Remember how the Democrats did it. They created Obamacare behind closed doors. There was no real pubic vetting. No real attempt to make sure the pieces fit together in a sensible way. And no possibility of a single vote from the other party.
The House Republican Leadership seems enamored of that approach. The latest GOP replacement plan was announced last Monday after weeks of secrecy. The two relevant committees began their markup two days later – with no hearings, no vetting, no CBO score and no amendments.
It does not lower costs. It insures many fewer people. It does not stop the race to the bottom in the exchanges that is so harmful to the chronically ill.Instead, the GOP plan seems designed to make the individual market work better. That means helping Obamacare work better. For all the apparent differences, the Republicans are just as committed to the managed competition model as the Democrats were.
Does anyone else see a problem with this arrangement? And yes, it is all very legal. But that doesn’t mean it is prudent or even ethical to continue this convoluted, monopolistic, expensive, and restrictive method of accessing and paying for healthcare!
Look carefully at the characteristics of how health plan networks operate and follow the money flow from start to finish. What holds it all together? Despite its byzantine complexity and 40+ years of being entrenched into our national psyche, there is one linchpin that holds the whole perverse system together: It is the physician contract!
The provider (or provider’s employer) buy-in is what propagates and guarantees the survival of this behemoth. Without provider network agreements, the whole thing collapses like a house of cards!
Basically, when it comes to access to care, Obamacare has returned us to the status quo from before the Great Recession – at great cost to taxpayers. And that is only the picture in broad strokes. Very few people account for most medical spending, and those very sick people are doing poorly in Obamacare plans. A politician who offers a compelling plan to restore prosperity, as well as repealing and replacing Obamacare, should not face overwhelming odds convincing Obamacare beneficiaries.
The real obstacle to advancing an alternative to Obamacare will be interests in the health sector, which has mastered Obamacare remarkably. The latest evidence is the first quarter earnings reported by UnitedHealth Group and Hospital Corporation of America, both of which Forbes colleague Bruce Japsen describes as having had the “best Obamacare quarter yet.”
Taken together, these facts suggest CoOportunity executives purposely set rates low to gain market share — assuming taxpayers would bail-out their losses. The strategic plan was simple: 1) underprice premiums to gain market share; 2) Let taxpayers bailout the losses with emergency solvency loans and the risk-adjustment distributions; 3) increase premiums later once the dust settles. This seems to be a common theme among health insurance co-ops. This type of activity should not have been allowed. Most stakeholders — apparently including CoOportunity Health — expected taxpayers to bailout struggling co-ops indefinitely. It’s now clear that is no longer going to happen.
The spectacular failure of CoOportunity Health was a wakeup call to other health insurance cooperatives, state insurance regulators, HHS and taxpayers. But it won’t be the last co-op that goes broke owing taxpayers large sums of money. Going forward, state insurance regulators and other government regulatory bodies need to be on the lookout for co-ops that have strategic plans premised on losing taxpayers money while gaining market share — expecting taxpayers to bail out the insurer. I suspect it will happen again and again until most of the co-op health insurers lose all their taxpayer financing and go bankrupt.
An established principle of money management goes something like this: “No one cares about your money more than you do”. Evidently, the government doesn’t agree. The feds have adopted the Lawrence Garfield approach, because it is obvious that the government LOVES your money… A LOT! As is evident by how much of it that they spread around. Sharing the love, I guess.
But this is only because the government knows better than you how to spend your money. It is for your own good that they
confiscate… collect taxes for the greater good. You might actually do something stupid with your own money if you keep too much of it; like save it or pay off debt or donate to a charity or give to your place of worship or invest for the future – or worse yet, spend it on something you want (greedy capitalists).
To prevent your reckless, dare I say selfish, use of your over-abundance the federal government has designed much better programs where your ill-gotten dollars can be put to better use. And it is easy
to lose, I mean risk…. uh, to invest in these programs. You really don’t have to do anything… other than pay more taxes of course. But as Joe Biden has reminded the citizenry, it’s our patriotic duty to give up the green to our overseers uh…pay our taxes.
With that fatherly guidance in mind, let’s examine
one scheme… an investment opportunity brought to you by one of the many pork sandwiches … special interest pay-days.... social infrastructure programs packed into the 2,700 pages of ObamaCare. Of course, being a non-profit kind of thing, your dividend is the satisfaction of knowing that you’re throwing good money after bad… you are lining the pockets of aging insurance executives …reinforcing the social fabric of the country and helping to make us all more dependent on government bailouts and make the economy weaker… stronger as a nation!
Without further adieu, let me give you a prospectus on this sure bet investment in the future of America.
But first a word from our financial risk department:
If anyone is still not convinced of the flawed assumptions and faulty financing mechanisms that permeate the ACA (ObamaCare), then please read the article below. But to summarize, a good crony deal is a deal that socializes the losses while paying large salaries to retired insurance executives to mismanage the company. Nowhere is this more evident than the Non-profit ObamaCare co-ops.
This butchery didn’t come about without a lot of government assistance along the way. Collectively, the taxpayers have loaned the co-ops more than $2.4 billion spread over just 23 health plans. Now, Uncle Sam stands to lose a good chunk of that money as the plans start filing for bankruptcy. In Iowa, the bankruptcy of just one co-op will likely cost taxpayers all of the $180 million they flushed into the insurer.
The New York Times blamed the failure of that Iowa plan, which went by the name CoOportunity, on the co-op’s success. The newspaper’s healthcare reporter reasoned that the plan proved so popular with consumers, it exhausted its budget.
Another way to look at it is that the co-op robbed its customers. They knowingly underpriced their product, took in more revenue than they could service, and then hid behind bankruptcy proceedings when they couldn’t meet the obvious demand. In business vernacular, this is a variation of the age-old Ponzi scheme. In the New York Times, it’s sadly portrayed as an inspiration – the co-op a victim of its own munificence.
Progressive architects hailed co-ops when the plans unveiled amazingly low rates last year. It seems that was the last political gasp of a dying dogma. Measuring the risk of a population of beneficiaries, and pricing an insurance product, turns out to be a hard business after all. The profit motive is a reasonable way to ensure that beneficiaries actually get the services they’re promised.
I’m joking of course since the giant health insurance companies along with Big Pharma wrote a good piece of the law. A law which was not even supported by a majority of Americans but was forced through Congress on questionable procedural grounds. A law which has now financially addicted a good portion of the American people like it was designed to. Yep, good times for the health insurance companies.
Not the small businesses of course. That’s a different matter. But they don’t have lobbyists and friends in the White House so that’s the way it goes in Obama’s America.
And all the profits the Aetna CEO is so happy about? They are a direct transfer of wealth from the middle class via taxes to his corporation’s bottom line. Congratulations big government people. Way to embrace corporatism.