"I mean, people have access to health care in America. After all, you just go to an emergency room.".
-G.W.Bush, 7/10/07.

(Quote Source: Official Bush White House U.S. Government Archives, Paragraph 16, here).


To: FULL SITE CONTENTS (click here).

(11/2013) Back in November of 2012, Obama Won Reelection and the Senate stayed Democratic. The last obstacle (Romney and a Republican Senate) to enactment of Obamacare (=The Affordable Care Act) was taken away. (Well, actually just this month, Oct 2013, the Republicans did a surprise action "Repeal Obamacare or We'll Destroy the Country" by shutting down the government for two weeks (minor) and then threatening worse by not raising the debt ceiling, and knocking out 5% of consumption to the U.S. economy and really making the already bad jobs situation much worse). The Republicans seem to have lost this battle, (though they may do it again in 3 months) and Obamacare goes into effect in January, with exchanges already open. (The internet-site version of the exchanges to find and buy insurance used in many states got messed up technically, and this could be so for a while, but that's a pretty minor problem in the scheme of things: there is maybe 20 hours of time on the site wasted for some, but that's small compared to millions of people going broke in medical bankruptcy, and, of course, dying from lack of health insurance. I live in Massachusetts, the only state that already has its own version Obamacare, and last time, on the first day of enrollment time, the MA internet site was overloaded with users, and kicked me out, but I just enrolled on paper, and 7 days later I had my proof of enrollment back in the mail.)Well, yes, at the moment (mid Nov 2013) the Federal site is worse than this, but its still small compared to the problems solved.)

The main provisions of the Obamacare law for people reliant on their own non-employer (="individual") insurance are that health insurers may no longer deny coverage or charge more for people with pre-existing conditions, or exclude coverage of pre-existing conditions. Further, people with lower incomes get partial or complete subsidies (on a sliding scale according to income and family size) so they can afford to buy the health insurance (with major exception (1), as below).
There will also be a modest tax penalty on people who can afford insurance, but do not pick it up. This is important to keep people who can afford insurance from freeloading on us all by not having insurance and just going to the emergency room whenever they get sick. (Under a Reagan-era law, the hospital has to stabilize a person if they are sick and show up at the emergency room, even without insurance. The person at the emergency room in that case is legally responsible for charges to the extent of all the assets they have. However, in many cases, the hospital isn't sure if it is worth their while to spend money on lawyers to go after those assets, which they are after all not sure how much you might have. And in some cases people don't use their real names at the emergency room, so this makes it harder for the hospital to recover. So the hospitals just raise prices for everyone to compensate for the money they can't collect for the emergency room services. The tax penalty under ObamaCare, for people who can afford insurance but choose not to buy it, is designed to discourage that freeloading.)

There are some real potential problems ahead, which are overwhelmingly, I am sorry to say, due to Republicans.

(1)MAJOR EXCEPTION TO AFFORDABILITY: in 26 Republican states the state's Republican governor and/or legislatures have exercised their option, given in the (unexpected) June 2012 Supreme Court decision on ObamaCare, not to extend coverage to a large group of low-income people (the group being people not so extremely poor as to be covered under pre-Obamacare-extended Medicaid but still very low income: income to about 130% of the poverty line -- the extension of Medicaid is how those particular people were supposed to have gotten their full subsidies in the enacted ObamaCare law). (See the state-by-state Obamacare-Medicare-Extension status here.) The state Republicans are choosing to not extend Medicaid even though 90% of the cost of covering those people would be paid for by the Federal Government as a provision of ObamaCare. And even though most of those people don't now get Medicaid simply because they work and make a little too much to be dirt-poor to qualify under pre-extension rules for Medicaid. (These people who will be denied health insurance in those Red States are often called the "working poor", and may be about 10% of the population in those states. Thus, those folks can keep getting whatever care they can get at the emergency room, and accept not being able to save any money if the emergency-room and hospital sends them humongous bills.) Those Red States' health care coverage will not be 98% (as in MA where I live, now, with its own version of ObamaCare in effect for several years) but maybe only 88% without those working poor having coverage.

(2)REPUBLICANS HAVE THE POWER TO, AND WILL, BLOCK ANY NEEDED ADJUSTMENTS TO THE LAW: Until at least 2016, and possibly for many years longer, the majority of members of the House of Representatives will be Republicans. They will undoubtedly block any changes to Obamacare, instead saying "tough luck, no changes, you must just repeal it".


(3)REPUBLICANS CAN NOT NOW, BUT MAY, AT ANY TIME AFTER THE ELECTIONS OF 2016, HAVE THE POWER TO REPEAL OBAMACARE AND GO BACK TO THE PRE-EXISTING-CONDITION-SCREENED SYSTEM.
They indeed might do it, particuraly if by not allowing changes they can force it to mess up. Thus, I plan to stay here in Massachusetts, the only state where we have already our own version of Obamacare, at least until the results of the November 2024 election.


(5)And, oh yes, the President spoke sloppily in an oversimplification when he said "you can keep your policy if you like it".
He would have been precise if he said, "if you had an individual policy at the time the law passed several years ago and it didn't change substantially, then it would not have to be cancelled under ObamaCare". But we can't really blame him for this over-simplicification. The Republicans have been blatantly many times more deceptive than he has, frightening people with "Death Panels", "rationing", and numerous other things that quantitatively minded people like me can pick up on. Since the people are not well informed, innumerate, have a poor understanding of economic mechanisms, etc., and since the Republicans were taking advantage of this and being so horribly deceptive, I believe the President was justified. I would hope for straght-for-the-truth non-deceptiveness in American politics, but it seems pretty far off for the time being.

(4)There are indeed cases of individuals for whom insurance costs will go up under ObamaCare.
These are generally people who had individual insurance in the 45 states that allowed screening for pre-existing conditions prior to ObamaCare (all states except MA, NY, NJ, VT, ME) and got relatively low cost insurance because they were in good health when they got their policies. (That is, the cost of those policies is low because the insurers threw all of the expensive sick people who applied for insurance under the bus and left them with no insurance.) Now, generally, the coverage that people with those pre-existing-condition-screened policies had is not that great over the long-term: what happens is that
(a) when some people with the same policy get sick, the insurers sell new low-cost policies to only the healthy people, making the costs rise rapidly for the sick people, who can not get new policies and are stuck with their old policies which get very high premiums to cover the medical costs of just the expensive sick people who have to keep those old policies. This happened to me once when I lived in Connecticut -- costs rose to 5 times in only about 5 years.
Also, with those old pre-existing-condition screened policies, the insurance could be cancelled, (b)this varies by state, but virtually always if the insurer decided to stop offering policies in the state.
What also happened in the past in many cases is (c) that the insurer issued a policy, and if you got expensively sick, they reviewed all of your medical records and said something like "look--you had such and such a blood test result 6 years ago that makes you more likely to get cancer and that is a pre-existing condition. Sorry, you left a relevant pre-existing condition off your application, policy cancelled." I posted examples of this a while back here on this page . Now, even with those old pre-existing-condition-screened plans, it has fortunately become more difficult for the insurance company to cancel a policy this way, but that is only due to a provision of ObamaCare itself that went into effect soon after the law was passed a few years ago.
It is the above-described case, people who passed prior pre-existing-condition-screens (which they call "medical underwriting") is the case where people are now facing higher prices. In some of those cases, the premium price, or premium price plus out-of-pocket, is up to a few thousand dollars more per year, and if the person is above the 400% of poverty income level (and therefore does not get the new Federal subsidy), that extra few thousand dollars can hurt. For people who the few thousand dollars does not particularly hurt, we would hope they would understand the system well enough to know that in the long term, if they got sick, their old policy premiums could rapidly escalate, and in most states, they could have even had their policy cancelled -- that is, the insurance they had was kind of crummy And we would also hope that they have some sense of solidarity with the umpteen million people who were uninsured under the old system, and would be running a high risk of medical bankruptcy and death all the time, so that they would happily pay the extra premium. I point out that any hope of helping out the people in tight squeezes with a tuning of the law is wrecked because Republicans will not go along (and just want ObamaCare to fail, no matter how many people die and go bankrupt), and at this point in time, their House of Representatives majority gives them the power to prevent any changes.

(4b)By the way, the people "thrown under the bus" by the insurer (people denied coverage because of a pre-existing condition)
in the (expiring unless the Republicans have their way) pre-ObamaCare system did, in some states only, at least have access to a state-run "high risk pool". There were problems with these, one of them being that in many states, the high risk pool had a waiting period, was closed altogether, or had some eligibility design problem that could let you go broke from hundreds of thousands of dollars in medical bills between the time you lost your old insurance and the time you actually were allowed to get the high-risk-pool coverage. Another problem was straight expensiveness: if you look at the example of Connecticut's high risk pool, the best available deal, for a 60-year-old male without a very low income, is $27,668.40 a year in premiums (=2305.70x12) (verify here) plus up to $7500. in out of-pocket-costs (verify here on p. 3) (total $35,168.40) for one person only per year. (If you don't trust my numbers, and think that people with pre-existing conditions may have had a better deal to pick than the ones I chose, here is the CT high-risk-pool website. You might stumble upon the lower-out-of-pocket option, which, unfortunately, for one 60 year old male without a very low income, would run $52,300.68 a year.) br>
(5)And, oh yes, the President spoke sloppily in an oversimplification when he said "you can keep your policy if you like it".
He would have been precise if he said, "if you had an individual policy at the time the law passed several years ago and it didn't change substantially, then it would not have to be cancelled under ObamaCare". But we can't really blame him for this over-simplicification. The Republicans have been blatantly many times more deceptive than he has, frightening people with "Death Panels", "rationing", and numerous other things that quantitatively minded people like me can pick up on. Since the people are not well informed, innumerate, have a poor understanding of economic mechanisms, etc., and since the Republicans were taking advantage of this and being so horribly deceptive, I believe the President was justified. I would hope for straght-for-the-truth non-deceptiveness in American politics, but it seems pretty far off for the time being.


To: BY-STATE INFORMATION AND FINANCIAL-WIPEOUT DANGERS (click here)

The Site is About Managing Pre-Existing-Condition Health Insurance Issues Under the Current System, The Passed-in-2010 Effective-In-2014 Obama Health Insurance Reform, and the Republican (Including Mitt Romney--even after 6/28/12 Supreme Court Law-Is-Constitutional Decision) Efforts to Repeal the Reform.

The Obama Reform Will Completely Do Away With Pre-Existing-Condition Health Insurance Issues starting in 2014. (That Is, Pre-Existing Conditions Will Not Be Allowed As Grounds for Claim Non-Payment, Higher Rates, Non-Coverage, Condition Exclusion from Coverage, or Policy Recision.)

However, if the Republican Repeal Efforts Succeed, the country Will Continue to Be the Only Developed Country With Medical-Financial-Wipeout Risk Due to Pre-Existing-Conditions Traps, Inter-State Moves, Job Changes, and Job Loss. (All Republican Proposed "Replacements" to Obama Care are Minor and Keep Pre-Exisiting Conditions As An Allowed Reason for Insurance to Deny Coverage, Deny Claims, Charge Higher Rates, etc.)





10/4/2012 debate 1: Chameleon Romney Introduces New Deceptions on Pre-existing Conditions at Debate 1

As somewhat referenced here, Romney, realizing that more middle class people than he would like are realizing that they're gonna get completely wiped out financially if they wind up with a pre-existing health condition at the wrong time (if they don't live is Massachusetts, which has RomneyCare), has just sprinkled in some new assertions in the debate about "his health plan", whatever that completely unspecified thing in his mind might be. In any case, he seems to be asserting that he would force insurance companies to give health insurance to people holding health insurance continuously, either with no new law (and thus in the limited case as provided by the 1996 Kennedy-Kassebaum law of people losing employer coverage), or possibly by some new extension to Kennedy-Kassebaum (imagining that somehow the radical antigovernment Republicans in Congress would allow him to get it passed), which would be a Federal law to force insurance companies to give coverage to people with pre-existing conditions even if the prior insurance was not from a job.

As a quantitative person, a statistician, who has looked at the details of Kennedy-Kassebaum, let me point out that it involves a big trick. The big trick is that the insurance company (under Kennedy Kassebaum) has to offer you coverage if you have a pre-existing condition, but they can charge you whatever they want or need to to cover how expensive you are with that pre-existing condition. Thus, you might have had a pretty bad heart attack recently, so they can charge you $108,000 a year for your policy. There is, in Kennedy Kassebaum, a provision that, if the state you live in has chosen to set up a high risk pool to cover the people with pre-existing conditons losing job-based insurance, then, rather than the insurance company insurance with the unlimited rate, you get that state high risk pool insurance. But even in those states, the issue is how expensive it is -- that high risk pool insurance is much more expensive than insurance for people without pre-existing conditions, and may typically in the financial wipeout zone for older people, say in their 50s or 60s. I exhibit the case for the Insurance Capital of America State Of CT where the rates are here, as well as the brochure for the plan here, where we find out that you will likely have to toss in $7500 per person in addition to the high premium, which high premium itself is over $25,000 for a male in his early 60s. So this is one version of the no-details-available plan that Romney might have going on in his head. It is also just the status quo, with a small extension of Kennedy Kassebaum.

There is another possibility that the plan that Romney has going on in his head and has not given details on is to force insurance companies, via a new Federal law, to give coverage to people who have maintained continuous health insurance prior which is actually at the same rate whether or not they have pre-existing conditions, but without a mandate on people to carry coverage. This is precisely to make national what New York State has already done. For New York State now, rates are here. If you click on, say, the non-wealthy St. Lawrence County, you see that you've got $1200. a month for any adult on the cheapest plan. This is better than the CT high-risk option (up to $2700/mo), but it's still unduly expensive. That's because there is no mandate to carry coverage in New York State. People tend to not pick up insurance until they get sick. And there's also a constant possibility of a "death spiral", which is, as the problem of only the more expensive, sicker people buying insurance worsens, the rates go up and up rapidly, and soon maybe rates hit $60,000 a year. (This had started to happen in New York State when I lived there several years ago. Monthly rates on the cheapest available policy went from about $650. a month per adult to about $1150. a month per adult over the three years I lived there. This was around the time of the financial meltdown, when all of a sudden many people who weren't really, really sick decided they just couldn't afford insurance. So, at that time, anticipating the start of a death spiral where rates might hit $2000 or $3000 or $5000 a month, I rapidly left the state, and moved to Massachusetts, which had just enacted Romneycare. That insurance has served me well -- rates are much lower, the insurance company can't charge more if you have a pre-existing condition, and it's all made possible by penalizing people who don't carry insurance, that is, by keeping them from freeloading on the nonfreeloaders. And, it is well recognized by experts that the mandate is the only way to get reasonable rates without tossing people under bus once they get a pre-existing condition, without also having much more government involvement (like the government-only-insurance of Canada, or the fully run-by-government health care delivery of Great Britain).

Thus, the chameleon Romney, having said he'll repeal National RomneyCare = ObamaCare on day one of his taking office, can only have something in his mind like the current Kennedy Kassebaum / high risk pool system (very expensive if you get a pre-existing condition and you don't have humongo savings, and will throw you under the bus completely if the state you live hasn't chosen to set up a high risk pool to implement Kennedy Kassebaum), or the New York State Community-Rated but No Mandate system, where the insurance costs maybe double what it costs in MA, and further, where you can get a death spiral at any moment, and the insurance might start costing $10,000 a month or so for everyone.

P.S. I, personally, have moved from state to state kind of a lot in the last few years, completely to be in a state where the health insurance is, at the moment, safe. Since the states I have to move to for the insurance don't happen to be the same states where the work that I am most productive at, and get paid much more at, are, I no longer work. This is done because of my calculation that the, say, $600,000 I might lose in a year in one of the numerous states with unsafe health insurance is more important than the considerable but smaller amount of money I might earn by doing something productive in the economy. I'm having a really good time not working, since I have a lot of interests, so don't worry about me. But what I was producing has been lost to the economy, and, well, a pretty good amount of tax revenue paid be me has been lost that would reduce our humongous debt that we are burdening everone's children with. (This is what Romney's leave it to each state has yielded for the economy in my case.)

P.P.S. Yet another issue I can foresee with "leave it to each state" is that people can easily move between states. For Massachusetts itself, the Presidential campaign coverage has let the cat out of the bag that a person with no insurance living in State A which is not Massachusetts, where he or she may be accumulating say $200,000 a year in uncovered medical bills, or otherwise perhaps may have a serious pre-existing condition and be paying $50,000 a year for health insurance, can move to Massachusetts and immediately or almost immediately get complete health insurance for between $0. a year and $5,000 a year (depending on his/her income) under our MA RomneyCare. Well, then, we have a problem here in Massachusetts, with a big load of sick and poor and sick but not poor people from the other states flocking to Massachusetts. Then the people of Massachusetts have to pay humongous state taxes to support the subsidies needed for the new poor-sick, and rates skyrocket in non-subsidized policies with all the high proportion of non-poor sick now in the state. Thus we have a new kind of health insurance "death spiral" for Massachusetts with "leave it to each state". Massachusetts might be able to break this death spiral by rapidly enacting a law requiring say 5 years prior Massachusetts residency in order to get health insurance, but we can foresee that this might violate the U.S. Constitution for some reason, and even if it doesn't, we have to wait maybe 4 years for that to get decided by the U.S. Supreme Court. I expect some residents with foresight hear in MA are anticipating that possibility, and have an eye on an eventual relocation to some place where you don't need health insurance at all, but rather costs are low enough so you can just pay cash for care. Perhaps Panama, Costa Rica, Argentina, or Chile.

P.P.P.S. Not to mention in all of this what happens if Romney dies in office, and radical antigovernment Vice-President Paul Ryan becomes president.


10/16/2012 Romney/Obama debate 2: Romney, in his response to the final question, cites our Massachusetts 98% health insured rate (vs 85% elsewhere) as his success as MA governor, but leaves off that what he did in the state is virtually identical to what ObamaCare does nationally, including the mandate to carry coverage. Further, as Romney indicated in debate #1 and #2 both, he has pledged to repeal ObamaCare, but what most people who are not experts on health insurance don't know is that ObamaCare=National RomneyCare is, of the workable systems for healthcare, the one with least government involvement. Other workable alternatives are the full government-run paid-for-by-taxes insurance like Canada, and the fully socialized governmen-run-and-paid-for-by-taxes hospitals and doctors of Great Britain. (As discussed in comments above on the first debate, any other set of laws with less government involvement, which would keep health insurance and hospitals private, and keeping it optional for people to have insurance, fail, as health insurance under them is really expensive, because people game the system and pick up health insurance just when they get sick, and otherwise freeload by going to the emergency room for care with disguised identities so the hospital can't collect when it bills them. This is why, all of the other industrialized countries, which by now have for a long-time (20 to 100 years) had universal health insurance coverage, use either the ObamaCare=MA RomneyCare system, or the Canadian system, or the British fully socialized system -- nothing else can work.)




Further, Republican Vice Presidential Candidate Paul Ryan's "Ryan Plan", announced in 2010, (see here), would, take Medicare, now covering people 65 and over with a premium not dependent on pre-existing conditions, and, starting in 2022, convert it to mainly private plans which are under the bill allowed to charge much more or deny coverage for seniors with pre-existing conditions. Though subsequent documents on Ryan Budget Plans become ambiguous with tricky wording on whether seniors with pre-existing-conditions will wind up paying more, since Ryan, Romney, and the Republicans have all made clear that they are determined to repeal Obamacare and keep the current premium-may-be-much-much-higher with pre-existing conditions for people under 65 rules, we should assume that there is a good possibility that they will switch Medicare to the same higher-premiums-for-pre-existing-conditions systems that they have already at times indicated.

Even if Paul Ryan doesn't lead the Republicans into extending pre-existing-conditions problems to seniors on Medicare, he, as well as all the other Republicans, are intent on repealing ObamaCare and keeping people below Medicare age on a pre-existing-conditions-nightmare set of laws, and also raising Medicare age to 67. Thus at a minimum from Ryan, we get a pre-existing-conditions nightmare for people until they are 67, including two new, very expensive-with-pre-existing-conditions years 65 and 66.
(You can check aul Ryan's 2013 Budget Resolution "The Path to Prosperity" (here), and see on p. 5 the ObamaCare repeal. Further, that his plan also calls for raising Medicare eligiblity age to 67: see Ryan Medicare Plan pp. 265-267 here, and further you can check on a Google News search of both Republican-leaning and Democrat-leaning news sources that this eligibility age increase is still Paul Ryan's intent.)

Romney Position to Repeal Above a Bit Curious, Since:

Examine Mitt-Romney's-Championed-as-Governor Massachusetts State Tax Schedule HC (=Health Care) penalty/mandate/tax forms here:

Form, at Mass Revenue Department / Instructions (non-coverage penalty worksheet next-to-last page), at Mass Revenue Department

Form, backup copy up at my site / Instructions (non-coverage penalty worksheet next-to-last page), backup copy up at my site

See Mitt Romney Championing the Massachusetts Mandate to Carry Health Insurance here and here.

Note that the "ObamaCare" that Romney has promised to repeal is pretty exactly a National version of Romney's Massachussets "RomneyCare".

Strange Platform: "Vote for Romney to Repeal National RomneyCare"??? (Those crazy Republicans!)


Strange in-state Republican governor's platforms in many Republican States: "If Republicans in Federal Government do not succeed in repealing ObamaCare = National RomneyCare we will exercise the option the Supreme Court gave us of not extending Medicaid insurance to the working poor in our state and leave them uninsured -- despite that 90% of medical costs will be paid for by the Federal Government. We aren't generous enough in our state to raise state taxes just a smidgen to cover the remaining 10% of the doctors' and hospitals' costs, and in any case the state government I run is so inefficient that the administrative costs that we will have to pay are not say a tiny 2% like Federal Medicare, but really, really high so we just can't help those annoying working poor who make a little too much to qualify for current non-extended Medicaid! If they want insurance, let them just not bother working so their income is low enough for non-extended Medicaid." (This is the platform of the Republican governor of Texas (check here,) Florida (check here), and possilby also Colorado, Indiana, Iowa, Louisiana, Maine, Mississippi, Mosssouri, Nebraska, New Hampshire, New Jersey, Ohio, Pennsylvania, South Carolina, Virginia, and Wisconsin (check here). Yet more embarassing, because in my state, Massachusetts under RomneyCare, we cover the working class / working poor by paying the full cost, not just the 10% you won't even pay. That's how we get only 1.9% of legal residents non-covered, (as here). What these Republican governors are promising to do will keep maybe 12% of legal residents non-covered, and these will be the low-wage workers in your state. Shame on you!

Amazing Success of Republican Deceptions--how do they manage to keep it up?: Since 1994, all industrial countries except the U.S. have had universal healthcare and without non-coverage or additional charges for people with pre-existing conditions. Switzerland was the last country, which switched in 1994 (check here). Still, the Republicans manage to pull one over on enough of the people to keep this health and financial security away from us. Republicans scream "socialism" about ObamaCare = National RomneyCare. I point out that Switzerland, the last hold-out country in the industrialized world, is non-socialist enough for Mitt Romney to feel it is safe to keep some of his money there (check on Swiss bank account here).

By the way, I also checked (here near the end of the page), and the Cayman Islands also has Universal Health Insurance Coverage with a mandate to carry coverage. (Romney has some money there, too -- check here.) I'm really not trying to be money- or business- bashing by pointing this out. Business is indeed the engine of making us wealthy, and having a good lifestyle. I'm no economically-soft-headed bleeding-heart liberal. But, the Republicans assert that ObamaCare = National RomneyCare = (near) Universal Health Care is socialism that will destroy our country and our wealth and the wealth of business people, and yet the business people send their wealth to two places with Universal health care. The Republicans are deceiving us, don't you see!

(Incidentally, I live in MA, and love my RomneyCare. It makes my health and savings so much more secure, particularly between and moving to different jobs. Health insurance premiums here are the same whether or not you have pre-existing medical conditions, and coverage is always complete, without any exclusion of coverage of pre-existing conditions, or any waiting period for coverage of pre-existing conditions. People who make too little money to pay the premium get the premium partly or fully paid for, depending on income. The insurance companies and hospitals are all private. All of this just like in ObamaCare.
Too bad for people in the rest of the country if enough people who don't have a good grasp on the rate-dynamics of cherry-picking-allowed insurance want to repeal the extension to the other states. My main worry for us here in Massachusetts is that Romney, by not allowing RomneyCare to extend to the other 49 states, will be setting us up for numerous people with serious pre-existing conditions from other states to move here for the insurance. These people moving in from other states would break our state lower-income-insurance-subsidy budget, and generally cause premiums to go really high -- due to lots more really sick people now being covered. Thus, Romney would be wrecking the system he created here. Thanks a lot, Mitt.)

Note on Minimal pre-2014 ObamaCare Provisions: Certain minor and temporary provisions of ObamaCare=National RomneyCare=the Affordable Care Act are already in effect, but these temporary provisions are, frankly, half-assed. (For example, it makes some relatively cheaper insurance available for people with pre-existing conditions who have been uninsured for more than 6 months --info on such insurance is here). The main problem with this pre-2014 insurance is, of course, that you have to play Russian Roulette with your finances to get it, by being uninsured for 6 months. The reason the legislators put in the 6 month rule is to keep too many people from getting it, to keep down cost before the main changes in 2014. Of course, seeing this half-assed temporary plan, a person not familiar with the final 2014 details could be worried that the final 2014 ObamaCare plan is just as goofy. However, actually, the final plan that goes into effect in 2014 is pretty sound -- making insurance available at a uniform rate regardless of pre-existing conditions, and without any sort of goofy requirement of 6 months non-coverage, and follows the already-tested-for-a-few-years MA Romneycare model.)

Paul Ryan: Honest, Committed Leader?? Try Paul Ryan, Sneak. (People with a good grasp on the English Language, verify here.)



-- UNDERSTANDING WHY THE HEALTH INSURANCE REFORM ON PRE-EXISTING CONDITIONS WAS NEEDED (And Should Not Be Repealed) --


-- AND WHY THE REPUBLICAN ALTERNATIVES WERE INADEQUATE --


-- These Explanations Posted by Norm Spier





WHY DON'T INSURANCE COMPANIES COVER PRE-EXISTING CONDITIONS, UNLESS FORCED BY REGULATION?

Say there are 3 "nice" insurance companies, with an intention of providing good, reliable health insurance. They will cover people, even if they have a pre-existing condition.

This is what will happen. The 3 nice insurance companies might have these expenses: they have to pay out $1000 a year in typical medical expenses for 95% of customers who have a recent history of very good health and therefore aren't likely to get very sick, and $100,000 a year for the 5% of people who have bad recent health and are likely to get sick. Their medical-bill expenses for the average customer are then
.95 x $1000+.05 x $100,000 = $950 + $5,000=$5,950. There are administrative costs and profit, so the nice insurance companies might charge $7200 per person to all customers.

Unfortunately, this is what will happen next: A not-so-nice insurance company will realize that it can steal away from the 3 nice companies all and only the people who have a recent history of very good health, by charging them only say $2000 a year. Since these people with recent good health only cost the insurance company $1000. a year in medical bills, thats a whopping 50% for administrative costs, sales commissions, and profits. (The process of taking away the healthy customers only is called, in the business, "cherry picking".)

Then, in a little time, all of the recent-health-history-excellent customers, since they would rather pay $1900. a year than $5,950 a year, get cherry picked away from the 3 nice insurance companies. This leaves the 3 nice insurance companies with only the people who cost $100,000 a year, so they have to charge a bit more, say $120,000 a year to each of them, to cover administrative expenses and profits, to their customers, all of whom are really sick. But of course, since very few people can afford the $120,000 a year, this would put the 3 nice insurance companies out of business. THIS DYNAMIC IS FUNDAMENTALLY WHY EVEN THE 3 "NICE" COMPANIES CAN'T STAY IN BUSINESS UNLESS THEY TOO REFUSE TO COVER PEOPLE WITH PRE-EXISTING CONDITIONS. (Or unless some regulation forces all companies to cover everyone.)

Thus, we see that if insurance companies are forced to cover everyone, but not everyone is required to have coverage, certain people will not pick up health insurance until they get sick (that is freeload), and this will make insurance much too expensive for all people, including honest non-freeloaders who just want to be insured all the time. (Rates: say $14,800 a year per person, as
here in a low-living-cost area of upstate NY where exactly those conditions prevail. This is instead of what would be $6000 or $7000. unsubsidized if there were a mandate, e.g. MA. Further, the NY rates may keep rising astronomically, as a "death spiral" making it ridiculously uneconomical for anyone not already sick to hold insurance. As a detail, NY requires some months of continuous-prior-coverage in order to cover pre-existing conditions. These limit the freeloading, and without those regulations, rates for non-freeloaders would be even higher. Again, NY State is the case of " insurance companies must cover everyone at the same rate" but "no mandate on individuals to be responsible and have coverage".)

Now the above explanation of why mandating that everyone be covered is an essential component of the insurance reform, without which it breaks down, and honest people not gaming the system pay several times too much for insurance (exactly as NY state now, and why I myself left for MA which has a mandate). Despite this, Republicans and Ms. Pipes herself, are both trying to incite mass anger over the compulsion to buy insurance, and further, have launched "unconstitional compulsion" court challenges to the insurance mandate.

Now, the fact that the mandate that they are waging war on is the only reasonable way to keep the non-independently-wealthy away from the risk of medical bankruptcy is pretty easy to understand for very quantitative analytical people, but is not so easy to understand to most lawmakers (who are lawyers, political science majors, etc.)
Thus, some of the Republican lawmakers really going after the mandate aspect is excusable, kind of, in that they just don't have a grip on what's going on. But at least a few Republican policy and legislative people do grasp the mechanism and the need for a mandate, as Sally C. Pipes indicates at 17:00 to 18:00 in this video. Sally's talk, at the ideologically conservative Heritage Foundation, is the usual mix of inconsistent partial truths, expressing outrage at cutting government non-standard "Medicaid Advantage" that "takes care of our seniors", while at the same time expressing outrage at tyrannical government everywhere it suits her ends. I've noted the following critical statement (at 44:50 running for about a minute) that clearly is an attempt to deceive about how the Republican "plan" to boost the state high-risk pools could save from economic disaster the 10 million people with chronic pre-existing conditions. She says that these subsidies to the high-risk pool would only be needed until such point that "competition" kicks into play. Well, even if all 50 states would come up with well-engineered high risk pools, when perhaps 1/4 of states have such at the current time, there is no economic mechanism explanation for why insurance companies will take on a person with expensive pre-existing conditions and insure them for those conditions, unless compelled or subsidized.
It's also lots of fun to watch, in the video, many of the young interns at the Heritage Foundation, as they, in the ill-disguised manner characteristic of young people, try to curry favor with their mentors and career-makers, by trashing the Reform in the phrasing of their questions. )

Another Example Showing that Some Republicans Understand the Mandate is Needed, But Just Seem to Want to Keep Any Success From the Democrats Even if It Keeps the System All Messed Up: blog Post in Republican 'Reason' Magazine. The author even has presented information about the failures (due to people gaming the system and picking up insurance just when they get sick) in states without a mandate to carry coverage that do not allow denial due to pre-existing-conditions. You'd really have to know the author to figure out exactly why he then is hoping the majority of justices on the Supreme Court decides the Federal Government can not consitutionally have the mandate. The author toes the recent Republican and Rush Limbaugh committment to the interpretation that the Federal Government can regulate, but not mandate, the commerce of buying insurance. What can be the real motive to avoid having the health insurance system fixed in the only way possible without going to an actually more government-run form of health care (like single-payer as Canada or government-provided as U.K.)? Is the author truly an ideologue -- sticking to a no-government-ever principle instead of common sense? Or perhaps truly motivated by a class-loyalty sense of protect the wealthy with no sense of solidarity for the rest of us? Or perhaps the author has determined that the easiest or only way to support his family is to get jobs toeing the Rush Limbaugh line? (You can see that Limbaugh-bait careless thinkers are intended to be attracted to the article in that it is entitled How ObamaCare-Style Preexisting Conditions Regulations Failed in the States. But the failed states are NOT ObamaCare in the key specific lack of the mandate -- only successful Massachusetts (where I live and like the insurance) has that.

Besides me and most of the other people who live in MA, the local paper likes the Massachusetts Health Insurance System and supports extending it to the Federal level, and opposes the Republican effort to obstruct the Federal Reform. (See this Springfield MA Republican editorial here.
A curious eventuality, actually, as said paper was closely tied up with the actual founding of the Republican Party, which Party is said to have been named after the paper. See Wikipedia article on Springfield Republican.)


WHY DON'T INSURANCE COMPANIES COVER PRE-EXISTING CONDITIONS, UNLESS FORCED BY REGULATION? is explained by me a little below (within the orange box on the right). Click here to get there.


WHAT IS CHERRY PICKING? is explained here.


Why the Republican idea "To Allow Individuals and Businesses to Buy Insurance Across State Lines" would WORSEN the pre-existing condition problem, and is in all likelihood based on a trick by certain insurers in the advice they are giving Republicans to allow freer predation on people. Click here to get there.


WHY IS LEAVING THE HANDLING OF PRE-EXISTING CONDITIONS (Statewise High Risk Pools, Statewise Community Rating, etc.) AS IN ALL REPUBLICAN PLANS A VERY QUESTIONABLE IDEA? is explained by me a little below. Click here to get there.



DON'T INSURERS HAVE TO COVER ME, REGARDLESS OF PRE-EXISTING CONDITIONS, AS LONG AS I'VE HAD FULL COMPREHENSIVE HEALTH INSURANCE CONTINUOUSLY? NO, in all but the 5 community-rated and modified community-rated states (MA,NY,NJ,ME,VT). In the special case when you are coming off of an employer-based plan, there is a trickily worded false HIPAA protection, that they have to cover you, but "can charge you whatever they want extra due to your pre-existing condition". (Heck, I'll cover you for 5 million dollars a year!.) In many states (but far from all), if you are coming off an employer plan, they will at least give you a state high-risk-pool, which costs up to $25,000 a year per person.

DID ANY OF THE REPUBLICAN ALTERNATIVE PLANS CHANGE FROM THE CURRENT PRE-EXISTING-CONDITION SCREENED SYSTEM? NO, ALL THE REPUBLICAN PLANS KEEP THE PRE-EXISTING-CONDITION SCREENED SYSTEM? ( I verified this 9/2009 and again on 2/11/10 examining the plans in the footnotes on the copy of the here="GOP solutions for America" carefully. These 8 plans are all just minor patches that will continue to leave many people uncovered and/or destined for bankruptcy, either when they make just a little more, or have a little more assets, than free Medicaid allows, or when they have a pre-existing condition. Further, many of the Republican proposals have very deceptive wording, to make it look like they're solving the pre-existing-condition problems. Details below. Click here to get there.


GROWTH OF HEALTH CARE COSTS, AND LIFE EXPECTANCY, AROUND THE WORLD Click here to get there.

Yes, indeed, long-term cost controls are inadequate in the Obama plan. They will have to be added later, during a crisis, maybe like Greece of something. Devilishly irresponsible Republicans, by shouting "rationing", "death panels", and "socialism" for no other reason than to make Mr. Obama fail, have put much of the innumerate sector of the public out of the frame of mind for sensible and needed cost controls on the whole system, including Medicare.

ANOTHER GOOD SOURCE OF SIMPLE EXPLANATIONS ABOUT THE PLAN: (graphic book form) from an MIT health economist who helped create of the Federal Law (and a person who advised Mitt Romney on his construction of the Massachusetts predecessor of the Federal law.)


"BUY INSURANCE ACROSS STATE LINES"??
This was an insidious proposal whose effects are probably above the heads of most of the Republican Congress People--I think they're mostly lawyers with no head for economic mechanisms. They are probably being advised to do by some people at the nastiest of the health insurance companies.

From a Republican's policy speech:"Let's also talk about letting families and businesses buy insurance across state lines. I and many other Republicans believe that that will provide real choice and competition to lower the cost of health insurance."

What this provision would do (unless insurance market reforms stopping pre-existing-condition-exclusion AND a strong national minimum coverage standard AND a strong national enforcement mechanism are added -- so far the combination -- being equivalent to the Democrats' "national health insurnce exchange" -- rejected by all Republican Senators) is defeat state regulations that (in some states) offer some protections to people with pre-existing conditions. By allowing people without pre-existing conditions to get insurance across state lines, it would drive the premiums for people with pre-existing conditions (who can't get insurance in those other states) way, way, up. (This effect alone would ruin insurance prospects for people with substantial pre-existing conditions in the 5 community-rated and modified community-rated states, plus a number of other states that limit what can be called a pre-existing condition in various ways.)

Further, this "across state lines" proposal would destroy the funding mechanism for many high-risk pools that already exist in many states, which is to add a charge to support the high risk pool onto the policies of people without pre-existing conditions. (To find those states, go to this
Kaiser table, and look for where the "Financed through insurer assessments" column is "Yes". I count 28 states.) That funding, for the high risk pools, would be wrecked, since people without pre-existing conditions, can avoid that charge, and get a cheaper policy without that charge, by buying a policy out of state. That's right This proposal actually makes it worse for people when they have pre-existing conditions in almost all states!!! But what it does do is help the insurance industry sell cheap, not-very-good policies to only people without pre-existing conditions (i.e. cherry pick), in states where they are currently obstructed from doing this by state law.

Not to mention that without a mandate (opposed by Republicans as "socialism"), rates are too high for people who don't freeload (and pick up coverage just when they get sick).

My assumption is that the strongest impetus within the Health Insurance Industry for this proposal is from certain of them, whose predatory business model is based on finding only very healthy people, and selling them cheaper insurance, for which premiums they pay out only maybe 65% in actual medical bills -- the company keeps the rest. These ultra-predatory companies typically are not found in the 5 community-rated states, and they often have names that suggest patriotism or goodness or some such thing, to create an image in the mind of the most credulous folks.

[Republicans basing their reform on this miserable destructive proposal is not new, and I'm not the only one to notice its horrible implications. It was part of the McCain/Palin platform. (I'll give McCain/Palin the benefit of the doubt and assume they didn't themselves understand the implications of this plan that the Insurance Industry wrote for them.) At the time, Nobel economist Paul Krugman warned us (here), as did many others. For completeness on the Krugman article and McCain plan, here is the article from Contingencies that Krugman mentions. Here also is my copy of the old McCain/Palin Campaign Health Insurance page. (It's actually kind of funny, well, tragi-comic, to see the Republicans push during the election and again now for health insurance deregulation that thinking-through would show would really mess things up. This right on the heels of when their deregulatory President had deregulation of the financial system screw up on us so badly (brink of a worldwide depression) that he even had to announce the failure publically 7 weeks before a presidential election. I assure you, the last President would have waited till after the election if he could have!) ]


Bad Republican Policy Idea Behind All Republican "Plans"--Leave it to the States to Ultimately Handle Pre-Existing Conditions: The main reason that this is terrible is that every state has enormous finanical incentives to be nasty and extremely unbrotherly to sick people and people with pre-existing conditions. That is, any state that is not nasty and unbrotherly (i.e., is decent) will have sick people from nasty states go to the decent state whenever at all possible. This is a perverse incentive on states -- they are better off if they do the wrong thing. There is also gobs of general economic inefficiency in this, as people move to states where there health insurance works out, rather than where there is work that they are productive at, and where they enjoy the state's amenities. Another reason is that often state pre-existing-condition laws, due to state size and the small number of good minds available to look at laws, are often much less competently engineered than the passed Obama law. The Obama law sharply corrects the massive penalties for raising ones income by working that are in current state and Federal Medicaid laws, where in contrast in many state high-risk plans and other state-designed health insurance provisions there is a sharp disincentive to work and massive penalty for working. For example, in Connecticut,
this particular state-organized plan (which is above the Medicaid income limits and separate from it) for some age groups gives reasonably priced health insurance to people if they keep their incomes low. But if they work and make one dollar over the income limit, they have to pay typically tens of thousands of dollars more for health insurance (for example a male making a dollar over $32,670 a year pays as a penalty for earning that tiny extra income about $30,000 more a year for his health insurance if aged 61 or more, and thusly winds up paying $46,896 a year in premiums to cover just himself). Now, in fairness, that state also has a better deal with higher copay for people above the income cap with pre-existing conditions -- this one -- but that's still $25,926 in premium PLUS up to $7500 in copay each year = $33,436 a year in medical+insurance costs for that one person even if that person has not tried to freeload and responsibly maintained health insurance continuously for his whole life prior; (copay reference: p. 4 here). And this from a state with 3 million people--not the smallest, and further, the capital city, Hartford, has oodles of quantitative actuaries from the Insurance Industry who could theoretically help the state get it right. (Full disclosure: I used to live in CT. I could have chosen to never work again to make myself eligible for the low income plans, but I thought that kind of freeloading would be beneath the level of my own character. I left the state instead.)



DID ANY OF THE REPUBLICAN ALTERNATIVE PLANS CHANGE FROM THE CURRENT PRE-EXISTING-CONDITION SCREENED SYSTEM? NO, ALL THE REPUBLICAN PLANS KEEP THE PRE-EXISTING-CONDITION SCREENED SYSTEM? ( I verified this 9/2009 examining the plans in the footnotes on the copy of the
here="GOP solutions for America" carefully. The page keeps changing, but on 2/11/10 their page again has 8 Republican proposals linked to at the bottom, and the same is true. These 8 plans are all just minor patches that will leave many people uncovered, either when they make just a little more, or have a little more assets, than free Medicaid allows, or when they have a pre-existing condition.

  • All the Republican proposals keep the pre-existing-condition-screened system, which is a massive waste, because of all the resource spent tracing people's pre-existing conditions, and of all the expensive statistician resource spent by insurance companies trying to find only healthy people to sell insurance to.


  • Further, people never know when they accidentally forgot to report a pre-existing condition, or had one from some obscure lab test that they didn't understand, or their doctor forgot to tell them about-- and the company may decide to cancel the policy or not pay (e.g., see this page).


  • At best, one or two of the proposals propose encouraging states to expand high-risk pools to more states (people with pre-existing conditions pay more, there will remain large gaps, up to 51 confusing, non-intercompatible state laws will apply, and you have to spend weeks and weeks researching what's going on with a goofy, complicated table like this one if you want to change states.


  • Further, in keeping 50 separate state solutions, there is a lot of inefficiency and unfair expense to states that really try to cover their citizens, as sick people move in from out of state to get health insurance. (In particular, MA and ME are particularly vulnerable this way now, to higher insurance rates and higher state taxes, as mobile sick people move in to take advantage of pre-existing-conditions-not-counted rules, and state subsidies for those above Medicaid limits but still without enough income to afford insurance.)


  • To boot, some of these Republican proposals have VERY DECEPTIVE WORDING about pre-existing conditions, trying to make the wording suggest to those who don't understand the system, are not too good with their English, or are jelly-brained, that their plans address pre-existing-conditions more than slightly.

    For example, this this Shadegg One is quite the exemplar of deception.
    It says: "PRE-EXISTING AND CHRONIC CONDITIONS COVERED AT AFFORDABLE RATES." (Baloney--no such provision. Some improvement for a few, perhaps).

    "No American should go bankrupt because they get sick."-- If wishes were fishes.

    "The Improving Health Care for All Americans Act strengthens, expands and creates new avenues for affordable health care for the sickest Americans through high-risk pools and reinsurance mechanisms. The sick and those with chronic conditions will be able to buy coverage at competitive rates. "

    --Yes, it does strengthen them and expand them a teensie-weensie bit.

    -- Competitive rates. That's an interesting word. Rates are currently competitive; rates for a person with a serious pre-existing condition might be $80,000 a year. Competitive not the answer there. An older person making say $18,000 a year can't afford competitive insurance, even without pre-existing conditions, because they have to eat and pay rent at the same time.

    (Quite clear that the people aren't running the party; the special interests are running both these Senators and the people. This is sickening.)

    In contrast, all of the Democratic Proposals being worked on (and now melded together in Congress) would no longer permit exclusion from insurance for pre-existing conditions.








  • 3/30/2010: FINAL PASSED REFORM BILLS SIGNED BY PRESIDENT--TEXT:

    NOTE: HR3590 is the Main bill, HR4872 is the Reconciliation bill, which modified HR3590, and added student loan provisions).

    The full text of the two bills, in a nice form (with hyperlinked Table of Contents, and modifications to HR3590 from HR4872 shown in HR3590), is available here.

    For certain purposes, such as searching for text, a .pdf is preferred. Here is HR3590 .pdf (click here), and Here is HR4872 .pdf (click here),

    The bills have some details in references to external laws. If you have sufficient interest in those details, you can find some of them here at the full codified US law. (In other cases, you may need a Google search to find the law. What I have found helpful when doing this is to take any Wikipedia page that comes up at Google, where a footnote on that Wikipedia page will usually link you to the text.)

    7/11/09:WONDERFUL Bill Moyers (watch, read transcripts, and informative links here), showing cases of insurance companies not paying claims to policyholders, after people get sick based on searching for pre-existing conditions in their old records (this is in the first 10 minutes). The rest of the show has an ex industry insider from the Health Insurance Industry (PR Executive) discuss the current manipulation of the public by the industry (which is working really well for them).



    For the Following Graphs, NOTE Our Relative Costs per Person are Even Higher Because We Deny Coverage to 1/6 of our Population
    All the Other Countries Cover Everyone


    Per-Capita Health Costs Around the World (2003)

    Life Expectancy and Per-Capita Health Costs Around the World (2000)




    Plot below is based on Congressional Budget Office data, taken from
    this page.

    U.S. Medicare, Medicaid, and Social Security Projected Spending (% of GDP)



    Universal Healthcare Country Polling Results: here,

    Universal Health Care dates enacted--all developed countries except ours here.


    --Posted by Norm Spier . (I am actually a statistician who has made a successful career by working for the Pharmaceutical Industry. A Universal Healthcare plan threatens that industry, but I accept that. We all have to give a little and not be pigs if this country is going to work.)






    BOOK TV--It's Really Good.

    Archived free BookTV program video feeds

    Watch live (weekends) (C-SPAN 2)







    SOME CAMPAIGN DECEPTIONS (happen to be by McCain Campaign) which I am keeping around now, well after the election, as examples for us to study of how the government is getting taken away from the people by the special interests (and making us sick, broke, and otherwise miserable).

    Deception 1: McCain posted on his Website; archived here post-election. This text is near the bottom of McCain's page:

    "MYTH: Some Claim That Under John McCain's Plan, Those With Pre-Existing Conditions Would Be Denied Insurance."

    To anyone not armed to expect a deceptively worded statement, it sounds like under McCain's proposal, an insurer would not be able to turn you down for a pre-existing condition. But the McCain proposal kept the precise pre-existing-condition-screened system in place. Currently, in many states, a "high-risk-pool" is set up to cover some of the people who can't pass pre-existing condition screens. These plans can run up to $23,000. or more a year per person (as in CT), they often have ridiculous exclusions (e.g., paying at most $75,000 a year in your medical bills and with a waiting list in California, paying only half of out-of-state emergency treatment in MO), and they keep many people with pre-existing conditions ineligible. McCain keeps this precise system. (On his site, he renamed "high-risk-pools" as "guaranteed acceptance plans" to make it sound like something would change.) If McCain himself didn't intend to fool you, then it is clear he is working with deceptive marketing-types from the insurance industry who intentionlally came up with language that would fool most people. Under McCain, you still would have paid much more for insurance, and could fall through the gap entirely, if you had or got a pre-existing condition.

    McCain's so called MYTH statement would only be a myth if stretched to "those With Pre-Existing Conditions Would Be Denied the ability to get any Insurance at all". And, this would be very expensive high-risk-pool insurance (up to $23,000 a year per person), that you might not be able to afford. And further, with the current set of high risk pools, 35 states of 50+D.C. have some sort of big gap that misses some or all people. Those would have had to be ironed out in each and every state. (And further, massive funding for filling those gaps for people with pre-existing conditions would have to come from somewhere. And McCain actually melted down the limited current funding, with his "across state lines" provision.)

    Deception 2:

    In the first presidential debate, and then the first vice-presidential debate, we have a big misportrayal of the Obama plan as a government takeover. For example, in the VP debate, Palin said that Obama’s plan would be "universal government run" health care and that health care would be "taken over by the feds." However, as factcheck.org indicates, that's not the case at all. Obama’s plan would not replace or remove private insurance, or require people to enroll in a public plan.

    My favorite goofy little deception by McCain (nothing to do with insurance-- but it's cute) -- the "3 million dollar overhead projector for a planetarium" Obama earmark:

    As I guessed during the debate, and other science people may have guessed, that turns out to be a replacement of a 40-year old projector of the night sky at the major Chicago planetarium, the Adler. (factcheck.org on Adler Planetarium projector). In my book, over the next 40 years, about two million kids, young adults, and some adults would have learned a lot of science from it, had the earmark been approved. (I learned a lot, from the one at the Hayden in NYC. And I now have a Ph.D. in science!)


    Factcheck.org on both candidates on Presidential debate # 3. [Note: factcheck.org isn't perfect, but it's stilll pretty good. Notably, I find they are good with exact facts, but sometimes miss conspicous aspects when economic or other analysis is involved.]






    Silly People Looking for a Too-Good-To-Be-True Bargain Get Just What They Deserve

    Ah, the silly citizens. When they need non-group health insurance, and have been completely healthy, they buy this cheap health insurance that is cheap based on keeping all the unhealthy people away. It's really cheap, maybe $900. a year. It's a wasteful product, being that it only pays out 55%-75% in claims of the premiums paid in. But they've got really cheap rates. They see "Harry and Louise" (ad 2), and they feel really good about their really cheap insurance. [More recently (11/16/08), in this Marketwatch article, note paragraphs 7-10, where low average rates on individual insurance, achieved by basically keeping the chronically very sick without policies, are touted by a very interested party from a corporation that sells individual policies. Note also, in earlier paragraphs in the same article, a health insurance industry spokesperson posturing to bring "change"--some form of limited change--an illusion of "change" if they can get away with it this time. He indeed knows you can fool most of the people most of the time.]

    But then, when those silly people do get sick (which is what they had insurance for), they wind up with much higher rates, or no insurance at all

    So, collectively, we are morons looking for a bargain by getting insurance that keeps away unhealthy people. And when we get sick, that insurance, that keeps away sick people, says "good luck, buddy", and we get what we deserve.



    Curious, isn't it, that individual insurers never advertise their "payout rates". (This is the percentage paid out in claims for every premium dollar paid in.) Not only don't they advertise, but they won't even tell me when I ask lately, and often pretend never to have heard of such a term. You would think that it is a fundamental number that the consumer needs to know, like pixels in a digital camera, or fuel-burning efficiency in a furnace, both of which are always prominent when you look to buy it. But with health insurers, the product is so complicated that the company selling you insurance has an information advantage that the consumer isn't knowledgeable enough to break. And if they did give you a number, which would usually be in the 65% to 75% zone, and you compared to employer plan numbers, around 90%, or government Medicare efficiency (98%), you'd really know you were buying a wasteful, inefficient product.



    10/24/08: Plans for government aid to Insurance Companies (besides AIG) in the works Due to Financial Crisis!(According to several guests on PBS Lehrer NewsHour).
    Aid to more Insurance Companies??? The very same entities that won't insure people with pre-existing conditions in the U.S., and lobby for keeping able to keep not insuring them, when no other industrialized country allows the non-insurance of people due to pre-existing conditions?

    The Insurance Companies NOW HAVE A PRE-EXISTING CONDITION (near bankruptcy), AND WANT US TO INSURE THEM? The Insurance Companies want help from us???

    IF THERE IS TO BE ANY JUSTIICE AT ALL, IN LIGHT OF THIS, UNIVERSAL-COVERAGE-TYPE PRE-EXISTING CONDITION REFORM MUST BE PASSED WITHIN 90 DAYS OF A NEW PRESIDENT AND CONGRESS!





    WHAT IS OUR CURRENT SYSTEM, BY THE WAY?

    People under 65:

    Currently, people with very low incomes and assets (often assets < $2000 though sometimes a car or something else may be allowed) get free medical care (Medicaid). (NOTE: In a few states, even these very poor people will not be eligible for Medicaid if they do not have dependent children.) The quality varies based on the state--in many states, they really try to not stigmatize the people getting Medicaid, and feel like they just have a decent HMO. The trick for these people is that they're really in what economists call a poverty trap. If they work hard, they'll lose their free health insurance, and be much worse off and possibly dead. In the statistics, by the way, these people all count as insured -- they are not among the 46 million (almost 1/6 of the country) counted as uninsured.

    People above the very low Medicaid limits, but without enough money to pay for whatever insurance is available, when their job doesn't provide insurance, or when they are between jobs, are most of the uninsured. These people can be classified as "working poor" or "working class income" if they have lower incomes, and can't afford health insurance, and don't get it from their job. Besides working-class-level salaries, there are actually many higher-income/asset middle class people in this group. This is because, in most U.S. states, insurance can be denied due to pre-existing conditions. Further, in many states, a special "high-risk-pool" is set up by the state to cover them, but rates can hit $24,000 a year per person, and there are gaps. Also, many states have no high risk pool, and no alternate mechanism, or a humongous-gap alternate mechanism. (I took it upon to study the pre-existing condition wipeout risk to the hard-saving relatively-high-income middle class people here in my by-state dangers table. There is a wipeout risk in 23 states if you never move between states, and 36 if you do try to move. Few people know this.)

    Most insurance currently is employer-based insurance. Typically, smaller employers buy group insurance from an insurance company. The rates they pay depend on the state. In most states, nowadays for employers buying the insurance have some form of community rating or modified community rating, where they don't pay too much more for sicker employees. (This is in contrast to what happens to people in those same states when they are sick--individual policies in most of these same states that are community-rated for the employer are not community rated for the individual. This is one reason many experts are concerned about moving away from employer-based insurance without fixing the individual insurance regulations first.) At any rate, there can still be pre-existing-conditions coverage problems for employees of employers who have purchased group insurance. I am not an expert in this area, but you need to check the state specifics if this affects you.

    For employer-based insurance for large employers, the employer is usually self-insured, which means that they set up an insurance plan and just pay the cost of the medical bills that roll in themselves. (They often have an insurance company administer it, but they pay them a fee and the medical bills. The insurance company doesn't assume the medical risk.) Note that these large employer plans are usually exempt from state regulations by a Federal ERISA law. I am not an expert in this area, but I have been told there are few or no regulations of the Health insurance under ERISA.

    One thing I would like to point out about employer based plans is that, though Obama and the Democrats want to keep that system now, and that's OK, in the further future we might want to get rid of it. The reason is that there is a kind of manipulation or hanky-panky with freeloading on society, where employers can higher just young or healthy people, and reduce there medical costs. This keeps older and less healthy people both uninsured and unemployed. (Want an example of where this was at least contemplated--See The Walmart Memo. And I'm really not blaming Walmart -- there's a real economic force to be dealt with, and we have to engineer our system well.) Ironically, the McCain plan would have acted to de-employerize health insurance, which in itself is good, but because the plan messed up all protections for pre-existing conditions, and put people into the inefficient (65%-75% payout rate) individual system, it would have actually made things much, much, worse, as I posted here about a month before the election when I found out the exact details of his plan.

    [Incidentally (11/18/08), with the three American auto makers asking for a government bailout to stave off bankruptcy, many are pointing out that Toyota and other Japanese carmakers when manufacturing in the U.S. have lower costs than U.S. automakers manufacturing in the U.S. Though there probably are other factors, such as too many car models and dealerships for the US companies, I'll bet some of Toyota's reduced cost is that being newer in manufacturing in the U.S., they have younger employees. Think about this, and see what a mess self-insured employerized insurance can make of the economy!]

    Also, though I think Obama will keep the tax-favorable treatment of employer-based insurance, as we make things more optimal in the future, we may want to give equal deductions whether insurance is individual or employer. That is, we want to break the tie of health insurance (and in fact pension, etc.) to employers, since when we don't have continuous long term employment with one employer, all those things get messed up. (We have such a stupid way of doing things! It's stupider now that young people are expected to go between 10 jobs, not 1 job, per lifetime.) Now, there would be problems dis-employer-connecting in a non-mandated system (particularly, freeloading by individual people not replacing lost employer-provided insurance). But somes of the issues of de-employerization are false: the economics-versed will realize that "employer-pays" vs. "I pay" vs. "we split the cost" is a false belief (under everyone rational, no psychological effects, and no-sticky-entanglement agent assumptions at least.)

    Oh, yes. For completeness let me add that people with over $10,000,000 in assets often don't have or need insurance. They just pay cash.

    And at the risk of sounding facetious, people in prison get free medical treatment, whether they have a pre-existing condition or not.


    Current System, for People 65 and Up:

    Medicare, a program which has been in place since the mid 1960s, insures people for a modest fee. (Funding from a payroll tax.) There is no pre-existing conditions exclusion. The standard version of the program has a notoriously high efficiency measured by "payout ratio" of around 98%. There are also certain controversial private alternatives, which cost the Federal government something like $1200. more a year per person, due to the administrative inefficiency and cost of marketing the private alternatives. (Republicans generally support these alternative plans, indicating that they believe that though not the case now, ultimately the private plans will manage to squeeze costs down. At the moment, in my area of upstate New York, it looks like much of that $1200. is going into the ads I see on TV for the various private Medicare plans, and the sales people. Several different companies offer on TV to send a sales person (the ads say "health insurance advisor") out to the older people.)

    Do note that Medicare falls short in some areas, so people with assets to lose often purchase supplemental plans. I do not myself know about the problems people with pre-existing conditions have with supplemental plans. I do believe that at least in certain states, if you purchase a supplemental plan when you first hit 65 and start Medicare, you are O.K.

    Since so much of the medical system is Medicare (older people use a lot of care), you would think no one would sensibly object to the Obama plan, which has less of a government roll than Medicare. But, the explanation is that the current system for under 65 year old people is where the profit lies for many, many insurance companies. That is, those 65% to 75% payout ratios on individual policies mean there is 25% to 35% of premium left to be spread around to insurance agents, insurance company employees, and profit.

    Current Sytstem and Hidden Cost Shifting--Hidden Cost Shifting Now Worsening Due to Economic Meltdown

    The current system shifts the cost of medical care of those without insurance, and with lesser insurance, to the rest of us in a dishonest, hidden way. (An honest way would be to pay in an explicit way where the costs are calculated and announced-- e.g., the government budget with taxes. A dishonest way is just to have it all added to our medical and insurance bills, with nobody knowing what the amount really is. Hospitals and doctors rarely dare calculate the number, because if they have to tell you a third of your bill is really for other people, you might not pay.)

    The cost shifting is from the uninsured, who are required to be stabilized by law in a hospital whether or not they will be able to pay. Also, it occurs for hospital and doctor "charity" care. It occurs commonly for Medicaid -- when the state governments set doctor and hospital reimbursement rates too low. (And for example, in New York State, they've had a budget emergency due to the meltdown, and announced (11/12/08) a plan to cut the Medicaid payment amounts. So the cost will get shifted to all not-on-Medicaid state residents.) There is also cost-shifting in the patchwork of state government programs designed to help some of the uninsured, with a little too much income for Medicaid, get medical care. Those usually involve some government money, and also often involve an unrealistically low payment rate to doctors and hospitals (often with a law requiring that the doctors and hospitals accept that unrealistically low payment). This is yet more cost shifting, and of course this should get worse as state governments go into budget troubles.

    YOUNGER PEOPLE NOTE:

    You may be too young to know that in the early Bill Clinton Presidency years, around 1993, we were on the verge of getting universal healthcare in place when the special interests came in, ran these "Harry and Louise" ads to scare the people away from it. And it worked. (Thus, unlike the current financial meltdown, you can't really blame the government leaders--some of them were alert --you can blame the special interests, and the ability of some of the people to be mislead.)

    Since you, young people, can expect to have not one steady job, but rather 10 shorter-term jobs, over your lifetime, lets hope your parents and grandparents will let you have reliable and steady health care.


    Video: Economic Journalist Peter Gosselin and others discuss his book High Wire, about the increased risk of sudden financial catastrophes to families in America due to health insurance and other reasons.


    Frontline with Full Video on 5 Country's Systems

    Documentary Showing how well the current system is working for the working poor . The people followed in this documentary are all in the lower-middle and working-poor class. I find it a flaw that they missed the more well to do middle class, which is also at high risk. Though the better-off portion of the middle class has a lower likelihood of having no care or far inferior care most of the time than the working poor, the system still leaves no care and inferior care all too likely. And further, it gets combined with the likelihood of losing say $600,000 worth of savings all at once. (The working poor simply don't have that much in assets to lose.)



    American Prospect Special Report on Universal Health Care--May, 2008 . The following articles strike me as particularly lucid: Ezra Klein on two of the major proposals and their variants, Marcia Angell on the Massachusetts reform, and Anthony Wright on the California attempt.

    Cross-Insurer Database of Pre-Existing Conditions:
    Some people are not aware of it, and think they might give a try at just not putting down a pre-existing conditions. The health insurance industry maintains a large cross-insurer database of pre-existing conditions. Note below, my own policy's privacy statement indicates they can do that, as below, circled. ("Medical underwriting" is precisely pre-existing-condition-screening. The industry prefers that term, because it sounds more innocent, and most people don't know what it is.)




    WHY IS HEALTH INSURANCE DIFFERENT FROM OTHER INSURANCE LIKE FIRE AND AUTO?,
    (that don't need pre-existing condition regulation or subsidies).

    This is a perceptive question with a compelling answer.

    A)Pre-Existing Condition Regulations are Needed because the larger part of the cost of a medical event (heart attack, coming down with cancer, etc.) is not the immediate cost of treatment, but rather the future cost of treatment due to conditions which will pre-existing after the event. (Compare: If your house burns, it gets rebuilt and the insurer pays for that, but you can still get insurance on the new house because it is not more likely to burn again. Auto is actually similar -- yes, there is a detail that after an accident the insurer may presume you are a less good driver and raise your rate even 50% for a few years, but this is nothing like the event of a heart attack or cancer, where if you lose your current insurance, or you need to change insurers because your insurance pool gets cherry picked (see box below), your unregulated insurance premium (i.e. expected medical cost) may rise to 10 or 30 times what is was.

    Another way of looking at the paragraph above is that any truly rational consumer (with assets to lose) will only buy health insurance that covers, for a medical event, not only the cost of treatment now, but the elevated expected cost of future treatment which becomes apparent due to the current medical event. Of course, one reason no individual or job insurance offers this is that only about 2% of people are economics-quantitative analytical enough to see this even when pointed out, and the other 98% are oblivious to this. (Thus, for the health insurance product, consumers are not informed consumers -- rather they are terribly, terribly ignorant consumers for this product.)

    Another reason the rational-consumer insurance is unavailable is that such truly sound insurance is impossible to offer, based on the unpredictability of future medical advances and costs. Thus, the only available solution for a rational consumer would be to join a non-revocable agreement to pool medical costs with a large number of other individuals. Well, if you make that large group of individuals everyone, this is one form of universal care.

    B)Subsidies are Needed (even after regulation for pre-existing conditions) because many people simply can't earn enough to pay for the average cost of treating disease. This has much to do with the free-market spirit of U.S. regulations, where those with limited labor market power to garner a high wage (which arises largely because there is not a shortage of people doing the particular work that they do in the absence of unions of much higher minimum wages).

    C)Regulation Reducing Redundancy and Increasing Administrative Efficiency are not essential, but desirable, because of the extreme waste, partly in the insurance-marketing area. For example, because of so many insurers existing with all kinds of different rules, perhaps 20%-25% of doctor and hospital costs are due to assistants dealing with all the forms and different pre-approval rules for the different insurers. Further, on non-employer insurance, beyond that administrative loss on all health insurance, the insurance company only typically pays out 60%-72% in bills of the premium dollars it takes in. (I actually saw 55% for one individual insurance policy one time.) Thus, we spend 16% of GNP on medical care whereas the other industrialized countries spend 6%-11% or GNP, and many have longer life expectancies than us.






    TWO GENERAL SOURCES OF SOME BY-STATE AND CROSS-STATE INFORMATION:

    is the Georgetown University All-States Health Insurance Site.



    There is, for individual insurance, a by-state comparison table on the site: Georgetown By-State Table)


    THERE IS EVEN BETTER STATE-COMPARISION INFORMATION (ABOUT INDIVIDUAL AND STATE SMALL GROUP RULES) AT:

    kaiser statehealthfacts.org "Managed Care and Health Insurance" subpage.,









    Who am I? I am Norm Spier, a mathematical statistician who has spent most of his life in Metro NYC, Upstate New York, and Connecticut. Recently (3/2010), I moved from Vestal, in Upstate New York, to the Five Colleges area of Massachusetts.



    If you have any comments, or want to point out an error or oversight, please email me at
    norm@nastechservices.com

    Ads This Site and Elsewhere: Buyer Beware! -- even Well-Meaning Sellers May Only Be Able to Provide Terrible Products Given Current Laws
    --And Many of Them Just Want Your Money!






    MISCELLANEOUS OTHER SITES OF MINE REFLECTING OTHER INTERESTS

    Social Science Books for Science People

    Musical Software 1

    Musical Software 2

    Musical Spectrograms


    Sites not mine of Interest:

    Jewish Voice for Peace (Jewish Organization offering contrasting view to the "Israel Lobby", opposes West Bank Settlements, members include myself.)

    Comment by Charles Freeman, Obama Intelligence appointee, on his withdrawal due to Israel Lobby pressure.




    This site is partly supported by donations (with very modest supplementation by advertising revenue).

    If you wish to donate viaPaypal, you may use this link:





    Important Legal Disclaimer: I am trying to put useful, helpful information on this page. However, I can not be responsible for any errors above. Therefore, please check with the appropriate state insurance departments, and/or seek legal advice, as appropriate, before relying on the information above.

    Also, please note the above information is copyright Norman A. Spier.



    This page contains (above) information on:

    Obama pre-existing conditions

    Obama Health Plan

    Baucus Health Plan

    pre-existing conditions obama

    Fixing pre-existing conditions

    Pre-existing conditions and health insurance