Mike Kueber's Blog

January 25, 2013

More problems with ObamaCare

Filed under: Issues,Medical,Politics — Mike Kueber @ 9:20 pm
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Back in November, I blogged about some growing pains as ObamaCare took shape.  The post was prompted by HHS publishing regulations that, in addition to dictating standard policy coverages and requiring coverage for pre-existing conditions, severely limited the ability of insurance companies to accurately price the policies.  Specifically, the regulation provided:

  • Premium can vary based on age (3:1), tobacco use (1.5 to 1), family size, and geography.  All other factors – such as pre-existing conditions, health status, claims history, duration of coverage, gender, occupation, and small employer size and industry – are prohibited.

Today, more than two months later, there is an Associate Press article in the Express-News that describes a potentially huge problem with the interplay of the two authorized pricing factors – age and tobacco use.    According to the article, the age limitation on pricing will cap the annual price of a 60-year old’s policy at $10,172, with a tax credit for someone making $35k taking the price down to $3,325.  But the tobacco-use surcharge of 50% or $5,086, with no additional tax credit allowed, will bring the final price back up to $8,411 or 24% of this person’s income.  That’s not affordable.

This sort of snafu is inevitable in a program this big and new, and numerous tweaks will be necessary.  But as I pointed out in my blog a few weeks ago when discussing the possibility that the employer fine of $2,000 might be low enough that employers in masse will abandon employee health insurance, congressional Republicans are in no mood to tweak ObamaCare to help it work properly.   

I don’t know how this will play out, but gosh, it would have been nice if ObamaCare had been passed by a bipartisan majority.

January 3, 2013

ObamaCare comes to life as Frankenstein

As ObamaCare was being debated in Congress, one of President Obama’s most specious defenses of the initiative was that if you liked you current health insurance, as the vast majority of Americans did, then you would be able to keep that health insurance under ObamaCare.  That defense was specious because it was based on two false premises:

  1. It assumes that Americans purchase the type of health-insurance policy that they want.  That is not true for Americans who get their insurance policy through their employer (56% of Americans aged 26-64, according to an article in Politico).   Thus, if the employer decides to change the policy or eliminate employee health insurance, employees would not be able to keep their current policy.
  2. For those Americans who have individual health-insurance policies, it assumes that private insurance companies will continue to offer their current health-insurance policies.  That is not true because ObamaCare requires that all health-insurance policies must conform to the new mandatory coverages as prescribed by the federal government.  Thus, it is no exaggeration to say that health-insurance policies that pre-dated ObamaCare will cease to exist.

Not surprisingly, the mainstream media was complicit in this failure to question these patently false assumptions, as they seemed to go along with Pelosi’s suggestion that we need to implement the law first and then later we can we learn how it will work.  Unfortunately, the learning process may be sooner rather than later.

Just in the last few weeks, I have been hearing from multiple sources, including a senior executive for a medical-services provider, that large employers are moving quickly to drop employee health insurance and have their employees obtain ObamaCare coverage through insurance exchanges.  The ObamaCare law attempted to discourage such a movement by placing a $2,000 fine per employee on large employers who fail to offer health insurance, but large employers are apparently deciding that they would be better off paying the fine. 

If a few large employers go this route, the others will be at a competitive disadvantage if they don’t follow the same route.  And if large employers drop health insurance despite a $2,000 fine, you can imagine what small employers will do.  Employee health insurance could easily go the way of private pensions. 

If there is a mass exodus of employers from group health insurance, I suspect President Obama will want to increase the fine to $3,000 – $5,000.  Good luck with that so long as Republicans have a majority in the House or an ability to filibuster in the Senate.

November 23, 2012

ObamaCare takes shape

Filed under: Issues,Medical,Politics — Mike Kueber @ 12:31 am
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On November 20th, the Department of Health and Human Services published three proposed regulations that are designed to implement important features of the ObamaCare.  Because the regulations are based on the law, there are no significant surprises.  Although federal agencies sometimes push into areas not authorized by law, the Obama administration and Secretary Kathleen Sebelius have apparently decided that the law is already pushing America strongly to the left and pushing even more through the regulations would risk a backlash.

Essentially, the proposed rules prohibit denial of coverage based on pre-existing conditions, severely limit any underwriting by insurance companies, and standardize the coverage in policies.  That doesn’t sound like the insurance business that I grew old in, and it doesn’t sound very much like free-market competition.  Rather, it sounds like something that will inevitably become a sclerotic, paper-pushing bureaucracy. 

My major objection to ObamaCare, other than my judgment that universal coverage should have been deferred until our nation’s economy was righted, is that the federal government is not the best place (or the constitutional place) to develop progressive, innovative ways to deal with problems.  But the free market and the state governments brought this impending disaster on themselves by failing to provide Americans available and affordable health insurance. 

Maybe if we had more RomneyCares, we wouldn’t have needed an ObamaCare. 

The three rules proposed by HHS are as follows:

Proposed Rule #1:  .

  1. No denial of coverage because of pre-existing condition.
  2. Premium can vary based on age (3:1), tobacco use (1.5 to 1), family size, and geography.  All other factors – such as pre-existing conditions, health status, claims history, duration of coverage, gender, occupation, and small employer size and industry – are prohibited.
  3. Insurers are prohibited from having more than two pools of insureds in a state.  They can have one pool for individuals and one pool for businesses.
  4. Nonrenewal is prohibited.
  5. Catastrophic plans are authorized, but they must cover preventive serves without cost sharing.

The actual rule is 132 pages.  

Proposed Rule #2:  

  1. Essential health benefits that must be included in all policies, with each state having some control over the specifics –
    1. Ambulatory patient services
    2. Emergency services
    3. Hospitalization
    4. Maternity and newborn care
    5. Mental health and substance use disorder services, including behavioral health treatment
    6. Prescription drugs
    7. Rehabilitative and habilitative services and devices
    8. Laboratory services
    9. Preventive and wellness services and chronic disease management
    10. Pediatric services, including oral and vision care

    The Actuarial Value, or AV, of each policy will be calculated as the percentage of total average costs for covered benefits that a plan will cover. For example, if a plan has an AV of 70 percent, on average, a consumer would be responsible for 30 percent of the costs of all covered benefits – 60% for a bronze plan, 70% for a silver plan, 80% for a gold plan, and 90% for a platinum plan.

The actual rule has 120 pages.  .

Proposed Rule #3:   

Wellness programs.  These include, for example, programs that reimburse for the cost of membership in a fitness center; that provide a reward to employees for attending a monthly, no-cost health education seminar; or that provides a reward to employees who complete a health risk assessment without requiring them to take further action. 

The actual rule is 81 pages.

November 18, 2012

Rick Perry thumbs his nose at ObamaCare’s Medicaid expansion

Filed under: Issues,Medical,People,Politics — Mike Kueber @ 3:25 pm
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Rick Perry and a lot of Republican governors are back in the news lately because they are declining to participate in two major components of ObamaCare – (1) developing insurance exchanges, and (2) expanding Medicaid.    

Part of the problem with Medicaid is that people don’t have a full understanding of the role it plays in America’s safety net.  Most people believe the major difference between Medicare (healthcare for the elderly) and Medicaid (healthcare for the poor) and is that Medicare is insurance that the beneficiaries have paid for, while Medicaid is welfare that is paid for by general tax revenues.  That is correct, but another oft-overlooked difference is that Medicare covers virtually all of the elderly while Medicaid applies to only a fraction of the poor.  In fact, Medicaid is essentially limited to poor children and their parents.  It does not generally cover poor people without children.  (Incidentally, in 2012 the poverty line (Federal Poverty Level or FPL) for an individual is $11,170; for a family of four, the poverty line it is $23,050.) 

ObamaCare is changing the limited nature of Medicaid in two significant ways – (1) it will apply to all poor people, not just poor people with kids (this will bring in an additional 17 million beneficiaries to Medicaid), and (2) it will extend to people who earn no more than 138% of the poverty line.  That means a family of four can earn more than $30,000.

For families that are more than 138% above the poverty line, ObamaCare provides for them to purchase coverage at an insurance exchange and for this purchase to be subsidized by the federal government if the family earns less than 400% of the poverty line ($45,000 for an individual; $90,000 for a family of four).  The amount of the subsidy is calculated by limiting, on a sliding scale, a family’s cost for the purchase to between 2% and 9% of family income.

The insurance exchanges and the expanded Medicaid are the two most important mechanisms in ObamaCare to insure the heretofore uninsured.  Although the law couldn’t force states to develop insurance exchanges, it warned that the federal government would develop exchanges in those states that declined.  Similarly, the law couldn’t force states to provide the vastly expanded Medicaid, but, in addition to providing generous reimbursement, it threatened to withhold all existing Medicaid funding from those states that declined.

This summer, however, the United State Supreme Court threw a monkey wrench into the ObamaCare design by holding that Congress could not punish states by withholding Medicaid funds if a state declined to participate in expanded Medicaid.  And a bunch of governors in conservative states immediately, with much flourish, declared their opposition.  Texas’s Rick Perry was their leader: 

  • “I will not be party to socializing health care and bankrupting my state in direct contradiction to our Constitution and our founding principles of limited government.”

But since President Obama’s re-election, some of the governors are reconsidering their initial rejection of expanded Medicaid because, upon closer examination, the rejection is fiscally irresponsible. ObamaCare promises to reimburse states for 100% of its costs for three years and after that the reimbursement rate will be 90%.  How could a fiscally responsible state turn down a valuable benefit to the poor and near-poor individuals in a state if it only has to pay 10 cents on the dollar?  Not only does it benefit the state’s poor, but it also brings a lot of federal dollars into a state, which will more than make up the state’s 10% cost.

Some state critics of ObamaCare have warned that there is no guarantee that the federal government won’t increase state responsibility in future years (states pay 43% of the costs of existing Medicaid benefits), but that warning doesn’t make sense because states could always discontinue a program if costs start exceeding benefits.  (Political feasibility is another thing.)  Furthermore, the fact that every state already participates voluntarily in the existing Medicaid with a 43% contribution rate suggests that these states would be falling all over themselves to get in an expanded program with only a 0-10% contribution rate.  

ObamaCare proponents have suggested that Perry and the other Republican governors were engaged in pre-election posturing, and will come around post-election.  In a Politico piece, Jennifer Granholm pointed out that Texas has 6.1 million uninsured, and the Medicaid expansion would cover 2 million of them, plus provide the Texas economy with a huge cash infusion of $76 billion for 2014-2019.    

Wow, that’s a lot of money to walk away from.  If I were a betting man, I would bet that Rick Perry is going to come around on this one.

September 30, 2012

Sociopaths and psychopaths in our midst

Filed under: Medical — Mike Kueber @ 11:07 pm

A few days ago, a Facebook friend made a point about rapists, murderers, and people who have no empathy.  The people with no empathy were conservatives, like Paul Ryan and Ayn Rand.  In her book, the people with no empathy were worse than rapists and murderers. 

When I challenged her on that shocking position, she responded coolly that people with no empathy are accurately called sociopaths, and nothing can be worse than sociopaths.  At that point, I backed off the discussion because we were getting into psychiatric diagnoses that I did not have a working knowledge of.

For my future reference, I learned that dictionaries define a sociopath is a person with a psychopathic personality whose behavior is antisocial, often criminal, and who lacks a sense of moral responsibility or social conscience.  People often conflate sociopathy and psychopathy, which dictionaries define as a personality disorder that can be characterized by shallow emotions (in particular reduced fear), stress tolerance, lacking empathy, cold-heartedness, lacking guilt, egocentricity, superficial charm, manipulativeness, irresponsibility, impulsivity and antisocial behaviors such as parasitic lifestyle and criminality.

One pundit suggested that the term sociopathy may be preferred by sociologists that see the causes as due to social factors. The term psychopathy may be preferred by psychologists who see the causes as due to a combination of psychological, genetic, and environmental factors.

According to the WiseGeek.com, both a psychopath and a sociopath have a complete disregard for the feelings and rights of others. This often surfaces by age 15 and may be accompanied by cruelty to animals. These traits are distinct and repetitive, creating a pattern of misbehavior that goes beyond normal adolescent mischief. Both fail to feel remorse or guilt. They appear to lack a conscience and are completely self-serving. They routinely disregard rules, social mores and laws, and don’t care about putting themselves or others at risk 

Wiki.answers.com agrees that the terms are generally synonymous, but also suggests a possible distinction:   

  • Those psychologists who make a distinction between the two usually do so on the basis of organization. Sociopaths are seen as disorganized and rash, making extreme responses to normal situations. They lack impulse control. Psychopaths, by contrast, are highly organized, often secretly planning out and fantasizing about their acts in great detail before actually committing them, and sometimes manipulating people around them.  

Suffice to say, Ayn Rand and Paul Ryan are neither sociopaths nor psychopaths, and any attempt to demonize them as such is no helpful to a healthy debate over whether America’s safety net is too generous.

September 13, 2012

Fish oil bites the dust

Filed under: Medical — Mike Kueber @ 12:58 am
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USA Today reported today that fish-oil supplements don’t work in preventing heart attacks or strokes. While eating fish is helpful, consuming fish-oil supplements isn’t.

My Fitness by Design doctor turned me onto fish oil many years ago, and I don’t recall if my usage was directed primarily toward heart-attack prevention.  Rather, I think my doctor thought it was almost a miracle drug, akin to aspirin.  Thus, this news report is a big disappointment, especially when you add it to similar reports on ineffectiveness in the past few years concerning glucosamine chondroitin (painful knee), saw palmetto (urinary problems), calcium (strong bones), statins and CoQ10 (cholesterol), vitamin E (antioxidant), and vitamin C (avoidance of colds).  Multivitamins are about the only pill left in my daily cocktail. 

At least I wasn’t a sucker for ginkgo biloba (memory).

August 21, 2012

Political correctness and legitimate rape

Filed under: Issues,Medical,Politics — Mike Kueber @ 7:33 pm
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The current 24-hour news cycle is being dominated by a Republican candidate, U.S. Rep. Todd Akin, for one of Missouri’s seats in the U.S. Senate.  Akin earned the news spotlight by recently asserting that victims of “legitimate rape” are highly unlikely to get pregnant. Virtually everyone, including Akin’s congressional colleagues and Republican presidential candidate Mitt Romney, has vehemently rejected his statement and many have insisted that he abandon his senatorial campaign so that a substitute candidate can be selected to compete in November against the highly vulnerable Missouri senator, Claire McCaskill.    

Most early news reports focused on the outrage created by the statement and ignored the substance of the statement – i.e., what the hell is “legitimate rape.”  (Akin later clarified that he was referring to forcible rape.)  This failure of the media to address the substance of Akin’s statement reminded me of the political correctness that required condemnation, but not discussion, when Jimmy “the Greek” Snyder claimed that the breeding of slaves resulted in African-Americans being genetically advantaged to become world-class sprinters.

Today, however, the media seems to have finally gotten around to addressing the substance of the issue, but because political correctness so permeates American life, the best the media can do is state that there is no solid evidence supporting Akin’s assertion.  Unfortunately, there is little evidence contradicting it, either. 

An article in the New York Times today is typical.  The article refers to a doctor with the National Right to Life Committee (Dr. Wilkes) who essentially agrees with Akin – i.e., forcible rape will not result in pregnancy because trauma and fright will preclude fertilization.  To counter this argument, the Times article cites two doctors who call it “absurd” (Dr. Grimes)” and “nonsense… just nuts (Dr. Greene).” 

The argument takes the low road instead of the high road because of the dearth of evidence.  The Times article is able to cite only a single medical study, which concluded that 5% of raped women become pregnant, as compared to Dr. Wilkes’s assertion that only 1% get pregnant.  In response to this study, Dr. Greene says, “I’m not aware of any data that says [fright] reduces a woman’s risk of getting pregnant.”  Unfortunately, this does little to settle the argument.       

Time magazine this week also includes an op-ed column that attempts to address the substance of Akin’s assertion.  The column by Health & Science columnist Erika Christakis makes no pretense of being fair and objective by characterizing Akin’s assertion as bizarre and unscientific:

  • This embarrassing episode is only the latest in a long string of Republican rape canards that present a binary view of female sexuality where some women are deemed worthy of legislative sympathy while others are not.  The ignorance is reaching a new crescendo but it goes back decades.”

Christakis refers to a study that found pregnancy from a rape is more likely than pregnancy from consensual sex, but she thinks this is not the crux of the Akin brouhaha.  She is disturbed that some legislators, including VP candidate Paul Ryan, think forcible rape is more egregious than other types of rape (statutory, incest, etc.), and therefore its victim is entitled to more deference vis-a-vis abortions.  Her column concludes as follows:

  • But it’s a mistake to get mired in pregnancy rates….  There will always be nuance and ambiguity where pregnancy is concerned. That’s why many Americans have long preferred to stay out of first trimester abortion decisions, leaving them to a woman and her doctor, partner and conscience. People on all sides of the abortion debate should instead unite to prevent as many abortions as possible through comprehensive sex education; better access to family planning; improved support for adoption; and greater compassion for living, breathing parents and not only their unborn children. To this list, we might also add better science education for legislators.”

The problem with Christakis’s attempt to be reasonable is that, although “many Americans have long preferred to stay out of the first trimester abortion decisions,” that is certainly not true of Akins or his ilk.  They are fighting the signal moral fight of their lives.

And regarding her final point about better science education for legislators, such an education would be more accessible if academia were less reluctant to study politically incorrect, yet widely accepted statements.  Statements like “white men can’t jump.” 


p.s., according to USA Today today, Akin is going to tough it out and not drop out.

Medicine that works

Filed under: Medical — Mike Kueber @ 3:41 am
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Today’s New York Times includes a fascinating op-ed piece by H. Gilbert Welch on wasteful medical expenditures.  The article points out that the economics in the American medical industry create tremendous incentives for the development of medical products and services that are effective in treating medical problems.  Unfortunately, there are virtually no incentives for identifying products and services that do more harm than good. 

Because of this mismatch of incentives, Welch argues that Americans waste vast amounts of money on medical products and services that don’t work.  The two poster examples of this waste are (1) hormone replacement therapy to healthy middle-aged women and (2) P.S.A. screening for prostate cancer to older men.  Both of these treatments were widely accepted and used in the 90s, but then since the turn of the century, both have been determined by trial studies to have dubious value.

Although ObamaCare attempted to address this problem by creating the Patient-Centered Outcomes Research Institute to study the comparative effectiveness of different treatments, Welch is convinced that the Institute’s budget is wholly inadequate. 

Welch should be grateful that there is any budget to do this work after the Republican Party successfully demagogued this issue.  The Republicans piously whine that ObamaCare is inserting a government bureaucrat between individuals and their doctors.  I say that government is failing miserably if it blindly spends money on medical expenditures without ensuring that the purchased treatments are effective. 

I blogged about comparative-effectiveness research more than a year ago, and argued at that time that government bureaucrats should also look at cost-effectiveness.  Because of the mismatched incentives in the medical industry, this type of review needs to be performed by government. 



July 20, 2012

Reversing ObamaCare with only 51 votes in the Senate

Filed under: Issues,Medical,Politics — Mike Kueber @ 3:43 am

There has been a lot of bold talk by Republicans planning to reverse ObamaCare if they take control of the Senate in 2012.  Although most pundits assume that such a reversal would require Republicans to have a filibuster-proof majority (60 votes), there is an article floating on the internet, falsely attributed to renowned columnist Charles Krauthammer that asserts only 51 votes are needed to repeal ObamaCare because filibusters can’t be directed toward matters of taxation.  My initial suspicion was that the article was incorrect and that the 51-vote reconciliation process could be applied only to the taxation component of ObamaCare – i.e., the individual mandate – but repeal of the remainder of the bill will require at least 60 votes.  But I also suspected that there are numerous other actions that President Romney and his new Secretary of Health and Human Services will be able to take to eviscerate ObamaCare, beginning with a broad assortment of state-specific waivers. 

A recent article in the Huffington Post essentially confirms my opinion:

  • “A simple-majority reconciliation bill could certainly cover the health care law’s tax increases – including the penalties used to enforce the individual mandate to buy insurance – and subsidies for insurance premiums.”
  • “Republicans, however, could not use the filibuster-proof budget process to repeal provisions in the health care that don’t have a direct impact on the government’s balance sheet. For example, it still would likely take 60 Senate votes to repeal the law’s requirement that insurance companies cover people with pre-existing conditions.”
  • “Experts say leaving the insurance reforms intact on their own is economically unsustainable because the ratio of sick to healthy people in the plans would be out of balance – ‘If you were to remove everything else in reconciliation and be left with the insurance provisions, you have something that everybody recognizes is unworkable,” said former Congressional Budget Office Director Douglas Holtz-Eakin. “I think if you take enough out, the rest probably has to go.’”

Congressman Paul Ryan essentially agrees.  According to an article on DailyCaller.com, Ryan has asserted that Congress has the authority to repeal on a majority vote 85% of ObamaCare because it relates to budgetary matters.  Only the 15% that is regulatory in nature, such as coverage for pre-existing conditions or 26-year-olds would require a filibuster-proof majority.  . 

Remember how President has essentially gutted America’s immigration law via prosecutorial discretion?  Romney will be able to do the same thing with ObamaCare, and as we say in North Dakota, what’s good for the goose is good for the gander.


July 16, 2012

Medicare and socialized medicine

Filed under: Issues,Medical,Politics — Mike Kueber @ 1:13 pm
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While lounging in the apartment pool yesterday with an exceptionally enlightened friend (and insurance agent) and discussing America’s intractable deficit problem, he pointed out that Social Security was never intended to be sufficient to satisfy an individual’s retirement needs.  Rather, it was designed to provide a base of protection that most American’s would supplement with their separate retirement savings.  Everyone knows that. 

Later, when our conversation shifted to Medicare, it suddenly dawned on us we didn’t know whether the same concept applied to Medicare – i.e., was Medicare supposed to completely protect seniors from the cost of medical care or was it merely a base that was intended to cover a portion of an individual’s medical care?  In other words, are senior Americans paying a larger or smaller percentage of their medical expenses that they have historically done?

A little basic research on Wikipedia reveals some surprising facts:

  • Medicare covers 75% of the cost of covered services on average and 48% of average costs for all medical services, and the typical enrollee faces over $3,000, while 10% of enrollees have over $8,300 in out of pockets costs.

From these numbers we can infer that 25% of covered services are paid by individuals through co-pays and deductibles.  Uncovered services includes long-term, dental, hearing, and vision care, plus supplemental insurance.  Sounds like Medicare covers about the same percentage of a retiree’s medical needs as Social Security does for a retiree’s non-medical needs.

While doing this research, I learned that the current Medicare tax of 2.9% is scheduled to increase in 2013 to 3.8% on those individuals who earn more than $200k.  This tax is used to provide Part A Benefits (hospital care), while Part B Benefits (doctor care) are funded by premiums, which are highly progressive – i.e., $99.50 a month for individuals making less than $85k a year to $319.70 a month for individuals making more than $214k a year.  

Thus, unlike Social Security, which has some resemblance to insurance and an earned benefit, it is clear that Medicare is already closely akin to socialized medicine – i.e., from each according to their ability to pay; to each according to their needs.  You have to give the big-government types credit for maintaining the perception that Medicare is an earned benefit.  It may be for some, but certainly is not for most, and that is why it is going broke.

p.s., just like universal health coverage, I think socialized Medicare is a good idea, but it needs to be implemented in a way that our government can afford it.

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