Delay the Individual Mandate?

Kate Rogers, of Fox Business, had some thoughts.

Delaying the sign-up deadline would give the government more time to work out the kinks on healthcare.gov and allow users to become more familiar with the site and find the best plan that fits their needs, experts say.

But would it give sufficient time for the rest of the problems with implementation data reporting to insurers, payments for claims, etc to be worked out?  Time to work out the “kinks” in the law itself?

On the don’t delay side, she has this:

“As an economist, I can assume that the people with the most expensive health-care needs: the oldest and sickest, would be spending thousands out of pocket on health care and are the ones with the most demand for the product,” [Devon Herrick, National Center for Policy Analysis Senior Analyst] says.  “Younger people, if they get a break or are told they can wait three months, they may do that.  You can’t run a risk pool with the sickest people jumping in on day one, and the healthiest on day 90.”

Why would the healthiest jump in at all, though?  This is a bad bet for them.  Further, under what moral system can a government compel them to jump in?

In the end, the Individual Mandate needs to be delayed, if only to balance the Employer Mandate delay—but both of those need to be delayed only as stepping stones to getting rid of Obamacare and replacing it with a proper, market- and patient/doctor-oriented reform.

Obamacare Sign-up Rates

Despite HHS’ refusal to provide any figures about Obamacare policy purchase rates—they’re still routinely touting Healthcare.gov visit rates and account creation rates as though those numbers mean anything—some information is trickling out.  The Daily Caller has some of those data.

Here are some of the cancellation numbers:

  • Insurance carrier Florida Blue cancelled 300,000 policies—80% of Florida’s individual coverage policies
  • California’s Kaiser Permanente canceled 160,000 plans—half of its insurance plans in the state
  • Blue Shield of California sent 119,000 notices in mid-September alone
  • Insurance Highmark in Pittsburgh plan to cancel 20% of their total plans
  • Independence Blue Cross in Philadelphia plan to cancel 45% of their total plans
  • 800,000 plans in New Jersey will be cancelled by the start of 2014

This compares with Obamacare sign-ups—anecdotal data to be sure, since the Obamacare administration, as I noted above, refuses to provide any figures at all:

  • South Dakota reported that 23 people enrolled in the exchanges
  • North Dakota enrolled 20
  • Alaska has enrolled 7

The Daily Mail reported two weeks ago that, from its own sources, all of 51,000 Americans had signed up in the first week (since then, the government has really clamped down on leaks about its numbers).  If we optimistically double that rate as Healthcare.gov starts to get its software…kinks…worked out, we get an additional 250,000 actually signed up by now.  Even quadrupling that first week rate—to 460,000 by now—leaves the sign-ups far short of the cancellations, with more cancellations yet to come.

Hmm….

Some of the Worst Is Arriving

Earlier, I wrote about Senator Tim Scott’s (R, SC) concerns about the broader picture of the Obamacare failure.  It seems Scott was optimistic in some respects.  Jerry Markon, in The Washington Post, has written about the already ongoing failure Obamacare’s insurance co-ops, which are different from the exchanges that some states have set up and which the Federal government, under the auspices of Obamacare, has set up in 36 states and set loose on an unsuspecting public (that HealthCare.gov thingie).

These co-ops are

a network of nonprofit insurance companies aimed at bringing competition to the marketplace, long dominated by major insurers.

But these co-ops, started as a great hope for lowering insurance costs, are already in danger.

The danger is clear and present:

One co-op, however, has closed, another is struggling, and at least nine more have been projected to have financial problems, according to internal government reviews and a federal audit.

Their failure would leave taxpayers potentially on the hook for nearly $1 billion in defaulted loans and rob the marketplace of the kind of competition they were supposed to create.  And if they become insolvent, policyholders in at least half the states where the co-ops operate could be stuck with medical bills.

That’s out of roughly 24 in 24 states.

Worse, these operations were designed to fail: the then-Democrat dominated Congress loaded these entities with restrictions that, individually, elevated the risks for their survival, and in the aggregate, made their survival nearly impossible.

  • Federal grants for the co-ops were converted to loans with tight repayment schedules
  • co-ops were barred from using federal money for marketing
  • co-ops were severely limited from selling insurance to large employers…the most lucrative market

And so on.  This is one of the outcomes of central control of an economy—or even one-sixth of one.

The Obama Infomercial

Here’s another installment in President Barack Obama’s late night cable shill Rose Garden 800 number pitch (Operators are standing by!):

The online chat functionality turns out to be as dysfunctional as his 800 number—although, in fairness to the pitchman, he didn’t push the chat bit.  In an example excerpted on YouTube, you can see agent “Dean” advising a customer, “Adrian:”

Don’t lose your sanity over this website.  Try it.  If it doesn’t work, walk away.  Try it tomorrow.

and

Don’t run with scissors.

The transcript of the complete 12-minute chat is here (scroll down).  As you read it, notice two things: one is the admission of using canned answers, together with their near-irrelevance to the questions being asked.  The other is Agent Dean hanging up on Adrian in mid-chat.

This is government customer service, government medicine style.

The Worst Is Still To Come?

Senator Tim Scott (R, SC), whose business experience is in the insurance industry, thinks so.

After 15 years in the insurance industry I will tell you that the reality of it is this: if it’s hard on the front end, it’s going to be really painful when we get to paying, having to take care of claims, having to take care of people.  This is a real challenge and if it’s this bad now, I fear the worst is still to come.

Indeed.  If the system is unable to convey accurate information about an applicant for an insurance policy to the company actually handling the insurance, how can it be expected to convey accurate information about an insuree when he files a claim?  Or when his doctor files the claim for him?  Or make payments to the doctor or hospital based on that (potentially inaccurate) claim from that (potentially inaccurate) policy?

Keep in mind that, at the time the insuree files his claim, he’s just undergone an expensive procedure, and he needs the money.  Or the doctor/hospital who’s fronting the patient needs the reimbursement.

The filing to payment/reimbursement process usually was long and dragged-out, even before the advent of Obamacare.  How many of you have had an expensive trip to the hospital, or an expensive procedure done in your doctor’s or dentist’s office, and seen the bills come trickling in over the ensuing weeks or months—the initial bill, then what the insurance company covered, and a subsequent bill?  Then a final settling-up?  But at least then, it was accurate.

This government-generated software that fronts for Obamacare is a disaster now.  This same government-generated software also does that backend system of claim process and payment for Obamacare.

Heads up.