“Obamacare Death Spirals”: The Latest Prediction Of Doom Hits The Conservative Blogosphere
A new meme has arrived on the scene from the voices and pens of the anti-Obamacare devotees who remain more committed to frightening than informing when it comes to healthcare reform.
It’s the Obamacare “death spiral”— and it’s coming to a conservative blog near you.
Through a series of articles already going viral—thanks to a piece published on National Review Online and one by my Forbes colleague, Dr. Scott Gottlieb –we learn that the threat of impending doom ‘du jour’ comes via an allegation that, due to the poor launch of the healthcare.gov website, younger and healthier participants will now be more likely to stay away than sign up.
This, the falsely fearful argue, will result in an insurance pool jammed with older and sicker people without the required participation of younger and healthier Americans needed to balance the pools.
The result of such an event?
As insurance companies are forced to pay out more claims —due to their older and sicker participant base—without sufficient premium income from younger and healthier people less likely to call upon the insurer to pay for medical care, the insurance company is forced to raise their premium costs so they don’t loose money. As this problem builds upon itself year after year, it becomes, as it is termed in the insurance industry, a ‘death spiral’ as, sooner or later, the insurers are forced out of business when the premium costs get too high to be affordable by much of anyone.
Clearly, the authors suffer from a lack of understanding of human behavior—particularly when it comes to young people who are not given to dealing with these sort of issues until the deadline approaches…meaning we really don’t yet know anything about the potential success or failure of the insurance pools available on the health care exchanges.
If you doubt this, you might want to review what took place with the forerunner of Obamacare—Romneycare.
According to Jonathan Gruber, one of the key architects of the Massachusetts health care exchange—a program that the overwhelming majority of Massachusetts residents favor and support—and one of nation’s leading experts on all things Obamacare, “Massachusetts launched its health insurance program at the beginning of 2007 but enrollment didn’t fully flesh out for a year. In fact, it was less than 6% of the year’s total by the end of the second month. (emphasis added)”
In other words, people of all ages tend to wait until the deadline is upon them before coming to grips with an obligation like purchasing health insurance. But if you have kids, you know that younger people are even more likely to delay matters such as this.
Yet, here we have the opponents of the Affordable Care Act, ready to declare the entire program DOA based on a prediction of ultimate demise via the ‘death spiral’—and all because the slow start of the federally operated state healthcare exchanges are precluding younger and healthier prospective participants from signing up during the initial weeks of availability.
Even stranger, Dr. Gottlieb argues that, as a result of the failures of the federal website launch and the negative cascading effect he suggests will likely follow, more people will be driven out of the exchanges due to higher premiums in future years. In its place, Gottlieb proposes, these people will turn to “off-exchange” policies, purchased by going directly to an insurance company, broker, etc. for policies that are not offered on the exchange.
Gottlieb writes—
“Over time, conforming and non-conforming insurance policies sold entirely outside the exchanges could look increasingly attractive to consumers; even accounting for the subsidies many people would get for staying inside the exchanges.”
Why would they do this? Because, Dr. Gottlieb suggests, the off-exchange policies will be cheaper.
Setting aside that I have no idea what Gottlieb is referring to when he speaks of “non-conforming” insurance policies as every individual insurance policy, whether available on the exchange or not, must, for all practical purposes, meet the basic benefits requirements set forth in the Affordable Care Act, I can’t quite fathom why buying less expensive insurance off the exchanges would be a bad thing.
There is a tendency among those dedicated to burying healthcare reform to miss the point when it comes to the objectives of Obamacare. They spend so much time working out how to creatively attack the law that they simply cannot recall why we needed healthcare reform in the first place.
At its core, the law is designed to do three things—get insurance company abuses under control, make healthcare coverage more readily available to virtually all Americans and institute a series of experiments designed to bend the cost curve in healthcare delivery.
This being the case, why would anyone care whether you buy your insurance coverage off-exchange or on-exchange, so long as you obtain healthcare coverage? What’s more, the individual mandate does not require that you shop on the exchanges—it only requires you to purchase a qualifying policy.
The healthcare exchanges are designed to create competition among insurance companies. Should it not work, and Dr. Gottlieb is correct that the events occurring on the exchange will produce lower costs of an off-exchange policy—even for those who qualify for subsidies which are only available on the exchange—then we will have learned that the exchanges did not create the intended competition.
But, if Gottlieb is right and people can buy a cheaper policy that meets the requirements of the ACA off-exchange, then the objective of the law will be accomplished.
The bottom line here is that, by any reasonable and rational metric, it is far too early to know whether or not the insurance programs offered on the healthcare exchanges will manage to maintain the balance required of sick versus healthy and old versus young. In the final analysis, the doomsayers may turn out to be right. Maybe it just won’t work.
Or, maybe it will.
This is something we will simply not know for quite a few years.
Therefore, where exactly is the benefit of predicting a dire result at this stage of the game based on no available evidence whatsoever? Can there be any possible use of this information aside from giving political opponents some newly minted ammunition? Will the knowledge that insurance policies offered on the exchanges could experience a death spiral—a possibility that has existed for health insurers since the dawn of the industry—do anything to improve the odds of success?
If there is anything we can be sure of, it is that there will be a great many surprises along the way as we make these major adjustments to our healthcare system—some that will be good and some that will not.
As for the suggestion that we are in some immediate crisis because the healthcare.gov website has not yet worked as required, Jonathan Gruber, again, provides a reasonable and rational explanation of what is really happening and what it means.
USA Today reports that Gruber describes the current situation as “DEFCON 1″—a political problem, but probably not a problem yet for the marketplace.
If healthcare.gov is not running by Thanksgiving, it would be “DEFCON 2″, a real problem because people want to get insurance by January, but it’s not a crisis.
The crisis, according to Gruber, arrives if people cannot get insurance until March of 2014.
Gruber added that, in Massachusetts, officials were not focused on how well enrollment went on a day-to-day basis. They looked at the long-term potential, and expected that people would sign up in time to avoid the penalty.
Finally, Gruber noted, “I’m pretty confident they’ll have it up and going by Thanksgiving.”
So, how about we leave the death spiral stuff in the back room until the moment comes to actually haul it out and parade it around?
After all, at the rate Obamacare opponents are tossing out and using up their theories of pending disaster, they will soon run through their play book and have nothing left in their quiver.
Wouldn’t that be a shame?
By: Rick Ungar, Op-Ed Contributor, Forbes, October 28, 2013
“Another Great Anti-Obamacare Lie Exposed”: Data Proves ACA Not Responsible For Growth In Part-Time Jobs
One of the more popular economic myths spun by the anti-Obamacare forces is the suggestion that employers are avoiding the law by moving to an employee model based on part-time workers rather than full-time employees.
For those committed to destroying the Affordable Care act by any means possible, who can blame them for seeking to misdirect based on using only a small part of the data as it pertains to employment when telling the full story blows up the entire meme? Such a claim is, after all, ear candy for an audience looking for any reason to hate the law, even if they don’t quite know why they so are so displeased.
The problem, however, is that this popular line of attack comes with a rather significant flaw—the claim is provably false.
While there are, no doubt, a few companies out there moving to increase part-time employees at the expense of full-time workers—mostly involving retail and fast food companies that have always depended heavily on a part-time employee model—it turns out that the frantic claims arguing that the ACA is causing some massive loss of full-time work is simply not supported by the empirical data.
While we will get to that data in just a moment, to better understand how the opponents of healthcare reform are selling this bit of disinformation, it is important to know the basis of their claim.
It begins by acknowledging that 27 million Americans are currently employed in part-time jobs—a number that is, in fact, well above the historical norms.
Left on its own, that bit of information ties in quite nicely with the suggestion that we can hold Obamacare responsible for these numbers when one considers that employing full-time workers holds the potential for greater benefits obligations for a company with 50 or more employees.
However, when one looks just one layer beneath the surface—a bit of research one might expect honest brokers to perform before informing the public that the sky is falling—a very different picture emerges.
There are—as defined by the Bureau of Labor Statistics (BLS)—two classifications of part-time workers.
Those who are working 35 hours or less because they cannot accomplish the full-time employment they desire are called “part-time for economic reasons”, while those who work 35 hours or less because that is all the work they want are part-time by choice.
A more careful review of the latest BLS jobs report out last week—a review in which the anti-Obamacare forces do not want you to engage in—reveals that while we do, indeed, currently have 27 million part-time workers in the economy, only 8 million of these people are working part-time because they cannot find a full-time job.
That means that 19 million Americans are working part-time because that is all the work they desire to have.
What’s more, not only does the September jobs report reveal that the number of part-timers wishing for full-time work showed no increase when compared to the previous month’s numbers, the report provides a piece of data far more important—
In September of 2012, the number of part-timers seeking full-time work comprised 6 percent of the workforce. One year later, the September jobs report reveals that the number has shrunk to 5.5 percent.
Thus, not only has this supposed employer desire to avoid Obamacare not increased the number of part-time workers in the country; we actually see that the numbers are on the decline.
Now, before you launch into a cynical attack on the numbers as something ‘fudged’ by the Obama Administration, you might want to bear in mind that the opponents of the ACA have based their own argument on the very same numbers—albeit using only the top-line figures to make their misleading point rather than conveying the full data that shows a very different result.
As the old saying goes, what is good for the goose is good for the gander.
There is something else you should probably know when attempting to make sense of the part-time worker picture—
As the following BLS chart reveals, the number of part-time workers as a percentage of the entire workforce has been on the decline since the numbers peaked with the onset of our deep recession in 2008—well before the concept of Obamacare entered into the public lexicon and conscious.
Does it surprise anyone that, as the economy has improved—even if far slower than we would like—the number of part-time workers have declined?
Yet, to hear the anti-Obamacare forces tell the story, not only is part-time work increasing—when it very clearly is not—they have chosen to pretend that this is the result of the Affordable Care Act rather than obvious impact our economic circumstances would naturally play in the part-time versus full-time worker scenario.
Clearly, more part-time workers seeking full-time employment have found more success as the economy has improved.
So, should we give Obamacare the credit for the reduction in part-time numbers? I don’t think so as, to do so, would be as ridiculous as the efforts to blame Obamacare for the large top-line number of part-time jobs.
More liberal babble from an Obamacare apologist?
While you are entitled to think so if this brings some measure of comfort, you should probably know that even the staunchly anti-Obamacare publication, The Wall Street Journal—relying on data rather than right-wing hysteria—has reached the very same conclusion.
If you find yourself surprised that so much of the part-time workforce is comprised of people preferring a shorter workweek to a full-time job, you might ask yourself who, typically, seeks part-time work?
Many of us can recall our younger days as students in need of some spending money. We were not the least bit interested in full-time employment at that time, only that weekend job to earn some gasoline and date money.
Nothing much has changed in this regard for today’s high school and college students as they continue to occupy their spot in the count of part-time workers by choice.
So, where did the growth in part-time workers by choice come from following our recession?
The answer can be found in two categories—
First, we have the homemakers who elect to make the children their priority when allocating their time.
When the recession hit, many of these people found that the breadwinner in the family was being adversely affected by the poor economy and resolved to help the family finances by getting a part-time job to augment income. Now, as the economy slowly improves, some of these people are able to leave the workforce entirely and return full-time to their desired day job—”stay-at-home” mom or dad. This is, no doubt, playing a role in the declining number of part-time workers in the workforce.
Secondly, we have those who hit retirement age only to discover that their savings and Social Security payments were insufficient to support the lifestyle they had hoped to experience during their sunset years.
It is no secret that the lack of sufficient savings to support of seniors in retirement is turning into an epidemic problem. If you are, somehow, unaware of this, I recommend that you read a piece entitled, “The U.S. To Face A Married Couples Retirement Crisis” written by my Forbes colleague, Richard Eisenberg, to get up to speed.
As a result of the difficulties facing retirees, it can come as no surprise that, as the baby boomers have reached the age of retirement, they play—and will continue to play—a major part in increasing the number of part-time workers in the country. These are people who want to, at the least, accomplish semi-retirement if they cannot afford to fully retire and opt to augment their savings and Social Security with part-time work.
When you consider how and why the numbers of part-time by choice employees grew following the onset of the recession and the arrival of baby boomer retirement, only the hardest of heads can fail to see how the top-line number of part-time workers grew, why it is now decreasing and why a full two-thirds of the part-time work force chose to be part-time workers. It would also take a very committed ideologue to avoid the stark fact that these part-timers by choice are not relevant to an analysis of the impact of Obamacare on the availability of full-time work.
What is relevant to the question are the eight million part-timer for economic reasons.
Given that the data is crystal clear that these numbers are falling year-to-year, it defies logic to claim that Obamacare is forcing these numbers upward. Indeed, even if the number of people forced to work part-time because they cannot find full-time work was on the rise, it would not make the case that Obamacare is to blame as the weak economy would present a better explanation. Such a result would, however, at least give some basis for the possibility that the ACA is as fault.
But with the numbers of those who are part-time because they can’t find full time work falling, the argument becomes absurd.
As I often note, there are some valid arguments—even if I might disagree with the much of the logic behind theses arguments—to support those who wish to take a stand against the Affordable Care Act.
However, when the opinion-leaders who seek to guide your point of view away from a fair, reasonable and rational assessment of the law by feeding you false arguments and half-stories easily disproven by readily obtainable data, it defies reason that anyone—whether for or against the law—would believe anything else these people are trying to peddle.
Simply put, if you are going to hate this law, don’t you think you should hate it based on actual information and data rather than half-truths and misrepresentations?
By: Rick Ungar, Op-Ed Contributor, Forbes, October 27, 2013
“More Of The Same”: Keeping Alive A Flawed And Self-Destructive Strategy, The GOP Fights On Against Obamacare At Its Own Peril
In the wake of the public uproar over the government shutdown, Democratic hopes for recapturing control of the House of Representatives next year have risen sharply. The party needs to pick up 17 seats, and the main question is whether the current furor against the Republicans will remain until the midterm elections of November 2014.
The House Republicans and their tea party allies, unbowed by their failure to defund President Obama’s Affordable Care Act, have signaled that they have just begun to fight. They have seized on his administration’s inexplicable botching of the law’s rollout to breathe new life into their efforts to kill “Obamacare.”
In so doing, however, they may be keeping alive the flawed and self-destructive strategy that took the country to the brink of financial default. Public opinion polls cited a record plunge in Republican popularity during the government shutdown, attesting to how poorly the tea party scheme to strangle Obamacare in its crib played on Main Street.
House Speaker John Boehner, still nursing the political wounds suffered for trying to appease the get-Obama caucus in the House, told the still-faithful on Wednesday, “We’ve got the whole threat of Obamacare continuing to hang over our economy like a wet blanket.”
Boehner may or may not be proved correct in that view. However, his observation suggests he and his caucus have no intention of getting off the track that led them over a cliff in the executive-branch shutdown, a fiasco for which the GOP gets primary blame.
Much will depend on whether the Obama administration can recover from the amateur hour of the law’s initial implementation and begin to deliver health insurance to the millions of Americans without it. The president seems to have taken his head out of the clouds over the technological screw-up by calling in more experts to straighten out the mess.
Contrary to its foes’ insistence that the law is Public Enemy No. 1, the uninsured public showed unexpectedly heavy interest in enrolling, or at least to exploring whether insurance offered under Obamacare would be good for them and their families. The jury is still out, much as it was on Social Security and Medicare when these programs were first enacted amid even louder laments of “socialism” and “socialized medicine.”
In any event, if the administration manages to overcome the law’s growing pains, the Democrats will have at least a chance to gain new political support among beneficiaries. Many of them are of income levels and ethnicities customarily inclined to vote for the party of Franklin D. Roosevelt and his breakthrough New Deal.
Meanwhile, exertions to keep the flame burning against Obamacare among the House Republicans and their self-appointed leader from the other side of the Capitol, Sen. Ted Cruz of Texas, could be a blessing in disguise to Democrats pointing to next year’s congressional elections.
Their fund-raising arms are experiencing an usual upswing compared to the Republican cash solicitors. The Democrats will be targeting key House GOP incumbents up for re-election in admittedly strong conservative districts who have benefited from gerrymandering. At the same time, moderate Republicans in Congress are starting to band together to purge the tea party influence in their ranks.
The heavy hit on the Republican brand has been emphatically underscored by the post-shutdown polls. The question is whether voters fed up with the party’s increasingly sharp turn to ultraconservatism, one not seen since the days of Barry Goldwater, will remain turned off at voting time a year from now.
By then, Obamacare may or may not be a principal catalyst for decision-making at the ballot box, pro or con, on midterm election day. The same polls also indicate that Americans still worry much more about the state of the economy and, particularly, high unemployment than about the state of federally subsidized health insurance.
But for now, the House Republicans’ reply to all the criticism of their stand against Obamacare is a promise of more of the same, along with hope that the law will indeed collapse, helping them recover from the severe political damage they have inflicted upon themselves.
By: Jules Witcover, The Chicago Tribune, October 25, 2013
“Health Care Sabotage 101”: The GOP, Not A Botched Website, Is The Real Obstacle To Implementing Obamacare
It’s the latest chapter of Barack vs. the Health Care Killers, The Continuing Saga of Posturing, Bad Faith, Spite and Ineptitude.
Republicans, who have used every trick in their playbook to gum up the works of the Affordable Care Act, are now holding hearings to investigate how the works got so gummed up.
They could save themselves the trouble by looking in the mirror, just as O.J. Simpson could have done to find his wife’s killer. But that would rob them of the chance to grandstand.
In fairness, they do have one point. The Obama administration botched the debut of its insurance marketplace website so badly that it fairly begged for an investigation. And since Republicans had little or nothing to do with the website, the blame for its failures falls squarely on the president and his deputies.
The screw-up was a gift. GOP lawmakers were calling the law a failure before most of it went into effect, but lacking any evidence they had to rely on mere accusation. Now, finally, they can say that their worst predictions had some validity.
Nevertheless, Republican “outrage” over the glitches is hard to take seriously. If they’re really looking to find what went wrong — and there was plenty — one suspects it’s only so they can clone the virus. Then anyplace where the law is working, such as Kentucky, Washington and Oregon, they can infect the system, watch it crash, shake their heads and snicker.
Come on, folks. Republicans want to “fix” what’s broken here as much as they want to “protect” women by targeting their reproductive rights and “defend” the vote by obstructing it. But because Healthcare.gov went live on the same day that the party crazies shut down the government over the law’s funding, they were too deep in their own morass to capitalize on it. Worse, they had to fold on the shutdown without getting anything in exchange. No wonder they’re pouncing on the chance to grill the people whose job it was to enable what they’ve called the worst law in the history of man.
Yes, the administration deserves to be on the hot seat. There was more than enough time to make sure the website worked properly and there is no excuse for its failure to do so.
Mr. Obama had to know that the first weeks would set the tone for public perception. If he had wanted to raise doubts about the program or shoo people away, he couldn’t have done a better job of it.
Once again, we have to wonder what goes on in his mind. This legislation is only the most important accomplishment of his presidency. He put everything on the line for it. Millions of people are counting on it for coverage they cannot otherwise afford. If he can’t get the introduction right, well, let’s just say it’s a good thing he won’t be running again.
But then there’s that pesky caveat called perspective. A botched website, which can and will be repaired, is nowhere near the biggest obstacle to the success of health care reform. That distinction goes to the program’s sworn enemies, who have been conducting a misinformation campaign of false claims and scare tactics since the law was passed. To hear them tell it, “Obamacare” will turn people into devil worshipping socialist homosexual vegetarians who want the terrorists to win. So of course they will do everything they can to stop it.
Exhibit One: The quickest and easiest way for states to enact the law’s reforms is to expand Medicaid, which would trigger a huge infux of federal dollars for the first several years. Yet Republican governors in 26 states have refused to do so. The primary excuse is that they won’t be able to afford it once the federal money stops. The subtext is that they’d rather sabotage the president than help their own citizens get the treatment they need. Thanks to them, according to a New York Times analysis, the new law will leave out two-thirds of the nation’s black citizens and single mothers, and half of the low-wage workers who currently lack insurance.
In addition, GOP governors (including our own Tom Corbett and, regrettably, a few Democrats) have refused to create insurance exchanges that would facilitate reaching the uninsured. Instead, those people will have to go to the federal exchange.
They’re also refusing to assist applicants and blocking the use of so-called “navigators,” whose job is to help people understand the law and sign up for its benefits. When a constituent calls with questions, they are making sure they’ll get no answers.
Then there was the government shutdown, during which Republicans offered more than 40 measures to cripple the law. They failed in every sense, but it still cost the country $24 billion.
It doesn’t take a genius to see where the real obstruction lies. For all its screw-ups, the Obama administration is trying to make health care reform work. And for all their public posturing, Republicans are trying to ruin it. But the law was duly passed, it’s here, and it’s not going away. They should save the fake righteousness for a cause that isn’t already lost.
By: Sally Kalson, Pittsburg- Post Gazette, October 26, 2013
“Raising The Medicare Age”: A Terrible Republican Idea Exposed As Even More Terrible
Yesterday, the Congressional Budget Office came out with a report assessing the budgetary impact of something many conservatives have supported, raising the Medicare eligibility age from 65 to 67. What they found was that the change would save far less money than had previously been assumed: only $19 billion over the next decade. The main reason is that many of the people no longer eligible for Medicare would be eligible for either Medicaid or insurance subsidies through the health exchanges, so the net effect on the federal budget would be small.
But more important than that, this is an opportunity to remind ourselves that when government is doing something worthwhile, doing less of it isn’t a good idea even if it saved a lot of money. And if cutting back only saves a modest amount of money, it’s a really bad idea. You know what else would save a lot of money? Eliminating the United States Navy. But I’m guessing that most conservatives think having a navy is a good thing. Medicare is a spectacular success, one of the greatest things this country has ever done. Letting fewer people get on it is like the Miami Heat saying, “We won the championship last year, so what we need to do now is get rid of LeBron James.”
Don’t forget, Medicare is more efficient and less expensive than private insurance. Let me repeat that: Medicare is more efficient and less expensive than private insurance. It costs less to administer, its costs have risen more slowly than those of private insurance, and its beneficiaries love it. I realize that these facts cause many conservatives to begin blinking rapidly as their brains threaten overload from the cognitive dissonance produced when they realize that there are places where a government program outperforms its private-sector counterparts. But it’s true.
Yes, Medicare’s costs are projected to rise greatly in the coming decades. But that isn’t because the program doesn’t work, it’s because of the high cost of health care in general, and because there are going to be a lot more old people. And not incidentally, there was one piece of legislation that found ways to save hundreds of billions of dollars from Medicare’s future expenses. It was called the Affordable Care Act, and you may remember that Republicans didn’t think too highly of it. In fact, they even pretended to be terribly opposed to those very savings, falsely characterizing them as cuts to benefits. But instead they’d like to just make the program available to fewer seniors?
If you don’t let people get on Medicare when they’re 65, it isn’t as though they’ll just step into their suspended animation pods for two years and then pop out when they turn 67. Those people will have to get coverage from private insurers. That means they’ll be paying more out of their own pockets. And look, I realize that many conservatives believe that someone getting health insurance from the government is an inherently bad thing, no matter how well the program works. But it isn’t. When a senior goes on Medicare, it’s something to be celebrated. It isn’t free, but it’s government doing exactly what it ought to do.
By: Paul Waldman, Contributing Editor, The American Prospect, October 25, 2013
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