

          Gerald:

          Medicare does not cover everything. Part A will cover 100% hospitalization for a period of time. Part B will cover 80% of doctor costs for a period of time. Beyond both of those, you are left with the bill unless you have Supplemental Insurance like plan N or F, etc. as taken out with a commercial insurance company. You also need Part D for Meds and the monthly cost of that is determined by what you take; Tier 1, 2, 3 or 4 Meds. Tier 3 or 4 Meds require more money.

          The $7,000 for the bandage on her finger and whatever else is probably the Hospital Charge Master rate. The hospital bills people this rate who do not have insurance. Charge Master rates are like list or retail which typically nobody pays except those who do not have insurance. Medicare negotiates it downward and below what private insurance companies might pay. Medicaid takes it lower.

          My mother finally went on Medicaid in a Nursing home after being in Assisted Care which finally drained her assets (6 years?). It took a couple of months to get her set up in Medicaid to my knowledge and she also died there from Alzheimers. I am not sure in your case how long it should have taken to get her into a Nursing Home.

          There is only so much time you are allowed to stay in a hospital (60 days) where Medicare picks it up. On the 61st day, they start to share costs with you. At 90 days, it is all yours. If you have Supplemental Insurance, your coverage is extended well beyond the 90 days. You get skilled Nursing Care Facility after Hospitalization (minimum of 3 day in the hospital whether you need it or not). Medicare pays the first 20 days and then shares 50% with you. If you have Supplemental Insurance, those costs go away the same as Hospitalization. I assume much of this is determined how long you can stay.

          Medicare Part A and B was never forever 100% coverage. Much of what I just cited I read from the book. Supplemental Insurance does go up yearly and has been around well before the PPACA.

          1. Lyle

            Note if in a hospital on medicare, you will get an itemized bill that will be zeroed out and replaced with the amount medicare will pay for the illness in question.

          2. Gerard Pierce

            run75441:

            Your description of Medicare A & B are more or less accurate. What gets left out is how it operates in the “real” world. During some of her visits to her primary care physician, he suggested various blood tests and MRIs. He pretty much knew that there was no money for the co-pays, but those recommendations got him off the hook and he got to check off one more name on the list of patients where he could bill medicare. Physician care seems to adjust itself to the amount of money available.

            Co-pays are supposed to encourage the patient to be responsible and to not overuse medical care. When the choices are rent, food or medical co-pays and when the result is diminished health, you know you are dealing with a corrupt system.

      2. Gerard Pierce

        My wife was lucky enough to be be on Medicare, due to an underlying case of Lymphoma which had been treated and which was presumably in remission. Keep in mind that she had Medicare – the gold standard in medical insurance – and this is how it worked out.

        While I was trying to fight her battles, there were any number of times that I thought about how the same medical situation would play out under Obamacare. I hate to think how it would work out under Obama’s brass standard.

        1. Carla

          Gerard, I am so sorry about your wife. I think we can no longer use “gold standard” and “insurance” in the same sentence unless we are referring to insurance executives’ compensation.

  6. Steve H.

    So many goods in this post, thank you. In response to “And even if one assumes honest motives, forcing people to devote their lives to the minutiae of health insurance policies is a uniquely American form of torture,” and “rich people have accountants, lawyers, personal assistants, and others to do this for them, so the argument doesn’t apply to them,” please recall:

    Stress: Portrait of a Killer

    “Sapolsky: And you have baboon culture, and this particular troop has a culture of very low levels of aggression and high levels of social affiliation, and they’re doing that 20 years later.
    Narrator: And so the tragedy had provided robert with a fundamental lesson– not just about cells, but how the absence of stress could impact society.
    Sapolsky: Do these guys have the same problems with high blood pressure? nope.
    Do these guys have the same problems with brain chemistry related to anxiety, stress hormone levels?
    Not at all.
    It’s not just your rank, it’s what your rank means in your society.
    Narrator: And the same is true for humans, with only a slight variation.
    Sapolsky: We belong to multiple hierarchies, and you may have the worst job in your corporation and no autonomy and control and predictability, but you’re the captain of the company softball team that year and you’d better bet you are going to have all sorts of psychological means to decide it’s just a job, nine to five, that’s not what the world is about.
    What the world’s about is softball.
    I’m the head of my team, people look up to me, and you come out of that deciding you are on top of the hierarchy that matters to you.”

  7. yenwoda

    “half of the states have refused its most important element— Medicaid expansion, meaning that unless these state governments quickly change their minds Mr. Obama’s ‘pragmatic’ compromise looks a lot like what it is widely perceived to be— a cynical sell-out”

    Half of the states have opted out of the Medicaid expansion because the Supreme Court stripped the penalties for doing so out of the legislation that passed Congress. That may demonstrate cynicism somewhere, but not in the design of the law.

    1. mellon

      That’s quite possibly intentional because any actual expansion of public health care (i.e. medicaid) is prohibited (since 1995) unless it falls into a very narrow exception that does not apply. So 60% of the people in 58% of the states are excluded. More than half. Were they to do anything more than half, as soon as a US insurer turns multinational, they can bring suit before an arbitral body like in Achmea v. Slovak Republic. (Search at http://www.italaw.com on that case) And Governments almost always lose those investor-state cases. (If you read the fine print and the news you’ll see that Slovakia also lost as they had a whole election and spent years of time only to lose 30 million euros and have it clearly said that should they try to “expropriate” Achmea’s property (the Slovak market, by switching to single payer) they would lose a lot more. Their second suit was just too early, as Slovakia had not implemented the second part yet.)

      Yes, three corporate lawyers moonlighting as arbitration judges decide the healthcare fate of whole countries now, irreversibly. No future election can fix it! Shhhh!! Wouldn’t want anybody to know, that, now.

      As several countries have now discovered. Google “investor-state” or “ISDS” is a fish trap. Once the country goes in, once they sign, they can’t get out without giving the “investors” HUGE penalties in free cash for “their property”.
      Here are some stories about these cases

      Countries cannot do their jobs, and regulate, if that regulation causes any adverse effect to a “investor”, now. (a multinational) the private tribunals are superior to the Supreme Court, to all those countries laws and courts-

      Once a country signs away their rights, as the trade negotiators are doing now in 3 more FTAs, they commit to a “standstill”, no more public anything, only less. Also, its the first step in a “ratchet”-like process- Then an investment by a multinational or a company moving overseas, or merging with a multinational, seals their fate. “All their markets are belong to us”. Forever! Even changes in government, like revolutions, can’t clear the committment from limiting their ability to do anything other than pay, and pay more. Investors like insurance and drug companies need stability, the US leads in insisting. That concept is enshrined especially in the so called “US style” free trade agreements! So, please call and write everyone you can.

      If you ever want affordable healthcare don’t waste your time on the ACA, attack the FTAs. Like the Brits are doing.

      1. Yves Smith Post author

        You are asking to go into moderation. You are off topic and campaigning. Keep it up and I will oblige you.

        And in case you missed it, as we have pointed out, the TPP is dead thanks to the Senate AND the House. The TTIP presumably is too because it has the same secrecy features that Congresscritters objects to in the TPP. The Administration’s messaging is way ahead of where these deals really stand. I’m not about to get readers whipped up when Congress is actually doing its job pretty well on this one.

    2. Benedict@Large

      As a former medical insurance professional, I can assure you that ObamaCare is the most cynical piece of legislation I’ve ever seem. It’s not even a close contest. Everyone of the features of the law that people like could have been written and easily passed as a separate, SHORT bill. The rest of ObamaCare, the stuff that’s causing all the problems and no one likes, is all designed to feed money into insurance company coffers.

      Now here’s the secret no one wants to talk about: Health insurers were dying. The costs of healthcare had risen (and was continuing to rise) to a point where the costs of insurance overhead would be increasingly driven out of the system. Without ObamaCare forcing millions of new customers to buy insurance, we would have seen at least one of the majors dying within five years, with others following afterwards. Is it any wonder then that after all the years fighting a national payments system, the majors were suddenly on board? Their only problem was to move to that national payments system in a fashion that would hard embed them as a core component for the foreseeable future, and short of those features I mentioned up front, the rest of the 900 pages is all about doing just that. The only reason those other features were included at all was to dupe the rubes into thinking someone in Congress actually gave a damn about them.

      1. Benedict@Large

        Just a short historical note. To my knowledge, I was the first one in the industry to even point out that we (the insurance companies) were in a losing battle, and eventually we would be forced out of business as prices rose beyond a breaking point where employers could simply no longer afford to provide health insurance as a benefit. (I assumed incorrectly at the time that we would not degrade our product into the crap we did.) My alternative for this problem was single payer, as my company was years ahead in developing the infrastructure that single payer would require, and we probably could have won the entire market. There was no interest shown in my idea or even my recognition of the problem, and though I stayed in insurance for years afterward, that was a career-ender.

        That was in 1978.

      2. Jim Haygood

        ‘Health insurers were dying.’

        Maybe they gonna die anyway:

        Money drawn off the newly proposed user fees (tax) would be used to finance the risk corridors. This scheme is largely aimed at shifting money between insurers that lost excessive amounts of money, and those that were profitable.

        Problem is, almost everyone lost money. Few if any Obamacare plans had excess profits this year, owing to the rocky rollout. So there isn’t any money to shift around — absent, of course, some new cash infusion. That’s where the user fee comes into play.

        Since Obamacare health plans were prevented from pricing products to reflect true risk, they were always going to have atypically high cost, and in turn, losses. The red ink was inevitable. Now all of us will be forced to pay for it, whether we have an Obamacare plan or not. That new tax will be passed onto everyone in the form of higher premiums.

        http://tinyurl.com/kpmb4ox

        ————

        Can you spell ‘death spiral’? Fortunately, 2015 premia don’t get announced till the week after the election. Vote for the Depublicrat of your choice (and save up for the price increase).

        1. Nathanael

          They die anyway. The entire shenanigans were designed to keep the health insurers alive for another 10 years or so.

          Expect the CEOs to be looting like mad during those 10 years; they know the game is up.

      3. different clue

        I remember Krugman talking about that a little before the passage of the law. I remember him moaning about the “Insurance market death spiral” as if that were a bad thing. I think I even remember myself commenting that we (collective mass of co-ordinated individuals) should do everything we could to make the death spiral happen. Because the death spiral would have exterminated the private health insurance industry, and with that industry safely exterminated there would have been one less center of organized opposition to Single Payer.
        But Krugman considered the death spiral to be a bad thing, because he considered (and still considers) the private profit health insurance industry to be a good thing.

      4. mellon

        Around a hundred thousand or so Americans die every year because of what amounts to a intentionally dysfunctional health insurer-politician mutual self-justification system.

        >“Now here’s the secret no one wants to talk about: Health insurers were dying. The costs of healthcare had risen (and was continuing to rise) to a point where the costs of insurance overhead would be increasingly driven out of the system. Without ObamaCare forcing millions of new customers to buy insurance, we would have seen at least one of the majors dying within five years, with others following afterwards.”

  8. TarheelDem

    Yes. This.

    Here Wall Street and Obamacare start to come together. The issue of the complexification of health care, forcing people to know and to competently navigate every aspect of insurance contracts, medical consultation and health care provision or suffer adverse consequences, is related to Wall Street strategies of issuing mortgages that only those with a Ph.D. in math and a lot of time to waste on contractual minutiae can understand. The variable rate mortgages of the housing boom / bust were sold as ‘affordability products,’ as an accommodation to borrowers for their (the borrower’s) benefit. What they were is age-old predatory lending. The most complicated mortgages were issued to the least sophisticated borrowers. In the case of Obamacare, complexification works in the interests of insurers. The more difficult it is for the insured to know what costs they are ‘responsible’ for the easier it is for insurers to force the costs of health care onto them. And even if one assumes honest motives, forcing people to devote their lives to the minutiae of health insurance policies is a uniquely American form of torture.

    Another gimmick is the annual enrollment period and shifting policy plans each year.

    Which is why eliminating deductibles, co-pays, and patient out-of-pocket costs from the program is the quickest way to surface this issue. The solution moves either in the direction of a highly regulated Swiss-style private system or to single payer. Most people haven’t experienced this pain first-hand yet (Medicare Part D folks have) but it is coming. The timing may come by 2016. Watch carefully for Hilary Clinton’s “I can fix health care costs because…” position some time in late 2015. Unless the Republican clown circus disappears, we’re stuck with this or a return to a YOYO private system.

    1. Carla

      “Another gimmick is the annual enrollment period and shifting policy plans each year.”

      This is exactly how Medicare works now. I am relatively new to the Medicare universe, but I can’t take it. I just call an agent, who recommends whatever of course pays HIM, and do that.

      I think that perhaps people who worked for major corps and have pensions/lifetime healthcare through them, don’t have to go through this. As someone who was self-employed most of my working life, I never had that luxury. Medicare (so far) has cost me less than my individual premiums did. But less complicated? Not at all.

      Obamacare has brilliantly crapified Medicare.

      1. different clue

        Part of the reason for that was to slo-mo stealth-destroy Medicare as a better example and as a safe harbor of refuge into which we might hope to age if we live that long.

  9. stephen

    Even you if the insurance company pays up, you have the next hurdle of hospitals and doctors with the conflicting goals of 1) making you better and 2) maximizing their income.

  10. Jim Haygood

    ‘In the case of Obamacare, complexification works in the interests of insurers. The more difficult it is for the insured to know what costs they are ‘responsible’ for the easier it is for insurers to force the costs of health care onto them.’

    It’s the same sort of complexification that leads more than half of taxpayers to engage a preparer. It’s not that hard to design a simple tax system. But a big white-collar industry of preparers, accountants, tax attorneys and others benefits from complexification.

    Obamacare might have created an opportunity for ‘coverage concierges’ to show patients consumers the ropes, so they won’t get burned and bankrupted. But after the sticker shock of thousands in copays and deductibles, most consumers victims don’t have any disposable funds to pay a coverage concierge. So they just have to ’embrace the time sink’ or face personal ruin.

    It’s enough to make you sick.

  11. Jim Shannon

    Buyer beware! When it comes to complex contracts, designed to shift risk of loss back to the buyer, the buyer gets screwed! You can’t get blood from a turnip, and any health care event exceeding $100,000 forces 99% of uninsured consumers into bankruptcy, and 90% of the insured to hire a lawyer! Large claims are ALL managed by insurance company lawyers whose job requires them to find ways to delay and other specious legally defensive ways to deny claims! Insurance companies are involved in 90% of All litigation, usually as the plaintiff!
    Always and everywhere it is the consumer that pays for corruption, and the consumer is being abused like never before!
    Clearly we need single payer health care (like every other developed nation) with means testing and skin in the game. Gates and Buffet would have a $1,000,000,000 deductible, you and I 10% of prior years income, the poor free!
    Insurance has Ruined the market because the consumer no longer cares what a Doctor charges or how much a procedure or drug costs, as the Medical industry and the Media and the Advertisers were turning the consumer into a nation of drug addicts and hypocondriacs!
    No wonder it is out of control and refuses to change! The American consumer, is the Golden Goose of the greedy!

    1. mellon

      Single payer can’t co-exist with means testing or payment – because then you have to have a tiered system to exlude or punish those who can’t pay. Then you have the same complexity we have now and you end up in the same traps. Without the single, the whole thing falls apart, and become impossible to make work, although it may take a few years to collapse (the average is four or five) Single payer also has to be free because of GATS rules, you should read the putting health first publication from Policy Alternatives I linked earlier, it explains it well.

      Here- this also explains it

      The only exemption from GATS’s mandate to privatize is “services supplied ‘in the exercise of governmental authority’ (exemption) that was first introduced in the 1994 General Agreement on Trade in Services (GATS) and has become standard in other trade agreements since. Yet this safeguard is worthless in protecting public services in the modern era, as the definition of services supplied ‘in the exercise of governmental authority’ requires them to be supplied (a) not on a commercial basis, and (b) not in competition with any other service supplier. As trade experts have confirmed over many years now, the NHS does not qualify for this protection on either of the two counts.”

      Source .. Additional info

      Since the NHS does NOT qualify (Canada does, which is how they have so far escaped the privatization trap) the US certainly does not either! We also run into the standstill and ratchet which expect us to not have done anything to make our system any less privatized since 1995.

      1. Benedict@Large

        “… although it may take a few years to collapse (the average is four or five) …”

        Was that a guess? Because every time I was called upon to make an estimate (I was in health insurance back then) over how long some new product/feature would take to work its way in, my answer was always that it would take 3 years for the complaints to pile high enough to get noticed, and 5 years for the product/feature to fail. Co-workers (especially superiors) would always start by complaining I was too cynical, an always end by complaining I was right.

          1. Nathanael

            GATS will probably simply be repudiated. So don’t worry about it.

            One thing which governments do not appreciate is corporations acting as if they’re more powerful than governments. So these “investor state tribunal” jokes are going to be wiped out with extreme prejudice, and fairly soon.

    2. Benedict@Large

      Insurance has Ruined the market because the consumer no longer cares what a Doctor charges or how much a procedure or drug costs, …

      While you speak as if you have inside knowledge, you actually don’t know what you are talking about. Every health insurer I know has an aggressive, well-fund cost control department, whose sole purpose is to slow price increases down. The fact of the matter is that in spite of their efforts, the providers are equally as aggressive in their efforts to drive costs (and profits) up.

      Insurers aren’t the ones raising prices. They are merely the ones passing price increases along. You are blaming insurers because that is where you, AN OUTSIDER, have price contact with the system. It is however not the insurers who are setting prices, and to the effect that they can influence them, it is always in the insurers’ interests to lower them. Lower prices means higher sales, high sales means higher cash flow, and cash flow has always been how health insurers make their money. Anyone who tells you otherwise is merely blowing smoke.

      1. run75441

        Benedict:
        I agree with you with much of what you say. Increases will get even worst as hospitals, clinics, and doctors consolidate and negotiate with insurance companies and Medicare/Medicaid. Even now some hospitals can charge more based upon their status in healthcare (some are perceived better than others). Insurance is mostly lower margin busy. It is a pass along to buyers of pricing charged by healthcare.

  12. Denis Drew

    Illinois’ new Medicare-Medicaid narrow networks: the older you get, the less care you get?

    In Illinois elderly patients on both Medicare and Medicaid are being forced into narrow networks under one insurance company (e.g., Aetna, Blue Cross, Cigna, Humana, Ilinicare, Meridian).

    They may be lucky enough to keep their personal care provider — but he or she is stuck referring them to specialists on the network. PCPs usually refer patients to a physically contiguous medical group: in the same hospital or office building. What happens if PCPs are forced to refer the elderly (the sick elderly) to addresses all over town?

    Old people see a lot of specialists. The older — and more infirm; the more unable to shuffle all over town by themselves — the more specialists they need to see. Some of the medical deflation we are going to see here may not be a healthy trend at all.

    Horror of horrors: If you got to a doctor or get testing off network — from providers that accept Medicare — your Medicare wont pay for it? Payment is limited to network only — I think.

    1. mellon

      The system has to make money and because of GATS, we’re clearly trapped. It will get much worse soon, after TPP, TTIP and TISA are signed and its clear that the US electorate and our “Washington Consensus” have rejected public healthcare forever. (After all, we’re making millions selling drugs and services!)

      So arguably given that any real savings is precluded by ideology, the only way to keep the most important mandate (to never adversely effect corporations) is to keep cutting more and more out of the care side, and charge more and more until poor and middle class people pay an almost infinite amount of money (everything they have) and get almost nothing.

      Its a matter of principle.

    2. grayslady

      As someone who is on Medicare and lives in Illinois, I have no idea what you are talking about. Medicare doesn’t have provider networks. Either a doctor, hospital, independent imaging facility or whatever accepts Medicare assignment or not. Other than Medicare Part D, private insurers don’t factor into a Medicare patient’s selection. This is the case regardless of which state you live in. Where on earth are you coming up with this nonsense?

      1. cripes

        grayslady:

        I hate to tell you this, but it’s true: I attended a medicaid/ACA symposium at the doubletree hilton on Fairbanks St next to Northwestern University a couple of months ago. Insurance flaks manned the podium, explaining to everyone that Illinois will, over the next year, convert all Medicaid patients to privatized HMO-like insurance providers called Accountable Care Organizations (ACO’s) and how wonderful this will be.

        I have no knowledge that any of this was subject to public hearings, legislative debate or anything. They’re just doing it. Five major insurers will be participating. The industry is expecting a windfall from the 900 billion dollars they project to be spent on Medicaid patients over the next decade, thanks to Obamacare.

      2. cripes

        grayslady:

        dono’t have time to research this now as I must work to pay the Man, but here you can see that Illinois is working on a Medicare-Medicaid privitazation scheme. Of course, they don’t call it that, they call it “Patient-centered care.”

        “On February 22, 2013, the Department of Health and Human Services announced that the State of Illinois will partner with the Centers for Medicare & Medicaid Services (CMS) to test a new model for providing Medicare-Medicaid enrollees with a more coordinated, person-centered care experience.

        Under the demonstration, also called the “Medicare-Medicaid Alignment Initiative,” Illinois and CMS will contract with health plans to coordinate the delivery of and be accountable for all covered Medicare and Medicaid services for participating Medicare-Medicaid enrollees. “

        1. grayslady

          This is clearly a program for “dual eligibles”, and it isn’t just Illinois. New York, California, Virginia, and Ohio are also participating. Now that I’ve read up on the program–which was instituted by the Centers for Medicare and Medicaid, not the individual states–it strikes me that it may actually improve care for Medicaid patients, who often have difficulty finding any provider who will accept the low Medicaid payments, much less a network of providers. This has no effect on the normal Medicare patient, and will not result in old people being shuttled to new providers, as Denis Drew suggests. Also, I don’t see this as privatization, other than the coordination of care and administration of records. State Medicaid regulations will continue to govern services available, and since all of these states are merely participating in a trial program, if it turns out to be a disaster, it’s not permanent. Doesn’t strike me as being remotely as damaging as Obamacare.

          1. ginnie nyc

            “This will have no effect on the normal (sic) Medicare patient.” Well, isn’t that nice. It profoundly affects the sickest and most indigent Medicare patients, including the disabled. The basic guarantee of Medicare – that you may visit any physician that accepts the insurance – is thrown in the trash can. Instead, exceedingly narrow networks are established, in which, say, only 2 neurologists serve a cachement area of 50,000 very ill people.

            I speak from personal knowledge, as New York State (thanks, Andy) was among the first to join the 17-state pilot – and New York City the first location of the state’s roll-out of the HMOs (thanks, Bloomberg). I have only recently, if imperfectly escaped this, because of my brain dead status, and transferred to a special Medicaid waiver. Such a lucky ducky. For the time being, we (and disabled children on a Medicaid waiver) are exempt from this vile scheme.

            To pretend that this only a pilot, and can be rolled back at any time, is naive in the extreme. The number of newly enlarged home care agencies, managed care entities, insurers are much too invested in maintaining their new gravy train. Here ‘pilot’ means initial stage, not reversible experiment.

          2. Carla

            grayslady, I’m sorry to tell you, you’re wrong. I’m in Ohio, I’m on Medicare and not a “dual-eligible” and if I see doctors “not in network” I pay a huge penalty. If there’s anything about this that helps Medicaid patients of any age, I would be grateful. The truth, I’m afraid, is that Obamacare contained all the seeds of crapifying Medicare.

            You just can’t make money on healthcare. It’s not a profitable enterprise, no matter how you try to slice and dice it.

      3. Denis Drew

        That’s if you have BOTH Medicare AND Medicaid — and I quote:

        March 24, 2014
        You can now enroll in the Medicare-Medicaid Alignment Initiated!
        The Medicare-Medicaid Alignment Initiative is a new health care program for adults who have both Medicare and Medicaid. The program brings together all the Medicare and Medicaid benefits you get now. To enroll (become a member) in the Medicare-Medicaid Alignment Initiative, you must choose a health plan and a personal care provider (PCP). Please read everything that came with this letter to make the best choice for you.

        You must choose by May 31, 2014.
        The Health Plans you can choose from are:
        Aetna Better Health Premiere Plan
        Blue Cross Community MMAI
        Signa HealthSpring
        Human Health Plan, Inc.
        Ilinicare Health Plan
        Meridian Complete

        IF WE DON’T HEAR FROM YOU BY MAY 31, 2014, WE WILL CHOOSE THIS PLAN AND THIS PCP FOR YOU. [emphasis added]

      1. Denis Drew

        I have just been on the phone with Medicare (actually got straight answers) and reviewed the first quarter of the 197 page PDF from my insurance company. As long as I am in the combined plan I can put away my red, white and blue Medicare card. Even out of area. Out of area I my plan will pay for urgent or emergency services — I have to wait until I get back for non-urgent care. Medicare wont pay for anything separately at all.

  13. Sarah from TN

    Longtime reader, first time commenter…

    “Mistakes” leading to recission are certainly not limited to those in the initial application or those regarding a particular claim. Recently my family’s policy was terminated due to non-payment (as our insurer claimed), although my husband indeed paid every month’s premium since February and could back this up with evidence from bank statements. No phone calls, emails, or letters arrived warning us that premium payments had not been received and that we were about to lose coverage…just a very terse letter in the mailbox last Thursday informing us that our policy had been terminated, giving no indication why.

    After phoning the insurance company the next day and reading the poor “customer service” rep the riot act, my husband found out that (according to the company) premium payments were supposed to be on “autopay”…my husband never agreed to any such thing, or at least thought he hadn’t, and therefore never instructed the insurer to debit funds from his bank account for premiums each month. After the fact it’s impossible to prove whether he accidentally clicked some “autopay” box while making a premium payment online, or whether assigning our account to autopay was the company’s error. Either way the mistake was clearly used as an excuse to drop our coverage despite taking our money. After speaking to a supervisor over the phone, taking time out of work to do so, my husband was eventually able to correct the error and get our coverage reinstated.

    Obamacare has done absolutely nothing to prevent this kind of time-sucking BS from happening; in fact it has made it worse as your post suggests. Perhaps by making some formerly common reasons for dropping coverage (rejection for pre-existing conditions, large claims, etc.) illegal, Obamacare has opened the door for insurers to evade the spirit of the rules by exploiting minor data discrepancies that any reasonable human being would regard as pure errors as excuses to terminate coverage, whether on grounds of fraud, nonpayment, or otherwise. I also wonder if the fact that we purchased an individual policy not connected to either spouse’s employment triggers some insurance company “these people don’t matter” switch. Responses from fellow readers with knowledge of any differences in administration of policies purchased individually vs. through an employer’s group coverage would be welcome.

    1. Carla

      “I also wonder if the fact that we purchased an individual policy not connected to either spouse’s employment triggers some insurance company “these people don’t matter” switch”

      Oh, big time. Having been self-employed for most of my working life, I dealt with this crap for decades. Now that I’m finally on Medicare, guess what? The crap has infected the only decent healthcare insurance any Americans ever had. And it’s kinda like Ebola. Sorry to tell you this news, Sarah.

  14. RUKidding

    This is the tip of the iceberg, and I have concern that it’ll get worse from here.

    File under FWIW: I am still employed and “enjoy” what is probably one of the “better” health ins coverages available in this day & age. With the crapification of ObamaCare, I’ve witnessed ever increasing premiums, and now just about any type of medical thing I have done, no matter how simple, comes with a high price tag and usually it’s charged to me as part of my ever-increasing deductible. Fortunately, I’m very healthy and rarely have to see the doctor. But I’ve been hit with 2 bills this year where I am out of pocket to the tune of $500!! I can afford that, luckily, but how do others manage? And believe me, what I had done with almost nothing – some routine checks and not even lab work. It’s really outrageous.

    As I am a boomer, my concern, clearly, is what happens when I become elderly? I’ve been a part-time care giver for various relatives, and I know what happens from here on in, even to the healthiest & strongest among us. What. A. Mess.

    1. Oregoncharles

      What happens is Medicare, with its own set of problems and limitations, including unexpected and unpredictabnle “co-insurance.”
      Still better than a private insurance company.

  15. Cynthia

    There are too many people working in the back offices of healthcare whose jobs are largely dependent on having a healthcare system that’s drowning in financial and bureaucratic complexity. At this point, nothing will be done to change this because those in the back office are also the chief decision makers. They decide where downsizing takes place, and since they are never willing to downsize themselves or any of their fellow crones and obedient bootlickers in the back office, they decide by default to downsize those who work on the front lines of care.

    As I see it, there are only one of two ways to downsize the back offices of healthcare, which are severely bloated and overstaffed. One way is to implement a large scale operation to automate back offices. This should be relatively easy because financial and bureaucratic complexity lends itself well to automation. And if those in the back office resist their jobs being automated, then decision makers from the outside must be called in to order that their back office jobs be automated.

    The other way to downsize the back offices of healthcare is to pass legislation and implement healthcare policies, which aim to remove much of the financial and bureaucratic complexity that is burdening our healthcare with too many unnecessary costs. Those in the back office may try to hire lobbyists to prevent this from happening or they may try to push for policymakers who are paid to lie about the importance financial and bureaucratic complexity.

    Hopefully by then, the American people will wake up to the fact that the self-serving parasites in the back office are largely why healthcare has become increasingly unaffordable and why quality of care has greatly deteriorated. You don’t need to be healthcare policy expert to understand that as more and more healthcare dollars are being consumed at the non-patient care level, there will be fewer and fewer healthcare dollars at the patient care level, causing quality of care and patient outcomes to suffer.

    1. Carla

      Thanks for these notes of sanity. Automation is probably the best hope. BUT there goes personal privacy. So I don’t know what to hope for. We have been made painfully aware that the policy route (Congress) is hopeless.

      Or, revolution.

  16. kevinearick

    SMART Technology, Big Data Unicorns, & Psychographic Triggers

    There is nothing wrong with global communications; it’s working just fine, collapsing contracts made to be broken. We have the zombie on the table, dissecting it for all to see, but the old empire propaganda root, debt as accounting income chasing debt as accounting asset, died fifty years ago.

    Physicists employed to program other automatons, who have subjected themselves to the gravity of peer pressure History, to buy ever cheaper crap at ever higher prices, on the assumption that an irrational market can outlast all intelligent investors, with SMART technology built for the purpose, is nothing more than an extension of gravity, going backwards more efficiently.

    So, where’s the new education system, without which the empire majorities have sentenced themselves to demographic collapse?

    The problem with deduction, making assumptions about an open system from within a closed system, is that every moment spent in the process causes the closed system to contract relative to the open system, because the answer is always wrong, and nothing is learned. Life is about doing, and no amount of observation can replace it.

    The sexes exist for a reason, to make a battery. You cannot raise boys to become men in a female dominated culture, or girls to become women in a male dominated culture. The balance of power rests on marriage, for a lifetime, to employ NPV. Government of, by and for artificial borders is a derivative of civil marriage chasing its own tail, trying to prove it’s the integral, with management of specialization, obsolete at its inception.

    If quite a few individual investors couldn’t outlast an irrational market, you wouldn’t exist. The only possible outcome of civil marriage is economic discharge. Its market in war, the second derivative, stupid competing with stupid, has no winning hands, but that never stops the critters from playing MAD.

    The parties to civil marriage examine each other as enemies with one eye, while the other shops for replacements, for when the inevitable occurs. Who is on the axis of good and who is on the axis of evil, when the divide and conquer filter collapses, depends entirely upon arbitrary perspective. It’s not the DNA creating such stark contrasts.

    The empire extortion queue charges you $2k to smog a used car, not because there is anything wrong with the car, but to replace the electronics to ensure that you continue paying the extortion, while automatons employ more automatons to add additional layers of extortion, paying them with nothing more than an entitlement promise, a future share of extortion, growing ponzi inflation to make the entitlement worthless, for all but a few, to reseed the ponzi.

    Social collectivists build their lives around peer pressure extortion, and predatory capitalists exploit the stupidity, to hunt you down and force you to compete with stupid, to give your self away. The critters only want what they cannot have, something for nothing consumption, and you are the meal ticket. Be about your business, before the occupiers man their toll booths.

    The majorities hide behind sociopaths accordingly, which must now go to war against each other, because demand is falling, supply is growing, the finance costs to hide all the dead inventory, in plain sight, is exploding, and the critters cannot change their habits. The Bay Area is the destination of hot money because global majorities depend on it for bait and swap apps to distribute their SMART extortion infrastructure.

    If you want your children educated, you have to educate them, and if you educate them, the State majority will cut you a thousand different ways, because that is what it is bred to do, of, by and for feudalism. The only difference between nations is words on a piece of paper, the false assumption proffered that artificial borders separate the empire.

    War is a problemsolution for the majority because it tries to prove that it can adapt the environment to itself, rather than adapting itself. The corporations do not hire and train physicists to explore space, but rather to consume space, trying to eliminate your exit, eliminating their own exit, from implosion. What’s the problem?

    The sad fact is that empires of majorities are always treading water, faster and faster, until they drown, only to be replaced by the next majority, same as the old majority. Scaling five thousand years of gravity is not for the feint of heart, but hiding your children in a group to avoid reality is not the answer.

    History is not a surprise novel. Labor has no interest in solving repetitive closed system problems, but the majority loves to solve the same problem, over and over and over again, creating emergencies for the purpose. When the majorities get done hammering each other as nails, they forward the winning sociopath.

    Labor will do what it always does – give the critters another technology to build new cartels around, and raise children, to bypass the resulting gravity. If you are expecting sympathy from those being hunted, get in line, to get on a train, to see a doctor, to get the latest drug, like all the others.

    My daughters understand what I am talking about better than anyone else on the planet, so they have no need of an appeal to the majority for equal rights at the end of the FILO bankruptcy queue. Putin is KGB and he has a lot to lose, so he isn’t going to pick a fight with labor. But the socialists are stupid enough to declare war on labor, so they will try to give Putin nothing to lose.

    In the meantime, if you need a car, buy an old Honda Accord and install a terminal box for your meter, leaving the empire behind to compute itself, instead of chasing wires with monkeys, to feed an 800lb gorilla. Working for the cartels is like watching paint dry, while the critters run around in circles, acting like the process is rocket science. If you want to find labor, learn to build meters, to bypass stupid.

    Build two sandboxes, one for you and your spouse, and another for the majority, so your children can see the majority vote to turn its sandbox into a sewer. And begin with the foundation, in the basement, where you will find someone who has done it before.

    The path to the future is a spouse, who will tell you things you do not want to hear. You have to be patient, especially at the end of an empire cycle, because there aren’t many of those around, but, when the time comes, you’ll know.

    There are two ways to look at a battery. Choose the compliment that appears to the majority to be the opposite. Don’t make a decision, one way or the other, because of your parents. You complete the economic mobility circuit as you move forward, leaving the empire majority to build its toll booths, taking short cuts with your design, with no idea what you are going to do next.

    Gravity is, what you chose to make of it, and regardless of what the majority says or does, it’s you’re a* in the fire. The majority blows up its cave, with words, every time, trying to control a derivative with a derivative. Adjust the gap.

    The old man is in the basement, expecting the integral, not in the penthouse, managing derivative, all of which depend upon the elevator. Economies are built from the bottom up, and operated from the top down, regardless of ponzi mythology. Which sociopath or majority controls the perception of the past, with artificial borders, is irrelevant to labor.

    War, over artificial scarcity, is business as usual.

  17. impermanence

    Absolute simplicity equals Absolute truth.

    Increasing complexity is deception, by definition.

  18. cripes

    Medicare is federally funded and administered by the states, according to their agreements with dept of health and human services, leaving them plenty or room to innovate! Its not like the feds are going to discourage this privitization; to the contrary, it is encouraged. Innovation!

  19. Maureen Coffey

    The last time I read about it, Ms. Michelle Obama was receiving six figure paychecks for being on the board of or consulting with companies in the “health care complex”. As for the “… probability that an in network anesthesiologist …” who needs anaesthesia? That is elective, like in palliative medicine …

  20. Benedict@Large

    The is ABSOLUTELY NO REASON for any American to not have complete healthcare, as any MMTer could easily explain. The government could pick up the entire tab, sans tax increases, including the money needed for additional schools to train the additional professionals required.

    Of course, the knuckledraggers would complain that this MIGHT cause inflation, and we can’t have that. After all, as we all know, it is better to die than have inflation.

  21. cripes

    Benedict raises an important, but underappreciated, problem with Obamacare or any effort to increase access to health care for the 50 million or so that have gone without.
    Where are the doctors needed to provide medical care to treat these people coming from? What disciplines should they be trained in? The nurses? The clinics?
    We’re talking potentially of medical resources equivalent to a nation the size of France. Of course, they might be using emergency rooms, but still. A major undertaking.
    Or, the entire thing could be an exercise in funneling billions to insures, without increasing provision of medical resources? Innovation!

    1. Carla

      Actually, everyone has gone without. Those who get too much “healthcare” as determined by admins, insurers, surgeons, specialists, and big pharma, can suffer just as much as those who get none. This is what happens when we monetize, financialize and corporatize what should be, what properly is, a public good. We make it a very bad bad indeed.

    2. mellon

      >“Where are the doctors needed to provide medical care to treat these people coming from?”
      TiSA (Trade in Services Agreement) under so called “Mode Four” the movement of natural persons.

      People as global trade item. I suspect the already substantial number of US doctors moving north will eventually become a flood. Unfortunately, it wont be so easy for teachers.

    3. mellon

      Two other things. I should have included this before.

      1. Healthcare utilization seems to have gone down post ACA- maybe people cannot afford to go to doctors under Obamacare slice they often have a high deductible to meet before they can get any help with the huge costs of curative care. (as opposed to the employer plans with manageable co-pays many had before) So more are ending up in emergency rooms and not doctors. This is consistent with my theory that they are actually trying to increase, not decrease medical costs.

      2. See this Mythbuster from Canada- [“Myth: User Fees Ensure Better Use of Health Services”](http://www.cfhi-fcass.ca/PublicationsAndResources/Mythbusters/ArticleView/2012/11/12/10a65103-8c66-4269-9ec1-e2cd2b126363.aspx) It shows that its cheaper to just let doctors do their work. Lets face it insurance companies ARE USELESS. They add absolutely no value. they are trying to make up things to justify their existence and the misery and dubling of cost they bring, but its clearly cheaper all around to just literally GIVE people the best healthcare possible and let doctors do what they are trained to do, without HMO or government agendas or ideology.. Cheaper and much better to just make it free. No halfway measures work, its all or nothing, period.

      Healthcare utilization would decline under real single payer, where health care is free, it has to be free, so everybody is in, no tiers, no special bad healthcare to punish the poor. The facts show again and again that the whole con job of people using more healthcare when its free is BS, they actually end up using less and being healthier! Also, thats the only way that makes it through the GATS FTA gauntlet. GATS doesnt have to get passed, its already there. :( It has been since 1995. They just didn’t tell us it banned real public health care.

  22. cripes

    Well, yes, I tend to agree with that, but my comment raises the fact there is nothing to address the issue of capacity; the infrastructure and staffing needed to accommodate an additional 10-20-50 million patients needing care.

    Isn’t this a fundamental health care planning issue? Shouldn’t there have been a plan since 2009 to implement this expansion?

    How many patients per doctor? 500? Then we need 100,000 new doctors to serve them. And at least as many nurses, etc. How many medical schools does it take to turn out say, 20,000 doctors a year for five years?

    Is “we” asking the existing health care people, buildings, equipment to serve millions more patients with existing resource levels? Seriously, WTF?

  23. R40

    I don’t know about the large claims but I know Blue Cross Blue Shield of Texas is not even paying small claims. Just got informed by a doctor that they would not take a BCBS individual policy because they cause them more headache than it is worth. If they aren’t paying basic claims, I doubt they are going to pay the big ones.

  24. bh2

    The remarkable thing is how collectively enthusiastic many in the leftist press waxed on about the ACA before it was passed and now the same crowd claim they were duped — duped! — just like every other time the something-for-nothing carnival wagons roll into town and rubes flock like pigeons to score a free ticket, only to be rudely fleeced again.

    Dem pols in Congress were so convinced ACA was “the right thing to do” that they cast not a single vote against it in either chamber. (Talk about a triple-line whip!) Indeed, they permitted submission of not a single amendment. They judged this work of art perfect at birth, even though unread and undebated, and promptly passed their precious new bundle of joy into law. The Commander in Chief (pipes and drumroll, please) then signed it with a flourish of satisfaction and congratulations all around for a job well done. Mission accomplished!

    And now the same leftist party organs carry on like jilted lovers upon their shocked “discovery” that what plainly appeared to be an obvious fraud before the fact turned out to be…yep…. an obvious fraud after the fact, as well.

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