A portent of things to come with ObamaCare

Ramirez cartoon

What can we expect when ObamaCare takes effect on Jan. 1, 2014?

Chaos. Unmitigated, unfathomable, uncontrollable chaos.

On that date the Affordable Care Act guarantees all Americans – regardless of their health status or pre-existing conditions – will have access to health insurance.

There are ominous signs of just what is to come. Back in 2010, ObamaCare set up the federally-run $5 billion Pre-Existing Condition Insurance Plan to provide insurance for those with pre-existing conditions. Some states set up their own plans, but Nevada opted to let the feds handle it — by the end of 2012, there were 1,324 Nevadans signed on.

But if you go to PCIP’s website you are greeted with a pop-up that reads:

“Beginning February 16, 2013, the federally-run Pre-Existing Condition Insurance Plan (PCIP) is suspending acceptance of new enrollment applications until further notice. State-based PCIPs may continue accepting enrollment applications through March 2, and will then suspend acceptance of new enrollment applications until further notice. PCIP will continue providing coverage to more than 100,000 people currently enrolled nationwide.”

You see, they’ve run out of money, even though those 100,000 enrollees are far fewer than the 375,000 the administration expected. The reason is found on page 11 of a Jan. 31, 2013, report about PCIP:

“However … the actual experience in the program has seen fewer but much more expensive enrollees, underscoring the challenges associated with insuring people with pre-existing conditions through high-risk pools. …

“In 2012, the average annual claims cost per enrollee was $32,108. Costs varied widely across the states from a low of $4,276 per enrollee to a high of $171,909, with a median of $30,953.5. Not only do claims cost vary across states they also vary across enrollees. In fact, the relatively high average claims per member in the PCIP program are a result of a small percentage of enrollees with average annual claims of $225,000 per person.”

An earlier report said the expenditures were 2.5 times what was projected.

This is just typical for government projections. In 1965, it was estimated that the Medicare hospital insurance program would cost $9 billion by 1990, but the actual cost was $67 billion. In 1967, the entire Medicare program was only going to cost $12 billion in 1990, instead of the actual cost of $98 billion. In 1987, Medicaid’s special relief payments for hospitals was supposed to cost less than $1 billion in 1992, but actually cost $17 billion.

Health Care Costs (Photo credit: 401(K) 2013)

Writing in Forbes magazine this week, Grace-Marie Turner predicts: “This is a prescription for disaster. … If the ObamaCare Exchanges experience even a fraction of the excessive costs that the high-risk pools have seen, Congress will have no choice but to cut eligibility, provider payments, or subsidies.”

Turner explains that under the law people can pay a $95 fine instead of spending several thousand dollars on health insurance, but then can buy health insurance when they get sick and pay the same rates as though they had insurance all along. Of course, this will result in

  •  older and sicker people being covered, driving up the cost. Which is precisely what has happened with the PCIP program.

“The PCIP experience shows that the number of individuals facing pre-existing condition exclusions was not nearly as large as it was made out to be, and certainly didn’t require an insurance market takeover to fix it,” writes Alyene Senger at The Heritage Foundation blog. “Moreover, the higher-than-projected costs could be an indication that other cost projections for Obamacare ($1.8 trillion in new spending) are also underestimated.”

An Investor’s Business Daily editorial reached the undeniable conclusion that, if this is what happens when 100,000 sign-up, can you imagine what will happen on Jan. 1 when 30 million uninsured crash the medical system?

Katy, bar the door.

39 comments on “A portent of things to come with ObamaCare

  1. Hank Bond says:

    So Mitch, when you can’t buy traditional, commercial insurance, because companies completely deny you – all of them – what exactly is the healthcare alternative? It isn’t even price as much as availability.

  2. The problem is:

    “Turner explains that under the law people can pay a $95 fine instead of spending several thousand dollars on health insurance, but then can buy health insurance when they get sick and pay the same rates as though they had insurance all along. Of course, this will result inolder and sicker people being covered, driving up the cost. Which is precisely what has happened with the PCIP program.”

    Of course the fine will not stay that low, but all will pay more.

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  3. Hank Bond says:

    It was the only insurance Marilyn and I could get anywhere at any price. Sorry but for us it was the only alternative. I am glad we have it as you can’t get it now in Ky. either.

  4. You can’t get it anywhere, Hank. Enrollment has been shut down due to costs.

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  5. Steve says:

    On a personal note, for Hank Bond and his wife, a darn good thing you didn’t wait. Don’t feel sorry for using the things offered and remember that even as many of us cynics watch warily every time the real numbers emerge, in the end we also hope for the best outcome.

    I just don’t believe ACA will deliver as promised and so far the numbers are bearing it out. But, Hank, for you its a good thing you got in early.

  6. Vernon Clayson says:

    Single payer will raise its ugly head before long, it’s what those in government wanted from the start but a couple of elections, 2008 and 2012, got in the way so they had to stretch the change out. Hillary Clinton’s 1993 plan was put in abeyance until Congress had the president they needed. Obama was the key, he projected a better option, being cool and all, than shrill and waspish Hillary Clinton. She would never have developed the cult following Obama has with the public nor the obsequious worshipful media he has. It was a perfect storm for the progressives, they got an individual already programmed that was photogenic, cool, hip, not too black for whites, not to white for blacks, and thereby beyond racial generalization, and criticism from conservatives. Future historians will speculate this as complex but it really is kind of simple.

  7. nyp10025 says:

    1. Mr. Bond: I am sorry you have had such problems. If you don’t get insurance through your employer the new internet marketplaces will open this autumn, for a 2014 enrollment. Because everyone will be required to have health insurance (or pay a penalty,) and because the pool of paying customers will be greater, insurance companies will no longer be permitted to deny coverage to you and your wife, even if you have a pre-existing condition.
    By the way – I notice that Mr. Mitchell doesn’t bother to tell you what his alternative is for people like you. That is because he does not have one.

    2. Mr. Mitchell: it is rare that one has an opportunity to engage in what is referred to as a “natural experiment.” You have predicted that on January 1, 2014 the American healthcare system will descend into “unmitigated, unfathomable, uncontrollable chaos.” You are to be congratulated for not hedging your predictions. Seven months from now we will be able to assess your prediction (and that of all the legislators who have voted to repeal ObamaCare.) It should be interesting.
    But I have a question: if your prediction of “unmitigated, unfathomable, uncontrollable chaos” should prove to be wrong, what lessens do you think you will take from the experience?

  8. Vernon Clayson says:

    The so-called Obamacare has very little to do with health care, it has to do with money flowing to government and insurance companies, the latter will have a few days in the sun but eventually it will all be flowing to government. Insurance companies profit by gambling that most of their “clients” won’t need expensive care, the government has transcended that, it will profit by not extending expensive health care while collecting huge taxes, fees, and penalties. Okay, America, you wanted this president and this congress, your goose is cooked, the fiddler must be paid, etc.

  9. We are talking about “paying” for health care, not about “getting” health care.

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  10. Steve says:

    It’s not up to Mitch to provide an option, nor is it up to me. We elect representatives to perform those functions.
    When those representatives become power hungry and lock out a minority in the decision making process you see results.

    So far those results have been interesting, to say the least.

  11. Joe says:

    ” … what lessens do you think you will take from the experience?” (Quote from NYP1025) One thing about it, Mr. Mitchell will not have to take spelling “lessens.” Something that cannot be said for all contributors.

  12. Nyp says:

    Me not spel so good.

  13. Joe says:

    Don’t feed me a straight line.

  14. Joe Bob says:

    We have PCIP and although it’s not perfect, it’s better than nothing. The Heritage Foundation has no alternative to offer.

  15. nyp10025 says:

    Joe Bob: actually, when you press them hard for an alternative that addresses the problems faced by people like you, the opponents of ObamaCare put forth proposals that invariable involve some form of high-risk pools for people with serious pre-existing conditions. Like all such high-risk pools, it is expensive and not very satisfactory. That is why the program your family is in is only a stop-gap, transitional program. When ObamaCare is fully implemented at the end of the year you will be able to switch to a normal private insurance program. The insurance company will not be permitted to deny you coverage and, if you can’t otherwise afford it, you will get a tax credit.

    In any event, it is ironic that the conservative alternative to high-risk pools is … high-risk pools.

  16. Rincon says:

    I’m not so sure how expensive it will be anyway. We are still providing health care for the same number of people that we did before. After all, the uninsured still received emergency treatment for free in the previous system. Now though, even the former freeloaders have to pay into the system. Lemme see…same number treated, larger number paying suggests less paid per person IF we don’t have these newly insured people overutilizing health services. That is the big unknown.

  17. Steve says:

    They got “free” care in the ER. That takes a life threatening condition. The numbers don’t look good.

  18. This is what will have to change:

    Under the law people can pay a $95 fine instead of spending several thousand dollars on health insurance, but then can buy health insurance when they get sick and pay the same rates as though they had insurance all along.

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  19. Rincon says:

    I dunno Steve. Maintaining a diabetic properly is a lot cheaper than hospitalizing him when he becomes ketoacidotic. On the other hand, they do die younger when they aren’t cared for properly, so there are fewer years to pay for.

    The problem with the $95.00 fine is that it’s $95.00. You call that a fine? That’s more like a parking ticket! As for paying the same rates, I believe it should be law that that everyone must pay the same prices for every procedure. Seems to work in my (animal) hospital. Charging people quadruple because they have no insurance is unethical. Certainly far more unethical than forcing people to pay for their own insurance.

  20. Insurance companies that cover a lot of people can negotiate lower rates. Price fixing is no solution. Competition is.

    ________________________________

  21. Steve says:

    Although pet insurance is making some inroads, Rincon, you deal in a cash and carry world.
    This was how medical services used to work. Patient comes in, service is provided, provider (you) gets paid.
    I bet any pet insurer pays real fast today too.
    This is not how its done in the medical field for people. It can take months and sometimes more than a year to get billing correct and settled. Its also very true hospitals and small providers will screw anyone who does not have insurance. (I have the EOB’s and bills that prove it)
    As for maintaining a diabetic, that is 99% the responsibility of the patient. Again I know, from very close experience. Most things are the responsibility of the person or patient and doctors today like to prescribe pills or perform their particular specialty unless the patient gathers enough information to make the provider think twice. (Again I have the records, EOB’s and billing attempts to prove it) And if anyone thinks more bureaucracy is going to fix it, they need to think again.
    ACA is 2000 pages of federal bureaucracy, underestimated in costs and size.

    This is coming to light a little at a time as each new bit of the inner workings in ACA come to light. They are fixing the plane in mid flight and this only worsens the potential outcome IMO. But, it is the law of the land and as the land goes, so go we all.

  22. Nyp says:

    So the individual mandate, which Mr. Mitchell previously characterized as a body-blow to individual freedom, turns out to be … no biggie. So insignificant that any taxpayer can easily game the system. Pretty funny.

    Actually, gaming the system isn’t so say, Mr. Mitchell. One can only sign up during open enrollment periods, and the $95/person penalty is only for the first year. By 2016 it triples.
    RomneyCare works the same way as ObamaCare, but there has been virtually no “gaming” in Massachusetts.

  23. Nyp says:

    By the way – insurance companies don’t like to insure people with pre-existing conditions. No money in it. Without guaranteed issue community rating regulations they simply won’t sell insurance to those folks.

  24. I think the blog illustrated that point, Petey.

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  25. Steve says:

    And, if you really look, you will see Massachusetts has been fixing their law while in flight too. They are far from done and they still have some uninsured.

  26. nyp10025 says:

    Yup. Big, complicated pieces of social legislation are never perfect. They always need to be adjusted and improved. But all in all, RomneyCare seems to be working out pretty well. That is probably because it relies laregely on private market mechanisms.

  27. It manipulates the private market.

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  28. Steve says:

    “perfect” is not a word I would use in conjunction with describing any government program.

  29. Rincon says:

    Neither of us know enough about human medicine to know how easy or difficult it is to control a diabetic after he’s had his 2 or 3 office calls and is then is on his own. With animals, it would be malpractice to send them out the door and suggest they recheck only if they’re having problems.

    There is no justification for charging a cash customer triple what an insurance company pays with it’s boatloads of paperwork. When a patient is being treated in the hospital, there is no economy of scale for the hospital if he happens to belong to a big group. It’s all about money and power and the big companies have both. The individual patient has none.

  30. Athos says:

    Morons. The left is populated with “well meaning, good intentioned” morons.

    Culinary insurance added 14,000 new members with the ADA requirements of insuring your kids up to the age of 26. That number will increase dramatically 1/1/2014, when these same children that work, will no longer HAVE to take their employer’s offered insurance, but can then go into their parents Culinary plan.

    This will bankrupt the union, which is why they are now working toward a repeal of ADA.

    Strange bedfellows, eh?

  31. Rincon says:

    So Culinary is required to add the kids to their parents’ policies, but are not allowed to charge for the additional insured? The way I understand it is that they have to insure the kids, but are allowed to charge for the extra coverage. Am I missing something?

  32. Steve says:

    I couldn’t find anything on the Culinary calling for ACA Repeal but the Roofers Union released this on the PR Newswire.
    WASHINGTON, April 16, 2013 /PRNewswire-USNewswire/ — United Union of Roofers, Waterproofers and Allied Workers International President Kinsey M. Robinson issued the following statement today calling for a repeal or complete reform of President Obama’s Affordable Care Act (ACA):

    http://www.prnewswire.com/news-releases/roofers-union-seeks-repealreform-of-affordable-care-act-203194311.html

  33. Rincon says:

    I’m all for repealing the Affordable Care Act….but not if the alternative is the system that’s screwed us over for the last 30 or more years.

  34. Providing the best care in the world is screwing.

  35. Rincon says:

    If by advanced, you mean the most high tech gear and the most advanced chemotherapy trying to buy a couple of months of low quality life for a hundred thousand or so, then you’re right. I think advanced care is that which saves the greatest number of years of quality life.

    We have the same thinking in veterinary medicine. It’s common for people to be quoted $600.00 to clean their dog’s teeth. As a result, most people don’t have it done. In my hospital, the base price in the winter is $160.00. We get lots of people from the $600.00 clinics and end up doing a lot of extractions because the owners kept putting it off. Our regular patients fare much better because the owners don’t hesitate to clean teeth on a regular basis.

    How does this relate to saving lives? Bad teeth are a common cause of death in dogs. The $600.00 clinics require extensive preanesthetic testing and use the latest gadgetry to monitor anesthesia. We don’t require testing and monitor anesthesia with technology from the ’90’s. Do we do inferior work? I think not. We have a LOT of dentistries in a 4 vet practice, but in our 21 years, we have yet to lose a single patient including the 1/3 or so that have no preanesthetic testing at all..

    So the $600.00 vets are providing more “advanced” care than we do, but because of the deaths associated with bad teeth, they almost certainly have lost more patients than we have – and charged a lot more for it.

    The same is true of human medicine. While using the latest in high tech care, I have seen the basics ignored over and over in my personal experience. For example, my father was diagnosed with Alzheimers twice. The doctors were wrong both times and he made a complete recovery both times. High tech care didn’t solve the problem. Having educated children who could recognize failure to attend to the basics did.

  36. Steve says:

    Well we can add Max Baucus to the Roofers Union.
    Darn good thing this was ALL Democrats and liberal/progressives pushing this one sided behemoth of a law.
    Looks like the rest of us are going to get to say “we told you so”.

    http://www.usnews.com/news/politics/articles/2013/04/17/top-dem-sees-train-wreck-for-obama-health-law

  37. Rincon says:

    Even if it’s a disaster, we finally overcame the inertia of a grossly inferior health care system. I’m happy to change it, but I don’t want to go back.

  38. Steve says:

    Too bad conservatives were locked out of the process from the start on ACA.

    Prolly would have saved a ton of cash on paper by cutting 2/3rds of that bill. And actually reading the damn thing before voting on it.

  39. Rincon says:

    I agree Steve. Unfortunately, it’s winner take all these days. Compromise and cooperation are dead – mostly due to the Liberal and Conservative elements of the party bases.

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