Friday, January 22, 2016

January 2016, Part 1,The Unfolding Disaster That Is Obama Care: Gaming The System For Cheap Medical Care, Premiums Still Going Up and More

Every month for years now we have had to discuss how bad Obama Care is turning out to be under the continuing theme, “the unfolding disaster that is Obama Care.” This month is no different. As the legislation continues to march through America, driving up health care and health insurance prices as it serves as dead weight on economic growth, it cements it rightful place as the worst piece of legislation Washington has ever produced.

It never had a chance to be successful since it really never addressed the underlying root causes of our ever increasing health costs in the country:

  • Americans eat too much of the wrong kind of food, resulting in obscenely high obesity rates for the country.
  • Our food chain is infested with overdoses of high fructose corn syrup, salt, and other unhealthy additives.
  • Americans smoke too much.
  • Americans do not exercise enough.
  • The country is in serious need of health care tort reform.
  • Barriers to insurance company competition across state lines need to come down.
  • Obama Care never “followed the money” to find out who is actually profiting from the ever escalating healthcare costs in this country and how to get those factors under control.
  • Obama Care never got the immense amount of fraud and abuse in current government healthcare programs, Medicare and Medicaid, under control in order to save money to efficiently fund other government health care initiatives.
  • Obama Care never put serious research money towards curing the major diseases that drive high healthcare costs such as high frequency cancers and dementia type diseases.
You cannot resolve any problem unless you understand and address the underlying root causes. No difference here: Obama Care legislation never addressed these listed root causes and thus, has no chance of ever being successful.

But it is not just missing the root causes of our healthcare costs that makes Obama Care so horrible. It resulted in millions of Americans losing access to their favored doctors, hospitals, and insurance policies. It has caused insurance premiums, deductibles and co-pays to escalate substantially. It will likely add trillions of dollars to the national debt. It has exposed millions of Americans to higher than necessary identity theft chances. It has created government bureaucracies that are wastefully spending taxpayer wealth and being exploited by criminal elements. It has stifled economic growth and job creation.

These are just a sample of the types of idiocy that we have been reviewing for the past several years in this blog relative to Obama Care., To read those past posts, just enter the phrase, “the unfolding disaster,” in the search box above.

For the next several days we will be reviewing the latest unfolding disasters from the worst piece of legislation ever written by Washington:

1) One of the obvious holes in the Obama Care legislation, obvious to everyone except Obama and those in Congress who voted for the law, was that by forbidding insurance companies from refusing to insure anyone regardless of their health, it would be easy to “game the system.” By “game the system” I mean that one could go along without insurance, realize they were looking at major medical expenses, get an Obama Care policy, get those expenses covered, and then drop the Obama Care policy. 

This scheme then results in unhealthy financials for the insurance company which raises the rates on existing customers’ Obama Care policies which causes some existing customers to drop their Obama Care policies which hurts insurance companies’ financials which cause them to raise rates…. a classic death spiral. 

Two things within the ObamaCare legislation was supposed to stop this kind of game:

  1. First, the penalty for NOT having health insurance was supposed to drive people into Obama Care insurance policies so that they could not jump in and out of a policy depending on when they needed medical expense coverage.
  2. Second, with only very special and minimal exceptions, one could only get an Obama Care policy during a short window of time late in a calendar year, forcing people to decide whether or not they wanted to gamble on not having insurance via Obama Care since they would not be able to get it between sign up periods once a year.
But like all other aspects of Obama Care, these two safeguards have failed miserably. Consider some facts from a recent NewsMax article:

  • According to Newsmax, “Obamacare loopholes are letting some people wait until they get sick and need expensive care to use late enrollment periods to enroll, or drop coverage while abusing a "grace period" for payment — driving up costs for everyone.”
  • At a recent Congressional hearing, the Obama Care representative, Andy Slavitt, acting administrator of the Centers for Medicare and Medicaid Services, admitted that this was indeed the case: "There are some [special enrollment periods] that we need to clarify because they're subject frankly to abuse. There may be bad actors and others out there who are abusing those." 
  • According to reporting by Politico, more than 900,000 people have been allowed to sign up for Obama Care coverage outside of the official signup periods, hardly the minimal, few cases that were supposed to get exceptions to the rules.
  • These 900,000 exceptions represent almost ten percent of all Obama Care policy signups.
  • Again, according to Politico, many of these exceptions for such excuses as a physical move or job change were granted without ever getting proof they were legit.
Obama Care insurers assert that these exceptions/latecomers cost much more to insure and run up higher medical bills than those that use the regular sign up periods and that exceptions have a higher policy drop rate than others, all of which help cripple insurers’ financial results.

In addition, insurers also complain about policyholders who abuse a three-month "grace period" that lets them get the subsidized medical coverage even if they've stopped paying for it, i.e. free health insurance.

Slavitt testified that he has created an enforcement task force to make sure people are getting legitimate exceptions. But given the government’s performance so far in this area, I would bet success will be minimal.

I suspect that one of the reasons why the exceptions are so high is that Obama wanted to pump up the enrollment numbers as much as possible even if it meant financial pain to the insurance companies since his promise of having Obama Care policies covering 20 million people by now will fall about 50% or 10 million people short. As always in Washington, politics trumps common sense and rational thought.

Bottom line: insurance companies are paying for some of the serious flaws in the law and those flaws will cause Obama Care policy costs to go up and the number of Obama Care insurers to eventually go down.

2) A recent article in the Tampa Bay Times reinforced the reality that people are screwing the Obama Care system and regulations to get either short term or free health insurance to handle medical care expense and cost coverage. Details of their reporting include the following:

  • The Obama administration created 30 “special enrollment” reasons and then sent out millions of pieces of mail encouraging uninsured people to sign up for an Obama Care policy under these specialenrollment reasons.
  • So many special enrollment periods have caused financial stress for the Obama Care insurers.
  • According to the Blue Cross and Blue Shield Association, the people who enroll under the special enrollment reasons use up to 55% more of medical services than those that enroll during regular enrollment periods.
  • Aetna claims that one fourth of their enrollments come under these special enrollment reasons which may explain their recent announcement that they cannot survive long term in the world of Obama Care without changes to the regulations.
  • An Aetna representative claimed in the article that special enrollment enrollees stay with the insurer for only four months, probably just long enough to get medical care and to have their expenses covered.
  • A spokesman for the Health Care Services Corp., which operates insurance plans in five states, claims that one fourth to one third of the policies he writes come under special enrollment reasons and that those policies are much more likely to generate high claims in the very first month that the policy is in effect.
There are certainly reasons for special exceptions to the standard enrollment periods. But as with everything else that Washington touches, they screwed up this simple concept also. And this screw up is likely to continue to drive up health insurance costs, the exact opposite of what Obama Care was supposed to do.

3) Dozens of times in this blog we have presented videos and quotes from Obama where he promised that Obama Care would reduce health insurance costs for Americans up to $2,500 a year. Of course, the reality has come nowhere close to this promise and/or lie, with health insurance costs still climbing far beyond the total inflation rate.

More proof of this fallacy was recently presented by Freedom Partners which is a Virginia based non-profit organization. Their analysis found that 49 out of 50 states will see insurance premium increases in the individual health insurance market in 2016, the market that Obama Care serves. More detailed findings from their analysis include the following:

  • Mississippi is the only state where premiums will not rise in 2016.
  • Most states will see double digit increases in insurance premiums.
  • Some state citizens should expect insurance premium increases of at least 20% including Alabama, Alaska, Delaware, Hawaii, Idaho, Illinois, Iowa, Kansas, Maryland, Minnesota, Missouri, Montana, North Carolina, Oklahoma, Oregon, Tennessee, and West Virginia.
  • The states getting the largest hits include Minnesota at 47.7%, Alaska at 39.1%, Tennessee at 35.2%, Hawaii at 30%, and Oklahoma at 29.4%.
So much for seeing that $2,500 annual decrease.

3) We have often spoke how the various Obama Care portals to get insurance have been utter failures. Many of the taxpayer funded state exchanges to buy Obama Care policies online have already folded down from failure, with one of them having never even signed up a single customer. We have reviewed how over half of the Obama Care co-ops have already failed and gone out of business, leaving hundreds of thousands people without insurance and wasting over $1 billion of taxpayer subsidies.

Now we can add another failure to this litany of failures. Kentucky’s Governor Matt Bevin recently told the Obama administration that his state will terminate Kentucky’s Obama Care exchange, kynect. The exchange will terminate operations on January 31 after the current enrollment period ends. Just another disaster in the unfolding disaster that is Obama Care. More disasters in the coming days.

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