By Lambert Strether of Corrente.
It’s been awhile since I’ve posted on ObamaCare, and this survey is an attempt to pick up the threads; I’m afraid I’m selecting for coherent narrative rather than the questions I’d really like to ask, like: How are narrow networks, including hospitals, doctors, and formularies, affecting the quality of care? Are ACOs really just HMOs in disguise? Is the back-end fixed, and are the 834s finally working? Are we ever going to get really accurate enrollment figures from the ObamaCare hub database, or are we going to keep relying on Gallup? What’s going to happen to employer insurance? And will anybody ever be held accountable for the website rollout debacle? I’m guessing no on that one, and I’m sure readers can come up with some answers, some new questions, and even ask and answer their own questions!
Will ObamaCare pass Constitutional muster again?
The latest Constitutional challenge comes from the conservative side of the aisle, given that the Democrats only raise “rule of law” questions when their guy isn’t President. The point at issue: The Supreme Court decided that ObamaCare was constitutional because the mandate was a tax. But in Civics 101, we learned that revenue bills must originate in the House, and a tax raises revenue. And — at least substantively — ObamaCare did not originate in the House:
At issue, again, is the individual mandate, requiring most Americans to buy health insurance or pay a government fee. In 2012, a five-member majority of the Supreme Court labeled the individual mandate a “tax.”
What they didn’t answer was whether this “tax” was created in a valid way.
That’s the question posed by the Origination Clause lawsuits — one from small-business owner Matt Sissel of Washington state, the other from Steven Hotze, a physician from Houston, Texas.
As both lawsuits point out, the Founders wanted taxes to start in the House because it is the chamber most accountable to the people.
But Obamacare started in the Senate. Majority Leader Harry Reid erased the contents of an unrelated House bill (the “Service Members Home Ownership Tax Act of 2009”) and replaced it [with] the Patient Protection and Affordable Care Act — Obamacare.
Hotze’s lawsuit, which is at the Fifth U.S. Circuit Court of Appeals, has yet to be heard. But oral argument in Sissel’s case was held in early May at the U.S. Circuit Court of Appeals for the D.C. Circuit.
The questioning was tough, underscoring the contentiousness of the issues. For instance, it was suggested that the individual mandate is meant to prod people to buy insurance, not raise revenue. However, the Supreme Court didn’t attach any qualifiers when it labeled it a “tax.”
As for the merits of the claim, what makes the Origination Clause argument difficult is that Congress observed the Origination Clause in form if not in substance. The Senate took a bill that had passed the House, stripped out its contents, and inserted the PPACA so that it could claim fealty to the Constitutional requirement. This approach clearly circumvents the purpose of the rule. So, would a Court throw out portions of the PPACA on such grounds? I doubt it. Although the Supreme Court has suggested its willingness to consider such arguments before, I am skeptical that federal courts are likely to scrutinize how legislation gets produced. Thus, for example, the D.C. Circuit has turned away challenges to federal legislation that allegedly violated the enrolled bill rule, refusing to second-guess the legislature’s certification that a given bill satisfied the relevant constitutional requirements. When a federal court reaches the merits of an Origination Clause challenge, I would expect a similar outcome, even if this means the Senate may continue to play fast and loose with the origination requirement. Utilizing shell bills may make a mockery of the rule, but it’s not the sort of thing that is likely to be overturned in federal court.
So, a story to watch, if only because the very word “taxes” causes so many knees to jerk.
Because markets, I don’t know why there’s such a focus on enrollment numbers; surely the more relevant metrics are profits and stock prices? I don’t normally quote The Motley Fool, but since stock touting is the whole point here:
Why the Obamacare Profit Surge Isn’t Over Yet
One of the crucial areas where the Affordable Care Act, better known as Obamacare, has driven profitability for insurers has been through the expansion of Medicaid, which the majority of states have implemented. Those millions of new people on the company rolls have helped drive revenue across the industry. And more may be yet to come.
Yes, we think of Medicaid as a government program, but when we increase funding for it, we’re really increasing pass-through to private contractor. It’s enough to make you go all NHS! Sorry for the stock picking, but here are some numbers:
Insurers Molina Healthcare (NYSE: MOH ) , UnitedHealth (NYSE: UNH ) , and Aetna’s (NYSE: AET ) Coventry Health may all see sales growth tied to the Affordable Care Act’s Medicaid expansion this year as California digests a big backlog of enrollees and Michigan’s newly launched expansion kicks in.
Molina is a major provider of Medicaid services in California, and all three companies provide private Medicaid insurance in Michigan, where the enrollment expansion began on April 1.
California already accounts for more than 20% of Molina’s Medicaid members, and the expansion is already contributing significantly to company sales this year. In the first quarter, Molina’s revenue soared 21% to $2.1 billion — thanks in no small part to California enrollees, who accounted for 47,000 of Molina’s 133,000 new Medicaid members.
And the profits goose stock prices:
In the 12 months ended April 30, health-care stocks in the S&P 500 index gained 22.7%, beating the overall index’s 17.93% return. Health-care stocks made up 13.2% of the S&P 500 index’s market capitalization as of April 30.
Mission accomplished! But let’s recall:
The key point to remember in all discussions of ObamaCare is that neither it, nor indeed the entire private health insurance “industry,” should exist. They are rent-seeking parasites, economic tapeworms. One does not improve a tapeworm; one removes it.
To understand this simple point, all we need to do is look north to Canada, where we see a single payer system — they call it “Medicare” — delivering equal or better health outcomes at dramatically lower cost, without a health insurance industry, and without ObamaCare’s bizarre, mystifying, and above all unfair Rube Goldberg-esque complexity. In fact, if we’d passed HR 676 in 2009, we would have saved hundreds of billions of dollars by now (more than enough to cover everyone) and thousands of lives, though ObamaCare apologists don’t like to talk much about the excess deaths that ObamaCare’s achingly slow rollout caused and is still causing.
So, profits there may be. They have at best no social utility; they do not serve public purpose. It’s as if we were diagnosing the health of a body by measuring he length of a tapeworm within it.
Below — and check me, readers, this part has numbers — we see 1.7 million applicants in limbo + 2 million accounts with “discrepancies” = 3.7 million, and 3.2 million / 8 million = 46% of 2014’s ObamaCare surge have screwed up Medicaid accounts. Of course, the Republicans can’t hold hearings on this, let alone run a Dukakis-style “competence” campaign because (a) even they couldn’t handle the hypocrisy of denying Medicaid to their own citizens while alos exposing how poorly the administration handled expanding it, and (b) they would rather wank about repeal anyhow, to throw red meat to their base and because markets (see Profits, supra). Anyhow, ObamaCare’s their plan.
1.7 Million Applicants in Limbo
While an unprecedented 6 million people have gained Medicaid coverage since September, mostly as a result of the Affordable Care Act, more than 1.7 million more are still waiting for their applications to be processed—with some stuck in limbo for as long as eight months, according to officials in 15 large states. Federal and state officials say the delays should not hamper people’s ability to get health care because Medicaid coverage can be extended retroactively for three months and people can seek emergency care at hospitals.
“Can be extended retroactively…” What could go wrong? And ER rooms are over-extended as it is. Anyhow, this could go wrong:
But [Stan Dorn, senior fellow with the nonpartisan Urban Institute] said that some providers may refuse to see patients until they have confirmation they have insurance coverage. And without insurance, patients may not have cash to pay doctors who demand it upfront.
The waits also contradict the administration’s promise that the online insurance marketplaces would bring a “no wrong door” approach to signing up for health care, regardless of a person’s income.
Wait, what? The administration lied again?
[T]he process has been further complicated by state eligibility reviews that have found many people ineligible who applied through the federal marketplace. States were always expected to make final eligibility decisions, but that has taken longer in some places than anticipated.
Of the 245,000 Ohioans who applied through healthcare.gov, for example, 93,000 were found ineligible, said state Medicaid spokesman Sam Rossi.
Another 66,000 had already enrolled or are in process of enrolling directly through the state Medicaid program. Ohio, which expanded Medicaid eligibility, has more than 65,000 cases pending, he said.
2 Million Have ‘Discrepancies’
Yes, with 21 separate items to fill out on the ObamaCare form, all of which are crosschecked against data from the IRS, DHS, CMS, the Bureau of Indian Affairs, and credit reporting agencies, not to mention whatever’s going on at the state level, it’s turned out there are some mistakes. (How, or whether, the mistakes will affect people’s health are is not known.) From the LA Times:
More than 2 million people who got health insurance under the Affordable Care Act law have data discrepancies that could jeopardize coverage for some, a government document shows.
About 1 in 4 people [that seems like a lot to me] who signed up have discrepancies, creating a huge paperwork jam for the feds and exposing some consumers to repayment demands, or possibly even loss of coverage, if they got too generous a subsidy. Updated numbers provided by Bataille indicate that the total number of people affected remains about the same as a month ago. About 1.2 million have discrepancies related to income; 505,000 have issues with immigration data, and 461,000 have conflicts related to citizenship information.
(At this point, we recall that people filled out their ObamaCare forms under penalty of perjury.)
CMS says that the “discrepancies” shouldn’t affect coverage. Politico:
The officials emphasized that discrepancies in people’s application data are unlikely to affect their coverage or the level of subsidies they received. Rather, they’ll have to submit additional documentation to ensure that they’re getting the correct level of tax credits.
The result: some Americans may have received greater subsidies than merited or were allowed to purchase plans for which they were ineligible. HHS says it’s now “double- and triple-checking” with applicants to verify their information.
Wait, which is it? “Unlikely to affect their coverage,” or “allowed to purchase plans for which they were ineligible”? (I wonder if many of these people were “on the bubble” between being forced in to Medicaid, or allowed to buy a plan on the Exchanges.)
Where a consumer fails to provide the follow-up information, or reveals that they have erred, the policy will be revoked and a request for subsidy repayment will be made, [HHS’s Julie] Bataille said.
What could go wrong? This sounds like people being told to skip payments to gain eligibilty for HAMP.
She said the agency is scrambling to follow up with each applicant, commonly requesting copies of paystubs as proof of income or birth certificates to verify the correct spelling of a name.
Responding to the document, administration officials expressed confidence that most of the discrepancies can be resolved in the next few months. Nonetheless, the department has set up a system to “turn off” benefits for anyone who is found to be ineligible.
So, the discrepancies are unlikely to affect coverage except they will. Too bad we can’t just have citizens covered because they’re citizens under single payer. Then maybe all the government officials setting up these programs and explaining them to the press could be doing something valuable with their time.
The Asset Recovery Program
There’s a ray of hope on the Medicaid Asset Recovey Program, at least in California. Here’s an explainer with the state of play:
Obamacare wrinkle: California bill seeks to reduce state’s seizure of Medi-Cal recipients’ assets
One of the Medi-Cal recipients is Campbell resident Anne-Louise Vernon, 59. She contends that California’s aggressive cost-recovery program is unjust because people whose higher income levels allow them to get subsidized private health insurance through the new Obamacare health care exchanges don’t have to pay back anything.
I’m glad to see somebody make the “justice” case; since the insurance, and hence ultimately the care, if any, that citizens receive from ObamaCare varies so randomly by age, income, jurisdiction, and employment status, among other things, there’s hardly any aspect of the program at all that can be said to be “just,” if by justice we mean equal treatment for citizens, before the law. It’s wrong to mandate that people purchase a product, and then have the degree to which the product is defective depend on “the luck of the draw.”
Vernon said she requires constant medical care because of severe nerve damage in her arms and arthritis in her legs –conditions that have prevented her from finding a job. The divorced mother of two said her home is her only real asset.
Medi-Cal, she said, has now essentially imposed a “reverse mortgage” on her home in exchange for health insurance.
“What is fair about that?” asked Vernon. On Tuesday, a state Assembly health committee will take up proposed legislation that would limit Medi-Cal recovery only to what’s required under federal law: the cost of long-term care in nursing homes.
Authored by state Sen. Ed Hernandez, D-West Covina, SB 1124 has already sailed through two Senate committees.
Should it pass Tuesday and then get the blessing of the Assembly appropriations committee in mid-August, it would be voted on by the Legislature by the end of August. Brown would have until the end of September to decide whether to sign it.
“I don’t know of any other program that demands repayment after a recipient dies,” said Hernandez, who chairs the Senate’s health committee. “We don’t do it for Medicare. We don’t do it for people getting coverage through the (Covered California health care) exchange, and most other states don’t require estate recovery. People are really frightened about this policy.”
Sarah Kliff has a good article on “Selling ObamaCare” in Vox. I’m going to excerpt one woman’s story to show what Kliff missed:
[Celia] Maluf was optimistic about the health care law when it passed in 2010; she hoped it would lower her premiums to about $200, an amount she thought she could fit into her budget. Instead, the insurance plan would cost $359 after a subsidy. It was much less than the premiums she saw in the past, but nearly double what she’d hoped to pay.
Maluf didn’t expect to have high medical bills; she’s the type of person who gets one or two colds each year. In the nine years she spent without coverage, she never had a major illness.
“I went back and forth and back and forth, on what I should do,” she says. “The whole October and November and December, I was going back and forth. On Christmas Eve, I made my decision.”
Maluf ultimately decided, after three months of deliberation, to purchase an insurance plan. That meant trade-offs: she’s skipping a trip to Brazil to visit her baby niece, and putting off building a website to advertise her pilates business.
“It’s been very challenging,” Maluf says. “I haven’t been able to travel much. I really don’t have any money left to spare now.”
Maluf says she does want to buy her health plan, which she hasn’t used yet, again next year. But she’s not totally sure she will be able to afford it anymore. The rent on both her apartment and her pilates studio increased by more than $200, which has further squeezed her budget. She thinks her income this year, which she earns at individual pilates lessons and therapy sessions, will be lower than she had initially expected.
“I am at the maximum,” says Maluf of what she currently pays for health coverage. “I couldn’t go higher than this, not by a penny.”
So — and this is the conclusion Kliff does not draw — the opportunity cost for Maluf for purchasing ObamaCare was marketing her business (plus travel; people need and deserve time off). And it’s at least a tenable theory that because Maluf couldn’t market her business, her business won’t bring in as much as it should have, and not enough to buy insurance again if the cost of ObamaCare goes up at all, which it’s likely to do. And people wonder why ObamaCare polls badly! Feed that tapeworm, baby! (And note the conservative case for single payer here; it encourages entrepreneurs!)
Well, that’s a wrap for today. ObamaCare is the same tapeworm it’s always been!