Michael Olenick: Consumer Reports Joins Obama in Telling Obamacare Big Lies

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

“If you wish to be a success in the world, promise everything, deliver nothing.” – Napoleon Bonaparte

After months of analysis I can objectively conclude that Obamacare is, to ordinary middle-class people, worse than worthless.

Under Obamacare, those not covered by their employers or Medicaid – a subset of the public consisting mainly of the self employed and people working for small businesses – wind up paying enormous subsidies to help the sick. In the case of my three-person Floridian family the subsidy rate – the difference between the cost to insure ourselves and the cost to insure sick people – is about 10.5% of gross earnings. That is not the cost for insurance; that is the cost over-and-above insuring one’s family. That cost will be lower for those on subsidies, approaching non-existent – because they are the ones receiving the transfer – but for my specific family, in my specific circumstances, my calculations show that figure is 10.5%, which is obscenely high.

No similar financial sacrifice is asked for nor required from people employed by companies with over 50 employees, or government workers, or from those who make slightly less income. Businesses also spread risk but, obviously, virtually everybody in the risk pool for a business is healthy enough to work, or they wouldn’t be in that pool. Conversely, the pool for the employed but under/uninsured includes all uninsurable people, which is almost the exact opposite.

I calculated the 10.5% subsidy figure by purchasing a private policy for my family while comparing rates and coverage to the Obamacare plans. I have researched the Obamacare plans extensively and, make no mistake, this new coverage is much better than the lowest cost Obamacare plans, even with its vastly lower cost. In fact, it is comparable to Obamacare plans that cost almost 3x as much. Let’s repeat that because it refutes the latest Big Lie: these plans, in the real world, for most people, are less expensive and oftentimes better than the “Affordable” Care Act plans.

But here’s the Big Lie from Obama in his press conference of November 14, 2013:

We will continue to make the case, even to folks who choose to keep their own plans, that they should shop around in the new marketplace because there’s a good chance that they’ll be able to buy better insurance at lower cost.

No, Mr. President – if they earn an ordinary middle-class income and they are reasonable health they will not find more affordable insurance on the exchanges – that’s just not true.

Once more, because the lie has been repeated so often: the more expensive Obamacare plans are not always, or even often, better insurance.

Let’s unpack the Big Lie a little. Nancy Metcalf of Consumer Reports sums things up well by vilifying a predictably lousy $54/month private plan while misrepresenting the benefits of a $485/month lousy ACA plan. Metcalf gets right to the point in the headline, “That Florida woman’s canceled Blue Cross policy? It’s junk insurance.” Next she brings out the pompoms for an ACA plan, “She can get a real plan for only $165 a month.” Got that, one is “junk” and the other is a “real plan.” Metcalf beats us over the head with the idea that “[Ms.] Barrette’s expiring policy is a textbook example of a junk plan that isn’t real health insurance” and the ACA plan is “only $165 a month.” Later she goes further, quoting an “insurance expert” who says “She’s paying $650 a year to be uninsured.” If anybody besides Consumer Reports made a claim like this, Consumer Reports would jump on them.

Let’s check out Metcalf’s attack on Barrette’s predictably lousy $54/month plan, which conveniently omits a comparison to an ACA plan on a point-by-point basis. In the interest of clarity I’ll add the cross-references to the $485/month “real” Humana plan they reference later.

Before the analysis let’s pick up on piece of analysis Metcalf forgot: affordability. For the sake of argument let’s ignore that the subsidy is still real money being paid out and focus on the net-after-subsidy $165/month premium, three times what this woman is used to paying. Each year she will be expected to pay $1,980 in premiums for insurance that is worthless unless she pays another $4,600 in deductible costs. That is $6,580 or 22% of this woman’s $30,000/year gross take-home pay.

In contrast, housing costs that exceed 30% of gross take-home income are considered unaffordable, so affordable healthcare is supposed to cost more than 2/3rds what families pay for housing. Further, Consumer Reports curiously omits that the $320/month subsidy is for health insurance and not health care which, as the following analysis shows, are entirely different. Let’s get to the points that Metcalf’s article in Consumer Reports does address.

First, Metcalf argues, the “junk” insurance pays “only the first $50 of doctor visits.” She doesn’t clarify whether that is for every doctor visit, one per month, or one per year, the latter which seems extremely unlikely so I’ll assume one per month or every visit. My wife just went to the doctor for strep throat; her GP charges $65 per visit for his uninsured patients. My daughter and I have both visited specialists who charge $90 and $100 respectively without insurance. So by paying “only” the first $50 the “junk” plan has $15 primary care doctor visits and $40-$50 specialist visits, presumably with no deductible or they would have raised the point. In contrast their “real” ACA Humana plan has a $4,600 deductible so the bulk of regular patient visits cost whatever the network Humana doctor charges. Of course, almost all Humana plans are tightly controlled Soviet-style HMO’s, so not only will those doctor visits be to a Humana clinic but charges will be at Humana pre-deductible rates, and there will be no specialists without referrals. It’s fair to conclude the “real” health insurance doesn’t cover routine doctor visits that the “junk” insurance does cover, particularly since I saw that routinely in the plans I analyzed extensively.

Next Metcalf complains that “only the first $15 of a prescription is covered” and that “some prescriptions cost hundreds or even thousands of dollars a month.” Guess what: many, many prescriptions – especially under negotiated insurance rates – cost $100/month or less. Remember, we’re comparing a $485/month plan to a $54/month plan. People who take a generic prescription or two are better off paying the difference, assuming the generic costs more than $15, which many do not (my local grocery store gives away a large number of generics for free while the big box retail pharmacies sell a laundry list for a few dollars). In contrast to the “junk” plan the “real” plan pays nothing until the $1,500 drug deductible is met.

Next Metcalf moves on to complain that “junk insurance” pays only for “complications of pregnancy” and then only covers the first $50. Metcalf notes that the woman is past childbearing age so this issue is irrelevant. However, by raising it as a public policy issue I think they have a valid concern, though they largely brushed it off because the ACA is almost equally atrocious. ACA plans do cover delivery but the lowest cost plans pay only about $1,500 so people are better buying the lower-cost higher-quality plans and banking the money if the stork comes calling. Every other country recognizes that children are the lifeblood of civilization and that woman already carry an extraordinary burden birthing babies and provides for free or low-cost childbirth. Even many other species of animals protect and support birthing females; this is a core instinctual responsibility of being an adult. I’m not sure how the US Government, with Obama and Pelosi in charge, managed to blow off providing for a right so basic, safe childbirth, that it’s recognized by nonhuman species. By now I’m sure you’ve guessed the pattern but the “real” Humana plan pays nowhere near the full cost of childbirth (see my earlier piece for an exact breakdown).

Metcalf then moves onto mammography, noting the “junk” plan pays $50 for a mammogram. Healthcare Blue Book tells me (customizing the results to my zip, which is fair because the woman in the article also lives in Florida) that a bilateral digital screening mammogram costs $259. Therefore, noting the savings from the “junk” plan, mammograms are affordable under the old plan (the $400 a month in lower premiums alone covers the single mammogram upcharge, which most women aren’t advised to get annually till the age of 50).

Metcalf also complains about a $50 limit for MRIs and CT scans for osteoporosis screening. Healthcare Blue Book tells me a CT spinal scan costs $597 and a pelvic MRI costs $843. Both are arguably affordable though given that doctors diagnosed osteoporosis for years without this technology, and continue to do so in developing countries, it is unclear if these procedures are even necessary.

In any event, without meeting that deductible the Humana plan would pay nothing except that this woman would be stuck with Humana’s provider network, which might have higher cost than clinics advertising on the Internet. After the deductible is met she would require a referral and somehow I’d bet would be put off until the first of the year, when the deductible resets.

Towards the end, Metcalf plays her trump card: “[L]et’s imagine that Ms. Barrette’s luck runs out and she receives a diagnosis of breast cancer that will cost $120,000 to treat.” They claim that under the junk plan she will receive “no more than a few hundred dollars” and end up with $119,000 of unpaid medical bills whereas under the Humana plan “those bills will top out at $6,300 a year, no matter what.”

I don’t know enough about Barrette’s old plan to offer an opinion but under Humana there’s that narrow provider network issue where, during a surgery, if a single non-network doctor or nurse sneaks in, she’ll get a big bill. Add a few more of those, some visits when Humana’s HMO will not give her the meds she wants, and maybe a few second-opinions when she’s worried about the conflict of interest for HMO’s to treat high-cost conditions, and – if she survives physically – she’s probably bankrupt. I worked with many bankruptcy lawyers while I was focused on foreclosures and can definitively say that $30,000 of medical bills vanish exactly the same as $300,000 of medical bills with the bang of a bankruptcy judge’s gavel. Finally, all this is irrelevant because Barrett earns only $30,000 a year: cancer treatment will leave her job, unable to work, and Medicaid will pay the bills.

By providing access to early healthcare at low cost from a wide array of providers – apparently, almost anybody – the $54 plan isn’t doing such a bad job taking its cost into consideration. Consumer Reports’ Metcalf refers to the woman’s health as “luck” but, maybe, by not worrying about showing up to the doctor for little things small low-cost issues do not become big high-cost problems so the “junk” $54 plan isn’t doing such a bad job keeping this woman healthy. You wouldn’t know it from these high-deductible plans but it’s cheaper to keep people healthy than cure them when sick – and a lot more pleasant for patients too – and her plan was successfully doing that.

Conversely, with the high deductibles and narrow network the “real” Humana plan that Metcalf loves puts financial hurdles in the way towards early low-cost intervention. Humana’s $485/month plan is predictably better for catastrophic care than the $54/month plan but it’s a lie to call one, that pays for basic medical care and is working “junk” while labeling the other, which does not pay for basic medical care, as a “real plan.”

Big Lies need to be repeated lots so we see these plans, which millions want to keep – a case of mass delusion I suppose – attacked ad nauseam. “.. [P]eople forget how terrible many of the soon-to-be-abandoned plans were. Some had deductibles as high as $10,000 .. and required large co-pays after that, and some didn’t cover hospital care” writes the New York Times Editorial Board on Nov. 2, 2013, in Insurance Policies Not Worth Keeping. I dunno but paying one amount for a high-priced plan with a $6,350 deductible – that provides nothing until the deductible is met – doesn’t sound that much better than a plan which costs a fraction as much but has a $10,000 deductible, though provides many medical services before the deductible is met.

In my case, which I expect is like many others*, the pre-ACA plans are simply better; there is better coverage at lower cost. I just signed up for a $400 per month plan with a $10,000 deductible and a $12,500 annual out-of-pocket limit for my family of three. There is accident insurance which covers up to $5,000 of that deductible if the charges are caused by an accident. Doctor and specialist visits cost $35 and do not have a deductible. Generic prescriptions do not have a deductible; non-generics have a $500 annual deductible. There is out-of-network coverage at double my deductible. There are some exclusions – I’m not covered for drug-rehab (though could buy coverage by paying more) – but that’s OK because we can easily avoid that health hazard. There is even extremely low-cost term life insurance, presumably to be used as a supplement to ordinary life insurance to pay end-of-life medical bills. The only potentially meaningful exclusion is pregnancy but prenatal and postnatal office visits are covered, as are complications, and deliveries are at the negotiated rate.

Let’s compare that to the Obamacare plans. For my familiy, lower end plans cost $550-650 per month; they’re more expensive though carry slightly lower annual out-of-pocket caps. These plans pay little or nothing until the deductible is met; there are no cheap office visits, no inexpensive generic drugs, and accidents that required a few $500 stitches are paid for by the insured. This is catastrophic insurance at premium prices: it is worthless unless a person develops either cancer or severe hypochondria. As I’ve said before the only difference between this insurance and the “bankruptcy by sickness” insurance is that the ACA plans will bankrupt both healthy and sick people.

This contrast leaves no question whatsoever that Obamacare is a regressive tax on the middle-class and, specifically, on those who have gained enough financial traction working for themselves that they are making 200% more than the poverty rate, which is where meaningful subsidies begin to evaporate. Taking my family of three as a benchmark. I’ll keep a tiny bit of my privacy on real earnings though, as a benchmark, if we earn a combined gross income of $39,060 we are wealthy and $78,120 marks us as Warren Buffet rich, 400% the poverty rate, where all subsidies disappear. Only Obama, who promised hope and delivered Bush’s worthless Hope Now program for foreclosure relief, could disguise a scheme that requires self-employed families who earn 200% above the poverty level to subsidize those who earn less.

Before the end-of-year window closes I’d urge anybody in my position – middle-class people with healthy families – to shop for and purchase private non-Obamacare plans. I know that doing so might cause the infamous insurance “death spiral,” where the healthy wage-earning middle-class opts out of being screwed, leaving only high-risk/high-cost people in the plan. Quoting an anonymous commenter when I first pointed out the immoral foundation of Obamacare, “cry me a river.” It is immoral to willfully subject one’s family to this 10.5% surcharge on income which, let’s face it, is really just a regressive tax levied on a tiny minority – the self-employed – who, coincidentally I’m sure, are the only group without lobbyists. I am not going to happily accept the burden of caring for strangers at the expense of my own family’s health when that burden is not shared by the “vast majority” of Americans, a fact the Administration appears proud rather than ashamed of. Further, I urge anybody in my position to do exactly the same.

This is not to say that the old system is a panacea. Single payer Medicare For All, where everybody is put into one risk pool and costs are contained through bulk purchasing power, is clearly the only sustainable health insurance system. This is an economics blog and nobody seriously makes the case that the US healthcare system, especially with the collusion exemption the industry receives, is in any way economically efficient. But until we come to our senses and adopt Medicare For All it is time that the self-employed middle-class force the ACA into a death spiral by purchasing private insurance. It won’t take long; I’m sure the insurance companies will release projected rate increase information before next years elections even if they need not do so.

America seems only to function in a crisis lately and, whether they mean to or not, politicians turned over the ability to spark such a crisis onto a very small group using economic means. If the healthy Just Say No we are likely to force the genuine “hard discussion” about healthcare the White House has been avoiding, how to get to universal coverage with meaningful cost containment.

* We are a three person family. I am in my mid 40’s, my wife is in her mid 30’s, and we have a child. At the worry of putting a hex on I’m thankful that everybody is healthy. Our ZIP code is 33405.

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  1. Arnold Lockshin

    “Obamacare” is a cynical plan to effectively deprive tens of millions of Americans of adequate medical care.
    If is part of the overall plan to drastically lower the American standard of living, in order to make US capitalism more competitive in the world.
    The Republicans, of course, are not one whit better. In the fabulously “democratic” USA, the people are confronted constantly with a political “choice” without a “choice you can believe in.”
    Over the long haul, millions – if not tens of millions – of Americans will die prematurely. And Goldman-Sachs and confreres will continue to do just fine, doing “God’s work” as always.
    Arnold Lockshin, political exile from the US now living in Moscow

    1. MC

      I have been emailing Consumer Reports for months on their endorsement of this freedom takeover. Consumer Reports even had one edition where they breakdown which cancers you should and should not get tested for based on “probability”. This should be my choice and not the governments.

      Consumer Reports is a liberal front. It never ceases to amaze me how seamingly intelligent people, like at Consumer Reports, cannot see the devastation government plans like these create. Liberalism really is a mental disorder.

      1. Katniss Everdeen

        Labeling EVERYTHING that Obama/government does “liberalism” is the mental disorder.

        Or maybe I should have said ANYTHING….

        1. Waking Up

          What Obama does consistently comes under policies of Neo-Liberalism. Unfortunately, many don’t understand the difference between classic “liberal” policies and “neo-liberal” policies in the U.S. The ACA is very much a market first law with the primary beneficiaries the health insurance companies and Big Pharma. Typical neo-liberalism.

          1. InfoWarz

            Different names, same shit. Let’s remember that two of the crowning achievements of American liberalism are Social Security (a regressive tax) and Medicare (structured as a giveaway to the medical-pharmaceutical complex, in which doctors overprescribe drugs in collusion with Big Pharma, who can charge the government whatever they want for them). The name of the game has always been to take as much out of people’s pockets as possible while doing the bare minimum necessary to maintain the facade of liberal democracy–as though we’re all supposed to be grateful that the government might, maybe, possibly, one day return a small percentage of the money they expropriate from us.

  2. Katniss Everdeen

    So, I guess what you are saying is that if you “choose” an insurance plan from the exchange, you are “choosing” to place yourself in the highest risk, most toxic patient pool there is. This “choice” comes with significant financial responsibility for the healthcare needs of the other members of your pool.

    And that financial responsibility will be disproportionately borne by the pool members and the taxpayers by way of the subsidies. This despite the fact that just a handful of insurance companies collect ALL premiums for ALL insureds, and could spread the risk more evenly if they wanted to.

    I guess I didn’t realize how “ring-fenced” this “reform” actually was.

    And there’s not much talk about subsequent years. Does pool “quality” deteriorate with time? It’s reasonable to expect that it would, with the deterioration used to justify relentlessly increasing cost.

    One more thing–this “junk” insurance meme that has sprung up. Insurance companies have generated billions in profits selling this product and the establishment has patted itself on the back for the fact that most of the population was “covered.” Except that they weren’t. But NOW they will be.


  3. Jay Goldfarb

    Under Obamacare … a subset of the public consisting mainly of the self employed and people working for small businesses – wind up paying enormous subsidies to help the sick.

    This is not correct. The subsidy goes to the insurance company.

    1. Yves Smith Post author

      Obamacare’s main benefits have been consistently presented as extending more affordable insurance to the uninsured, covering existing conditions (those two benefits overlap), extending Medicaid, and providing subsidies for lower income people. Some of the secondary benefits claimed are providing coverage of more services (preventive care, mental health).

      The subsidy goes to the insurance company to induce, um, compensate them for covering people with existing conditions and for limiting disparity for premiums for older people to 3x younger ones (it’s hard to get decent data on age-based disparities in health costs but the data I could locate showed the difference in average health care costs for a 60 year old men v. a 20 year old man was 4x. No data on women overall, but the disparity for women is likely to be less, since young women spend 20% to 60% more on health care than men (that’s commonly attributed to women being more diligent, but ahem, that’s kinda silly. If you want access to birth control other than a condom or be able to get a morning after pill on short notice, you pretty much need to have an established relationship with a doctor). Just dampening that difference is a subsidy, and that’s before you get to the pre-existing conditions issue.

      Under the ACA, insurance companies are also allowed generally higher profit margins than now (80% of premiums are supposed to go to medical care, although as we’ve pointed out, that is higher than current levels of ~85% and ~90% as of the early 1990s). That is a second, additional culprit for the structure and pricing of these policies.

      1. schmoe

        “Under the ACA, insurance companies are also allowed generally higher profit margins than now (80% of premiums are supposed to go to medical care, although as we’ve pointed out, that is higher than current levels of ~85% and ~90% as of the early 1990s).” True, but that is a statutory floor and market forces should dictate a higher loss ratio, assuming that a given state has a sufficient number of companies offering exchange plans to induce meaningful competition.
        From a quick summary of the comments, I do not see any mention of the fact that whie the ACA policies are all very comparable within the respective bronze to platinum categories, with differentiation likely to occur in provider networks and pharma benefits, there should be price competion to dictate better or at least comparable benefit payout ratios compared to existing policies. Also, homeowners and auto policies are relatively standard ISO forms, and we tend to have a very competitive markets in those lines of business due to insurers competing on price.

        1. Yves Smith Post author

          No, your assumptions are incorrect. We have a competitive insurance market now with employers highly motivated to contain costs. Yet the % that insurers have been able to increase for themselves has risen over time.

          It is very difficult to compare key details of plans, particularly the key part you finesse, the network. And in some states like New Hampshire, there’s a dearth of competition. The New York Times similarly pointed out the other part you blow off, drug coverage, is extremely important to a lot of patients.

  4. John F. Opie

    Rent-seeking crony capitalism taken to the next level. The Affordable Care Act ensures only one thing: that the market for health insurance is distorted beyond recognition, leaving consumers more or less at the mercy of the sellers, unless they actively assess their options and make informed decisions that bear, at the end of the day, the stigma of “not playing the game”.

    Normally, it’d be time to buy stock in insurance companies. Given the expected backlash, though, when the true catastrophe becomes more apparent, it’s sort of like buying stock in tobacco companies.

    Oh, and the Democrats own this one, lock, stock and barrel. This is a fubar that takes the meaning to a new level. I am just happy, as an expat, that the IRS has decided that making non-resident US citizens sign up is impractical, given that it would be forcing people to buy something that they would never use, given that I am insured here in Germany within the public system and willingly pay a premium above and beyond the legal limit (“freiwillig Versicherte”, that’s me) because it does, indeed, subsidize the grandmothers and those otherwise unable to pay.

    What a mess.

    1. weinerdog43

      “Oh, and the Democrats own this one, lock, stock and barrel.” Well, no. Yes, Obamacare is crap. But our current ‘system’ is also crap. But because the idiot Republics have fought any reform whatsoever tooth and nail, the other tribe, Democrats, will reflexively support it regardless of its inherent crappiness.

      As Yves points out, the only intelligent route going forward is something that looks like single payor or Medicare for all. It’s a lot easier pivot to say “Oh well, O-care is not working, let’s cut out the middleman and go directly to Medicare for all than it is to knee jerk away from any reform whatsover.

      1. Carla

        “As Yves points out, the only intelligent route going forward is something that looks like single payor or Medicare for all. It’s a lot easier pivot to say “Oh well, O-care is not working, let’s cut out the middleman and go directly to Medicare for all than it is to knee jerk away from any reform whatsover.”

        Just since the devil conceived Obamacare 4-1/2 years ago, Medicare has been made steadily worse. Now we actually need “Expanded and Improved Medicare for All.”

        I get the impression that for those with defined benefits in retirement (retirees from government and major corporations) Medicare works quite well. But for the entire cohort that was supposed to be served by Obamacare, the insurance companies have complicated Medicare supplements and “Advantage” plans with all kinds of deductibles, co-pays and exclusions. It’s a nightmare. There are dozens of plans in each state and they all change every year. You must know in advance what dread disease you may contract in order to choose a plan that makes sense for you. Better not guess wrong!

        “The intelligent route” does not now and never has had a place in the machinations of the U.S. medical industrial complex.

        Years ago, Marcia Angell, M.D., (former editor of the New England Journal of Medicine, I believe) proposed a really smart idea. It went something like this: Reduce the eligibility age for Medicare by 5 years every 5 years until the entire population is covered. She proposed this after the State Children’s Health Insurance Program had provided coverage for everyone under 18, and before the insurance industry had completely f*cked up Medicare.

          1. NotTimothyGeithner

            Ted Kennedy was the chief co-sponsor on the HMO Act of 1973. So I wouldn’t say he drank the kool aid as much as promised good things to cover his more successful efforts.

            Teddy never managed to filibuster Republican policies and Clinton’s various betrayals, and NLCB was Teddy’s bipartisan baby.

      2. different clue

        Well no? Actually, well yes. This is a purely Democratic achievement. It was an internal Dem Party conspiracy which ruled Single Payer or even Free Choice Medicare Public Option out of discussion . . to make sure they were never even heard about.

        The toxic atmosphere generated on purpose against the whole idea of revisiting “health care reform” is designed to prevent the simpler pivot to Single Payer which some people try to hope was somehow intended by this law. This law was written on purpose by the Democrats and their Insurance Company assistants to prevent Single Payer or Medicare for All from ever emerging ever. This achievement is part of what Obama and some other Democrats hope to collect millions of dollars for after they leave office.

        1. Carla

          Oh, God. We have to get past this Democrat/Republican thing. It’s which form of murder do you prefer? Guillotine or Shooting Squad?

          These Republicrats are killing the country, and as quickly as they can, all of us in it. The elites at every level of both parties are equally self-interested and equally corrupt.

          C’mon different clue, get a clue!

          1. different clue

            I believe I may have said something similar myself somewhat down thread . . . about how neither the Dems nor the Reps will permit any repeal of this Big Insura TARPiform law.

            But the law itself is indeed a strictly Democratic Achievement.

  5. Clive

    Seemingly the make-or break determination for whether an Obamacare policy really puts the “A” into “ACA” is how likely you are to get stiffed for the deductible (US readers please do correct me if I’m talking out my behind on this one).

    I’m thinking back to that awful story (some things stick in your mind for weeks or months after you’ve read them; this is on of those things) http://www.freerepublic.com/focus/f-news/3083933/posts where a poor chap (in every sense of the word) spent $10,000 on a CT scan which, much too late alas, confirmed he had advanced cancer of the colon.

    What struck me apart from the sheer human misery inflicted on someone was that cost. $10,000. $10,000 for a CT scan. Now, okay, this is a fairly advanced diagnostic technique. But $10,000 ? Really ? $10,000 ? Here in hardly-low cost England you can get the same diagnostic for £500 or so (c. $750) e.g. http://www.privatehealth.co.uk/private-healthcare-services/diagnostic-imaging/ct-scans/ct-scan-prices/

    Now, some of that $10k might cover clinicians fees, hospital charges etc. But a full consultation with a surgeon is about £200~250 (c. $300~400) and an INPATIENT (yes, an admission) to at an uber-upscale London hospital (e.g.http://www.thewellingtonhospital.com/) is £1,500 / day (c. $2,250) — I know, I’ve been there and that was the pain in the wallet which I emerged with. So all in, you’re looking at $5,000 and that is way, way top heavy because typically you don’t need a hospital admission for CT scans. The poor guy in the story could have flown to the UK, had his scan, got his diagnosis and got back to the US for $6,000 tops.

    If he had gone to eastern Europe, that cost would have about halved.

    So where did the (minimum) $4k extra cost come from for his US tests ? Healthcare scamming and skimming, that’s where.

    The ACA plans sound bad enough. The “killer” (perhaps literally) is the hugely inflated actual costs of treatment which you’re subjected to which turns the potential risk of having to pony up the deductible (which is where the “A” in “ACA” becomes “UN-affordable”) into a near certainty.

    I’m tempted to say you guys should aim your fire at the inflated healthcare costs rather than the ACA plans… To use a health analogy, treat the cause not the symptoms… but bad is bad and I guess you’ll have to open up a battle on more than one front.

    Good luck.

    PS — I just got my worldwide travel policy renewal documents through. They’ve upped the coverage for US health treatments from $5M to $10M stating this is now the recommended minimum level of cover should you have the misfortune (which would be the healthcare industry in the US’s good fortune!) to need to access healthcare there. $10M. Jeeze…

    1. scott

      We US citizens, er consumers, will have to buy a travel policy to go to a neighboring state. You wouldn’t want your kid getting sick or have a fall out-of-network while visiting grandma.

      1. LucyLulu

        From healthcare.gov

        Insurance plans can’t require higher copayments or coinsurance if you get emergency care from an out-of-network hospital. They also can’t require you to get prior approval before getting emergency room services from a provider or hospital outside your plan’s network.

        So…. if Jr. falls at grandma’s and needs a trip to an out-of-network ER, it’s covered. If you want to take Jr. to the out-of-network ortho that set his leg in the ER for a recheck 6 weeks later, it won’t be covered. If grandma lives in another state, your non-ACA policy wouldn’t have likely covered the physician visit either. If you travel abroad, you may need travel insurance. Some countries with universal coverage are no longer treating non-citizens for free.

        1. Yves Smith Post author

          The healthcare.gov blurb is a misleading summary of how emergency coverage works under Obamacare. Frankly, if a private company wrote something like that, it would verge on advertising fraud.

          As we wrote earlier:

          Families USA summarizes the relevant parts of the ACA Patient’s Bill of Rights:

          Although the new law does not completely solve this problem (balance billing), it does make some changes that are designed to minimize your bills for emergency care: It sets some standards for what health plans must pay out-of-network emergency providers, and when providers are paid adequately, they are less likely to balance bill.

          Your plan must pay the emergency providers the greatest of these three amounts:

          1. The amount it pays in-network providers;
          2. A payment based on the same methods the plan uses to pay for other out-of-network services (for example, a percentage of usual and customary fees charged by other providers in your area); or
          3. The amount Medicare would pay for that service.

          As you can see, if you get hit with a large bill (say you are in an HMO which negotiates rates and does not provide for out of network services; in Florida, my recollection is none of the plans Olenick qualified for on the exchanges had a HMO/PPO structure, with one co pay for in network and a higher copay for out of network; there was nada coverage for out of network providers), in most cases, you’ll get only what the plan pays as determined by 1 or 3. That leaves an awfully large amount to be paid by the patient.

          The big emergency room benefits for Obamacare is it does not require preapproval and does not restrict emergency room treatments (as in does not second guess the hospital after the fact for what it did).

    2. Banger

      You’re right–costs are and have been the major issue. The reason the ACA turned out as it did is that everyone in the fraudulent HC system wanted to maintain their income stream, essentially Obama traded some mild reforms and some subsidies for the working poor for the right to continue to drastically overcharge the customer for HC. The right doesn’t like it because there are costs to subsidies–the right wants consumers (patients?) to bear all the costs including stunning profits for everyone involved.

      How did this happen? The reason for this is willful ignorance. Most Americans know absolutely nothing about other countries and, worse, don’t want to know anything about them even Canada and Mexico. They are encouraged in this by the mainstream media which is run by corporations dedicated to waving the flag of American exceptionalism at all times and a degraded intellectual class that similarly knows only slightly more about the rest of the world than the American public. If this were the case only about health-care that wouldn’t be so bad but this ignorance extends to every area of human endeavor unless it is war or riots.

      This is why there was virtually no public pressure for real health-care reform–people did not then and still don’t know that there are demonstrably better alternatives to Obamacare that address costs. I don’t think, other than those of us who have some experience with countries outside the USA, have any clue at the cost disparities. When I bring them up to the usual right-winger they mumble something about long-lines and primitive equipment in Europe and so on.

      1. Clive

        Thanks Banger, yeah, that’s why I wanted to make the point about for-profit UK healthcare provisions. The example I listed in my comment is a world-class facility with all the bells and whistles anyone could wish for in terms of equipment and clinical knowledge (and the resultant risk of over-treatment, but that’s another story for another time !)

        That you could access this sort of healthcare — including flights and accommodation — for way, way less than the off-the-street (uninsured) price billed by a healthcare provider in the US is simply a scandal.

        As you say, ignorance and fear that outside the US, it’s like the dark ages with nothing but leeches and an apothecary to rely on keeps most people in the US locked, unquestioningly, into the system.

      2. Carla

        Banger–the reason the ACA turned out as it did is that Obama and the Democrats sold out at the git-go. Since at least Clinton and maybe before, that was the plan.

        The right hates any kind of healthcare reform because they want poor people to die as quickly as possible and before they cost the taxpayer another red cent.

        How did this happen? Actually, when single-payer activists were excluded from Obama’s famous “everyone will be at the table” table, they entered the Senate hearing room anyway and were arrested and removed from the hearing.

        Everytime the American people have been polled over the decades, well in excess of 60 percent and often close to 70 percent have indicated a desire for Medicare for All.

        Americans are not willfully ignorant. Our “elected” government, every shred of it, from top to bottom, is willfully corrupt. With candidates hand-chosen for us by the two corporate parties, what else would we expect?

        There WAS public pressure for real healthcare reform. It was squashed, which is what fascist governments run by international financiers DO. And their toadies, most recently Clinton, Bush, and Obama put a face on that.

        The American people are not stupid, and I hope you will stop saying that we are.

        1. Benjamin

          The fact that we’ve let things get to this point rather indicates that we are stupid. Or at least ignorant. This whole mess is the result of a creeping increase in corporate power that has been decades in the making. Yet election cycle after election cycle we get taken in by the latest whore with a good PR team.

          Again, if not stupidity, ignorance, and especially in the current age of the internet, inexscusable willful ignorance. I really don’t mean to blame the victims, and I don’t seriously believe we in any fashion deserve this, but after a certain point it becomes very hard to elicit empathy for a general populace that would much rather watch the latest crappy cooking show than take even the smallest step towards being an informed voter and responsible citizen.

          “There’s no point in acting surprised about it. All the planning charts and demolition orders have been on display at your local planning department in Alpha Centauri for 50 of your Earth years, so you’ve had plenty of time to lodge any formal complaint and it’s far too late to start making a fuss about it now. What do you mean you’ve never been to Alpha Centauri? Oh, for heaven’s sake, mankind, it’s only four light years away, you know. I’m sorry, but if you can’t be bothered to take an interest in local affairs, that’s your own lookout. Energize the demolition beams. I don’t know, apathetic bloody planet, I’ve no sympathy at all.” – Hitchhiker’s Guide to the Galaxy

    3. David

      You’re spot on – the issue that hasn’t been addressed is the cost of healthcare. There is no reason most folks shouldn’t be able to affort healthcare without insurance. What was the price of a 3-day hospital birth in 1960 and what would it be today if tracked to CPI? Far less than what people are charged now.

      However, when you have an industry that is exempt from anti-trust legislation and subsidized drugs for the rest of the world (due to illegal re-importation) you get collusion to fix prices and corruption out the ass.

      Remove these exemptions and allow drug re-importation and the market would fix the problem overnight. Of course, you’d also cause a tremendous hit to the economy because it would drastically reduce the number of people benefitting from the current grift so politically it can’t be done.

      The best solution I’ve heard thus far is a black market for healthcare, where folks can operate outside the current system, since it’s too broken to fix. Oh wait, the ACA will penalize you for doing that…

  6. DakotabornKansan

    Wall Street’s view of narrow networks – from the Health System Change’s 18th Annual Wall Street Comes to Washington Conference transcript excerpts:

    Paul Ginsburg (President, Center for Studying Health System Change): Let me move on to network innovations. And one thing that came up a little bit in our first session was narrow- or limited-network products. And let me start by asking about how are plans building limited networks? I mean, in a sense, what are they looking for as far as which providers would they like to have? How sophisticated are they in assessing the value of different providers?

    Carl McDonald (Director and Senior Analyst, Citi Investment Services): I can go quick: Price. I’m done.

    Sheryl Skolnick (Managing Director & Co-Head of Research, CRT Capital Group): And when your rates go down, some of your plans, and some of your providers in those plans will have to be terminated, because you need to essentially shrink to a profitable size, or a sustainable size. So that’s part of what you’re seeing, is instead of the proactive “We’re introducing a new benefit plan, we’re going to build a narrow network,” now you’re seeing the reactive effect of United’s always been a very inclusive and broad based network. They’ve had some issues of adverse publicity in St. Louis and some other places when they’ve tried to narrow the network based on quality. There is a lot less push back on that sort of thing now.

    Paul Ginsburg: So, getting into the employer based, the commercial space, you know, it looks like there’s been substantial growth in small group plans to have narrow networks. And, of course, so many of the products of the exchanges are narrow networks. Any comments about that strategy, how it’s going, is there going to be, is there going to be push back by the public?

    Sheryl Skolnick: It was only when the exchange contracts came up that, even in the beginning, there was some concern that some of the contracts that were being signed weren’t narrow-network contracts, in the very beginning of the contracting. Towards the end of the contracting for reform these are commercial, by the way, these are fundamentally commercial contracts. So, by the end of the contracting, though, almost all of the contracts being signed were for some sort of a narrowed network. So, I think there was a very quick evolution in the thought process of the plans in negotiating these things, where they very quickly realized: This is one of the very few levers we have, we better pull it.
    Paul Ginsburg: Yes. And, to what extent, as they form these networks, to what extent are the savings going to come from keeping high cost providers out, or getting discounts from providers?

    Sheryl Skolnick: Yes. Yes.

    Paul Ginsburg: Which is the dominant piece, or are they both very important.

    Sheryl Skolnick: Very important.

    Paul Ginsburg: Okay. That’s the answer


    “there’s that narrow provider network issue…”

    They keep narrowing their lists of contracted providers.

    “If you wish to be a success in the world, promise everything, deliver nothing.” – Napoleon Bonaparte

    Wall Street understands. It’s not about quality or access for patients. It’s all about the $$$$$.

  7. Laura G.

    “Finally, all this is irrelevant because Barrett earns only $30,000 a year: cancer treatment will leave her job, unable to work, and Medicaid will pay the bills.”

    Actually, no, Medicaid will not pay the bills. If she is residing in Florida, since Florida did not expand Medicaid.

    1. Yves Smith Post author

      I don’t see the basis for your objection as I read Olenick’s statement v. Florida’s Medicaid provisions.

      Picking Orlando, a living wage is for a single person $10.57 an hour. Someone with a $30K income is making $8,000 over that. You’ve got employee share of FICA of 7.65% plus Federal taxes, which assuming she is single and takes a standard deduction is 15%. So her net pay above a living wage is more like a bit over $6K.

      That means I doubt she has substantial assets. She’d go through savings in the event of a job loss pretty quickly unless she has an inheritance or Lotto winnings or was vastly better paid in the past.

      She’d be eligible for Medicaid with less than $2K in assets (yes, pretty desperate, but with over 60% of the public living paycheck to paycheck, she’s likely to be one of the ones who would get there quickly). And Florida also has a “Medicaid needy” which allows for cost sharing for those not quite poor enough for Medicaid but with large medical bills for Medicaid cost sharing.


      1. Rodger Malcolm Mitchell

        All of the convolution and excessive cost would be eliminated in an instant if the federal government merely provided fully funded Medicare for every man, woman and child in America.

        And please don’t say the government can’t afford it. The government can afford it much better than can the private sector.

        1. Jim Haygood

          Tonto, Rodger: the government ultimately obtains all its revenues from the private sector.

          There is no magical cornucopia of free money at the government’s disposal.

          1. different clue

            We would probably pay less tax money overall under Medicare For All than the money we will pay out as premiums and subsidies and etc. under Ocare. If we had Universal CanadaCare or GermanyCare or FranceCare or whatever . . . with a mass-cadre of experts from those countries hired to operate the system to keep insurance company moles and feltravs from sabotaging the system, we might spend a lot less money overall net-net.

        2. bluntobj

          Haygood has it right. “Afford” in government parlance is money sourced from taxation or printing. Both take from the populace, one overtlyt, and the second stealthily.

          I produces a quick analysis a couple weeks ago for the operating cost of a universal VA type system would be $1.4 trillion dollars a year, under the assumption that the costs would scale the same. This would require government employment for all doctors and government ownership for all hospitals in the US, as you’d need that infrastructure to service 310 million people.

          Initial setup costs for purchasing and hiring that infrastructure would be in the trillions. I can’t even hazard a guess.

          The above demonstrate the foolishness of RMM’s comment that government can do it.

          As an aside, if government attempted such a healthcare plan, there would naturally be a mandate for certain health behaviors, and enforcement mechanisms. With teeth.

          1. LifelongLib

            A quick web search shows current U.S. healthcare costs are about $2.5 – 3 trillion a year, so $1.4 trillion would be a huge savings.

            1. bluntobj

              That is private sector, unfortunately. It’s also not a great savings, because it must be financed by taxation or debt, plus it removed the 2.5 trillion or so from the private sector GDP.

              The example I gave was a simple scale up of VA costs per patient, of which there are about 8 million. I have no doubt that such a program would not scale with the same cost structure, as I said.

              Alas, if it were only so easy…

    2. Yancey Ward


      The point is that she loses that job due to the illness. Her income drops to zero, and I assure you, she qualifies for Medicaid at that level- even in Florida.

  8. papicek

    As for “subsidizing the sick” I’d love to ask Olenick what he thought the insurance business model was before ACA? So it specifies the business model (and I’m all for that – especially in finance) – but lets insurers set the price.

    What can go wrong with that?


    The takeaway, if you want to do public policy, then DO PUBLIC POLICY WITHOUT TRYING TO ENLIST THE “FREE MARKET” IN SUPPORT. That’s ACA’s fatal flaw, and yes, Virginia, it’s a killer. Ask anyone from another OECD country.

    1. bluntobj

      I agree. Government co-option of the free market has been done a lot in the last century, with poor (mostly fatal) results, especially in the first half.

      Naturally, government should simply implement policy without regard to the non-governmental systems. It’s far more efficent and humane.

  9. LucyLulu

    Under the ACA, Ms. Barrette won’t pay a dime for her mammogram, nor will any other woman over 40. There are quite a few preventive services covered without co-pays or out-of-pocket costs, e.g. blood pressure screenings, cholesterol and blood glucose screenings for those who are high risk, colonoscopies after 50, PAP smears, and more depending upon one’s risk factors. Depending upon her risk profile, screening for osteoporosis at 60 or 65 would also be covered under all ACA plans.

    I’m also unclear if one has an insurance policy that provides the first $50 towards doctors’ visits, how one obtains the uninsured rate from the physician.

    1. Michael

      Lucy – A plan that costs $450/month, every month, isn’t a “bargain” if it provides for a “free” procedure that costs $250, once a year at most, when another plan would pay $50 but costs only $54. Even in that case an insured is ahead about $200, just for that month. Granted there needs to be a cushion to pay for the insurance part of things but that is still excessive. Even with mammograms are covered under the ACA without deductibles makes me angry because maternity — labor and delivery — are not. There is no healthcare “procedure” more predictably needed by young healthy people. They excluded the #1 predictable healthcare cost for young couples, who should be predictably enraged.

      On the current system it’s also not sustainable. Healthcare is just not economically efficient and never will be in a full-blown market-based system. People usually “purchase” healthcare in crisis or rely entirely on conflicted third-parties for referrals or have no idea what they’re “buying.” Oddly it does seem to work with some voluntary procedures. Vision is a good example: I’ve never heard of anybody with uncorrected nearsightedness because of costs. There are so many options that anybody can somehow correct their vision.

    2. Yves Smith Post author


      First, many of these preventive tests are bad tests and/or overdone. I’ve gone on about how terrible mammograms are. We are also the only advanced economy to recommend that everyone get a colonoscopy at the age of 50 and we don’t show materially better results on colon cancer mortality. Pap smears used to be an inexpensive test IF you could get them in isolation (oh, and the gynos have taken to using a pelvic exam to charge for broad STD testing at the same time you get a Pap smear. I got something like a $300 bill for STD tests I wasn’t told I was getting when I got a Pap smear, this with the gyno not asking me re my sexual history). But now a lot of doctors use a more sensitive Pap smear, and they are costly.

      Second, these tests will not be done in the absence of a doctor visit, so they are at best free ad-ons. For instance, at least in NYC, you can’t get a Pap smear just by visiting a lab like Labcorp or even your regular MD (none of my past GPs would do them and I’ve had four here, while it was routine in Australia for GPs to administer Pap smears). You have to see a gynocologist. So you are in for a visit to an MD and then the specialist or if you are lucky, a specialist’s office visit charges with only the Pap smear free. And I doubt as to whether lab visits on your own are covered under any ACA plans (currently Labcorp will let you have tests without a doctor’s scrip but those you pay directly). Heel bone density tests are similarly unreliable and deliver a lot of false positives; they seem designed to help sell Fosimax. I can’t see any specificity as to what type of bone density test is actually covered.

      See here, an at-risk population had false positives of 61 % (!!!):


      And from this widely cited study:

      In addition to central DXA systems for measuring the spine and hip, a wide variety of other types of bone densitometry measurements are also available.11,33 These include quantitative computed tomography (QCT) measurements of the spine and hip,34,35 peripheral DXA (pDXA) systems for measuring the forearm, heel or hand,36 and quantitative ultrasound (QUS) devices for measurements of the heel and other peripheral sites.37 In principle, pDXA and QUS devices offer a quick, cheap and convenient method of evaluating skeletal status that makes them attractive for wider use. In practice, however, these alternative types of measurement correlate poorly with central DXA, with correlation coefficients in the range r=0.5 to 0.65.38 The lack of agreement with central DXA has proved a barrier to reaching a consensus on the use of these other methods.38,39


      In general, the “free preventive tests” appear to be to encourage annual physicals, which are in fact shown to be of no benefit to asymptomatic people:


      1. Cynthia

        As I’ve said before, ObamaCare places too much emphasis on the importance of preventative medicine. Even though preventive medicine, aka primary care, has been short changed for years and deserves more funded, this shouldn’t be done by underfunding emergency and rehab medicine, aka acute and long-term care, respectively. Keep in mind, most preventative medicine requires self-motivation. This means that if patients aren’t motivated to get a flu shot every year, eat right and exercise regularly, or stop smoking and wear a seat belt every time they get behind the wheel, no amount of prevention can change that fact.

        1. Jim Haygood

          Some of us are motivated NOT to get a flu shot every year, in the interest of proactively protecting our health.

          Angel of darkness is upon you
          Stuck a needle in your arm

          — Lynyrd Skynyrd

      2. John F. Opie

        The public health care system in Germany recommends and pays for colonoscopies after the age of 53. That and skin cancer screening by a dermatologist, stress cardiogram, among other things. Oh, and yes, a trip to the urologist to check the prostate. Every two years thereafter, less if a doctor thinks you need it. Women get the mammograms.

    3. Bridget

      In my neck of the woods, a screening mannogram can be had for $50. A diagnostic mammogram, which includes ultrasound and a visit with the radiologist is $350. A DEXA is $100. I’d a whole lot rather pay for these things myself if and when I deem it necessary, and know that I can seek treatment at MD Anderson Cancer Center if I get cancer. These choices have been taken away by Obamacare.

      I am glad to hear that Michael has been able to enroll in a private plan. It is still possible in Texas to enroll in the old individual plans, if you do so before the end of the year. People who do so can hold Obamacare at bay for 12 more blessed months. I have been urging every person I know who buys in the individual market to reup this month. The feedback I’ve been getting back is that they are very happy they have done so.

      1. Carl

        Thanks for this comment. My insurance company had indicated that we could re-up with a small ($15/mo.) increase and I’ve been thinking about doing just that. One question: have you found other non-ACA plans available in Texas? I’ve checked the ehealthinsurance site and all they have are ACA plans, the cheapest of which are almost 100% more than our current premium. Needless to say, we are in the same boat as the author of this post: self-employed and make too much to qualify for subsidies.

        1. Bridget

          You need to click on “for coverage starting in 2013” on ehealthinsurance.com. If you click on “for coverage starting in 2014, all you get is the ACA plans.

  10. Dino Reno

    Medicaid rates are being raised to Medicare rates levels to encourage wider physician participation. Insurance companies are only required to pay Medicare rates to physicians and hospitals. Insurers don’t have to bargain in the free market place. They just pocket the difference.
    Along the way, Obama has told the Insurers he has their backs no matter how bad things get screwed up. He will make them whole, just like he did for the banks with the bailout. That’s why you barely hear a peep out of them amidst all the turmoil.

    1. Cynthia

      Because ObamaCare mandates that Medicaid reimbursements be raised to match that of Medicare reimbursements, Medicaid reimbursements aren’t small potatoes for hospitals anymore. Thanks to ObamaCare, Medicaid will soon become a significant source of corporate welfare for hospitals, particularly so-called “safety-net” hospitals. But if you think about it, hospitals wouldn’t need all of this welfare money from Medicaid if they didn’t hand out million-dollar salaries to their senior management staff and spend millions of dollars to make their facilities resemble five-star luxury hotels.

      Unfortunately, hospital have no intentions of taking additional Medicaid dollars to provide better patient care for the poor and disabled. Instead, they will use this welfare money to fatten the paychecks of those who are living it up in the corporate suite and spend it on gourmet meals, crystal chandeliers, granite floors and other such frivolous and inconsequential things that contribute absolutely nothing to the goal of improving patient care and reducing hospital stay.

  11. LAS

    I’d say you remain in the same risk pool as ACA so long as you are purchasing private insurance of any kind. The only thing that removes you from the same risk pool in my mind is government insurance of some kind.

    You bring up the interesting question: Does health insurance have any value at all (beyond taxation) if we know that the person buying may have to declare bankruptcy anyway, whether charged $20,000 for some few run-of-the-mill procedures occurring over several years or $1,300,000 for a catastrophic disease? ACA authors may believe they have found the right balance with their subsidy formulas. But have they really in light of other cost of living and general lack of good jobs?

    Hospitals and technical services are a wild card. They send bills for so many behind the scenes activities many months after date of service and any amount of these may be characterized as outside the HMO network without notice.

    There’s ever so slight risk reduction to the middle class in this insurance program that ongoing rejection is not to wonder.

    1. Yves Smith Post author

      Incorrect. The ACA includes those the insurance industry has chosen to reject or charge super-high premiums, those with pre-exsiting conditions.

      My own plan disproves your statement. I’m peculiarly in a group even though buying insurance on an individual basis, and I guarantee pretty much everyone in the US would kill to have my policy at my rate: an indemnity plan (I can go to any doctor, anywhere in the world, directly to specialists, low monthly premium, low deductible, lower “here’s where the insurance company picks up everything” ceiling than with Obamacare, pretty low copay). And I’m well into my 50s.

    2. Yancey Ward

      A common error I have seen repeated over and over in the last two months.

      A risk pool is most definitely not the customer base of an insurance company.

  12. JTFaraday

    “Under Obamacare, those not covered by their employers or Medicaid – a subset of the public consisting mainly of the self employed and people working for small businesses – wind up paying enormous subsidies to help the sick.”

    I agree that Obamacare whacks the self employed, even at a median income level, which is absolutely outrageous.

    However, I am not sure I agree with the way Olenick frames this subsidy as “the middle class self employed subsidizing the sick,” which has persisted across several posts now.

    Given the nature of Obamacare, as opposed to the world of policy choices the political class could have selected from, it seems just as likely that this is a case of the middle class self employed subsidizing the for-profit health care financing industry that seeks to deny the claims that the sick try to remit.

    If there are policy loopholes big enough to drive a freight train through, then saying “the self employed subsidize the sick” is not a particularly accurate, and yet divisive, framing of the issue.

      1. JTFaraday

        “The “fraud” out, which is the big way insurers deny coverage, persists under Obamacare, so I’m not sure what your beef is about.”

        Yeah, that’s what I said. For several posts now Olenick has insisted that the self employed middle class are “subsidizing the sick.”

        But if there is is a huge policy loophole in Obamacare that attempts to deny “coverage to the sick,” then self employed aren’t really subsidizing the sick, they’re subsidizing the healthcare financing companies. Olenick’s money just falls into a big finance industry black hole.

        But I repeat myself.

        1. Yves Smith Post author

          They can but that does not mean they will be quite as successful as in the past, but for different reasons. The ACA also lets your insurer have all your records (!!!) if they pay your doctors (so I’ll be paying my doctors myself and submitting for reimbursement, thank you very much). The access to patient records (if they are transferred properly from the old doctor) may cover that issue for people who’ve been seeing doctors on a regular basis and have decent records. It’s the people who haven’t been getting care consistently that I’d hazard are at risk.

          And the industry usually tries to exclude people when they show up with cancer or develop something else costly like HIV. So people who already have expensive existing conditions won’t be able to be excluded. It’s the ones who get them who may be subject to this abuse.

          1. JTFaraday

            “It’s the ones who get them who may be subject to this abuse.”

            Well, you know, Olenick says he’s relatively healthy–so I guess that means him!

            But, given the current state of affairs, Olenick almost sounds like he wants the insurance companies with the blessing of the government to deny the claims of “the sick” because it’s “immoral” for him to have to subsidize them.

            Until, I imagine, he gets sick or–since he brought this up– his wife plans to be sick by getting pregnant and then he wants Obama and Pelosi to demand the responsibly child free to subsidize it for him. Because, you know, it’s their moral obligation.

            Olenick’s hypocrisy on his deliberately planned illness aside, if it’s the case that the loopholes in Obamacare make it more likely that insurance companies won’t be paying the claims of the healthy who get ill, then it sounds to me like Olenick is just whipping his own @ss raw here– in a fit of rage against his fellow sickies.

            Ain’t ressentiment grand?

            However, if Olenick’s real point is to repeal the mandate then I’m all for it. As it happens, I agree with candidate Obama: “‘Health insurance’ is ‘house insurance.'”

            For sure, only some people need house insurance, and there’s no need for the 20-something homeless to be subsidizing Olenick’s home.

            F*ck him.

          2. Bridget

            “(so I’ll be paying my doctors myself and submitting for reimbursement, thank you very much)”

            I like it. Think I’ll make it a point to do the same.

    1. Cynthia

      One of biggest criticisms of ObamaCare is that it benefits the upper class and the poor at the expense of the middle class. If our healthcare system was funded through income taxes, instead of through the private insurance industry, much of these benefits would shift away from the upper and lower ends of the income spectrum and towards the middle of this spectrum.

      Following the credit collapse of 2008, the rich got richer by pouring money into Wall Street, the poor improved their lot in life by receiving more public assistance, while those in the middle got squeezed slaving away on Main Street. Those in the middle got nothing good out of the deal — their wages have gone down and their living costs have gone up. ObamaCare only compounds this problem facing the middle class.

      A healthcare system funded through income taxes is the only way to get the rich to pick up some additional burden of our nation’s healthcare costs; otherwise, the burden on the middle class will be so great that the middle class will cease to exist. This is a very real possibility and it must be stopped before we have nothing left in terms of a middle class.

  13. taunger

    Olenick’s analysis goes right off the rails first thing.

    “My wife just went to the doctor for strep throat; her GP charges $65 per visit for his uninsured patients. My daughter and I have both visited specialists who charge $90 and $100 respectively without insurance.”

    He’s comparing apples and oranges; cost of visit for ACA insured and uninsured. I’m no fan of the ACA, but comments this morning show olenick’s analysis isn’t right on. We’ve got to get a better critique – especially because this by the numbers approach sets up the left of further lies – “don’t worry, this tim costs will really go down!”

    1. Michael Olenick

      Costs for uninsured are higher or the same than the costs for the insured, or at least they are supposed to be because no rates have been negotiated. Doctors, being bright, are beginning to realize how dumb this is though because they’d rather just be paid outright than collecting from difficult insurance companies and extending the same pricing structure. But I’ve never heard of prices for the uninsured being less than prices for the insured. If there was such a trend the insurance companies would throw a fit at the doctors, fire everybody in their rate negotiation groups, or both.

      1. Wells Fargo Must Die

        It is common knowledge that prices for the uninsured are definitely lower than for the insured. I learned that the hard way with my high deductible plan. A doctor visit paying cash costs $65 as you described. But when I used my insurance, I paid $107. When the receptionist processed my card, she said: “It says it costs $107.” I realized afterward that she knew I was getting ripped off by using the insurance.

        The office told me afterward when I complained about the high costs of the labs which cost $250 versus $11 for an employer-sponsored plan that if I had paid cash my lab fees would not have been nearly as high as with insurance because they processed them in-house and got a discount which they could pass on.

        Reimbursement rates for high deductible plan are much lower by design. The whole idea is to make people pay more to incentivize them to shop around.

        So you cannot get a $65 visit with a cheap plan. You can keep the cheap plan for emergencies and pay cash with no help from insurance. Or you can use your insurance to count toward your deductible and pay more. But you cannot have it both ways.

        Self-employeds have been thrown under the bus because they can afford to pay the premiums because most of them are fairly wealthy.

        1. Wells Fargo Must Die

          Keep in mind that this arrangement is very good for the insurance companies. It encourages people to pay cash rather than use their insurance which means they don’t rack up money on their deductible (a direct savings for the insurance company) and it saves them administrative costs.

        2. Yves Smith Post author

          No, this is not true. Period. Some doctors may do this, but you are just not correct in declaring to be well known (and by implication universal).

          I have paid for my own insurance for nearly 25 years. I have also just about always until recently paid myself, in full, at the time of service. That means I am a cash patient from the perspective of the doctor. I wouldn’t give them my plan info because my plan ID was my Social Security # and I did not want doctors with crappy not secure systems with God only knows who using them having my SSN. I even refused to see a radiologist over this issue, they wanted my SSN even though I was paying myself.

          I have never, once, had a doctor offer a discount for paying in cash.

          Not in single case was I offered a better rate when paying in cash at the time of service. In fact, I’ve had multiple cases where I wound up with a doctor who was by happenstance in my insurer’s network ( I have an indemnity plan, which means the same copay and deductible no matter who I see), I’d get a vastly CHEAPER rate. I had a specialist have to refund half what she’d charged me as a “cash” patient. Similarly, my astonishingly expensive eye exams (my God, does this eye doctor run every test imaginable) have the rates knocked down big time by Cigna. My GP’s rate is about 60% of what she charges “cash” patients, and her tests are discounted to people with my insurance carrier by about 2/3.

          This is not a plug for my insurer, I can have huge hassles when they decide they need to make budget (as in they simply don’t process claims and pretend they never got them, so I need to be diligent). But just sayin’….

          1. Wells Fargo Must Die

            No, they will not offer a discount to you. You have to say you are going to pay cash and ask what the cash rate will be. This is something that has been widely written about as a means of controlling your healthcare costs.

            As I noted,. the cash rate was $65 for the doctor visit. The insurance was $107. That’s a fact.

            If you have insurance, you are going to pay the negotiated rate which is HIGHER unless you have a good insurance plan. I am talking basically high deductible plans here.

            This applies to prescriptions, too. You can get $10 prescriptions paying cash with Wal-Mart. Use your insurance and you will pay the negotiated rate which likely be higher for the prescriptions Wal-Mart and others offer on basic drugs with a cash rate.

            1. Wells Fargo Must Die

              There aren’t going to be any lower rates when paying cash for specialists or eye doctors or dentists. Those are for people that can afford them. Specialists became specialists for a reason. They want to make more money. This applies to family doctors for routine medical care.

              1. Yves Smith Post author

                Sorry, GPs can’t substitute for specialists.

                A GP will not give a pelvic exam, Pap smear or STD test to a woman (that falls to a gynocologist), or administer an MRI or a mammogram (radiologists do that) or give you a glaucoma exam (you need to see an opthamologist)). Most GPs won’t give you a cortisol shot if you have tennis elbow or shoulder pain (they’ll refer to you to an orthopedist for an assessment and to determine treatment). A GP won’t treat autoimmune diseases, they’ll send you to a rheumatologist. Etc….

                The fact you think GPs can do everything suggests you don’t have much knowledge of medical practice.

            2. Yves Smith Post author

              No, you really don’t get it.

              I tell them BEFORE I GET TREATED I am paying myself (in cash) and I always ask what the rate will be before even booking the first appointment. Some doctors charge more than I think is warranted and I know what my insurance will typically pay for NYC GPs and specialists and I don’t want to get stuck with “this was in excess of ordinary and customary”. I’ve never been quoted any special “cash rate”. Zero. Nada. That is just not done in NYC. It may be common in some parts of the country, but it is just not done here, and I suspect is not done much or at all in other large cities.

              And as indicated, I’ve gotten the exact reverse of what you indicated: substantial discounts in some cases when it turned out my doctor had pre-negotiated discounts with my insurer. This was for both specialists and my GP.

              1. Wells Fargo Must Die

                Everyone’s circumstances will be different. If you go to high-rent doctors, they will obviously hold the line on their charges. My only point is that many doctors do have cash discounts which Olenick was arguing was absolutely not the case. His facts were a little off on how things work in more than one case..

        3. Bridget

          I have a high deductible plan combined with an HSA. Generally speaking, the negotiated rates that can be obtained through using the insurance company network providers are lower than the rates quoted for a cash patient. Not always, though. It pays to ask. I even had a provider recently offer to discount the cash price to a lower level than the negotiated network rate. In those cases where the cash price is lower, you should still be able to file the claim with the insurer yourself if you want the amount to be applied against the deductible.

      2. run75441


        I have to agree with the uninsured paying more. It is a fact and I have lived it with pneumonia. Just going to a primary care doctor visit was $160 -$200 at U of M clinic. The EKG test was a double charge from the clinic and then U of M hospital. Imaging, blood tests, urine tests, etc. made up the rest. In the end, I was on the hook for $1700 in tests and visit. Not sure where you go for specialists; but typically, they are more than primary care doctors. Figure in the range of $200+ dollars just for the office visit on a cardiologist.

        I was reading your exchange with EMichael below on 30% of Gross Take Home pay and the original comment in your article: “housing costs that exceed 30% of gross take-home income are considered unaffordable,.” A commenter Doug Tempstra pointed to a Wiki article on affordable housing which suggests Affordable Housing is: “a commonly accepted guideline for housing affordability is a housing cost that does not exceed 30% of a household’s gross income.” Gross Income is defined: “Gross income is the starting point for determining Federal and state income tax of individuals.” I guess I do not see where it is cited as “take home income or pay.” Typically, a mortgaging bank or broker will look at your expenses after Gross Income is determined. I have not seen a term such as Take Home Gross pay being used for mortgages which may have added to the confusion. Affordable Housing is usually determined from 30% of Gross Pay for borrowers of Median Income or less.

        If we look at the Census article you have cited, it states: “The conventional 30 percent of household income that a household can devote to housing costs before the household is said to be “burdened” evolved from the United States National Housing Act of 1937.” This statement is a little more definitive as it begins to look at mortgage, property tax, utilities, etc. in the term “housing costs.” Again, no where does it state gross take home pay. The calculation is made off of Gross Income.

        Being that Florida was the first state to challenge the PPACA in Federal Court, would you say Florida favors the PPACA even after SCOTUS ruled on the PPACA? Did Florida expand Medicaid for those making <138% FPL? Has Florida implemented the state exchanges or did it wait like Michigan till one year later to have the federal government put in place exchanges? Florida has always had high healthcare insurance rates and much of this is due to the numbers of uninsured within the state (4th highest in the US). I have looked at how Medicaid funding would impact Florida; but in Michigan if the payout percentage remains the same as determined by the Republican Senate investigating committee, the Federal Funds given to the state for the Medicaid Expansion will finance the expansion till 2027/2028. This is well beyond the cut back to 90% of the Medicaid expansion cost in 2019/2020 (?). Of course, this is contingent upon the state not robbing the funds to build roads or for business tax breaks.

        Quite a few of the state insurance regulatory agencies have been pushing back on healthcare insurance company premium increases. I believe Florida has rune into issues there as the state legislature in conjunction with the Governor have passed laws preventing the state regulator from pushing back. Insurance companies now have a free hand in increasing prices. Beyond the MLR, the Federal Government has no jurisdiction in forcing roll back of pricing.

        In the end, there is a lot wrong in Florida as being promoted by political interests that go well beyond the limitations and flaws within the PPACA. I think you present quite a few of the issues; but, you leave out much more which is not the fault of the PPACA.

    2. Yves Smith Post author

      You can hardly criticize the piece if you didn’t bother to read it.

      Olenick’s analysis proves that the insurance coverage under the ACA is so lousy v. the high premiums that it is pretty much equivalent to overpriced catastrophic coverage. So his discussion of what doctors charge to uninsured patients, which is actually not all that bad, is completely germane.

  14. JTFaraday

    “I’m not sure how the US Government, with Obama and Pelosi in charge, managed to blow off providing for a right so basic, safe childbirth, that it’s recognized by nonhuman species.”

    Maybe they had a philosophical moment and realized there’s really no human reproductive imperative. I think that would make it kind of like, say, cosmetic surgery then.

    OTOH, if Obamacare doesn’t cover birth control, we can at least nail the philosophers for their collective hypocrisy. Did Rush Limbaugh win on that one or not? I lose track.

    If I recall, the complaint was that he didn’t want to subsidize the sex lives of the sluts.

    So entertaining, public morality.

  15. Larry

    You pointed out there were $4,600 in deductible costs in Ms. Metcalfe’s $165 ACA policy but didn’t point out what the deductible was with Ms. Barette’s cheaper $54 a month policy. Did I miss something or were we to assume that both policies had the same deductible amount? If not then, and the cheaper policy had a high deductible than the policy that cost $165 a month, wouldn’t this weigh in to your over all costs for health care for Ms. Barette?

    1. Yves Smith Post author

      No you seem to have missed HIS point, which is that per the summary of her plan, as reported in Consumer Reports, Barette DOES get benefits in terms of routine coverage, on regular doctor’s visits. This is true of a lot of plans: you get either a negotiated rate (or as appears to be the case with Barette, a max payment towards various routine visits) for every visit, even before you’ve hit your deductible.

      The onus was on Consumer Reports to mention any deductible. Given their goal of depicting the Barette plan as junk, you would have expected them to mention it in the context of routine coverage. Olenick is only as good as his sources, so your beef is properly addressed to them, not him. He’s just analyzing what CR said.

  16. ep3

    “No similar financial sacrifice is asked for nor required from people employed by companies with over 50 employees, or government workers, or from those who make slightly less income.”

    But this is inaccurate as well. Even those that are employed will face increasing costs as their employers push costs onto their employers. Now, the author’s point may be that the costs will not increase as fast due to pooling. But insurers will increase their costs, because they can, and pass those to employers who will continue to cut employees benefits.
    I concur, Medicare for All.

    1. Yves Smith Post author

      You are straw manning.

      Olenick’s point is about who is being asked to bear the cost of those who were uninsured due to existing conditions.

      That is completely separate and apart from the issue of rising health costs, which hit everyone no matter how you are set up.

    2. Michael Olenick

      As I wrote, those who are employed are typically in a better risk pool because, by definition, they are healthy enough to hold jobs. The ACA buyers are in a riskier pool because while some are healthy enough to hold jobs that do not have insurance there are others who are not, and who are uninsurable using ordinary underwriting. It is unfair to spread those high-risk people among only those who are healthy and insured through non-employer insurance, the 5%. That risk, and the commensurate cost, should be spread amongst everybody.

      1. Cynthia

        Obamacare is based on flawed logic. The young and healthy must be making so much money that they won’t mind carrying the burden for the sick and elderly who now live to 90 instead of 70.

        The fatal flaw is that the young and healthy cannot find jobs that would allow them to even entertain this noble gesture. And if they cannot carry the burden for the others, the entire plan collapses.

        Jobs will make Obama look brilliant. Lack of them makes him look like a fool with absolutely no sense of priorities.

  17. TarheelDem

    Let’s evaluate employer-based insurance and even Medicare and Medicaid by the same standpoint of adding in the deductibles and out-of-pocket costs. What we will find is that even Medicare, the touted single-payer program is unaffordable for most people whose sole means of support is Social Security.

    The notion that must be attacked in to Obamacare but the the whole idea that having to pay a portion of the cost of health care makes patients into “better consumers”.

    People know this but the punitive moralist argument that no one should get anything for free dominates conventional thinking among the experts thinking about health care. And that leads them into pseudo-market systems that really don’t work.

    A straight-forward government expenditure for health care as a part of the infrastructure is where single-payer comes out. Like other parts of the infrastructure, increased economic inequality results in higher costs and reduced economic inequality result in lower costs. I believe that the economy and efficiency of operating health this way has been demonstrated in international comparisons of per capita health care costs. The same logic applies to education as a part of infrastructure. And remember that those international comparisons show that total health care costs in the US can be halved without sacrificing outcomes–indeed with getting much better outcomes because of universal coverage.

    The next step is Medicare/Medicaid for all with Long Term Care. Continuing the patient as consumer frame for health care delays that from happening. Patient-consumer dissatisfaction with Obamacare accelerates the possibility of that happening but only if the frame of the argument is shifted from consumerism to infrastructure. And that means that some employers will be stripped of their golden handcuffs; their employees will be the ones most fighting change. If out-of-pocket expenses become zero for patients, the obvious question is how the program gets paid for. Eliminating the payroll tax cap moves toward doing that. As does a financial transaction tax. Increasing the tax rate on the upper income brackets to recapture the funds currently being spent on employer-based insurance adds to the fund. At 2009 estimates, the total fund needed to be somewhere around $1 trillion per year and would save $1 trillion per year over 2009 health care expense levels.

  18. Yancey Ward


    You have done the best writing on the quality of the exchange plans, and I have linked your essays repeatedly elsewhere whenever the topic is discussed. Like you, I am in the individual market, and I have found the exact same thing- non-exchange plans offer better value when one actually thinks the issue through leaving the emotion aside; and only those people who can claim the highest subsidies and have high expected healthcare costs actually come out ahead by buying on the exchanges.

    Here is the key quote, and it is like ones I have made myself repeatedly:

    This is catastrophic insurance at premium prices: it is worthless unless a person develops either cancer or severe hypochondria.

    1. Michael Olenick

      Thank you for the kind words. I think the dysfunctional website and the cancellation notices masked the more fundamental problem that this is lousy and high-priced insurance.

    2. Jim Haygood

      ‘Non-exchange plans offer better value.”

      Makes sense. Anyone who’s healthy enough to qualify for underwritten coverage, or belongs to a group which qualifies, is going to be in a less risky cohort than the open-enrollment population served by the exchanges, where those with pre-existing conditions are to be subsidized by the healthy.

      But this window will close if O-care succeeds in stamping out all non-exchange individual coverage, with its stipulation that any changes in the policy terms will no longer qualify for grandfathering.

  19. BondsOfSteel

    Yes! Obamacare is a plan where the healthy are subsidizing the sick. As a progressive, I think that’s part of the “general Welfare” the preamble talks about.

    It’s also kinda the whole point of insurance. Take Fire Insurance. People pay into it… and the one who’s house didn’t burn down pay for the ones that did.

    The problem with health insurance is the costs are too high. Personally, I’m for single payer. With the average American spending ~$8000/year on medical expenses, we’d need to raise taxes on average ~$8000/year. That’s a lot more than Obamacare premiums.

    So… how does Obamacare cost less than $8000/year? They’re not taking all the risk from the sick to the healthy. They’re making the sick pay huge deductibles. They’re adding in co-pays. The exact things you’re complaining about are designed to reduce the amount the healthy spend on the sick.

    So, I think the interesting questions are:

    1) You brought up a good point about different insurance pools. Are corporations paying less than the small-business/individual pools? (Are the risks higher?) It seems like this could be the case… but… I’ve seen no analysis or confirmations of this. Corporate group policies have been covering pre-existing conditions for years… especially since the Americans with Disabilities Act of 1990, so I’m not sure this is the case.

    2) The reasons we spend ~$8000/year on healthcare?

    1. Cynthia

      Our terrible and out-of-control healthcare system is caused by too much fragmentation, duplication of services, and multiple audiences each paying different “negotiated prices.” In any other “industry” but healthcare, this would be total insanity.

      It’s time to decouple healthcare from markets. I am deadly serious. For starters, I would eliminate the entire health insurance industry that serves as middleman and contributor to extra layers of cost. Then, I would put every physician and physicians group on government payroll, receiving salaries commensurate with skills, training, and reasonable costs for services delivered. I’d do the same thing for hospitals. Rates could be regional but there would be no leeway to offer one insurance plan one rate, another plan another.

      Every American citizen would be given an insurance card at birth — just like in most of the civilized industrialized nations. There would be one system and one payer — the US government and citizen fees based on income. No more special privileges for Congress, perks for CEOs, and private health insurance in the gazillions for self-employed Americans. No more Medicare, Medicaid or VA.

      One uniform health system. One set of prices for each region. No gaming the system. Everybody pays in — healthy or not.

      Do this, and healthcare costs will come tumbling down.

      The health “system” in the United States is archaic and has run amok. It largely exists to provide obscene undeserved salaries of hospital and insurance company executives at the expense of providing for the needs of patients.

      When is America going to join the rest of the modern Western world and institute a single-payer system of universal health care for all?

      1. Doug Terpstra

        Cynthia writes “It’s time to decouple healthcare from markets.”

        Amen, sister! Healthcare and markets are categorically incompatible. Obama has cynically enshrined the hallowed “marketplace” in ObamneyCare because that’s what his investors demanded of him. But there is simply no such thing as a free market in healthcare. People cannot possibly shop for healthcare as they would shop for Band-Aids or aspirin. It is simply too opaque, concealed behind the blackout curtains of witchdoctors, drug-pushers, and death-panel gatekeepers (insurance rackets).

        This is exactly why Americans pay twice as much as people in civilized countries do for poorer results. It is an indefensible moral obscenity that Obama has now made compulsory. It’s like getting an involuntary, monthly colonoscopy, without anesthetic.

        1. Banger

          The ACA was never about morality or practicality. It was a political document where a bunch of people were sitting around the table with guns and demanded their share of the loot. Had this been part of a truly democratic discussion based on facts not guns the ACA would never have come close to being implemented–it is an absurdity. I blame the greater part of the left for this debacle–they could have insisted on spreading fact, data, scientific papers and so on–instead they retreated and trembled in fear of the medical industry as if they were indestructible–they’re not. They are, mainly, criminal gangs who extort money from the system and once a close examination of the facts became generally available they would have scurried for cover like cockroaches when the light turns on. This process would have, IMHO, taken another year. But everyone was in such a big hurry.

          We have to remember that nearly all the American people have not the remotest understanding of the HC systems that exist in the rest of the world or even this country–even American intellectuals know next to nothing on the subject mainly because they don’t want to know.

          1. different clue

            Everyone who went to see Sicko certainly wanted to know.
            Maybe others would have wanted to know if they knew it existed to be known about. Supressing that information was the Democrats’ Prime Directive. Arresting and removing the Physicians For Single Payer from the Baucus hearings was one of many actions taken under the Democrats’ Prime Directive.

            1. NotTimothyGeithner

              I don’t spend time in Democratic circles or read Democratic sites very much anymore, but I haven’t seen Moore in some time. I have a vague memory of him appearing on Bill Maher in last two years, maybe.

              I wonder if he is hard at work making a documentary about the wonders of ACA.

    2. Michael Olenick

      They’re spreading the cost of the uninsured/uninsurable against the 5% in the private market, the group that received all the cancellation notices. Spreading the risk across everybody is what’s needed. You can’t really compare these plans to corporate plans because the corporate plans tend to be much better, with lower deductibles, copays, and wider networks. There’s a timely article about that in today’s NYT.

      I did a back-of-the-envelope calculation while writing this but did not write it in which is interesting. The World Bank says the US spends about 17.9% of GDP on healthcare. France spends 11.6%, Germany 11.1%, and the UK 9.3%, all with similar or better outcomes. So let’s say about 7% of our GDP is spent on wasteful healthcare. Our GDP is $15.7T so that comes to about $1.1 trillion dollar! That is a mind-boggling amount of money to throw away. If wasteful US healthcare spending was its own country — not healthcare overall but just healthcare waste — it would have the 16th highest GDP in the world, just behind South Korea.

      1. Splashoil

        Wasteful healthcare spending (actual costs of services rendered) in one factor. Wasteful RENTS to parasitical operatives infesting the current (and enhanced under Obamacare) system is another. A pie chart would be helpful to sort the costs out.

      2. Bridget

        “They’re spreading the cost of the uninsured/uninsurable against the 5% in the private market,”

        The cost is also intended to be born by the healthy uninsured (the young invincibles), and those few who pay new Obamacare taxes. Not that the latter will get much sympathy at this site. :)

        But to add insult to injury, the 5% in the private market are pretty much the only people in the entire country who pay the full freight for their insurance costs out of their own pocket. Literally everyone else receives a subsidy of one kind or another. It’s terribly unfair.

        1. different clue

          If the young invincibles boycotted the Ocare plan and payed the penaltax instead, and if they did it as part of an organized movement to tear down Ocare in the teeth of a unified Depublicrat Bi-Party establishment determined to keep it on the books; would they still have little sympathy here?

          What if OWS returned as a vast leaderless movement of young people determined to tear down Wall Street by tearing down one of its new pillars?

    3. Jim Haygood

      ‘The healthy subsidizing the sick … it’s also kinda the whole point of insurance.’

      The point of insurance is to cover insurable risks. The risk of a dwelling fire or an auto accident is insurable. But the routine costs of painting the trim or relining the brakes are not, since everyone incurs them.

      High-deductible coverage for catastrophic health events is insurance. Indemnification coverage for routine health care is, and always was, a tax-privileged fringe benefit for employees.

      The employer-provided health coverage which came to be the postwar model in the U.S. is a lousy model. Obamacare only serves to entrench it.

      1. jrs

        Yea sure pay for routine costs out of pocket, nothing wrong with that, if 50% of the country wasn’t approaching poverty. Yea, routine costs out of pocket, it’s all doable: with middle class wages.

  20. ericinaustin

    Mr Olenick writes a long article and does little except to demonstrate he doesn’t seem to understand how to evaluate health insurance policies and compare them and that he doesn’t seem to understand what they are truly for.

    The policy he bought for his family truly is Junk insurance and he runs the risk of putting his family in bankruptcy if they are unlucky enough to be struck with any number of health care problems that you truly need insurance for. When he compares the ACA policy with the crappy policy he bought for his family he uses simple sore throat 50 dollar office visits to compare with the ACA plan which is worse than useless when trying to decide if you have good health insurance.

    The difference is he is comparing when the two plans kick in for simple things and not when the plans top out . That is where you will hang yourself. Strep throat visit to the DR your right the cheap plan might be better but frankly you shouldn’t be buying insurance for that anyway.

    I had a young man come to my office with a high fever and a peri rectal abscess that he thought was just a hemorrhoid . He needed I&D a shot of rocephen, blood work ordered and needed that done again 3 days later and 2 follow up visits the next 2 weeks. Total cost in my office was likely 2 thousand dollars when all was said and done. I probably should have taken the easy route for me and sent him to the ER and they would have done the same thing but kept him in the hospital for 3 days and done an MRI of the pelvis to eval the extent of the abscess. Likely 25 to 35 thousand dollars and I guarantee it would not have been covered by the junk policy. Or they might pay a thousand or so.
    Had a 33 year old with a lump under his arm. No previous problems and a CT scan last week showed a 10 cm mass likely a sarcoma under his pectorals muscle. He is now looking at years of surgery chemo and possibly end of life care. Mr Olenick’ policy would likely bankrupt him for that one.

    One of the great things the ACA did was go a long way to eleminate those crapy policies . So quit comparing the cost of 4 sore throats and a broken arm on the two policies , as that was never what health insurance was supposed to cover.

    One year recently a patient I had that thought he had health insurance through his job found out it maxed out at 3000 dollars total . He found that out after he was diagnosed with colon cancer. A 3000 dollar max health insurance policy is not health insurance, its fraud . Those 57$ month plans are likely no better.

    And one other point , Mr Olenick notes the self employed are subsidizing the ” sick” Ive got news for you . They are the sick. They have high blood pressure , or diabetes , or have a wife with endometirosis and couldn’t get health insurance before the ACA and they can now. I have pts. in horrible jobs that can’t leave because of health insurance and men and women in horrible marriages that can t divorce because of health insurance and the ACA will eleminate that.

    Almost all health insurance makes people pay huge deductibles and copays its just that the ACA has among many good things at least put some standards in to prevent them from ripping people off with ” health insurance ” policies that leave people horribly exposed. It’s not perfect but when it is up and running and more companies come in to bid for business it will be much better than the status quo.

    1. Michael Olenick

      Glad to see that there’s a mysterious fountain of money for high-deductible plans. That money tree seems to be a recurring theme for ACA defenders .. the notion that there’s lots of money to be paid if somebody gets sick; that ordinary people are just hoarding the $5K copay and will pay it out happily if they develop cancer. Funny but the theme breaks down for ordinary people; as I wrote if people develop cancer they’ll end up on Medicare, as you no doubt know because you’ve seen it happen to your patients.

      Ignoring that sore throat so that you can theoretically pay for lots of advanced tests sounds great, except that to a doctor — rather than a pharma-hack — knows the difference between early throat cancer and strep throat and may be able to quickly intervene. My guess is that if you have an MD, a big if, you’re spending more time as a health insurance executive than a doctor. Real doctors don’t talk about their patients; it’s not only illegal and unethical but it’s also not nice.

  21. Wells Fargo Must Die

    Self-employeds shopping for their own insurance outside of the exchanges has no impact whatsoever on the concept. So long as self-employeds are getting insurance, it doesn’t matter if they get it through an exchange or on their own.

    The only death spiral occurs when people who aren’t on insurance to begin with still don’t get on it and fail to chip in the money necessary (whether by subsidy or out of pocket) for the insurance companies to turn a profit on the deal. Self-employeds are wealthy on the whole and will not risk going without coverage.

    High deductible plans are less health insurance as portfolio insurance which is why I buy mine. You cannot take a plan designed for the rich and expect it to succeed for the lower and middle class. That was the fundamental error of ObamaCare.

    However, it did manage to give insurance to the uninsured and there is no going back on that deal. It will be impossible to toss everyone off of insurance and go back to pre-conditions. That is the one saving grace of ObamaCare. It is the first step on a long road to universal coverage whether intentional or not.

    1. Yancey Ward

      This is completely wrong. The death spiral will come to the exchanges if the pools within the exchange policies skew too unhealthy, and it will be worse if the healthier people decide to buy outside the exchanges, or choose to go uncovered. In other words, insurance companies will not sell policies on the exchanges if those policies garner nothing but losses.

      1. Wells Fargo Must Die

        Yes, that’s the part about the uninsured not getting into the health insurance game. You need all those healthy young adults joining in which is why you offer them the subsidies. The uninsured aren’t going to buy their own health insurance outside the exchange. If they were, we wouldn’t have a problem now would we?

        Wealthy self-employeds are not going to cause the death spiral. Because they are already covered and they aren’t going to go without it. You may notice Olenick saying he doesn’t like the price, you don’t hear him saying he’s not going to buy.

        1. Wells Fargo Must Die

          It’s also the reason the health insurance companies are not going to sell anyone a policy outside the exchange that will not make them money. They may offer such a policy for a year as a means of paving the potholes, but the price is going to be sufficient to earn a profit and it will not be available again in one year’s time.

          1. Wells Fargo Must Die

            The people that are going to make or break ObamaCare are the people that make between $25,000 and $35,000. Those are the people that really have to pay way too much for basically no insurance. The subsidies are not enough to justify buying insurance when you have no wealth to protect.

            The subsidies are going to have to be increased for those people. The rich self-employeds will whine and complain but they are going to buy the coverage in the end. It’s the people in the lower middle class that are going to make or break it because they are caught in between on price and subsidies.

  22. EMIchael

    There is so much in here that is just utter, anecdotal bs based on “your family experience” that it is really not worth even commenting.

    Further, I doubt your overall knowledge about any kind of costs after reading this inane statement:

    “housing costs that exceed 30% of gross take-home income are considered unaffordable”

    In what world do you live? Over 30 years of finance experience tells me you have no idea what you are talking about regrading home finance. Course, a couple minutes on the net would convince anyone you do not know what you are talking about concerning home finance.

    And I believe that ignorance carries over into healthcare discussion.

    1. Michael Olenick

      Look – thirty seconds on the net brings up this long article about the 30% standard. Spend 60 seconds and you’d find other articles from Fannie, Freddie, HUD, Treasury, and pretty much every academic there is. Do you have a credible source that suggests there is a different figure (not suggests that there should be a different figure but states that the benchmark of affordable is something other than 30%)?

      More to the point you can look to prior analysis for non-anecdotal evidence. Then there’s the Metcalf’s “analysis” which collapsed like a subprime CDO when put to any stress (like a subprime CDO). I think you mean that if I play with the figures enough this scheme works for somebody — especially healthcare insurance executives — and that those being screwed should shut up and accept it, for the good of the bonus checks of course.

      Throwing around ad hominem attacks, without citing anything specific that you disagree with, is lame.

      1. Doug Terpstra

        Yep, EM’s charge of ignorance without evidence casts rather serious doubts about his own “over 30 years of finance experience.” Big fail.

      2. EMichael

        Define the term “take home gross pay”.

        Cause I have never heard it. There is gross pay. There is take home pay. I have never heard take home gross pay used in any circumstance, professionally or otherwise.

        And in terms of finance, the old 28/36 ratios were all but discarded a couple of decades ago. Many, many succesful mortgage programs base their front end DTI on numbers in the 30s, and have done so succesfully for decades.

        1. Michael Olenick

          Take home gross pay = gross pay after deductions that reduce one’s pre-tax paycheck but, whatever; they’re not very much. You were given a very specific challenge: find a single credible source that defined affordable housing as something other than 30%. In this — which you said should not take more than 30-seconds — you failed. ’nuff said, troll.

          1. EMichael

            So you show no knowlege of the the approppriate terms in the business then challenge me again? BTW, I love your explanation of gross take home pay. Fairly humourous.

            Define affordable.

            I am well aware of the guidelines, dealt with them for decades and decades.

            You think there is a big difference in affordability between a family with $4000 of income paying a $1200 mortgage payment and the same family paying $1400? You would be wrong. Unless of course you thing $6.50 a day cannot be found in that family’s budget.

            Not my problem you tried to compare apples to oranges. Let me know when you come up with default rates based on your thoughts. BTW, make sure you stop in the mid 30’s.

            1. Michael Olenick

              For the third or fourth time you’ve dodged the “30 second” 30% example. Get to it; show some example, from highly credible sources, where a different standard than 30% is used as the accepted standard for affordable housing.

            2. Yves Smith Post author


              You are flagrantly in violation of comment policies here by

              1. Making shit up

              2. Failing to back down when caught out

              3. Trying to shift grounds of your argument to cover for 1 and 2.

              4. Taking an aggressive, borderline abusive tone while engaged in 1-3.

              You frankly owe Olenick either an apology or an admission of error.

              Commenting here is a privilege and I don’t tolerate dishonest argumentation and abuse of guest writers.

          2. run75441


            I have to agree with the uninsured paying more. It is a fact and I have lived it with pneumonia. Just going to a primary care doctor visit was $160 -$200 at U of M clinic. The EKG test was a double charge from the clinic and then U of M hospital. Imaging, blood tests, urine tests, etc. made up the rest. In the end, I was on the hook for $1700 in tests and visit. Not sure where you go for specialists; but typically, they are more than primary care doctors. Figure in the range of $200+ dollars just for the office visit on a cardiologist.

            I was reading your exchange with EMichael below on 30% of Gross Take Home pay and the original comment in your article: “housing costs that exceed 30% of gross take-home income are considered unaffordable,.” A commenter Doug Tempstra pointed to a Wiki article on affordable housing which suggests Affordable Housing is: “a commonly accepted guideline for housing affordability is a housing cost that does not exceed 30% of a household’s gross income.” Gross Income is defined: “Gross income is the starting point for determining Federal and state income tax of individuals.” I guess I do not see where it is cited as “take home income or pay.” Typically, a mortgaging bank or broker will look at your expenses after Gross Income is determined. I have not seen a term such as Take Home Gross pay being used for mortgages which may have added to the confusion. Affordable Housing is usually determined from 30% of Gross Pay for borrowers of Median Income or less.

            If we look at the Census article you have cited, it states: “The conventional 30 percent of household income that a household can devote to housing costs before the household is said to be “burdened” evolved from the United States National Housing Act of 1937.” This statement is a little more definitive as it begins to look at mortgage, property tax, utilities, etc. in the term “housing costs.” Again, no where does it state gross take home pay. The calculation is made off of Gross Income.

            Being that Florida was the first state to challenge the PPACA in Federal Court, would you say Florida favors the PPACA even after SCOTUS ruled on the PPACA? Did Florida expand Medicaid for those making <138% FPL? Has Florida implemented the state exchanges or did it wait like Michigan till one year later to have the federal government put in place exchanges? Florida has always had high healthcare insurance rates and much of this is due to the numbers of uninsured within the state (4th highest in the US). I have looked at how Medicaid funding would impact Florida; but in Michigan if the payout percentage remains the same as determined by the Republican Senate investigating committee, the Federal Funds given to the state for the Medicaid Expansion will finance the expansion till 2027/2028. This is well beyond the cut back to 90% of the Medicaid expansion cost in 2019/2020 (?). Of course, this is contingent upon the state not robbing the funds to build roads or for business tax breaks.

            Quite a few of the state insurance regulatory agencies have been pushing back on healthcare insurance company premium increases. I believe Florida has rune into issues there as the state legislature in conjunction with the Governor have passed laws preventing the state regulator from pushing back. Insurance companies now have a free hand in increasing prices. Beyond the MLR, the Federal Government has no jurisdiction in forcing roll back of pricing.

            In the end, there is a lot wrong in Florida as being promoted by political interests that go well beyond the limitations and flaws within the PPACA. I think you present quite a few of the issues; but, you leave out much more which is not the fault of the PPACA.

    2. Doug Terpstra

      EMichael charges Mr. Olenick of ignorance regarding unaffordable housing. He writes:

      Over 30 years of finance experience tells me you have no idea what you are talking about [regarding] home finance.

      Actually, Wikipedia and other sources substantiate Mr. Olenick’s statement rather precisely.

      Comprehensive data for the most affordable and least affordable places in the U.S. is published each year by an affordable housing non-profit organization, the National Low Income Housing Coalition.[79] The NLIHC promotes a guideline of 30% of household income as the upper limit of affordability. According to a 2012 National Low Income Housing Coalition report, in every community across the United States “rents are unaffordable to full-time working people.”


      Would he care to enlighten us based on his “over 30 years of finance experience”? Exactly what is Olenick’s ignorance here? If this is his yardstick for discrediting Olenick’s article, it comes up short.

      1. run75441

        You should look at what is in the Wiki citation and what Michael O is using.

        “a commonly accepted guideline for housing affordability is a housing cost that does not exceed 30% of a household’s gross income.” Gross Income is defined: “Gross income is the starting point for determining Federal and state income tax of individuals.”

    3. Yancey Ward

      This is not a number he pulled out of his ass. Try getting a mortgage with a payment greater than 30% of your income and you will likely have to demonstrate access to significant assets that could be used to stay current if you lost a job, for example.

  23. Joseph Keller

    “…that this is lousy and high-priced insurance.”


    Self employed, husband, wife, child here in CT. Our existing policy was cancelled, the sticker price on ACA plan that most closely resembled it was 150% higher for just my wife and myself–the child was placed on the state free program!!!…However, our subsidy would have knocked it down to what we are currently paying for all 3 of us.

    We decided to gamble and go bronze for really shitty insurance that will cost us $11 per month…We’ll bank what would have been premiums, and use that for out of pocket expenses going forward.

    Thinking about looking at small building lots in Vermont…their upcoming experiment looks like the right way to do it…if so, could be a good place to move to, or a good investment.

    Nice work on this. Thanks.

    1. aletheia33

      i am self-employed/freelance and my income usually hits the lower end of the median, i.e. a lower middle income. i live in vermont because i love the place but also for the health insurance; before obamacare the state had a quite progressive health care system in place, far more progressive than obamacare.

      vermont has passed a law to implement single payer, but the ACA doesn’t allow vermont to do so until 2017, when the ACA says that vermont will be able to apply for and will get an obamacare “waiver” from the federal gov’t. i’ll believe that’s a reliable provision in the law when i see it happen. i fear that provision will somehow be finagled out of the law by the national powers that be before we get to 2017.

      vermont ha set up its own ACA exchange and it does continue some of the good parts of the system, but certainly not all. personally, i’ll see no change right away–in 2014 i’ll have the same coverage, under vermont medicaid, that i had in 2013, for a monthly premium of $33 (income based). so far, i have had no reason to complain of the coverage medicaid has provided me.

      the fight to establish decent health care was succeeding here–until the ACA came along. leads one to wonder about the timing of ACA. i am one who believes the ACA represents an attempt to forestall single payer from ever happening anywhere in the usa.

      the fight for single payer in vermont is far from over. however it turns out, though, i recommend vermont anyway for a very high quality of life and a saner cultural milieu than one finds generally in the usa. plus democracy is not yet on life support here, and one can personally influence political matters if one chooses to be active in that realm. it’s a human scale place.

  24. EMichael

    Yep, we know health insurance in the US is really expensive, but let’s blame in all on Obamacare.

    “In 2013, the average annual premiums for employer-sponsored health insurance are $5,884 for single coverage and $16,351 for family coverage. The single premium is 5% higher and the family premium is 4% higher than the 2012 average premiums. During the same period workers’ wages increased 1.8% and inflation increased 1.1%.2 Over the last 10 years, the average premium for family coverage has increased 80% (Exhibit A).”


    Yep, and those ACA subsidies are stealing money from the middle class and giving it to the less well off. Course, most of the subsidies come from taxes on the rich and reduced payments to providers, but there is certainly a redistribution from the healthy to the not so healthy(not so much age as people think).

    As opposed to the employer provided market where there is a government subsidy that isn’t directly funded and is one of the most regressive subsidies in the US of around $250 billion a year flowing from the lower and middle classes to the upper class.

    Oh, and on the anecodtal front, do not assume that all employer provided insurance is that much better than plans found on the exchanges.

    My insurance is through my wife’s employer. Over 200,000 US employees. The deductible is $3000 per person; 20/80 after that’ max out of pocket is $6000 per person. Employer cost last year(according to the wife’s W-2)was over $14,000. Add in another $285 a month in our premiums and get the total cost of over $17,000.(course we get a nice subsidy from the IRS).

    Now, that is not 10% of our income. But my wife has over 40 people that report into her that do not make what she does.

    So many of those forty are well over 10% of their income for health insurance. And that’s before they even pay the deductible.

    But I am sure the ACA caused all that also.

    1. jrs

      Does it even matter what the ACA caused and what it did not? I guess only if you are advocating for pure 100% repeal. For the rest of us, we were promised healthcare reform and got a bag of dog @#$# instead. Isn’t that enough?

      1. jrs

        IOW what kind of “healthcare reform” is this “reform” when it leaves us with all these problems?

        1. EMichael

          C’mon, man!

          The “problems” the ACA leaves you is health insurance in a country where health insurance is outrageously expensive.

          As opposed to not having it. As opposed to being trapped in your job becuase it has health benefits. As opposed to not having it because you cannot afford it. As opposed to not having it because you once got sick.

          Look, the ACA is light years from the healthcare reform I would like, but it is also light years from prior to the ACA. And the future is far better now than it was prior to the ACA. Do not forget that this is mainly a state specific law, which gives states all kinds of power to change their health insurance systems.

          Negatively, it gives individual states the ability to crush poor working people(and probably their whole healthcare system) by not expanding Medicaid. But there is a positive side.

          It also gives states the right to undertake drastic changes. Changes that were not possible on a Federal level. Vermont is going to implement single payer in 2017. Mainly because of the ACA. Other states will follow.

          It’s gonna happen.

          Unless so called progressives keep bitchin’ about anecdotes.

          1. Yves Smith Post author

            Insurance is a big part of why health care here is overpriced. Admin costs for health care in other advanced economies with either single payer or mixed public/private systems have admin costs of a max of 8% of healthcare costs, and below 5% is typical. Here we are in the middle teens if you just count insurance overheads, and if you add in the extra admin costs on the MD end of billing to and fighting with insurers, most sources estimate over 30%. That’s 25% off the top for getting rid of the negative value added insurance industry and all the crap that results from it.

            But I’ve got a plan that’s a screaming bargain particularly given my age and that I am in a high cost market for medical services, lower premium, same co-pay, vastly lower deductible and out of pocket max, and I can see any doctor any where in the world, no gatekeeping. Does your wife’s employer have a lot of low paid people (which often translates into higher rates of obesity) or employees who skew older?

            The ACA basically HAS to be worse by creating fragmented pools (state based) and having the cost of people with existing conditions spread over a fairly small subset of the population (less sick people who get overpriced insurance rather than pay the penalty).

            And Vermont has to get permission from HHS to be able to provide single payer, and hasn’t gotten it yet. And that provision being permitted in the ACA was not Obama’s doing. Lambert has the goods:

            Under the ACA, Vermont had to get a waiver from the Feds for a single payer program (hat tip, Dennis Kucinich, who made a “strange bedfellows” alliance with conservatives on his committee on “state’s rights” grounds). Another litmus test for a true “progressive” is whether they would support immediate waivers. Why wait ’til 2017 for single payer?


            Better trolls, please.

            1. EMichael

              So you have a plan that is a “screaming bargain” therefore the ACA is bad? Let me know when a country adopts legislation only if it benefits every single person in the country.

              I see no reason to dispute the fact that taking insurance companies out of the game would reduce costs, it is common sense. Guess what? It is not what we have. You want to argue about whose fault it is, knock yourself out(Lambert can help you).

              Talk to the Roberts court about the ACA being so state driven. I didn’t do it. While you are at it, ask yourself if Vermont could go single payer(even with a waiver) without the ACA being in place.


              My wife’s employer does not have many “low paid” employees. Minimum income is more than the median in the US. Course, you should realize that my anecdote is not locked into nothing, as the link I provided shows the costs are right around the average in the US.

              You people need to get out more.

              Gratuitously, better web sites please.

              1. EMichael

                I should correct that. Minimum income in her group is more than the US median, not the entire company.

                Still, they consist of a lot more than Michael and Yves.


              2. Yves Smith Post author

                So we’ve now compounded your straw manning and dishonest argumentation with abuse.

                Did you answer my question about the age distribution of employees of your wife’s employer? No. So that possibility remains standing.

                You try arguing for the fact that self employed people, who generally have worse policies than people on employer plans (this is not a controversial point) are made worse under Obamacare by citing your irrelevant “Well my wife is with a big company and I have a sucky plan.” I respond with my case to show using anecdotes is irrelevant, and now you try to twist that into claiming I used my plan (which BTW is under no threat of cancellation due to the ACA) to attack the ACA.

                I’ve never used my plan as a basis for an ACA criticism, I’m using it ONLY to argue with you about your employer-provided plan, to illustrate that there is an explanation for you having a notably worse plan at a large company which has the heft to negotiate for a much better deal than I get. The fact that you either don’t know what the explanation is or won’t come clean with it is besides the point.

              3. Lambert Strether

                “Let me know when a country adopts legislation only if it benefits every single person in the country.” Dialing back the obvious “every single person” straw man, Canada.

                When they adopted single payer, which they call Medicare.

                Next question.

          2. Lambert Strether

            Of course, if “progressives” were honest about wanting states to experiment, they’d be advocating for the 2017 date to be brought forward to, say, 2014.

            And if “progressives” were honest about wanting Vermont to have single payer, they’d eliminate the requirement that the states get waiver from the HHS to experiment — and Vermont does not have such a waiver.

            Finally, I’ve been seeing the talking point that “the ACA is going to bring us single payer because Vermont!” is one I’ve been seeing a lot from lying, weasel-like, KoolAid-addled Obots (sorry for the redundancy).

            This argument tickles me because:

            1) Obama and the Democrats censored and suppressed single payer advocacy through the passage of ObamaCare. So to see them claiming credit for it now, instead of the butchery they produced on their own, gives me a tingle of schadenfreude right down my leg;

            2) The waiver clause was put into ACA through the efforts of Dennis Kucinich, who Obots (as above) vilified at every turn, so again, it’s pretty rich (though not unexpected) to see them stealing his work and giving him no credit;

            3) When Kucinich got the waiver into the ACA, he did so with a “strange bedfellows” tactic of allying with the Republican right, justifying the waiver on “state’s rights” grounds. This is another tactic ridiculed and shunned by Obots, so again, it’s pretty rich to see them claim the good outcome of that tactic for their own.

            Smarter trolls, please.

          3. Banger

            Well Obamacare is not light-years away from the system that is passing. It is mainly a move sidway. At best it replaces a square wheel with a hexagon wheel–assuming everything works as advertised which I don’t believe will be the case. The policies I see are, to put it mildly, terrible and over-priced because American medicine in overpriced and dominated by a number of criminal gangs as is the case with an increasingly large segment of our economy.

            My objection to the ACA has been that it is not reasonable and unreasonable and broken systems break down because they become too complex and easy to game and are always full of unintended consequences. Experts in HC did not create this bill–the bill was created in virtually smoke-filled rooms by people sitting around the table with guns and gunsils at the ready. It was a power play, pure and simple–data, science (social or otherwise) comparing all the systems of the rest of the world which all work light-years better than this one and, of course, none of this entered into this bill. I don’t object so much to the provisions but to how the bill was written based strictly on power-politics. My view is that the equation could have been changed had the Democrats and the left realized the wonderful opportunity they had.

  25. jfleni

    RE: Consumer Reports etc.

    Consumer Reports is just a self-serving “serious” huckster for the plutocrats.

    Aside from which stereo sounds better, and similar “serious” nonsense, their conclusions on political issues (the case here) are just crazy, and far outside their real expertise.

  26. bh2

    The first goal of revolutionaries is to disarm and eviscerate the middle class.

    “There is great chaos under heaven — the situation is excellent.”
    — Mao Tse Tung

  27. Mac

    This entire deal was/is far too complex to be designed and decided by elected amateurs especially when they depend on the industry they will effect for funds to keep their jobs and that apples to the staff also.
    I think that the elected group goes into far too much detail as they are guided mostly by self interests
    They should have enacted guidelines and the procedures put together by employed government staff and those should be insulated from lobby’s.
    The elected folks have gotten too far into procedure when they should deal with policy not procedure.

  28. EMichael

    Alright, let’s do some math.

    Michael and Yves(and a couple of other posters in here) are upset with their increased costs. Michael is incensed that he may have to pay 10.5% of his income for health insurance. I’ll ignore whether that is with the deductible counted or not cause his attitude turns me off and I will present numbers without the deductible counted.

    The average cost of family health insurance for employer provided insurance in the US is over $16,000 in premiums.

    To only pay 10% of your income on that amount means an income of at least $160,000 a year. So over 90% of the people in the US with employer provided insurance are paying in excess of 10% of their income for that insurance.

    Yep, the high cost of US healthcare is all about the ACA.

    Field of Dreams thinking:

    Shoeless Joe Jackson: What are you saying, Ray?

    Ray Kinsella: I’m saying, what’s in it for me?

    Insurance is the ultimate of “it takes a village”.

    A bitch if you never get sick or never get old and never care about anyone else doing so.

    1. Yves Smith Post author

      Again, better trolls please. How many times do I have to point out your straw manning and dishonest argumentation?

      I get to keep my current plan. In fact, I actually come out better because I have a lifetime cap lifted. But I don’t see why I should benefit when I already have a bargain and have most other people who are largely similarly situated to me (generally healthy self employed people) get screwed. Everyone should help pay the cost of covering people with existing conditions, not the ones who happen to have just about the least clout in our political system.

      Michael similarly is not complaining, contrary to your efforts to engage in ad hominem about him and me, that he will face higher costs.

      Had you bothered to read this post and his past posts on this topic (links to critical ones provided), you’d know 1. He has acquired a non-exchange plan which is a better deal and he’s very pleased with and 2. He can and probably will move overseas to escape the eventual costs of being subject to the ACA, which all in all will be a positive move (as in the ACA will force him to overcome his inertia about moving overseas, so it is actually doing him a favor of sorts too).

  29. Jus7tme

    >>so not only will those doctor visits be to a Humana clinic but charges will be at Humana pre-deductible rates, and there will be no specialists without referrals.

    PLEASE tell me more about “pre-deducitible rates”. Is this what I think it is? I have suspected that my health-carer provider colludes with the insurance company to charge me a higher rate for the same procedure, IF I am paying for it out-of-pocket (OOP because the deductible of my insurance plan has not been met yet).

    Can anyone confirm that such a dual-tier charge system exists??

    Read more at http://www.nakedcapitalism.com/2013/12/michael-olenick-consumer-reports-joins-obama-in-telling-obamacare-big-lies.html#9idpaGWgkfbM3qP8.99

    1. Yves Smith Post author

      The economic result may look the same, but you have the causal chain backwards.

      From what I can tell, insurers have gotten MUCH more aggressive about negotiating significant discounts from “in network” doctors in the last 4 or so years. This might have kicked in earlier or later depending on what state you are in and what insurers are powerful there.

      So yes, you face a higher rate because your doctor has a standard rate, and the insurer, as a volume provider of patients, has negotiated a discount. The insurer is effectively getting a bulk discount.

  30. Jus7tme

    But but but … WTF … I thought when I was insured (on-board with the insurance company, so to speak) then *I* would always be charged the rate that the insurance company has negotiated with the provider network (A.K.A. “the negotiated rate”), no matter whether I or the insurance company is the payer in any particular instance !!??!!

    Jesus, am I wrong ?? If so I would consider this one of the biggest frauds I have ever seen, and it should be widely exposed and publicized.

    Thanks for the reply, Yves. I have googled this topic and I am getting none the wiser. In fact, the search terms “pre-deductible rates” (note quotes) and “health insurance” points mostly to the very article I am commenting on here.

    1. Yves Smith Post author

      I had a long comment sorta on this issue above and I though I was being self indulgent in going on about my circumstances, so I am sort of relieved to find that it may be relevant to someone.

      Basically, for pretty much all of the nearly 25 years I had this plan, I paid my providers and then submitted for reimbursement. Shaggy dog story as to why (you can find it above but not germane here).

      My impression is that my insurer has gotten MUCH more aggressive about signing up doctors in PPOs. Until 4-5 years ago, I’d submit and get my usual % back unless my insurer was going through one of its periodic “screw customers” phases (in those phases, I’d get some stupid denial or haircut and would have to fight to get paid. I’d always prevail, this seemed designed to extract dough from people who didn’t have the time and energy to go a few rounds with them).

      Now because I am in an indemnity plan (I am NOT in an HMO or PPO of any type) I’m not limited to doctors that are in my insurer’s network. However, it happens that my GP, one current specialist, and a not so long ago specialist all were. I found that when I paid myself and submitted, my insurer would make the doctor refund me the difference between the non-discounted rate and their negotiated rate (my GP knows better and just charges me the negotiated rate).

  31. Jus7tme

    Yves, I certainly appreciate you describing in detail how your plan works, not self-indulgent at all, and I have now read all your comments above as well.

    .I’m in California so who knows what is the difference between your New York indemnity plan and my Calif. PPO plan (Healthnet is my insurer), but in any case it is useful.

    I still suspect that I’m being overcharged with a non-negotiated rate before the deductible has been reached, but I have no idea who I have to threaten with legal action in order to find out for certain ;-).

  32. InfoWarz

    Surprised we aren’t seeing more in the way of organized tax resistance to what is in essence one of the largest-scale thefts ever perpetrated on the American public. I’m hoping it just hasn’t sunk in yet and the reckoning is just a couple of years away. Either way the IRS shouldn’t go looking for my 1040 anytime soon.

    1. Lambert Strether

      @Infowarz: That has always amazed me, too since (a) the conservatives are supposed to hate taxes, (b) oppose tyranny, and (c) the IRS can’t slap a lien on you if you don’t pay the ObamaCare penalty. So where the heck are they on this?

      1. NotTimothyGeithner

        There are so few “conservatives” who aren’t loyal GOPers through and through there won’t be any resistance, and two the anti-tax conservatives only really show up to protest taxes on the wealthy. As far as the GOP, they are stuck in their racist paradigm. Younger voters aren’t going to come over, and I think wading into the debate at all only serves to harm their political interests much like the government shut down only hurt the GOP politically in the short term.

  33. washunate

    Awesome takedown.

    It has been a fun spectator sport watching the implementation hilarity of the past couple years. I anticipate the renewal premiums in the marketplace to provide equally dark humor over the next couple of years (assuming it even lasts that long).

    The marketplace is (potentially – details pending) an improvement for uninsured people with low incomes and/or chronic conditions. Why would anyone who is currently uninsured and not in one of those groups enroll next year, though?

    What cracks me up the most is that I think a lot of the Obots don’t understand that question. It’s as if they’ve never even heard of places like ehealthinsurance.com.

  34. steven

    The reason the florida woman’s plan was called junk was very simple. It pays only small amounts for preventative care while leaving the “insured” on the hook for paying potentially limitless costs and covering everything beyond the first $50 out of pocket. There is no out of pocket limit and essentially no emergency room coverage (beyond the first $50 of costs and for emergency visits that are “complications of pregnancy only”), no hospitalization (in or out patient coverage). In other words, other than paying the first $50 for some screenings or doctors visits the insured was on the hook for all other costs out of their own pocket and without limit. This is the exact opposite of the purpose of insurance. The purpose of insurance is not to cover small costs and leave the insured to pay everything else. It is to protect the insured against nearly limitless risk.

    If your homeowners policy said the company would pay the first $50 of costs if your house burned down and you would be on the hook to pay everything else you would rightly call it a junk policy. Sure you could construct scenarios(like getting a singe mark on your back deck that requires a $25 board replacement) where you could argue that, in that instance, the policy that paid the first $50 of costs was a better deal. This doesn’t make it a better insurance policy.

    I don’t see how anyone acting in good faith could not see the difference between a policy that pays only the first few dollars of doctors visits or screenings and leaves the customer to pay everything else from a policy that has a $6350 deductible but pays everything beyond that. Of course, if the only cost you incur in a given year is a $75 doctor visit to get a flu shot the junk policy is going to look better for that year, but that isn’t the point. If you want to argue the deductibles are too high, especially for poorer people then argue that, but don’t try to convince people that these junk policies were better than a real insurance policy.

    I would also point out that, under the aca, there are subsidies for out of pocket costs to meet deductibles for those below 250% of the poverty line.


    I would also point out that it isn’t difficult to hit $6350 in medical costs in america. One emergency room visit for a broken arm can exceed that. My mother recently had a detached retina and had a 45 minute outpatient surgery at a hospital facility and the total bills were $20k. It isn’t really accurate to say that such policies will only pay if there is something truly catastrophic, like cancer.

  35. phemfrog

    My only comment would be that i dont think its fair to say that employer plans arent covering those with existing conditions. I guess i mean to say that plenty of people who have long term health conditions work or have working spouses who cover them, so there are lots of sick folks in that pool. it just seems that your statement that almost all uninsurable people will be in the individual market pool isnt right. sick people who are currently in the employer-based pool probably would be considered uninsurable if they were not on an employer plan (because those plans dont seem to exclude preexisiting conditions).

    employer plans get more expensive every year and have higher and higher deductables. they do seem to cover more things like full maternity benefits, but at a high cost. when i bought a plan on the individual market, i was overwhelmed at all the different choices and could not believe that some plans didnt cover everything. so compared to my old employer plan, they had higher premiums, dedcutibles, and less coverage.

    this seems all so comlex just to screw people out of money, no matter if it kills them. i am with Lambert. Medicare for ALL! Single payer please.

Comments are closed.