The American Dilemma and How We Can Fix It

Posts tagged ‘Obamacare’

ONE MAN’S IGNORANCE

“When ignorant folks want to advertise their ignorance, you don’t really have to do anything, you just let them talk.” – President Barack Obama (on the subject of Donald Sterling’s racial comments).

“If you like your health insurance you can keep your health insurance. Period.”

“If you like your doctor you can keep your doctor. Period.”

Moral – One man’s ignorance is another man’s political agenda.

CRONY ACCOUNTING

On April Fools Day amid blares, whistles, balloons and dancing buffoons our government announced that they had (due to a last minute surge in enthusiasm and interest) attained their goal of enrolling 7.1 million people in Obamacare.  Naturally, Chief Head Games Player Obama did a lap victory dance in the Rose Garden to make the announcement.

Frankly, I have always been suspect of government accounting.  There is a reason for that.  In my first job after college, I worked for the State of Illinois for two years and was one of the people who helped develop some of those numbers.  And I saw how they were crafted together.

My division of the Illinois Department of Revenue was responsible for determining the valuations for personal and real property which would be the basis for assessing the amount of property taxes that the railroads who ran through the state would pay to the various local taxing districts and to the state itself.  We had a formula for making these assessments which was fair and which had been used for years.  Not only had it been in use for a long time, it had been challenged in court by several of the railroads and upheld as a valid way of assessing their property by the Illinois Supreme Court.

As it happened, the man who was the head of my section was the retired general counsel for one of the smaller Illinois railroads.  In that position, one of his responsibilities was trying to reduce the assessments that the state levied against his employer.  Now he was sitting on the other side of the desk.  Naturally, over the years he worked for the railroad industry, he had many friends and associates at other railroads who had the same responsibility.

One of our largest railroads had a tradition of coming to our office a few days after we had compiled their assessment and taking my boss to lunch to “discuss” it.  Traditionally, they enjoyed this repast at one of Chicago’s nicer businessman’s lunch facilities, The Union League Club.  On his return my boss always seemed quite contented and a bit quiet – perhaps due to the Old Fashioneds which accompanied the meal.

Several days after one of these lunches, I had to go into that railroad’s file to make a minor change in the valuation of their property in one county for which they had filed an amendment.  As I pulled the file, I happened to notice that the total valuation which we had assessed had been reduced by a little over fifteen percent and that new valuation was certified by nothing more than my boss’ initials.

After spending hours trying to compute the assessment correctly and fairly, I was offended that all this work could have been wiped out with the stroke of a pen.  I was a little steamed and asked to see my boss to discuss this with him.  He always made himself available to me and we sat down to chat about the change.

During that conversation he told  me that the same Illinois Supreme Court decision which validated our formula for arriving at assessments also said, “Notwithstanding any formula, it remains within the purview of the Chief Assessor of Common Carrier Assessment to adjust, change or re-compute any assessment based on his knowledge and judgment.  His final determination shall be the final determination of any assessments for those railroads and private car lines who are required to report to his department.”

In other words, two Old Fashioneds and a nice lunch had far more value in determining railroad assessments than the hundreds of hours that my colleagues and I had put into following our formula.  While I followed the formula precisely during my second and final year with the department, I must say that I did so without the enthusiasm that I exhibited the previous year since I realized that the final number was going to be adjusted by my boss.  And I began thinking about starting my own business, which soon followed after my second year of employment by the state.

So what does all that have to do with yesterday’s announcement of Obamacare’s enrollment success?  Just about everything.  Simply put, I have always had some degree of suspicion when I view numbers that are generated by the government, based in part, on my personal experience.  The way in which this administration either throws around or withholds numbers seems more determined by whether they will bring political advantage or disability than providing the facts.  That certainly has been the case for Obamacare.

Since there is no oversight – no independent person or group who oversees the actual enrollment numbers – we will probably only know the truth after the fact.  But even if we were to take the generous position that the administration has accurately reported the number of enrollees, we should view that in light of the primary goal of the law to see how well it is working.

The key focus of Obamacare was to insure all Americans.  The estimates of those who do not currently have insurance range between 30 – 50 million individuals.  We need to take into consideration that many of those being counted in that 7.1 million are people who annually renew their applications for Medicaid.  Then there are the 5.6 million whose plans were cancelled because of Obamacare and might have enrolled because they had to replace their former plans with which they were perfectly happy..

So what is the net effect of this total shakeup of our health care system?  To make any definitive statement would probably be rash because all we have to rely on is anecdotal evidence.  However, based on that evidence, it is reasonable to make the estimate that we now have about two million fewer uninsured people than before the enrollment period began last October.  That number might be generously high.

And what have we spent to achieve this accomplishment that the White House celebrated yesterday?  It has cost the Federal government $677 Million to develop its website.  That states which developed their own websites have probably spent a nearly equivalent amount.  And then we spent another $100 million at the federal level to promote this law and get people to sign up for it.  That’s about $1.5 Billion to enroll perhaps two million people.  In other words, we spent $7,500 per person to get them health insurance.

Now we have to hope they continue to pay the premiums and choose to keep it.  Soon they will be receiving their insurance booklets and, if they read them, will realize that they are subject to high deductibles and will, except in the event of a serious medical event, be self-funding the entire cost of their own insurance.  In other words, with the exception of complying with the law (and even that is now in question with yet another Obama administrative change), they would still be better off if they get a bad cold or strep throat to bypass their insurance plan and get treated at the Emergency Room – as is the case now.

While I do not have a background in medicine, if one of my friends with a brand -spanking new Obamacare plan phoned me, sufferring with a sore throat and asked me what to do for it, my advice would be simple.

Have two Old Fashioneds and call me in the morning.

LESSONS FROM PRISON

In the United States we don’t get a lot of news from foreign sources.  I’ve never seen a copy of a newspaper published in Sri Lanka.  Perhaps the same is true of foreigners who may not be as informed about life in America – although the internet has helped democratize the process of news dissemination.

Making the assumption that matters of interest in the United States might not hold the same importance to my foreign readers, you’ve probably never heard of an American by the name of Kevin Trudeau.  In fact, I suspect there are a fair number of my countrymen who are similarly ignorant of this individual.

If you are an insomniac or just a television junkie, at some point over the last decade you’ve probably seen one of Trudeau’s infomercials.  For those of you abroad who may not know about infomercials, they are the advertising version of reality TV, normally lasting for one half hour.

A typical setting for an infomercial is a studio, the “pitchman” pushing the product is most often male and is usually accompanied by an attractive, younger female who asks insipid questions of the host or oohs as the host describes and normally demonstrates the product he is promoting.  These  might be vacuum cleaners, a kitchen appliance – or in Trudeau’s case – books.  Kevin has written a number of these whose subject matter includes “unique ways to get out of debt,” “’natural cures’” that the health care industry doesn’t want you to know about” and, of course America’s favorite health issue, “no effort ways to lose weight.”

You can certainly understand the reason that Mr. Trudeau appeals to a wide audience.  After all, being debt free, healthier and better looking are things that most of us would embrace as goals to which we would aspire.  In fact, at his sentencing hearing yesterday in Chicago, the courtroom was packed with his supporters as the judge remanded him to ten years in prison.

Mr. Trudeau had previously been convicted of bilking the public out of $37 million.  You see, what Mr. Trudeau promised to deliver the prospective buyer in his infomercials was substantially greater than the value of the advice which appeared in the printed word – or so the court found.

Mr. Trudeau has been imprisoned since his conviction late last year.  In an impassioned twenty minute speech he said that, “Prison has changed me.  If I ever write another book I promise that there will be no puffery, no embellishments, no lies and no mis-leading statements.”  Sadly for Mr. Trudeau, that plea fell on the ears of a deaf judge who agreed with the prosecution’s recommendation that he receive the full ten year term.

I’ve seen a number of Mr. Trudeau’s infomercials though I’ve never purchased any of his writings.  I can see how a person would be inclined, were they interested in the subject matter, to understand why he sold a lot of books.  Mr. Trudeau is an outstanding pitchman.  He’s the kind of person who is believable and could convince a farmer dealing with drought that he was the long awaited rainmaker.

But I couldn’t help thinking …

If we held the Congress and the president to the same standards regarding Obamacare as we held Mr. Trudeau, our correction facilities would be breaking out a lot of orange prison suits and we’d have a great number of political vacancies to fill.

OBAMACARE AND THE “WAR ON WOMEN”

If you’re a mainstream liberal-left Democrat you undoubtedly subscribe to the mantra that all Republicans (in addition to being white, male and overweight) are uniformly misogynists, merciless and are actively engaged in the well-publicized “war on women.”  That’s true even if you can neither spell nor pronounce “misogynist” or know it’s meaning.  No matter.  When yelling slogans and enjoying the approval of the mindless mob, there’s no reason to think for yourself or form opinions which might conflict with what the politburo tells you to think.  Besides – thinking has been identified as a dangerous activity and has (or soon will be) outlawed – so why waste your time on it when you could be painting picket signs.

There is certainly some evidence that, if taken out of context, would suggest that those who are Republicans (code name conservatives) might fit the definition which you have been taught in your local cell.  After all, a lot of Republicans//conservatives (code name people who have a religious background) oppose abortion – and that, of course, is an assault on your “right to control your own body.”  Granted, there are some in that conservative camp who feel indisposed to pay for your voluntary indiscretion resulting in the need for an abortion.  Most would reluctantly agree to the procedure in the very rare cases where rape or incest is involved.  But rehashing Roe v. Wade is not the thrust of this post.

So you’ve hitched your star to those who are really concerned for the well-being of Americans – the Democrats – and point to all the wonderful things that Obamacare contains.  And there are some excellent features in the act.

It’s great that irrespective of pre-existing conditions, people will be able to get insurance.  Of course, given the fact that people with life-threatening or chronic conditions will pay the exact same premium as someone of his or her age who is disease or drug free means that you and I will contribute to their health insurance directly by paying higher premiums on our own policies and indirectly through the inevitable tax increases that will be forthcoming from Washington to reimburse the insurers when they fail to make money on the policies they are being mandated to sell.

It’s great that there is now portability of insurance.  If you lose your job you will be able to keep your current policy.  Of course, you will be required to pay the full amount of the premium a portion of which your previous employer subsidized.  It’s one of the benefits of having a job – something lost on approximately 13.6% of our populace who are unable or unwilling to find employment.

The main theory behind Obamacare is that in a nation that used to be as great as the United States it is unacceptable that thirty million of us should be without insurance.  Apparently, those who are in that condition are less impressed with their precarious perch than those in the marbled halls of Washington  since the latest polls indicate that three out of four or those uninsured mistrust Obamacare and do not plan on enrolling and a solid one quarter of them have never even heard of it – despite the hundreds of millions our government has spent on public relations to promote it.

We know from well-established studies that women, more than men, need health care and treatment.  Part of that is because women are child bearers and have internal configurations that are more complicated than their male counterparts.  In addition, women have a longer life expectancy than men which results in more medical attention for a longer period of time.  Therefore, it is not hard to conclude that women will be more impacted by the provisions of Obamacare than men.

Since women live longer than men, the $600 Billion cut in Medicare funding written into the law to pay for other parts of the law hits women especially hard.   One of those cuts will affect what are known as “home health services.”  Perhaps you’re familiar with this if you’ve seen commercials advertising “companions” who might assist an elderly woman who needs someone to prepare meals, do some cleaning or simply provide companionship.  There are 5.2 million elderly (the vast majority of whom are women) who will be losing insurance coverage for these services due to Obamacare.  That’s a lot of people who either are going to have to move into a nursing home or will be left to their own resources.

Now I realize that five million is not a lot of people.  After all, when that number lost their previous “crappy” insurance last year – the administration pooh poohed this as a “small number” so we shouldn’t really be too concerned about all these elderly people.  That is unless one of them happens to be your aunt, your mother, your sister – or you.  But there is hope.

Suddenly last Friday, el Presidente decided that those formerly “crappy” insurance policies were good enough so that people could keep them another two years.  Personally, I took that as an act of beneficence – not to mention an astute political move, deferring all the forthcoming cancellations beyond the mid-term elections.  (Shame on me for even thinking that there was a political motivation behind all this).

So ladies, if you’re lucky – you never know when Obama will whip out his pen and perhaps unilaterally change the law for the thirtieth time and restore the home health benefits that were dropped by the law and restore all the other cuts that were made to Medicare.  That would go a long way to end the Obamacare war on women.  And if you’re really fortunate, he may pick up his phone and call to let you know the good news.

READY, AIM, STEAL

Poor Target Corporation.  The 112 year old retailer today disclosed that its original estimate that 40,000 of its customers’ credit and debit cards that were used during the Holiday shopping season might be low – now suggesting that as many as 70,000 such accounts might have been compromised.  In addition to card and pin numbers the data which hackers might have collected may also include home addresses, telephone numbers and email addresses.  In response, the corporation is taking steps to ameliorate the damage by offering free one year subscriptions to data security services for those customers who might have been affected.

Speaking of identity theft, the House conducted hearings late last year in which they interviewed five IT experts and asked them if, given the stories about the lack of security built into the Obamacare website, they would entrust their personal data to it.  All five responded, “No.”

Today, the House of Representatives passed a simple two page bill which it sent to the Senate where Majority Leader Harry Reid will most likely not allow it to come up for a vote.  The Health Exchange Security and Transparency Act would simply require that the government notify anyone whose identity was compromised while using www.healthcare.gov within a 48 hour period after the data breach occurred.  That doesn’t sound terribly controversial.  In fact, 67 Democrat Representatives voted in favor of the bill which passed 291-122.

Rep.Elijah Cummings, (D – MD) who voted against the bill said, “There have been no successful security breaches of HealthCare.gov.   Nobody’s personal information has been maliciously hacked.”  Prior to the assault on Target’s customers, I suspect that corporation could have made the same claim.

The purported principle underlying Obamacare is that by requiring all Americans to have health insurance it would provide greater health security for everyone.  Fortunately, one of the mandated requirements is that the policies issued under the law must include treatment for psychiatric conditions.  And that’s a good thing.

If a for-profit, well run company like Target Corporation cannot completely defend itself or its customers against electronic hacking, consider what we might expect from a flawed website where no front to back testing for security has yet to be conducted.

Incidentally, the prime contractor on the website, CGI Federal, which had a number of other flawed projects under its belt previous to their receiving this contract, was fired today.  Apparently the Obama administration has finally figured out that there is another “F” word other than the one that polite people try to avoid using.  Watch out Kathleen Sibelius.

The good news is that, considering the horrific job creation numbers for December of a mere 74,000, when the breaches to the website start occurring there should be an uptick in the earnings for the nation’s psychiatrists, psychologists and others in the mental health business.  Of course the question remains, will any of them accept the insurance that Obamacare offers?

GAMING THE SYSTEM

You really have to hand it to young, tech savvy people.  Sure, they may walk into lamp posts while texting, but their proficiency in understanding technology provides them with huge advantages in dealing with today’s complex issues – which, of course, includes Obamacare.

There is a young man who lives down the street and who just turned 27.  Under the rules which are currently in place that means that he can no longer be covered under his parents’ health insurance plan.  And, of course, that means that he needs to obtain health insurance on his own or face a tax penalty for non-compliance.  At least those are the rules today – and since Obamacare relies on fleecing people like this young man to subsidize the system, that rule is likely to remain – unlike others which change almost daily.

So my young friend who has more patience than many his age made a run at the Nevada Health Insurance Exchange.  My experience in looking at the sites for various states was that the Nevada marketplace seemed to work better than most.  That is a little surprising since in Nevada we have a Republican governor.

When he went through the application process and looked at his options he realized that given the fact that he was healthy and hadn’t seen a doctor in four years, the least expensive of the plans which were available to him were totally unaffordable.  This is the same “sticker shock” that many are experiencing throughout the country.  So he decided that he would simply pay the penalty – which in his case would amount to about $350.  That compared to a subsidized cost for a “Catastrophic” plan with a $660 annual premium which carried with it a $6,000 deductible he would have to satisfy before insurance would pay for his medical costs should he incur any.

As it happens, this young man works in the accounting department of a major corporation that runs a large number of casinos nationwide and in the Orient.  Because he just started with them he is not currently eligible for the company’s group insurance plan.

There is probably no industry which has more controls in place which check, double and triple check the amount of cash that runs through their business.  If you’ve ever had the opportunity to get a tour of one of these back offices, you’ll know what I mean.  There are cameras all over the place and people checking on the people checking on those who count and account for the casino’s receipts.  The casinos have developed one of the most “hacker-proof” systems ever, Hollywood movies notwithstanding.  They have to do that because it is their livelihood and they take it very seriously.

So as my friend was thinking about all the issues that have become obvious in the implementation of Obamacare a thought suddenly struck him.  Given all the problems in setting up a working website, he wondered, “How likely is it that the IRS which is responsible for imposing penalties for not having insurance will be able to verify anyone’s answer that they indeed have purchased it?”   Of course, falsifying a tax return is a criminal offense because the individual has committed perjury.  But the way Obamacare is currently worded, the question the IRS will be asking is “Did you have health insurance on January 1, 2014.”

What my young friend decided to do is to purchase a Catastrophic plan, pay the net $55 premium for one month – and then cancel it.  So for an out of pocket cost of $55 he can honestly answer that IRS question, “Yes,” and save himself the balance that would be due as a penalty as well as avoid paying substantially more for insurance that he really doesn’t want.

Now here’s the dirty little secret.  If this idea catches on with the young “Invincibles” whose premium payments are essential to subsidize this Ponzi scheme it will collapse like a house of cards caught up in a tornado.  Perhaps then we can find the will and insight to craft health insurance and health care reform that is both bipartisan and which actually works.

FOOD SHOPPING AND OBAMACARE

No doubt you know the expression, “There are many ways to skin a cat.”  I know I’ve heard that countless times but, notwithstanding, I haven’t the faintest clue how you would even approach this project using any of the purported methods.  Nor am I inclined to check out You Tube for an instructional video on the subject.

True, I am a dog lover and prefer their company to that of our feline companions.  But I did have three cats in the house at one time who learned to be quite civil and extremely social proving that my dogs who instructed them on the finer points of good behavior could easily have been educators at the finest Ivy League schools.  At least my dogs’ feline pupils learned something.

Well, as we have now gone through that wonderful holiday known as Thanksgiving, you will, no doubt, have noticed that the grocery stores were well stocked with cans of cranberry sauce – both jellied and with whole cranberries – and only slightly more expensive than they were last year .  Although I normally make my own I did grab a couple of cans because it’s hard for me to resist a sale on cranberry sauce.

So I brought them home and added them to the larder in the pantry.  Much to my surprise as I rearranged the shelf on which cranberry sauce properly belongs, I discovered that I had a can of whole berry cranberry sauce left over from last year.  This little blighter had hidden itself in the Oriental fruit section, between the lychees and the sliced mangos in heavy syrup.  Who knew that cranberries could be so furtive?  Naturally, this annoyed me as I like to keep an organized pantry so I set about getting all the cranberry sauce organized in one place as every right thinking person knows it should be.

I was stacking the cans and was going to put the older can on top so that I would use it first when I made a discovery.  The old can was oversized compared to its new companions and didn’t nestle nicely as it should.  That was because the old can contained 14 ounces of cranberry sauce and the new cans only contained 12 ounces, a 14% reduction in the quantity of product.  No wonder the new cans were priced only a little higher than last year.  Higher price/Smaller quantity = Large Real Price Increase.

How does this apply to Obamacare?  It’s the same shell game.

One of my neighbors who is on Medicare and has an Advantage plan as her Medicare supplement asked me to review her new policy booklet for next year.  Like most of us, reading voluminous booklets is not one of her favorite activities and she finds it a bit daunting.  So I obliged her.  What I found in reviewing the plan booklets for this and next year was extremely informative.

There was no change in the planned premium which she pays to maintain this insurance.  That’s hard to understand if you’ve heard that in order to implement Obamacare there was $600 Billion cut from Medicare’s budget.  But the devil is in the details.  In order to disguise these cuts the Feds have generally chosen to incorporate them not in premium cost increases but rather in the co-insurance costs for which subscribers are responsible.

Although it’s difficult to say what the “average” increase in co-insurance will be for my friend, because it’s impossible to predict which, if any, specific services she might require, it is possible to look at specific procedures and benefits and see what the increases in co-insurance are.  They range between 40% for drugs to 100% for an ambulance.  This at a time when she was just notified that her Social Security payment which represents the majority of her income will increase by 1.5% next year.

This, of course, only deals with the Obamacare cutbacks from the standpoint of the consumer.  Doctors are discovering that their fees are also being cut – to the point where they cannot operate their offices profitably enough to keep their doors open.  A neurologist from Atlanta yesterday testified before a House Sub-Committee that he has been notified that certain drugs which have helped stabilize the conditions of his MS patients will no longer be covered and they will have to pay full cost out of pocket if they want to keep taking them.

Wait a second – this is a group of people who are one of the primary “beneficiaries” of Obamacare – those with pre-existing conditions.  But I think I’ve finally figured out and can sum up the essence of Obamacare.  You get to pay more and get less.

Please pass the cranberry sauce.

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