Thursday, August 07, 2014

With or Without the Subsidies, Obamacare May Fall Apart

The Obamacare subsidies depend on Halbig’s outcome, and whether millions of Americans can afford their healthcare plans depends on the subsidies. At least, that’s the narrative. Commentators warn of a coming “death spiral” of extraordinary costs and insufficient incoming premiums as people cancel their plans without the subsidies. But what they’re ignoring is that Obamacare is on track to fail regardless of what the court decides.

What people aren’t grappling with is that with or without the subsidies, health insurance under Obamacare is simply too expensive. The hundreds of pills and procedures every insurance plan is now federally required to cover has bloated premiums beyond what most Americans want to, or often can, pay. That’s why Obamacare subsidizes the plans.

The whole point of Obamacare was supposedly to make health insurance more affordable. The problem is that Obama’s promise that “If you like your plan, you can keep your plan,” never squared with his plan to replace so-called catastrophic care plans with comprehensive coverage. Companies can’t cover breast implants and Viagra for the same price as covering cancer and car wrecks only.

Subsidies were the answer for affordable care. The federal government pays up to 100 percent of the premiums for certain insurance plans for people with low incomes. In total, the administration claims 6.7 million people will receive tax credits to pay their premiums and 70 percent, or 4.7 million, are using a federal exchange.

However, even with Medicaid expansion and subsidies, Obamacare still failed spectacularly to reduce premiums. Instead of reducing what every American family pays for health insurance by $2,500 per year, as candidate Obama promised in 2008, insurance premiums increased for millions of Americans once Obamacare made their existing plans illegal. Families can expect to pay 32% more per year to stay covered under Obamacare. And that’s with the subsidies.

Money for subsidies has to come from somewhere. Here’s where things really get tricky for Obamacare. The entire premise is that, even with subsidies, young, healthy people’s premiums will subsidize care for the sick and elderly. Turns out that young people don’t really want to do that. And why should they? The plan hoses young, relatively poor people right when they least need high bills for services they’re not using. And it helps older, relatively rich people who should be able to afford the care they need.

Nick Gillespie and Veronique de Rugy have pointed out for Reason magazine that today’s seniors are far wealthier than today’s young adults. While, 36% of millennials are still living under their parents’ roof, 83% of elderly households own a home. Poverty rates for those over 65 years of age are much lower than most other demographics. Households headed by people 65 or older have 22 times the wealth of households headed by people under 35.

Not only are many young people either unemployed or underemployed, the Consumer Financial Protection Bureau estimates that people under 40 owe 67% of the roughly $1.4 trillion that Americans owe on school loans. That’s on top of an average of several thousand dollars of credit card debt.

Obamacare forces people who can scarcely afford the extra cost to subsidize care for people who absolutely can afford to pay for their own health services. Obamacare’s solvency also requires that people who aren’t eligible for subsidies sign up. That, too, doesn’t really appear to be happening. Shockingly, people aren’t into paying a lot for services other people use more than they do. The plan will fail to reach solvency because it’s too expensive for the very people the plan needs on board in order to stay solvent.

Obamacare only works if many more young, healthy, and wealthy people get insured than were insured previously. Instead, Obamacare has only reduced the percentage of uninsured Americans by 3%, from a peak of 18 percent last year to 15 percent. And most of the signups are sick, poor, old people.

If the Administration prevails, 7.3 million people will continue to get subsidies, according to recent analysis from the Robert Wood Johnson Foundation. According to the Henry J. Kaiser Foundation, 83% of Obamacare plans are subsidized to some extent. Subsidizing the vast majority of health insurance plans without signing up a lot of new, healthy, unsubsidized payers simply does not work out, mathematically.

The Halbig case is certainly interesting. But even if the Administration gets its way, they’re a long way from out of the woods when it comes to Obamacare.



Obamacare: Will Mandates for Doctors Come Next?  Central planning is replacing individual choice

John Foust, a Democrat running for the 10th congressional seat in Northern Virginia, is—like Gov. Terry McAuliffe and other state Democrats—gung-ho to expand Medicaid. His wife’s position is, shall we say, a bit more nuanced.

Foust has slammed his opponent, Republican Del. Barbara Comstock, for her opposition to expansion. He has spoken of the need to “make health care available to 400,000 Virginians,” insisting it is “the right thing to do.”

Foust’s wife, Dr. Marilyn Jerome, practices with Foxhall OB/GYN in northwest Washington, D.C. Six of its physicians made Washingtonian magazine’s list of “Top Docs,” and one of them—Nichole Pardo—was featured on the cover. Not too shabby.

The practice is notable for another reason as well: It doesn’t accept Medicaid patients.

This draws attention to an under-covered aspect of the debate over Medicaid expansion. While advocates speak of it as “making health care available” to the needy, what it really does is make coverage, rather than care, available to them. A newly enrolled Medicaid patient can get the money to pay a doctor. But can she get the doctor to take it?

On his website, Foust blasts insurance companies that “hiked insurance premiums and gouged consumers. … Insurance companies denied care to those with pre-existing conditions … and refused coverage to those who needed it most. … We cannot go back to the days when insurance companies could arbitrarily … deny coverage.” In a commentary on the Foxhall practice’s website, Dr. Jerome praises the Affordable Care Act—particularly because now “women cannot be denied insurance” and because the plan’s standards mandate coverage for a wide variety of treatments.

Doctors, however, can operate under a much different set of standards. They can deny care all they want. Statewide, roughly one in five physicians will not accept new Medicaid patients—usually because Medicaid pays only two-thirds as much as private insurance does, on average.

The point here isn’t to shame physicians or to provoke a marital spat. The incongruity goes to a much broader issue—regarding individual responsibility in a system that is becoming increasingly collectivized.

You might have read recently about the blowback some pharmaceutical companies have been getting for charging stratospheric prices for new wonder drugs, such as Sovaldi—a life-saving treatment for Hepatitis C. Two U.S. senators, Democrat Ron Wyden and Republican Charles Grassley, are demanding the company that makes Sovaldi justify its $84,000 price tag. Similar questions have been raised about Kalydeco, a life-saving treatment for cystic fibrosis that costs more than $300,000 per year.

Prices like that provoke a lot of anger. Many people think it’s wrong to charge more than patients can pay. Much of the outrage also comes from insurance-company self-interest. The trade group AHIP (America’s Health Insurance Plans) routinely cranks out diatribes against what it considers unjustified prices and profit margins in the pharmaceutical industry.

This is a sore spot for the insurance industry. Under Obamacare’s medical-loss-ratio rules, insurers must spend at least 80 percent of premium dollars to pay for treatment (rather than, say, for overhead). Drug companies face no such government-imposed caps. Yet.

Indeed, insurance companies now face a whole raft of mandates governing whom they must insure and what treatments they must cover. The rationale for such requirements is that to deny someone insurance because of a previous medical condition, or to decline to pay for certain categories of medical care, is immoral.

Obamacare also imposes obligations on individuals: Everybody must obtain insurance coverage, or pay a hefty fine (or, as Supreme Court Chief Justice John Roberts calls it 50 percent of the time, a “tax”). This is partly for people’s own good, but mostly the requirement exists to make Obamacare work. Without the individual mandate, the rules on insurance companies would bankrupt them, and the whole system would collapse.

Abiding by the individual mandate therefore constitutes what President Obama, in another context, recently called “economic patriotism.” He was castigating companies that use overseas mergers to avoid U.S. taxes. “You know,” he said, “some people are calling these companies corporate deserters.”

Ominous language. Treating private enterprise as a conscript in service to the State is a philosophy with an ugly lineage. In liberal democracies, government is supposed to be the servant—not the master. In health care, however, the relationship is growing increasingly inverted. As a result individuals are forced to buy insurance, and insurance companies are forced to accept them. Now many people want to force drug companies to cut prices. And so on.

Forcing doctors to accept Medicaid patients would be an obvious, logical extension of these trends. If insurance companies can’t turn people away, then why should physicians be allowed to? If drug companies can’t charge more than people can afford, then why should doctors? So far, no elected officials have yet proposed reining in the limited liberty that doctors still enjoy. But such proposals could very well come, one of these days. Though probably not from John Foust.



How the Media Craft Victory for Hamas

On Tuesday, CNN's Wolf Blitzer hosted Hamas spokesman Osama Hamden. The week before, Hamdan labeled Israeli Prime Minister Benjamin Netanyahu "a new image of Hitler" on the network. But now, for some reason, Blitzer stumbled into a random act of journalism: He asked Hamdan about comments he had made suggesting that Jews used Christian blood in matza. Hamdan stumbled around and blamed the Jews for their action in Gaza.

Blitzer called Hamdan's comments an "awful, awful smear."

The very fact that this represented a unique moment in the media coverage of the Israel-Hamas Gaza war demonstrates the malpractice of the media. The first questions on the media's collective tongue should have been: What does Hamas stand for? What are its goals? Why does it use women and children as human shields? Why does it hide military resources in civilian areas?

But that had to wait for a month.

In the meantime, CNN viewers saw an unending stream of dramatic images from Gaza of Palestinian Arab suffering: heavy blasts from Israeli ordinance, screaming women, bleeding children. Every so often, CNN punctuated its coverage with death toll statistics -- never mentioning that it received those statistics from the Palestinians themselves, and neglecting to mention the Palestinians' regular practice of classifying dead terrorists as civilians. Then CNN asked questions about Israeli "proportionality" and wondered aloud about whether Israeli strikes were sufficiently "targeted."

If you want to know why the conflict between the dramatically overpowering Israeli military and the sadistically brutal Hamas has continued for weeks, look no further than CNN and its like-minded media brethren. Hamas' goals in this conflict did not include military victory; Hamas may be evil, but it is not stupid. Its main goal was to shore up its base by achieving small concessions from Israel and Egypt, as well as the Palestinian Authority; those concessions could only be achieved if Israel could be portrayed as an international aggressor against a terror group.

And that's where the media manipulation came in. Hamas placed heavy restrictions on journalists and even threatened them. Hamas put women and children and mentally ill people in harm's way for the cameras, and as a deterrent to Israeli military action.

And the media went right along with it, proclaiming balance all the way. When I was on CNN this week with Alisyn Camerota, she maintained that CNN provided balance by presenting "both sides," to which I responded that presenting both sides in a battle between Hamas and Israel is not balance, but anti-Israel bias. No Western media member would, in 1944, have assumed that balance meant quoting both Winston Churchill and Julius Streicher. To do so would have been to forward propaganda.

But that is precisely what the media have done. They have turned balance into a synonym for amorality. In doing so, they have handed a propaganda victory to evil.



New research questions calorie counting

The results of the research, which examines the effects of the balance of protein, fat and carbohydrate on metabolic health, ageing and longevity in mice, were published in March in the prestigious scientific journal Cell Metabolism. Their work showed that:

A high-protein, low-carbohydrate diet resulted in reduced body fat and food intake but also led to a shorter lifespan and poor cardiometabolic health.

A high-carbohydrate, low-protein diet resulted in longer lifespan and better cardiometabolic health, despite also increasing body fat.

A low-protein, high-fat diet provided the worst health outcomes, with fat content showing no negative influence on food intake, leading to obesity.

Food intake is regulated primarily by dietary protein and carbohydrate, and not by the number of calories consumed.

“To the extent that this research on mice reflects the situation in humans, it has enormous implications for how much food we eat, our body fat, our heart and metabolic health, and ultimately the duration of our lives,” said Professor Simpson. “We have shown explicitly why it is that calories aren’t all the same. We need to look at where the calories come from and how they interact.”

Co-author Professor David Le Couteur added: “this represents an enormous leap in our understanding of the impact of diet quality and diet balance on food intake, health, ageing and longevity. We now face a new frontier in nutrition research.”

By examining mice fed a variety of 25 diets, the research team used an innovative state-space nutritional modelling method developed by Professors Simpson and Raubenheimer to measure the interactive effects of dietary energy, protein, fat and carbohydrate on food intake, cardiometabolic health and longevity.

The results suggest that lifespan could be extended in animals by manipulating the ratio of macronutrients in their diet – the first evidence that pharmacology could be used to extend lifespan in normal mammals.

Although mice were the subjects of this study, Le Couteur said the results from the study aligned with previous research in humans, but with a much larger number of dietary treatments and nutritional variables.

“Up until this point, most research has either concentrated on a single nutritional variable, such as fat, carbohydrate or calories, so much of our understanding of energy intake and diet balance is based on one-dimensional single nutrient assessments,” he said.

“The advice we are always given is to eat a healthy balanced diet, but what does that mean? We have some idea, but in relation to nutritional composition we don’t know terribly well. This research represents an important step in finding out.”

In terms of practical advice, the researchers predict that a diet with moderate amounts of high quality protein (15-20 per cent of total calorie intake) that is relatively low in fat and high in good quality complex carbohydrates will yield the best metabolic health and the longest life.



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