Relevant and even prescient commentary on news, politics and the economy.

Obamacare Killing Jobs . . . again

Cost of Obamacare

picture hat tip TPM DC


After shown to be wrong by in its analysis, the Fox News group and Republicans are at it again  with a worn out commentary on how Obamacare kills jobs. This time they are using the CBO’s new analysis on the impact of Obamacare. Sometimes, I wish the CBO’s Douglas Elmendorf would simply shut up and keep his calculations and thoughts to himself. From Healthcare taking over the economy which Louise Sheiner and Glen LaFollette debunked and Yves Smith at Naked Capitalism portrayed; to Fair Market Valuation of Student Loans for risk even when Student loans can not be discharged in bankruptcy and make a greater return in default; and now the nebulous wording in a recent CBO report;

“The reduction in CBO’s projections of hours worked represents a decline in the number of  full time-time equivalent workers (page 117) of about 2.0 million in 2017, rising to about 2.5 million in 2024.”

What this really means is Labor can work fewer hours as a result of Obamacare causing healthcare insurance to be less costly. The number of hours needed to work would decrease 1.5 to 2%. People may want to work less and it sounds like they will opt to work less. The Republicans and Tea-baggers (their right of right brothers) just made their own version of the CBO’s report. The entire blog-o-sphere is laughing at Fox News and the Republicans with their obvious effort to distort the report.

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News from hřbitov Nové Město na Moravě, Czech Republic “Stupid is as Stupid does Edition

– “Missouri Republicans have drafted a bill that would allow parents to pull their children from science classes that are teaching the theory of evolution. According to the National Center for Science Education (NCSE), Missouri’s House Bill 1472 would effectively “eviscerate” the teaching of biology in the state.” Stupid is as stupid does. “Missouri GOP: Allow Parents to Pull Their Kids From Science Classes Teaching Evolution”

– “Drop Dead, Detroit!” Oakland County Executive L. Brooks Patterson admitted, “Anytime I talk about Detroit, it will not be positive. Therefore, I’m called a Detroit basher. The truth hurts, you know? Tough shit.”
“I made a prediction a long time ago, and it’s come to pass. I said, ‘What we’re gonna do is turn Detroit into an Indian reservation, where we herd all the Indians into the city, build a fence around it, and then throw in the blankets and the corn.’” Stupid is as stupid does. Michigan GOPer:’Herd all the Indians’ to Detroit, build a fence and throw them some corn” Stupid is as stupid does.

– “Fox News host Martha MacCallum on Monday asserted that the solution to the arrest gap between black and white Americans was for African-Americans to smoke less marijuana. ”Fox’s MacCallum: Solution to high minority arrest rate is for blacks to smoke less weed. “Fox’s MacCallum: Solution to high minority arrest rate is for blacks to smoke less weed.” Stupid is as stupid does.

– “Sitting around that table we felt like a rag-tag grouping of Davids, in the historic Biblical story,” DeVos told me in an email. “But we left the table committed to doing our best to change Michigan’s future for the better.” Another wealthy wingnut trying to buy influence in government. As if he has not done much to influence the Michigan courts through his funding. QOTD: Dick DeVos Stupid is as stupid does.

– “On Thursday, an Orlando man shot and killed a 21-year-old who was fleeing his yard. He didn’t appear to be stealing anything, according to witness accounts. He didn’t appear to be threatening anybody. But Claudius Smith said he feared he was a burglar, followed him over the fence to a neighboring apartment complex, where he shot him after he said he felt threatened, according to a confession documented in an Orlando Police Department report. Smith even said he feared victim Ricardo Sanes was armed “because his pants were falling down” and his hands were in his hoodie pockets, according to a report obtained by the Orlando Sentinel.” Get off my lawn or I’ll shoot you dead. Stupid is as stupid does.

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Why Attorneys Will Not Always Sue In Malpractice

Hat Tip to Crooks and Liars; ProPublica When Attorneys Refused My Medical Malpractice Case”. I wrote on this topic one time before. What attracts me to it again is newer data as presented by Publica, which expresses the same finding I noted before. Attorneys will not take a case unless they can win and make a living. The investment of $50,000 to $100,000 by an attorney to litigate a malpractice case presents a high economic hurdle.

Many well-meaning people believed the words of President George W Bush;

“The health care system looks like a giant lottery. That is what it looks like these days with these lawsuits and somehow the trial lawyers are always holding the winning ticket.”

In reality, far more people do not get their day in court to rectify a wrong done upon them through accident or negligence by doctors, hospitals, or the industry. Attorneys are the gatekeepers to whether a plaintiff receives their day in court.

Before taking a case, “personal injury lawyers in both reform and non-reform states take into consideration the same three factors;

• the monetary value of the injury (damages);
• the factual components of the case, including their assessment of their ability to demonstrate wrongdoing or negligence on the part of a doctor or product manufacturer;
• their estimation of how the potential client will be evaluated by a jury (“likeability”).

Across cases, each of categories can vary dramatically in what impacts the decision; damages can be either significant or trivial; liability can be clear, difficult to prove or even nonexistent; and lawyers decide whether clients are perceived as “likeable” or “unlikeable” by a jury.”

The decision-making criteria identified above will vary in significance by whether the state is a reform state with caps on rewards or a non-reform state; however and in the end, the decision still pivots on whether an attorney can win the case and recoup his investment. Mary Nell Trautner’s paper examines the differences between reform and non-reform states; “Tort Reform and Access to Justice: How Legal Environments Shape Lawyers Case Selection”. By reviewing such non-reform states as Pennsylvania and Massachusetts, reform states Colorado and Texas and within the select cities of Philadelphia, Boston, Denver and San Antonio of each state; the author then assessed how attorneys from the selected cities within each state come to a decision as to whether to accept a case.

Likeability appeared to be important criteria. The closer the match to the jury pool, the greater the tendency a jury might like them. Understand though, there are always 12 different opinions making up a jury; consequently, it is always better to settle than go to trial. “A ‘perfect” personal injury case, then, would have unquestionably significant damages, strong and clear liability, and a ‘likeable’ client” to which a jury can identify.

Given plaintiffs and the cases they bring are not perfect, lawyers must contend with the various legal, social, and political factors of the environments in which they practice deciding which cases to take or not take regardless of whether the case has legal merit.

Case Selection in Non-Reform States:

Attorneys in non-reform states such as Pennsylvania and Massachusetts rely more on the likeability of the potential client after the damages portion of the case has been established.

“If the clients are really good, I know they’re good, I like them, but not enough evidence pops up…I’d probably take that case…because the case is easier to be received by the jury if they like the people. They’re more willing to give the benefit of the doubt if the client is real likeable.”
85% of the attorneys surveyed said they would take the case whereas 61% of the same attorneys said they would reject a case if the client was not likeable regardless of legal merit. Likeability can extend to paying taxes, past record, race, etc.

Case selection in Reform States:

Attorneys in reform states such as Colorado and Texas stress the strength of the case as being more important than likeability and after the damages/wrong doing has been established.

“I don’t care how likeable the person is, because juries don’t like plaintiffs anyway, and so a likeable plaintiff is not going to carry a weak case. A strong case is much more likely to carry a less likeable client. You can’t go in with a weak case.”

75% of the attorneys in Reform states said they would accept a case where there was clear liability even if the client was not likeable. 62% of the attorneys rejected cases where the liability was not clearly established.

In either reform or non-reform states, the decision to take or not take a case does not indicate there was no wrongdoing. The selection was based upon likeability or the strength of the case after other factors in the selection process were established. Furthermore, likeability does not go away in the courtroom either. Juries which do not like a plaintiff’ mannerisms, physical characteristics, etc. will still focus on the plaintiff and determine whether they are worthy after the case has been established. In which case, the jury may award less to a plaintiff they do not like or nothing at all. An attorney who accepts such a client runs the risk of losing the case unless the strategy is to settle before a trial.

Insurance companies, doctors, and some states have launched publicity campaigns calling for tort reform proclaiming lawsuits as frivolous, increasing the cost of healthcare and/or business, or driving doctors and/or businesses out of state. Without commenting directly on the merits of the points made in these campaigns, potential jurors carry these points against liability or malpractice suits into the courtroom. Attorneys going into the courtroom must consider these factors also with a particular need to do so in Reform states.

Healthcare Insurance companies, medical associations and the healthcare industry have focused on tort reform as one of the biggest drivers of the steadily increasing cost of providing healthcare. They point directly at greedy lawyers, generous juries, and people who bring frivolous cases to trial. In reality, all of the cases make up a fraction of the total cost of healthcare. The income and profit motive driven attorneys screen out cases in either one manner or another leaving only those which are winnable. Attorneys do not take unwinnable cases as they can not afford being stuck with the cost. As referenced here Patient Harm: When An Attorney Won’t Take Your Case and above, there are many reasons why an attorney will not take a case and some are the most trivial such as age, etc.

One of the biggest drivers of malpractice lawsuits are the mistakes made in hospitals that go unacknowledged and/or uncorrected. Some hospitals such as University of Michigan, University of Illinois, and Stanford University have started to meet with patients and admit to making errors. This goes a long way towards soothing the anger many feel from being the victim of errors. The PPACA has within it a forced readmission at hospital cost of patients who are not fully cured and suffer reoccurrence of a disorder. This takes the financial burden off of the patient. What has not happened is the correction of reoccurring mistakes by some doctors as pointed out in a 2007 Public Citizen paper.

“The vast majority of doctors – 82 percent – have never had a medical malpractice payment since the NPDB was created in 1990.” The Great Medical Malpractice Hoax Public Citizen January 2007 The remainder of the doctors have been left without oversight as to why the mistakes or errors. Fixing the issues would directly impact the number of lawsuits.


Are the lawsuits for malpractice frivolous and commonplace? If we are to believe the manner in which attorneys screen potential cases, the answer would be no. The numbers of lawsuits is a result of the screening process which would suggest they are legitimate. Is there an increase in the numbers of lawsuits and subsequent payouts? Public Citizen would say no. As I suggested above, there are in which to decrease lawsuits, own up to errors and better oversight of doctors who make more errors than others.

When An Attorney won’t Take Your Case Marshall Allen and Olga Pierce

Ten Patient Stories . . . ; Marshall Allen and Olga Pierce

Tort Reform and Access to Justice: How Legal Environments Shape Lawyers Case Selection Mary Nell Trautner, September, 2011.

Great Benefit is like a Giant Slot Machine that never pays off

Malpractice Risk and Cost are Significantly Reduced after Tort Reform

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Sunday Reads

50% of Congress Are Millionaires
“The nonprofit Center for Responsive Politics reports at least 268 of the 534 lawmakers were worth an average of $1 million in 2012. These millionaires are the people debating issues like unemployment benefits, food stamps and the minimum wage, which affect people with far fewer resources — it’s no wonder that it seems we’re seeing such a ‘Let them eat cake!’ attitude from many elected officials.”

Maddow: Did Christie Retaliate Over Supreme Court Filibuster?
Why would Christie risk being caught over harassing a small town mayor? Rachel Maddux suggests there is more to it:

“Kansas Court Could Kill the Right to a Decent Public Education”

“In 2012, tea party-aligned legislators in the reliably red state of Kansas, backed by deep-pocketed outside groups, were able to purge Republicans they viewed as insufficiently devoted to Governor Sam Brownback’s (called Brown Shirt by many) right wing agenda. Since then, Kansas, like North Carolina, has become a test bed for conservative policy-making.

Deep spending cuts to education, health care and other social services were central to that agenda. And this month, the Kansas Supreme Court is expected to issue a ruling in a lawsuit precipitated by those cuts which could have profound consequences for public education in America.”

“Freedom to lie”

“The U.S. Supreme Court on Friday said it will hear a challenge to an Ohio law that forbids candidates and issue groups from making false campaign statements.

The case, involving an anti-abortion group’s claim that Ohio’s False Statement Law violates free speech, will likely be argued in April, with a ruling announced during the last months of the Supreme Court’s term in May or June.”

We could not get SCOTUS to hear a fundamental case concerning the lack of capacity resulting from brain disorders and yet they will hear this nonsense? ~85 case are heard annually by the court.

More Evidence of the Demobilizing Impact of High Housing Costs

“Those of you who read Tim Noah’s important article in the November/December 2013 issue of the Washington Monthly will recall his argument that the gap between high housing costs and middle-class incomes is distorting what would otherwise be a market-driven migration of Americans to places with higher wages and more opportunity. The Atlantic’s Derek Thompson has more on the housing cost problem.”

How Bad are Junk Healthcare Polices

Everyone seems to concentrate on the loss of healthcare policies resulting from Insurance Companies making changes to the low cost policies or canceling them altogether. In either case, what healthcare insurance companies do as well as employers and states; the fault does not lie with the PPACA. Neither does anyone look to see what the policies consisted of in content.

Dianne Barrette’s story was widely covered in the media after she found out that her $54/month policy was getting cancelled and a new one would cost ten times as much. (Red flag alert: Before the ACA’s subsidies, there was no such thing as good individual health insurance for a 56-year-old for $54 a month. Prices like that disappeared a generation ago.) As it turns out, Barrette’s policy would have paid $50 towards doctor visits and some limited preventive care, but otherwise it covered almost nothing.

We know that Barrette’s old policy was worthless. But what did real health insurance in Florida cost prior to 2014? The statewide average monthly premium for individual health insurance in 2012 was $243/month. For a 56-year-old, the premium would have been significantly higher.

Barrette’s income makes her eligible for a sizable subsidy on a 2014 plan, bringing the cost of real health insurance down to the $100-$240/month range. The 2014 plans are better quality than even the non-junk plans that were being sold in 2012. And yet someone like Barrette, earning $30,000 a year, will pay less in 2014 than she would have for a real health insurance plan in 2012, even though the new policy is better.” Read more at the site.

“The legal march to personhood (and de-personhood)”

I live in the increasingly backward state of Michigan, which appears to have found the “WayBac” mechanism to take it back to the fifties when abortions were done in alleys, minorities rode in the back of busses, and poverty was at its highest. The state has even made it impossible for abortion to be covered on the exchanges unless women buy a separate policy. I found this article by “Digsby” to be interesting.

Digsby: Keep in mind that the laws were never so designed before. It may have been true that women did not have the same rights as men. But this new approach is making them have fewer rights than a fetus that cannot survive outside the woman herself. That is just bizarre. And this movement is growing.

Lynn Paltrow at National Advocates for Pregnant Women has been tracking these laws for years and advocating for women to be full citizens in the eyes of the law. In 2010, she wrote a piece for The Huffington Post exposing the move towards ‘personhood’ as part of this sinister agenda. She points out that recognizing the humanity of others has never before come at a cost to an entire class of people. When women were recognized as equal citizens under the constitution, this did not come at a cost to men. She states that “efforts to legally disconnect fetuses and to grant them entirely independent constitutional status would not merely add a new group to the constitutional population: it would effectively denaturalize pregnant women, removing from them their status as constitutional persons.

Worth the read even if you do not agree with abortion as this has now taken a different hue.

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On the Horizon "After Obamacare"

Many of us have talked about bending the healthcare cost curve by changing the services for fee healthcare cost model to a model of better outcomes for those fees. This is precisely what the PPACA does. Phillip Longman based his book “Best Care Anywhere” on how the VA brought about such a change in the rendering of services to the nation’s veterans. Much of the cost savings today will come from a consolidated healthcare industry delivering healthcare more efficiently and at lower costs. STR has pointed out a few times without explanation the issue of consolidation within the healthcare industry, which if left unchecked, will cause its cost to increase. Both Phillip Longman and Paul Hewitt in a Washington Monthly article take-on the issue of healthcare industry consolidation “After Obamacare” and the monopolistic results. A keynote finding points to the future of America’s healthcare unless certain actions take place outside of the PPACA or whatever evolves.

“A frenzy of hospital mergers could leave the typical American family spending 50 percent of its income on health care within ten years – and blaming the Democrats. The solution requires banning price discrimination by monopolistic hospitals.”

As it stands and even with its faults, the PPACA is a viable solution to many of the issues faced by many of the uninsured and under insured; but in itself, it only addresses the delivery half of the healthcare problem. The other half of the problem rests with the industry delivering the healthcare and the control of pricing through the inherent monopolistic power coming and pushing the industry into greater integration of delivery. As Longman and Hewitt posit, “the message from Department of Health and Human Services stresses the vast savings possible through a less ‘fragmented’ and more ‘integrated’ health care delivery system. With this vision in mind, HHS officials have been encouraging health care providers to merge into so-called accountable care organizations, or ACOs”; while on the other side of Mall, “pronouncements from the FTC are about the need to counter the record numbers of hospitals and doctors’ practices that are merging and using their resulting monopoly power to drive up prices.

This is not solely the result of the PPACA implementation as it has been going over the last decade and has increased in intensity with the signing of the PPACA.


Announced Hospital Consolidations by Year

The result is a lessening of competition in and about major cities. The Herfindahl-Hirschman Index (HHI) was used to measure competition in and around cities. The results of the HHI revealed an increase in the concentration of hospitals from mergers and acquisitions. Going from moderately concentrated in 1990 with an HHI numeric of 1570; the concentration can be described as highly concentrated in 2009 with a HHI of 2500 and some cities purely monopolistic at 10,000.

Today, much of the struggle exists between the providers of healthcare and the buyers of healthcare. Before the PPACA, this was broken down between the uninsured, the healthcare insurance companies, and the doctors, clinics, and hospitals. With little power, the uninsured absorbed the highest prices while the insured and the providers battled it out with the larger and more powerful of the two getting the better of the negotiation. Today and with the PPACA, many of the uninsured are insured with just the citizens of states not expanding Medicaid at risk. With growing consolidation of provider, the balance of power is shifting towards providers as competition lessens amongst them and they supersede the size of the buyers of healthcare. With the greater concentration of hospital and doctor networks come the higher prices often as high as 20% and sometimes higher. You can witness this phenomenon today with some of the well-known hospitals being able to demand higher fees from insurance companies and in concentrated markets.

– “Berkeley health care economist James C. Robinson studied the prices hospitals charge insurance companies (and, by extension, insured patients) for different procedures. In concentrated markets, the price for a pacemaker insertion averages $47,477; but in markets that remain comparatively competitive, the cost of the procedure averages $30,399.”

“in concentrated markets, the average hospital makes a return of $20,000 above its direct costs on every angioplasty it performs. But in more competitive markets, while the margin is still astoundingly high, at $10,900, it is nonetheless 90 percent less than in concentrated markets.”

– “Massachusetts Attorney General Martha Coakley subpoenaed claims data (reflecting negotiated prices) and contracts from health plans and providers in her state. By examining the behavior of individual hospitals and physician practice groups, a strong link between market concentration and price was established. Within markets, prices charged for the same services typically varied by 200 percent or more. This variation correlated almost exclusively with ‘leverage’ – the relative market position of the provider.”

Very much my own experience between two hospitals reveals similar pricing inconsistencies. One out-of-town hospital in the top 5% for cardiac procedures; billed me for 8 days of hospitalization, catheterization, surgery and the associated doctors, radiologists, and nurses besides home care resulted at ~$80,000. Returning home and going to a major well known local hospital for a hospital walk-about of my heart (catheterization) resulted in a bill of $16,000 for a stay of less than a day, a cardiologist, and a couple of nurses beating me up as I wanted to leave (they took good care of me). One year later and I still do not feel 100%. In any case, the fees would have been lower in the out of town hospital. Why?

So what is the solution if the PPACA will not resolve it and the industry balks at controlling pricing? The authors, Phillip Longman and Paul Hewitt, propose rigorous action by the FTC; however, the FTC has in place a staff 22 lawyers and economists monitoring a $3 trillion industry. It is understaffed to take on such a large industry which would overwhelm it with legalese and paper.

Larger scale (and) integrated healthcare systems can (will) lead to better quality outcomes and efficiencies overcoming today’s fragmented healthcare system – “of specialists ordering up redundant tests and contraindicated drugs as they each treat one body part at a time, often with costly treatments of dubious effectiveness.” Promoting the integration of healthcare systems making them larger in scope also runs the risk of pricing abuse by the industry as evidenced today. In Maryland, pricing established by a review board has lowered costs from a high of 26% over the national average in 1976 to 4% less than the national average today. Maryland also has generous Medicare payments as set by an AMA committee, which has been blamed for lower costs experienced on the commercial side. Providers with their hand still opening the till for their own kind.

Bureaucrats establishing pricing is acceptable in some places; but then, there are those who believe their freedom is impinged upon by government keeping a watchful eye on business which the impinged upon have no control over anyway. If you do not believe so, attempt to negotiate your pending care in an emergency. You will be unconscious or dead first and will receive the care in such a state. The authors go on to suggest a hybrid regime of better antitrust enforcement tied to a “common carrier” methodology.

A common carrier offers its services to the general public under license or authority provided by a regulatory body. The regulatory body has usually been granted ‘ministerial authority’ by the legislation created by it. The regulatory body may create, interpret, and enforce its regulations upon the common carrier (subject to judicial review) with independence and finality, as long as it acts within the bounds of the enabling legislation.”

This moves the competition to delivering the best product or service as opposed to leveraging market power to the market place due to size of the company. A similar methodology was used to prevent monopolistic railroads from offering better rates to other monopolistic enterprises such as Standard Oil and US Steel. Recently, courts used the same methodology with Microsoft. Historically same is being used in the transportation of oil, in phone service, internet, etc. Prices must be the same for the same service.

A similar logic should apply to healthcare. Nowhere does it makes sense that some providers are offered special rates by buyers when the service provided is the same.

“Uwe Reinhardt and other health care economists have noted, in this realm charging different people radically different prices for the same procedures does not even in theory lead to greater efficiency or lower prices. Rather, it just wastes enormous resources as different parties scheme to shift costs onto one another (buyers of service) through secret, special deals.”

In the end, it does not cost a hospital or a doctor to scan a patient through a CAT, X-Ray a patient, do a urine or blood test whether that person has insurance or not. So what makes sense for increasingly consolidated hospitals, doctors and clinics?

If for example, a market threshold was established setting the number of beds or doctors within a locality as controlled by a business was exceeded; that hospital and/or business might have to make public its pricing for all procedures and services to the general public which is already established on the establishment charge master. All customers whether insured or not or out of network would pay the same fees. Affiliated and independent doctors would also pay the same overhead charges. In effect, hospitals and doctors organizations would be similar to public utilities and a basic part of the community infrastructure.

Those organizations of doctors or hospitals which did not meet common carrier thresholds would be free to set their own pricing giving way to competition between common carriers and themselves in pricing, services, and procedures. The over ruling authority as to monopolistic tendencies would remain the FTC. The FTC would warrant competition between providers within certain areas.


After Obamacare, Phillip Longman and Paul S. Hewitt, Washington Monthly January/February 2014

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Why Will Healthcare Insurance be Cheaper in Florida with the PPACA???

The fact of the matter is; healthcare insurance will not be cheaper in some places. Why it will not be so in Florida, I will get into later.

If you remember from 2010, the progressive state of Florida was the first to launch a suit in Federal court claiming the PPACA was unconstitutional. Eventually and after the casting of the bones by the news media and pols numerous times in attempts to predict what SCOTUS would do and why it will do it; in the end, little of the PPACA changed with the June 2012 decision. Struck down by SCOTUS was the mandate of the Medicaid Expansion for all < 138% of FPL or face a penalty of the overall defunding of Medicaid (which practice is not something unusual by the federal government as it was used with highway funding). Apparently with different SCOTUS justices, the practice is now unconstitutional. States such as Florida chose not to expand Medicaid or implement state exchanges which in the end will have an economic impact on the states besides insurance rates. In Florida’s case, the state went further to hinder the PPACA implementation. Even at the Bronze level, the PPACA provides preventative care which previously would have come after co-pays, deductibles, or not be covered. Maggie Mahar at Health Beat Blog points out the 62 new preventative services and procedure now available under the PPACA without deductibles or copays. While much of the expected increase in insurance cost from added benefits has been negated in much the same way as the elderly being covered at lower rates (through gained efficiencies brought to bear by the PPACA0 however they too will cause a much smaller increase in the cost of coverage. Even so such preventative services and products such as immunizations, anemia screening, and well women visits that were out of pocket previously are now covered.

Those uninsured who are not covered by the Medicaid Expansion will fall under PPACA coverage if the state expanded Medicaid benefits. The new PPACA coverage is made-up of the elderly, those with pre-existing disease and disorders, the healthy older and younger people. The elderly and those who have disorders and diseases will be covered at lesser cost premiums than what was before as insurance companies can no longer deny them coverage and the 3 to 1 ratio (old to young) establishes a maximum cost which previously was scored much higher. While this coverage will come at a lower premium than the back door ER in treating them, it too will have an impact on insurance rates overall. This is a component of the individual healthcare insurance market, a much smaller segment of the healthcare insurance population which has an MLR of 80% thereby giving back another 5% to the insurance companies. While gaining many benefits from the new healthcare market created by the PPACA, it still comes at a higher cost from private insurance companies then the Group Employee Sponsored Insurance.

The addition coverage has an impact on cost in the various state insurance markets; but in Florida it goes a step further. Prior to 2010 Florida was the second most expensive state for healthcare insurance premiums; but, such was not always the case.

2003 2010 Comp

“The average annual health insurance premium in Florida was $15,032 in 2010, a 61 percent increase since 2003. Only New Hampshire was more expensive, although the District of Columbia had the highest average premium in the nation.

That 61 percent premium increase in Florida put the state behind only Mississippi for the most rapidly rising costs.

That health insurance premium in Florida represented 24 percent of the average family’s income in 2010, up from 16 percent in 2003, according to the study.” Florida Second Most Expensive

Florida has gone from a state which had premiums at < 17% of Median House Income in 2003 to one >20% of Household Median Income in 2010 well before the PPACA was signed into law. Another way to look at this is Healthcare Premiums represent ~ 24% of average income. The loosening of regulatory guidelines by prior administration(s) to lower costs has not done what it was intended to do (introduce competition) and has led to an abundance of bare bones healthcare plans doing little and being just as costly. Many have sought to blame the PPACA for premium increases in Florida when it was already in place. As shown by the charts, healthcare insurance in Florida has increased, is the 2nd most expensive in the nation, and will increase even more if left unchecked.

Projected Premiums

Employer Health Insurance Premiums Increased 50 Percent From 2003 to 2010; Employees’ Share of Premiums Increased 63 Percent

For far less insurance coverage then what the PPACA offers, the insurance premium trend has been upwards in Florida hitting ~24% higher in 2010 and projected to be ~25% higher than this for some states (which category Florida is in) by 2015. Even with the greater numbers of the elderly living in Florida in 2003, the insurance premiums were more moderately priced. Florida went from a moderately priced state (redundant alert) for healthcare insurance to one of the highest cost states (#2 in healthcare premiums) in a matter of 7 years (2010). The increase does not appear to be the result of a large number of older people as much as the increase and the potential increase in the cost of healthcare based upon providing services for fees of higher cost procedures and technology and a lack of regulation.

So what ELSE is driving the cost increase? In lightly regulated states such as Florida, Ohio, South Carolina, etc.; insurance companies were allowed to sell bare bones insurance plans before and after 2010. The Florida Insurance Regulatory Agency recently did a comp between a hypothetical silver based plan considering the offerings then as compared to coverage under the state exchanges. Drawing a comparison to plans available on the state exchanges, they found there would be a range of ~7% to an ~ 58% increase in premiums or an average of 35% increase in cost. The state also looked at the numbers of uninsured within the state.

“’The main driver of the premium increases is the Obamacare mandate that coverage be offered to everyone,’ said Kevin McCarty, Florida’s insurance commissioner. There are just short of a million enrollees in the individual market in Florida, while 3.8 million are uninsured. The state does not allow new entrants into a ‘high-risk pool,’ which provides coverage to the sick.” PPACA Premiums Florida is also the 4th highest with an uninsured population.

The large numbers of uninsured becoming insured and the large number of uninsured who will remain uninsured due to the failure to expand Medicaid to 138% FPL will feed into higher costs. Those who had been denied insurance previously will rely on the individual market and those who will be denied coverage due to a lack of expansion of Medicaid will continue to use the ER at a greater cost. This is something the state and insurance companies do not explain.

A key component of premium increase has been the politics of the Republicans within the nation to overturn the PPACA and to hand President Obama a political defeat. It is no secret the Republicans work solely against President Obama to defeat him regardless of cause or circumstance. To wit, for 20 years the nation has waited for a government or an industry solution to the rising cost of healthcare with neither offering up much except for more of the same. To add to this, there is little hope of a concerted effort by both parties jointly to reach a viable solution to rising healthcare costs.

Politics in the State of Florida differ little than what has been experienced nationally as the Republican State legislature and Governor had turned down the state exchanges long after SCOTUS ruled, have made it difficult to apply for the PPACA Healthcare Insurance by limiting assistance, and have stripped the Florida State insurance Commissioner of the ability to review and regulate healthcare insurance premiums. The last point prevents any state intervention in lowering or altering insurance rates.

“’since it became law in 2010, Florida had repeatedly refused — first challenging the constitutionality of the law, then waiting to see if a new president would offer a reprieve.

But with the law upheld by the Supreme Court and President Barack Obama back in office, the state was stuck. It had refused federal money to help with the transition. Now it was also running out of time.

A state Senate committee in 2013 said it sought a “rational, reasonable approach.” State law needed an update to match federal requirements of the Affordable Care Act. The committee sought to do as little as possible.

‘We want to make sure that we’re in compliance, that we’re doing what we’re required to do,’said Sen. David Simmons, R-Altamonte Springs, at a March committee meeting.

The Affordable Care Act assumed that states would continue to take a lead role in setting insurance rates, just as Florida had done in the past. It encouraged states to strengthen their rate-setting authority, offering millions of dollars in grant money to help. But it didn’t require that.

The Florida Office of Insurance Regulation faced a serious time-crunch to get up to speed on a host of new requirements under the law. Legislators offered a compromise. If the federal government wanted to impose new coverage requirements — well, it could set rates, too.

‘Since the federal government is requiring these additional coverage that will cost more,’said Sen. Joe Negron, Republican chair of the Affordable Care Act Committee, ‘then to me it makes sense for them to be responsible for approving rate increases that are certain to come.’

Democrats on the committee agreed with this approach at its final meeting on March 18.

‘I think we’re going to find it’s going to cost us a lot of money to set rates here in Florida,’ said Sen. Eleanor Sobel. ‘… I think we should rely on the federal government.’

She expressed confidence the federal government would have a “greater wealth of knowledge.”

‘If we have concerns about the rates that the feds do set, then we should work with them,’ she said.

One hitch she didn’t mention: the federal government didn’t give itself rate-making authority.

What resulted was Florida Senate Bill 1842, which among other things, suspended for two years the requirement that insurers get state approval for rates for new plans — such as those that will appear on new marketplaces. Companies would still have to file rate changes with the state. But they could act on those changes without approval.” Democrats say Florida stripped insurance commissioner of power to set health plan rates ‘”

Healthcare insurance companies now have a freehand in establishing pricing with no interference from the state insurance regulators leaving the constituency to bear whatever it deems reasonable. As the Federal Government can not intervene, the only impediment in the way of companies going hog-wild is the PPACA MLR which sets the percentage of premiums applied to healthcare costs at 80% for the individual market. When one takes the law passed to block regulators, the failure to pass the Medicaid expansion, and the past history of healthcare insurance in Florida; it is no surprise that Florida Healthcare Insurance premiums will be higher even with the PPACA in place. The state of Florida bears much of the responsibility for the increase in healthcare insurance premiums in the past and also after on the PPACA implementation.

Somewhere else I have read that the low turnout of voters has resulted in the Republican controlled government in Florida. I would guess Florida Republicans hope the constituency will blame the PPACA and Obama for the health care insurance premium increase they are faced with in 2014. The media and the Republicans have assigned blame to the PPACA as well as some bloggers who have not dug deeper into examining the reasons why the premium increases. The greater part of the premium increase can be assigned to the state’s practices in the past and even more so to the recent law giving insurance companies free rein.


“Florida second most expensive state for health insurance” South Florida Business Journal, Brian Bandell

“Obamacare Premiums” CNN Money, Tami Luhby

“Democrats say Florida stripped insurance commissioner of power to set health plan rates” Politifact, Ted Deutch

“Obamacare facts separated from spin by Wendell Potter” The Center for Public Integrity, Bill Buzenberg

“Florida says health insurance prices will spike; feds disagree” Miami Hearld, Daniel Chang and Patricia Borns

“The Florida Health Care Landscape” Henry J. Kaiser Family Foundation, Rachel Arguello and Alexandra Gates

“Florida health insurance exchange” Health Insurance Org., Carla Anderson

“PPACA Cost Sharing and Maternity . . . “ Growing Family Benefits

“States Rejecting Medicaid Expansion Under the Affordable Care Act Are Costing Their Taxpayers Billions” The Commomwealth Fund; Bethanne Fox

“Employer Health Insurance Premiums Increased 50 Percent From 2003 to 2010; Employees’ Share of Premiums Increased 63 Percent” The Commonwealth Fund; Charts

“The Pricing of U.S. Hospital Services: Chaos Behind A Veil of Secrecy” Health Affairs; Uwe E. Reinhardt,

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Sunday Reads

The 1% are Still Stealing Our Homes Hat Tip Crooks and Liars Diane Sweet

Following the bank’s instructions, Laura and her partner missed three months of their mortgage payments to qualify for a loan modification. But instead of working with the family, Bank of America put the home in foreclosure, using the highly controversial process of “dual tracking” in which banks simultaneously put families in the process of modifying their loans and put the loan in the foreclosure pipeline.

In Laura’s case — as with so many other homeowners across the country — the foreclosure process won.

Her home was sold at an auction and bought back by the government-owned mortgage giant Fannie Mae — which then allowed a private equity firm, The Cogsville Group, to buy the right to manage her house and collect rent from the family. But when her home flooded this past spring, the company did not help her with clean up, mold remediation or repairs.

100% Of New Power Capacity in US Came from Renewable Energy In November (2nd Month 2013) Hat Tip Crooks and Liars

Here are the full details from FERC on the split for November:

•0 natural gas power plants placed into service = 0 MW
•0 oil power plants placed into service = 0 MW
•0 coal power plants placed into service = 0 MW
•0 nuclear power plants placed into service = 0 MW
•0 waste heat power plants placed into service = 0 MW
•1 water power plant placed into service = 4 MW
•4 wind power plants placed into service = 81 MW
•1 geothermal steam power plant placed into service = 25 MW
•8 biomass power plants placed into service = 108 MW
•14 solar power plants placed into service = 177 MW

Bad news for the GOP and possible good news for average Americans Hat Tip Digsby

House Republicans, including Speaker John Boehner, face a sharp backlash from voters for pushing a budget deal that denies the extension of unemployment benefits for 1.3 million Americans past Dec. 28, according to a collection of polls being released Monday.

In Boehner’s Ohio district, for example, 63 percent of voters support extending the benefits, 34 percent don’t. As part of the budget compromise and at the urging of the GOP, the benefits were not extended.

Chart ‘o the decade Hat Tip Digsby

Chart of the Decade

Digsby: I’ll just note one little thing and then move along. The 1981, 1990 and 2001 recession recoveries all happened under Republican presidents. And a Democratic congress . . .

Americans Surprisingly Supportive of Unemployment Insurance Hat Tip Washington Monthly Ryan Cooper

With conservatives’ bitter hatred for any government spending on the lower 80 percent or so of the income ladder, and the public’s approval of Congress falling into the single digits, one could be forgiven for thinking that regular people aren’t too concerned with unemployment insurance.
But a small set of polls from PPP shows that is not exactly the case. They took some measurements in four Republican-held swing districts, as well as John Boehner’s district. Here’s what they found:

Support for Unemployment Benefits

How Sotomayor undermined Obama’s NSA Hat Tip Washington Monthly for pointing to this MSNBC article

If Edward Snowden gave federal courts the means to declare the National Security Agency’s data-gathering unconstitutional, Sonia Sotomayor showed them how.

It was Sotomayor’s lonely concurrence in U.S. v Jones, a case involving warrantless use of a GPS tracker on a suspect’s car, that the George W. Bush-appointed Judge Richard Leon relied on when he ruled that the program was likely unconstitutional last week. It was that same concurrence the White House appointed review board on surveillance policy cited when it concluded government surveillance should be scaled back.

“It may be necessary to reconsider the premise that an individual has no reasonable expectation of privacy in information voluntarily disclosed to third parties,” Sotomayor wrote in 2012. “This approach is ill suited to the digital age, in which people reveal a great deal of information about themselves to third parties in the course of carrying out mundane tasks.”

Health Care Is Expensive In This Country Hat Tip Atrios

The NYT’s perpetual pity party for its affluent readership is genuinely annoying.

And, yes, Obamacare isn’t perfect and the subsidies aren’t generous enough. But here are the options to make it better:
1) Nationalize the health care system (or much of it) as the NHS was, at least before the Tories started wrecking it.
2) Have a single payer insurance system in which the government doesn’t run the medical system, but essentially sets the rates (and is empowered to do so).
3) Increase the subsidies in Obamacare, so that the not-quite-rich-enough also have taxpayers pay for at least part of their insurance bill, and the insurance companies can continue to take their pointless cut.

1) and 2) will help to control actual costs if done right, while 3) will just spread it around differently.

This Is the Golden Age of Deficit Reduction Hat Tip Daniel Gross at The Daily Beast

As Washington chewed over the Paul Ryan-Patty Murray budget deal, the Treasury Department announced a walloping drop in red ink. Turns out government didn’t need a “grand bargain” to get its fiscal house in order.

The Murray-Ryan budget deal was anti-climactic. After all this—three years of failed grand bargain talks, the sequester, a shutdown—we have a deal that will cut deficits by a grand total of $22 billion over ten years. No wonder the Tea Party crowd is incensed. Yet the outrage over the federal debt—$17 trillion and rising—won’t stand in the way of this deal. That’s because, thanks in part to the sequester; but thanks largely to the miracle of sustained growth, the annual deficit is shriveling.

Homeless Couple Gets A Home On Christmas Eve, Thanks To Innovative ‘Occupy’ Group Hat Tip to Think Progress – Scott Keyes

run75441: I raised my family in Mad-City, Wisconsin, a liberal enclave amongst a sea of conservatism. We always found a way to do something positive in the city. Red vested Gov. Dreyfus once described Madison, WI “Madison is 30 square miles surrounded by reality.” It appears there are still some innovative minds in Wisconsin in spite of the Governor Scott Walkers.

“For many couples, the thought of living together in a 96-square-foot house sounds awful. But for Chris Derrick and Betty Ybarra, it’s a Christmas miracle.

That’s because Derrick and Ybarra have spent the better part of a year braving Madison, Wisconsin’s often-harsh climate without a roof over their head.

They’ll spend this Christmas in their own home, thanks to more than 50 volunteers with Occupy Madison, a local Wisconsin version of the original Occupy Wall Street group in New York. The group, including Derrick and Ybarra, spent the past year on an innovative and audacious plan to fight inequality in the state’s capital: build tiny homes for the homeless.”

Scott Walker makes Wisconsin No. 1 — in jobless claims The Cap Times – Editorial

How’s this for a 2016 presidential campaign theme?

“‘Under Scott Walker, Wisconsin led the nation in first-time unemployment claims.’

That’s not the narrative Walker wants as he plots his run for the Republican presidential nomination. But it’s the one that has developed.

According to the U.S. Department of Labor, 4,420 Wisconsinites filed initial unemployment claims in the final week of November. The next two highest states combined — Ohio with 2,597 and Kentucky with 1,538 — couldn’t match Wisconsin’s total. And what’s particularly notable is that these numbers come at a point when states such as California, Texas, Florida and Michigan are seeing significant declines in jobless claims.

Walker ran for governor on a promise to create 250,000 new jobs.”

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Sunday Reads

Senator Elizabeth Warren introduces bill to stop credit checks in job application process
A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual’s character or abilities,Senator Warren said. “Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness — let people compete on the merits, not on whether they already have enough money to pay all their bills.” Hat Tip Crooks and Liars

The Bureau of Labor Statistics shows us the frugal reality of life on the social safety net.
“This month, the Bureau of Labor Statistics compared yearly spending between families that use public assistance programs, such as food stamps and Medicaid, and families that don’t. Surprise, surprise, households that rely on the safety net lead some pretty frugal lifestyles. On average, they spend $30,582 in a year, compared to $66,525 for families not on public assistance. Meanwhile, they spend a third less on food, half as much on housing, and 60 percent less on entertainment.” Hat Tip Atlantic Magazine

Annual Spending

You Don’t Have the Right to Remain Silent
“On Monday, in a case called Salinas v. Texas that hasn’t gotten the attention it deserves, the Supreme Court held that you remain silent at your peril. The court said that this is true even before you’re arrested, when the police are just informally asking questions. The court’s move to cut off the right to remain silent is wrong and also dangerous—because it encourages the kind of high-pressure questioning that can elicit false confessions. Hat Tip Slate Magazine”

Who said the appointment of Federal Judges do not have much importance? A judge’s life time appointment sways the legal course of the nation for decades to come until SCOTUS again finds time enough to rule on cases impacting people and not big business.

Land of The Free?
25% of the world prison population resides in US prisons and jails at an ~ cost exceeding $22,000 annually. As I had written in “One In 31 Adults”, ~50% of those incarcerated have been convicted of nonviolent crimes. Maybe it is time to review sentencing guidelines. Hat Tip Crooks and Liars

The Death of The American Dream in a Single Chart
Upward Mobility in America has become increasingly difficult. Whether black or white, “Children from low-income families have only a 1 percent chance of reaching the top 5 percent of the income distribution.” The odds of advancing up a rung increase when racial background is included. Understanding Mobility in America Hat Tip David Atkins At Hullabaloo

Gatsby Curve

Wealth inequality is even more disturbing than income inequality

Distribution of Income by Source

“Democrats are often afraid to talk in these terms because it sounds positively Marxist to do so. But while I don’t consider myself a Marxist, I’ve been writing for a long time now that it’s important to recognize that we have an asset class and a wage-earner class–and their interests don’t align at all.” Hat Tip David Atkins Hullabaloo

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