ACA Realities - by Harper

Obamacare was written by and for the insurance companies. United Healthcare dispatched lobbyists and lawyers onto the Senate staff of Max Baucus to write the bill that had the backing of the Obama White House. The bill diverts hundreds of billions of dollars that previously went as payments to doctors and hospitals directly into the pockets of the big private insurance companies.

Whatsmore, under Sections 1341 and 1342 of the Affordable Care Act, the insurance companies are guaranteed their projected profits. If there are shortfalls in their profits due to changes or failures in the Obamacare bill, taxpayers have guaranteed 80 percent payouts to the insurance companies. Now that there has been a delay in deadlines for small businesses to comply with ACA, now that people with previous individual insurance policies have been allowed to keep those policies ("if you like your previous policy you can keep it") and now that young healthy people are going to be able to buy cheap catastrophic care insurance at a fraction of the costs of ACA-compliance policies, the insurance companies are going to see their projected profits shrink.

Look what happens when the public learns that they are committed to another bailout! Furthermore, even the New York Times has documented that more than 9 million Americans will be stuck in the "gap" between Medicaid and affordable policies. If they can't pay the premiums, they can't get the policies offered on the exchanges, even if they are slated to have the government subsidize their policies. Of the first 1.6 million people who successfully navigated the website, 1.4 million were automatically signed up for Medicaid due to low incomes. But many people are finding that doctors are not taking Medicaid patients anymore because the cuts in payouts for Medicaid are so severe that they can't afford it. This is a disaster that will be playing out more and more in the coming months. Coming out of World War II and the experience of the military, Congress passed the Hill Burton Act, which was on the books until the mid-1970s when the for-profit HMOs were legalized. Under Hill Burton, there were regular surveys of America's medical needs and there were mandatory amounts of doctors, specialists, hospital beds, etc. per geographic area. A recent report indicated that if we had a Medicare for all single-payer program, $400 billion in overhead costs would be saved in year one. But the Obama White House told Congress that single-payer was off the table and that the system would center on for-profit insurance companies. This is yet one more example of the Obama Administration's slavish loyalty to the big Wall Street banks and insurance companies that paid for his two election campaigns.

Comments

[tv]

"A recent report indicated that if we had a Medicare for all single-payer program, $400 billion in overhead costs would be saved in year one"

From efficient government management?
That same government that's done such a good job so far?
OR
Using the Canadian/UK model of rationing?
Reducing medical costs by limiting services and putting specialists on quotas.
Not good for people's health, but cheaper.

But then, this whole mess has never been about health care.
It's about creating a new class of entitled voters - and the political power excepted to come with it.

[Lesly]

"But the Obama White House told Congress that single-payer was off the table"

I attended a local Democratic rally when the HCR debate-that-wasn't got underway. Brown was in and out. Kilroy refused to say whether Democrats would commit to single payer. Her aide scowled at me. The protesters/hecklers outside were as approachable.

Friends, enemies and frenemies didn't believe me when I said insurance companies would end up being the beneficiaries. It was the beginning of the cannibalization of Democratic sympathizers (I washed my hands of the party when the 110th reauthorized the Patriot Act) in the service of Obama's legacy.

I'm for single-payer. Get it right, or leave it alone.

[steve]

There are so many false political narratives out there, and two of them that thus far have tended to define the Obamacare debate are 1. it's a policy to make insurance affordable for the majority who no longer can easily afford it, and 2. it's socialized medicine. The false debate seems to revolve around those.

Of course, as you demonstrate, it's neither. Imho, it's a program to keep the increasingly dysfunctional for-profit heath insurance model creaking along for a few more years.

The debate is similar in its falseness to Obama's role in Iraq. Certain Obama cheerleaders hailed the US withdrawal from Iraq as evidence of Obama's peace-making sensibilities, suitable for the peace laureate. Of course, Obama worked for months to extend the military presence, and it was Iraq that said no, and pulled the plug, not Obama.

And of course those dem partisans all conveniently forgot that it was Bush who negotiated the withdrawal date, not Obama.

Now, with Al Qaeda taking Fallujah, the repub partisans and rightwing media, buying into the false dem narrative that Obama willingly ended the war, are accusing Obama of having "lost" Fallujah.

Of course, all these false narratives serve to deflect from the real issues, and just stir up political posturing, enabling Pepsi and Coke to market themselves as having meaningful differences.

[Tyler]

It was written for insurance companies AND the Democratic base of poor minorities via wealth transfer from the middle class.

Let's give the blame where blame is due.

[JerseyJeffersonian]

All this is true. I knew in 2008 that Obama was a lying, self-loving weasel who had his eye on the big payout that he could expect after his time in office from serving the interests of his Big Money playmates. I detested McCain and Wasilla Barbie, but I owed a duty to myself to not vote for the purported "lesser evil", and so I voted third party that year, and yet again in 2012.

But let's not be too quick to let the Congress off of the hook here. They had agency, too, agency that they could have used to guarantee that single payer got a fair hearing, but decided not to exercise it. And why not? Because they were largely in the pockets of the very same Big Money playmates as Obama. So the best interests of the citizenry be damned, they chose corruption over their clear duty.

The sheep looked up, and were not fed, in this instance as in so many, many others over these last decades. Untouchable banksters, captive regulatory agencies, Federalist Society activists squatted down on the judicial benches vaulting corporate interests over those of the citizens, a "Justice" Department that can't remember in what Justice might consist... The litany of shame goes on and on.

The stench of corruption emanating from our so-called leaders rankles my nostrils. I fear for the future of my stepson and his wife, and understand the qualms that they have about bringing children into the world, something that is particularly disheartening when I reflect upon what good parents they would be, and how their children would be a credit to their family, and an asset to their community. But seeing what I have seen, I can't argue with them if they feel that the deck is increasingly stacked against them, regardless of their good characters and their work ethic. Perhaps these "quaint" values no longer count for much, given how Our Betters have opted for debt slaves toiling on their latter day latifundia as their preferred social construct.

[William R. Cumming]

YUP!

[robt willmann]

The Obamacare Patient Protection (?) and Affordable (?) Care Act (ACA) has the two sections mentioned by Harper, 1341 and 1342, in Part 5 of Title 1, Subtitle D, which is called "Reinsurance and Risk Adjustment".

That part contains only three sections, each with its own title. Section 1341 is "transitional reinsurance program for individual and small group markets in each state"; section 1342 is "establishment of risk corridors for plans in individual and small group markets"; and section 1343 is "risk adjustment". They take up about four and a fourth single-spaced pages.

Section 1341 requires a reinsurance program that the States must set up starting in January 2014. Reinsurance is insurance bought by insurance companies to cover certain problems (risks) that might happen to them. Health insurance issuers and third party administrators on behalf of group health plans are required to make payments to a reinsurance entity which will then in turn make payments to health insurance issuers that cover "high risk individuals" in the individual market. This program is to last three years starting now. The health plan companies will be shuffling money between themselves through at least one reinsurance company in each State.

Section 1342 gives us some real comedy by making up a new name, "risk corridors", for what are really subsidies from taxpayers and a taxpayer bailout to the health plan companies. I kid you not: "The Secretary shall establish and administer a program of risk corridors for calendar years 2014, 2015, and 2016 under which a qualified health plan offered in the individual or small group market shall participate in a payment adjustment system based on the ratio of the allowable costs of the plan to the plan's aggregate premiums". If the "allowable costs" of providing benefits under a plan are more than a certain amount above the "target amount", the Secretary pays money (originally from the taxpayers) to the health plan company; if the allowable costs are a certain amount below the target amount, the company pays money to the Secretary (the government, but not back to the taxpayers).

Section 1343, "risk adjustment", is not limited to three years. It says that each State shall assess a charge on health plans and health insurance issuers if the "actuarial risk" of the enrollees of such plans or coverage for a year is less than the average actuarial risk of all enrollees in all plans or coverage in the State for such year; and that the State shall provide a payment to health plans and health insurance issuers if the actuarial risk for a year is greater than the average actuarial risk.

In other words, section 1343 can give taxpayer money from a State to health plan companies based on a high "actuarial risk", and not on documented high costs.

The ACA is Public Law 111-148. At least some (or all) of it is in Titles 42 and 26 of the U.S. Code. You can find it at what used to be the Library of Congress web site--

http://thomas.loc.gov

and which now switches to--

http: beta.congress.gov

See, http://beta.congress.gov/about

[Edward Amame]

Oh please. The ACA sucks but it's better than what we had.

Single payer, which I favor, never had a chance because Socialism yada yada and because the insurance industry wouldn't allow it.

[Fred]

If you weren't sick before just read the details of the ACA and you will be.

[Charles I]

Following on Shrub's drug plan profits guarantee, lets follow cui bono, as I said before. Its corporations that KEEP the dough they already rake in, not the Dems and the poor. There is NO TRANSFER of wealth from corps to any citizens.

[Charles I]

Huh. Fancy that. Must have been written by the free trade drafters, who always insert a provision to compensate a corporation for "taking" its putative future profits - when no business has been conducted - should domestic law and regulation preclude a more straightforward manner of looting the commons by usual business operations.

[NancyK]

I agree with you completely, single payer is the answer and there is no way the Republicans in Congress would ever let it happen. They have their great medical insurance and that is all they care about. Now we hear them whining how ACA will punish the middle class, when exactly have they cared about the middle class.

[NancyK]

There are a lot of poor white people too. Have you ever been to West Virginia, Kentucky, Tennessee? I agree that insurances companies will be the big winners, but they have always been the big winners, nothing much has changed. As a nurse I worked for a year as the liaison between the insurance companies and the hospital and the insurance companies were brutal,they tried to deny everything they could whether or not the patient needed it. On the other hand the hospital wanted to discharge the patient as soon as the insurance ran out or was denied.

[Tyler]

I've relatives in all three, and my point still stands that this is wealth transfer.

Please include stories of Medicaid short changing your poor people in the next sob story and the hospital expecting them to foot the bill TIA.

[Tyler]

No the Dems get the votes for the gimmedats and the poor continue to get free stuff from Uncle Sugar. Cui bono indeed.

[Tyler]

I too thought our system of specialty hospitals and plans based on your needs was nonsense. The days of volunteer firefighters and New York musicians having their own plans are OVER! One size fits all insurance with narrow provider markets and ridiculous deductibles is much better.

However Comrade, some may ask HOW we pay for single payer. Well we will fall back on that old standby of "taxing the rich*".

Viva la revolucion!

* rich being an arbitrary number as defined by a Chicago "community organizer" who never turned a hand's span of private labor in his life

[Tyler]

I personally like the part about how they knew hundreds of millions were going to lose their insurance but said EFF IT UTOPIA DEAD AHEAD!

Also the fact that they combined a student loan bill with the ACA so that they could claim the loan repayments as revenue under ACA and show how they were saving money.

[Mark Kolmar]

We need an engine that delivers a range of standard care, and another engine that delivers R&D. The German model is a start. I'm not one of those people who thinks process efficiency is the same thing as social or moral efficiency. So maybe a place will continue for a private insurance industry legislated into 20% profit. Will they deliver the R&D, or can they rest on earlier accomplishments and increase profits at the same time?

I see a few technical fixes that are indicated, but how likely is that?

[Matthew]

tv: Facts are the enemy of rhetoric and ideology. See http://healthaffairs.org/blog/2011/09/20/medicare-is-more-efficient-than-private-insurance/

[different clue]

The Democratic base of poor minorities is just a conduit through which middle class wealth can be transferred to the insurance companies. The poor minorities are just used as cover to obscure the intended beneficiaries of the transfers . . . the insurance companies. Or so it looks to me.

[different clue]

I have long wondered how many accusations against Obama of socialism have been reverse-psychology operations against DemParty members to convince them that Obama is not really Wall Street's pro-OverClass Warrior. I wonder how many DemParty members say to themselves: " if the
RepParty is calling Obama socialist, maybe he really is a liberal."

[jon]

Politics is the art of the possible. Health care reform had to be a bill that could make it through Congress. If doctors, hospitals, insurers, pharmaceutical companies and related industries had opposed the ACA it would have been defeated. I'm disappointed that Obama refused to put single payer on the table, but I imagine that his advisors told him that it was a hopeless play and might wreck getting to any deal.

The simple fact is that US health care couldn't continue the way it was. Costs were rising 15% a year, insurance policies were crippling and insurers wouldn't cover you when you needed care. The US pays more per person for health care than other developed countries. Our system is overly complicated. And our health, longevity and quality of life lags other nations.

No one really likes the ACA, but at least it's a start at making changes to the healthcare system and fixing some of the problems. I'm sure it will change. I'd start by cutting out the private insurers; they are bloated and profit seeking, complicate care delivery, and are poor at cost containment. But to do that, they have to be isolated politically, and that will take time and effort.

[different clue]

Is it? Is it? Naked Capitalism blog offers many detailed articles describing how it will be worse for many people than what they had before. Saying that is an acceptable price to make healthcare better for some people than what they had before is justification of human sacrifice.

Senator Baucus and Obama (and others) conspired to pre-emptively rule out any open hearings / discussion of Single Payer because they knew how much of a chance it had . . . so much of a chance that the insurance industry needed the collaborative conspiracy of a pro-OverClass Congress and President to make sure it wouldn't be allowed.

[Matthew]

Tyler: Both the corporations and the poor are getting a wealth transfer.

[Dr. K]

I voted for Pres. Obama when I was paying $1200/yr for health insurance. Now I pay $600 for health insurance. Same health care. Same doctor. Just less money. Win/win for me.