Monthly Archives: October 2013

A “Fix” for Obamacare

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Christopher Weaver and Louise Radnofsky wrote in their optimistically titled Wall Street Journal article, “Healthcare.gov’s Flaws Found, Fixes Eyed,” that, among other things,

By Thursday morning, a new tool that allows users to preview plans without registering appeared on the site with little fanfare.

I’ll come back to that.  First, though, here’s a bit of the backstory on that claim, also from Weaver and Rasdnofsky’s article.

Much of the problem stems from a design element that requires users of the federal site, which serves 36 states, to create accounts before shopping for insurance, according to policy and technology experts.  The site, HealthCare.gov, was initially going to include an option to browse before registering, but that tool was delayed, people familiar with the situation said.

The upshot of this decision (which was made not for technical reasons but so that a purely politically determined deadline for the Web site’s rollout could be met) was that at any point along the sequence of steps involved in account generation, a failure—a “glitch”—could halt the entire process.  Those bottleneck points include

  • software for collection of user information
  • software transferring data to a system used by Medicare’s Enterprise Identification Management
  • software sending data to a separate party’s system for confirming new users’ identities
  • a government identity-checking system

As an aside, it’s important to note that these technical problems would have been there waiting to bite a poor user after he made his choice and moved actually to buy a policy, albeit somewhat mitigated by the reduced number of actual buyers compared to the larger number of shoppers.

The foolishness of deciding to not bother with this standard, economy-wide shopping sequence has been noticed by folks besides me:

“People should be able to get [insurance] quotes” without going through the technical hurdles upfront, said Jay Angoff, a former director of the federal office overseeing the development of the marketplace, also known as an exchange[.]

When was the last time you went to Walmart to check prices and the door greeter required you to fill out an account application form—and be approved for that account—as a condition of gaining entry to the store?  Or Amazon?

Anyone?  I didn’t think so.

But that’s all fixed as of last Thursday, was it?  Not so much.  Below are a couple of screen shots of my attempt to shop before opening an account yesterday (Sunday, three days after this “fix” was rolled out).

On selecting the shopping path from the opening page of the version of HealthCare.gov set up in Texas, I was met with a few questions designed to characterize my demographic so the Fed’s exchange could know for what sort of policies I was eligible.  So far, so good.  This screen shot is what greeted me on hitting NEXT after answering the demographic questions:

Yep.  No policy options, no attempt to refine my status, just many statements of “You might consider this search, you ought to learn about that,” and so on.  So I tried to consider and to learn: I selected the “How can I get lower costs…” at the bottom of the above screenshot, and the next screenshot is what I got in response:

Yep, again.  No policies with coverage descriptions and premiums charged.  More stuff about what to learn, things to consider.  It’s important to note that this is a long page, with a long list of things I ought to consider or to learn about, all based, ostensibly, on that demographic information I provided at the start of this parade.  Scrolling to the bottom of the page, this is what I got:

In case the link is hard to read, it says [emphasis added], “apply for coverage, compare plans, and enroll.”

I still have to apply first, and see coverage options and prices second.  Two weeks into the Obamacare Purchase Program failure.

This is the capability of a Federal government that insists it knows better than we do how to manage our health care and our health insurance.

Mentalities: Engineering or Liberal Arts?

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Purdue University President Mitch Daniels (and ex-Governor of Indiana) had a thought on STEM graduates and gluts.  He spoke about this at his keynote address to the National Academy of Engineering a week or so ago.

Engineers, unlike, for instance, lawyers or financial experts, frequently generate through their innovation new work for themselves and others.  Somewhere in any potential “glut” will be new Watts and Edisons and Noyces who give birth to entire new industries that require the services of engineers and non-engineers alike.

But even if we were to somehow outrun the market’s need for engineering talent, we will be a far stronger country if the engineering mentality takes a more prominent place in our national conversations.

The Liberal Arts mentality (those lawyers and financial experts, and history and philosophy majors), on the other hand, worries too much about “what might go wrong” and not enough about “what is the problem, and how do we fix it” that is the STEM’s approach to life.  The Liberal Arts mentality worries too much about “we have to do all of this for the less fortunate” and not enough about “how do we help the less fortunate help themselves, and how do we pay for that” that is the STEM’s approach to life.

There’s nothing wrong with Liberal Arts approach; it provides an important alternative way of looking at the world.  But for a burgeoning, prosperous economy in which everyone, regardless of their individual situations, can participate, we need the engineer’s problem scoping and solving mentality.

Jobs and a Policy

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There are conflicting reports concerning the impact of Obamacare on job creation.  The President’s Council of Economic Advisors says, for instance, that since Obamacare’s enactment in 2010, 9 out of every 10 jobs created have been full time jobs—that is, by the Obamacare definition, jobs that required 30 or more hours of work each week.  Other economists disagree and talk about stunted job creation due to Obamacare.

Who’s right?  The answer depends on more than whom you ask; it hinges on the time period covered by the answer.  CEA is right when the time frame runs from the end of March, 2010, when Obamacare formally became law.

Andrew Puzder, Chief Executive Officer of CKE Restaurants, essayed a different answer, based on a different time frame, in a recent Wall Street Journal op-ed.  He suggested that (paraphrasing here), instead of spring 2010 to now, the relevant time frame is January to July 2013.  Why those six months?  For most of the preceding three years, the content of Obamacare was ill-understood, with clarity only trickling out over the time.  Businesses aren’t going to make major changes, including in employment, when they know they have only a poor understanding of the future.  They’re going to stick with their status quo, including the types of jobs for which they hire.

Two bits of clarity that did emerge over those three years were the definition of “full-time employment” (that 30 hours per week bit) and the full-time employment baseline to be used in determining a business’ insurance requirements under Obamacare—what the look back period would be.  The look back period turned out to extend as far back as 12 months prior to the date the employer mandate was to take effect.

With an effective date of 1 Jan 14, that starts our period of interest at 1 Jan 13.  On 2 July, President Barack Obama decided he wouldn’t do his Constitutional duty of law enforcement as it applied to the employer mandate: he announced he would not enforce that mandate for a year.  1 July 13 thus marks the end of the two quarters of employment data that exist prior to Obama’s decision diluting the mandate’s effects on hiring.

What was the effect of the employer mandate on hiring during the time employers thought the look back period was operational?

Between Jan 1 and June 30, according to the Bureau of Labor Statistics, the economy added 833,000 part-time jobs and lost 97,000 full-time jobs, for net creation of 736,000 jobs.  In reality, the economy overall added no full-time jobs.  Rather, it lost them.

And

In July and August [the two months following the announced delay in enforcement and so after the look back period], the economy lost 20,000 part-time jobs and added 132,000 full-time jobs.

That’s pretty unequivocal.

A Thought on Government Spending

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I’m prompted by Treasury Secretary Jack Lew’s testimony before the Senate Finance Committee Thursday.

The Wall Street Journal paraphrased him, in part, with this:

Given current spending and tax levels, the government would probably have to cut spending by at least 30%—or $100 billion—a month if the borrowing limit wasn’t increased.

This is an excellent argument for Congress getting spending under control.  Think about that: the Federal government, by Lew’s own claims, is saying it spends $100 billion per month more than it collects in tax (and other) revenues.  The Federal government, this year alone, is spending $1.2 trillion dollars more than it’s collecting.  That $1.2 trillion deficit goes right to our national debt; we borrow to cover that shortfall.  Getting this profligacy under control—eliminating that profligacy—is the only way to get rid of budget deficits, and the elimination of those deficits—not their reduction, but their elimination—is the only way to avoid having to repeatedly increase the amount of our borrowing, the only way to eliminate the “need” to repeatedly raise the debt ceiling—which is no ceiling, no limit at all, if it’s always raised for the asking.

Along these lines, Lew also said this (direct quote, no paraphrase):

I don’t believe there is a way to pick and choose on a broad basis.  The system was not designed to be turned off selectively.  Anyone who thinks it can be done just doesn’t know the architecture of our multiple [payment systems].

This is proof of our need to rationalize and streamline our payment systems, and the ideal time to do this is while we’re reducing and reforming our spending as a whole.