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

7 Million Insured versus 2.7 Million Millenials

The argument has been the ACA depends on a number of the young to sign up for healthcare insurance on the PPACA or at least this is what S.E. Cupp believes and suggested on This Week with George Stephanopoulis.

There’s two problems, one is the technological, sort of mechanics of this. Obamacare relies on Millennials, these young invincibles who have never bought health insurance in the past, to suddenly change their behavior and buy something they don’t think they need. And in some cases can’t afford. That mechanical issue remains to be seen and the web site rollout has affected that. But it also reads as an inability to speak their language. Donna, you might call an 800 number and sit on the phone for 20 minutes  .  .  .  Millennials are not used to that. They do not meet in person with Insurance agents  .  .  .  They need a website that works, tat gets them  .  .  . ”

Howard Dean:

I would have to disagree with S.C. This has been written on by many, many people, so I am not just picking on her. It is not true that if young people do not sign up the program is not going to work. That is false and the reason it  .  .  .

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Deficit Disorder Symptoms–via Naked Capitalism/New Economic Perspectives

by Linda Beale

Deficit Disorder Symptoms–via Naked Capitalism/New Economic Perspectives

Yves Smith over at Naked Capitalism has an insightful re-post today on the way the right in particular–and most in the media and public–talk about deficits and misunderstand the relative importance of failures to invest in physical and capital infrastructure (roads, education…) versus the relative unimportance of the US government deficit and national debt.  See Attention: Deficit Disorder and the Real Crisis Ahead, Naked Capitalism (Oct. 29, 2013), reposting article with the same title by Fadhel Kaboub, New Economic Perspectives.

Economic failure exists when (1) young people can’t get jobs, (2) old people can’t get health care and sufficient income to manage after retirement, and (3)  everybody else can’t manage well using potholed roads, unreliable energy distribution systems, casino-capitalism banks, and holding jobs in industries that treat CEOs (even those who stumble) like Gods and workers like peons. We already face situations (1) and (3) in most aspects of our lives.  If the flat-world GOP politicians have their way in cutting benefits of Social Security and Medicare rather than increasing the payments expected from those who have made off like bandits under the reaganomics winner-take-all system that has exacerbated inequality and moved us into a have/have-not economy, we will soon face (2).  When economic failure of that dimension exists, it is the ultimate burden to thrust upon the backs of our children and grandchildren.  In our case, it would represent the result of our short-sighted instant gratification desire to harvest carbon-based energy come what may; “develop” coastlines (more and more for second or sixth homes for the ultra-rich) and wilderness and wildlife refuges for the wealthy few at the expense of most other people and the rest of the world’s living beings;  while “protecting” gigantic, too-big-to-fail multinational enterprises like the big banks, Big Pharma, Big OIL and Big IP from having their workers unionize and demand a fair share of the revenues that those very workers generate and “simplifying” the tax code so that it collects less revenue, particularly from the ultra well off.

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Dianne Feinstein Should Hire Snowden!

Apparently, Snowden knew more than Dianne Feinstein and Barrack Obama about NSA spying on friendly leaders.
Dianne and Barrack never knew that the NSA was spying on friendly leaders such as Merkel.

“Unlike NSA’s collection of phone records under a court order, it is clear to me that certain surveillance activities have been in effect for more than a decade and that the Senate Intelligence Committee was not satisfactorily informed.

“With respect to NSA collection of intelligence on leaders of US allies – including France, Spain, Mexico and Germany – let me state unequivocally: I am totally opposed,” she said..

Feinstein also provided the first official confirmation of a German report that indicated Merkel’s phone had been monitored for more than a decade. “It is my understanding that President Obama was not aware Chancellor Merkel’s communications were being collected since 2002,” Feinstein said. “That is a big problem.”

How long has Feinstein chaired the Senate Intelligence Committee? Four years?

Is she now going to give Snowden a medal for keeping her informed? Will she now set her beady, vengeful eye on those that approved spying on allied leaders? Maybe fire them? Maybe…the mind reels at the possible repercussions…bring them to justice?

Maybe we should fire Booz Allen. After all, James Clapper, our Head Spy and Director of National Intelligence, came from Booz Allen. And Clapper’s predecessor under Bush, John “Mike” McConnell, was vice President of Booz Allen.

Maybe someone at Booz Allen gave the go ahead to spy on Merkel. May Clapper; maybe McConnell. Or maybe some newbie who thought it would be fun to see what Merkel and the others were thinking?

Who is running the show here? Clapper? McConnell? Booz Allen? Certainly not Feinstein. When private entreprise and goverment get too cozy, it is hard to separate one worm from another.

Anyway, give Snowden the medal and hire him.

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Big Business and the Tea Party

Lifted from Robert’s Thoughts:

Who said it ?  2013 edition

“that which the American people have been waiting for for the last 200 years, politicians listening to the people instead of the ruling class”

That would be far right tea-partier Raul Labrador (R-Idaho)

The mountain West is red.  Red Staters vs the capitalist class.

In the same post Dave Weigel quoted a Texas businessman in the 1930s:

“The capitalist system can be destroyed more effectively by having men of means defend it then by importing a million Reds from Moscow to attack it,”

It is true that reds from Moscow Russia are not much of a threat to the capitalists system.  But red staters from places like Moscow Idaho practically destroyed it last week.
And yes, of course I found the Republican against the ruling class contrarianism in Slate. What did you expect ?  The Daily Right To Worker ?

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Insurers “Had a Seat at the Table” when Reformers Hammered Out the ACA, but Things Didn’t Work Out Quite As They Expected . . . –

Maggie and I have discussed this topic on several occasions and she tackled it here at: The Health Beat Blog. In the general public, it always surfaces as accusations of a sell out to the insurance companies. It is unfortunate we could not have Medicare for all or single payor; but, the political environment at the time was not conducive to such a venture.

What This Means for Health Insurance Stocks–and Your Premiums

When Congress passed the Affordable Care Act (ACA) in 2010, liberal critics feared that the Obama administration had “cut a deal” with for-profit insurers. Single-payer advocates,were particularly incensed when reformers invited the insurers’ lobbyists to the table to help hammer out the details of the legislation. Some charged that, in return for the industry’s support, the administration agreed to a mandate that would force 30 million uninsured to buy private-sector insurance (or pay a penalty,) thus guaranteeing carriers millions of new customers, and billions in new revenues.

“It pays to be one of the few sellers of a product the government is going to force everyone to buy and provides subsidies to help them do it,” one Obamacare opponent sniped.

Why Health Industry Insiders Were Offered Seats at the Table

At the time, I didn’t believe that the administration was selling out to the health care industry. Reform’s architects offered insurers, drug makers and device-makers seats at the negotiating table, in part because because they hoped to persuade them to help fund reform – and they succeeded.

Ultimately, the industry agreed to shell out over $100 billion in new fees and taxes to help fund the legislation. Those contributions are critical to financing subsidies for low-income and middle-income Americans.

The Obama administration also did not want to watch re-runs of the “Harry & Louise” television ads that helped torpedo “HillaryCare.” Here too, they prevailed. In a new series of 2009 ads, the make-believe TV couple were all smiles: “A little more cooperation, a little less politics, and we can get the job done this time,” Louise declares.

Still, some feared that the administration was giving away the store. “No wonder the cost of reform keeps going up and up and up,” said Bill Moyers. “Could it be” he asked, “that Harry and Louise are happier because, this time, they’re in on the deal?”

But Didn’t the Administration Capitulate On the “Public Option”?

Skeptics on the Left also believed that reformers agreed to quash the “public option”—a government insurance plan that would compete with private sector carriers.

The truth is that Connecticut Senator Joe Lieberman ( sometimes known as “the Senator from Aetna”) almost single-handedly killed “Medicare for Everyone.” When Lieberman said “I’m not going to let this happen,” Congress was on the verge of passing legislation that would let Exchange shoppers choose between a public option and private sector insurance.

Then, in the fall of 2009 ,Lieberman, who was supposedly a Democrat, stood up and brazenly announced that if reformers didn’t drop the public option from the plan, he might join the Republicans in a filibuster that would stop the health care reform bill come to the Senate floor. In other words, he was threatening tote kill reform.(At that moment in time, Lieberman could have drummed up just enough votes from moderate Democrats to help him do this.)

In October of 2009, I wrote:: “This is vintage Lieberman. He’s an opportunist. I knew him many years ago, back in Connecticut, when I was working for a a reform candidate in New Haven who was challenging the Democratic machine. Lieberman wavered on the sidelines, waiting to see who was going to win. He didn’t want to risk picking a losing team.” For Lieberman, politics was not about issues and what might be best for his constituents. It was all about Joe.

Was he doing the administration’s bidding?

Hardly.Lieberman and Obama were never soul-mates.. Indeed, in 2008, Lieberman, nominally a Democrat, appeared at the Republican convention where he endorsed John McCain– and criticized Obama.

In 2009, many observers agreed that Lieberman wanted to stop the public option, not just out of loyalty to the Connecticut insurance industry, but out of spite. He was still furious that Democratic party leaders allowed liberal Ned Lamont to run against him in the state primary. Lieberman wanted to “show” the Obama administration what happens to anyone who dares to cross him.

What Investors Did Not Understand

In 2012, two years after President Obama signed the bill, the myth persisted that the administration had gotten into bed with the insurance industry,. As proof, critics pointed out that from 2010 to 2012 Aetna’s shares gained 33%, market leader UnitedHealth Group soared 65% and Humana climbed 76% Clearly Wall Street knew that in 2014, insurers were going to clean up.

But strangely, in just the past two months–on the eve of the Exchanges’ opening– investor confidence has weakened:

What is going on?

Wall Street is beginning to figure out that under Obamacare, for-profit insurers are not going to make out like bandits.

Investors who drove carriers’ shares to record heights were misled by media reports that the White House had “sold out” to insurers. Meanwhile, they overlooked the many ways that Exchange regulations would whack carriers’ profit margins:

  • Insurers can no longer shun customers suffering from “pre-existing conditions”—and they cannot charge them more.
  • All policies must offer free preventive care.
  • The amount that a carrier can ask patients to pay out of pocket is capped.
  • But insurers cannot cap the amount they pay out in a given year, or over the course of a life time.
  • All Exchange policies must cover the 10 essential benefits—no more “Swiss Cheese” policies filled with holes.
  • Perhaps worst of all, from the industry’s point of view, if carriers don’t spend at least 80 cents of every premium dollar on medical care for individual and small business policyholders (85 cents for large groups), must send rebates to customers, letting them know they were overcharged.

In order to keep their seats at the table, insurers also agreed to pay annual fees to help fund reform. The fees begin at $8 billion in 2014, grow to 14.3 billion in 2018, and then rise to track any growth in premiums.

Finally, Wall Street ignored the provision in the ACA that reins in overpayments to Medicare Advantage insurers. Last week, when UNH announced earnings, it cited this as a reason it is lowering projections for next year’s profits.

Virtually No One Actually Read the Bill

Why didn’t investors recognize the many ways the ACA would squeeze carriers? Like most Americans, they hadn’t taken in the details that make the ACA both strong and complicated, with checks and balances embedded on virtually every page.

Most of the reporters who spread the rumor that the administration had “caved” to insures also hadn’t read the legislation: “Too long, too complicated, too many details,” they groused. It was easier to simply repeat what the grand generalizations that the pundits offered.

To be fair, by 2010, print journalists were trapped on a high-speed information highway where they were trying to compete with bloggers working in “real-time.” Flogged by editors who wanted the story “Now” the just didn’t have the time to hunker down with the Affordable Care Act.

Meanwhile, by then, most publications had eliminated the fact-checkers who would have realized that the text of the legislation was their only reliable “red check.”

I Was Just Plain Lucky

Fortunately, in 2010, I was no longer on staff of a daily newspaper or a weekly magazine. Back then, the non-profit foundation where I worked was run by old-fashioned bosses who gave me great freedom to do in-depth research– and try to make sure that what I wrote was true. As a result, I had the time to read the Affordable Care Act, more than once. That was my job. (When I explained this to Lou Dobbs, at first he was incredulous, then he laughed. But ultimately, I think he was convinced.)

Because I understood how the ACA’s regulations would hem in insurers’ profits, in the Spring of 2010, I wrote that under Obamacare, for-profit insurers would not be big winners. Quite the opposite.

How the Insurance Industry Mis-Calculated

Okay, maybe investors and reporters did not read the bill. But the insurers’ lobbyists did. After all, they were “at the table.” Why, then, did they swallow the new rules and fees that would

“Because there is nothing the health insurance industry wanted more than an individual mandate to force people to buy their product,” explains Consumer Watchdog’s Carmen Balber.

As the Center for Public Integrity (CPI) points out, when the reform law passed in 2010, “the Democratic Party controlled the White House and both houses of Congress. By supporting the law, the industry was able to stay in the game on a very complex piece of legislation.”

Privately, the insurers’ lobbyists believed that Obama would not be re-elected in 2012. Down the road, they assumed that conservatives would help them overturn the parts of the bill that they didn’t like. This is why, even while loudly professing their support for Obamacare insurers were quietly funneling two-thirds of their campaign contributions to Republicans.

As they hoped, by October of 2011, the political environment had changed dramatically. “Democrats no longer hold a filibuster-proof majority in the Senate, the House is controlled by Republicans and the president is in a tight race for re-election,” CPI noted.

Insurers now began publicly criticizing Obamacare. At this point they openly lobbied for new legislation that “would effectively gut” the provision that insurers must spend 85% of premiums on medical care.

But to the industry’s utter chagrin, in November, President Obama won.

Ultimately, carriers would lose on every provision in the Affordable Care Act that they had hoped to see repealed.

State Regulators Develop Spine

Then came the final blow: Last summer, as carriers began proposing rates for the policies they hoped to sell in the Exchanges, state regulators flexed new muscles.

The ACA had set aside $250 million for state insurance departments to support an “enhanced rate review process.” Meanwhile the administration encouraged regulators to get tough– and many clamped down..

In response to the federal law, Colorado, Maryland, New Mexico and New York, all passed legislation giving their regulators more authority to review health insurance rates.

Insurers selling plans in Portland, Oregon ultimately were forced to reduce their rates by nearly 10% on average. Three of the 12 insurance companies in that market had to lower their rates more than 20% compared with what they requested.

In Maryland, Aetna filed a proposal with state insurance regulators to raise its rates 25.4 percent, the highest of any carrier. The rate the state approved July 26 was 29 percent lower than what Aetna sought, while other carriers saw their proposals cut back by as much as 33 percent.

Aetna backed out of Maryland.

In the end,, Aetna also fled California, New Jersey, New York, Georgia –-and Connecticut. “As corporate identity crises go, this is like L.L. Bean quitting Maine or Apple leaving California–for the Moon ”The Wall Street Journal commented.

Aetna is now participating in Exchanges in just 16 states.

Even in states where regulators didn’t reject bids, the Exchanges forced insurers to compete on price. Brand-name carriers who able counting on high premiums to offset the costs of the new regulations soon realized they couldn’t compete with non-profit insurers who don’t have to deliver profits to investors.

For consumers, this is good news. When it comes to the quality of the care that they deliver, and customer satisfaction, non-profit carriers get the highest marks..

In the end, the biggest for-profit insures backed away from the exchanges. WellPoint wound up participating in Exchanges in only eight states. UnitedHealth will be peddling policies in four. .

“It’s almost surreal to see the most dominant company in the industry completely sitting out the launch of the . . . exchanges,” observes Deutsche Bank’s Scott Fidel.

Reportedly UnitedHealth is now eying insurance markets overseas.

So much for having a seat at the table

(Note to readers: A shorter version of this post appeared on Health Insurance.org.

Soon, I plan to write about how drug-makers, device-makers and hospitals will fare under Obamacare, and where there shares are likely to be headed over the long term.

Maggie Mahar at The Health Beat Blog

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Oh Mein Gott! President Obama Lied . . .

Click on the title to view the YouTube link.

If you like your plan and doctors, you can keep them . . . even if it will cost you twice as much as it might under the PPACA . . . huh??? What idiot would pay more for a plan with similar or fewer benefits than under the PPACA with lesser cost? I guess some might on Angry Bear and other places as well.

Florida Blue CEO Patrick Geraghty plays the straight man to Meet the Press David Gregory Sunday morning and defended Obamacare. Florida Blue is dropping 300,000 policy holders because the healthcare plans do not hold up under the scrutiny of PPACA requirements, and, and the policy holders may be able to obtain similar or better coverage at the same or lower insurance rates.

Maybe we should impeach?

HT Crooks and Liars”

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Sell out alert

Via Alternet:

The list of Democrats who are entering these negotiations embracing the GOP’s terms continues. There are at least nine in the Senate. California’s Dianne Feinstein, Montana’s Max Baucus, West Virginia’s Joe Manchin, Delaware’s Chris Coons and Tom Carper, and Colorado’s Michael Bennett have all said they support cuts to entitlements in letters to constituents, proposed bills or statements made after the President’s fiscal reform commission led by Eskine Bowles and Alan Simpson issued its 2010 report proposing capping or cutting entitlements while lowering or eliminating corporate taxes.The list of Democrats who are entering these negotiations enbracing the GOP’s terms continues. There are at least nine in the Senate. California’s Dianne Feinstein, Montana’s Max Baucus, West Virginia’s Joe Manchin, Delaware’s Chris Coons and Tom Carper, and Colorado’s Michael Bennett have all said they support cuts to entitlements in letters to constituents, proposed bills or statements made after the President’s fiscal reform commission led by Eskine Bowles and Alan Simpson issued its 2010 report proposing capping or cutting entitlements while lowering or eliminating corporate taxes.

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There is a debt problem

Yves Smith writes:

So bad economic times increase income disparity even among the young, and that will also make it even harder for them to contend with debt.

I’ll return to this topic, because I think this recitation isn’t adequate to convey how the pieces are being put in place to put bigger and bigger swathes of the public under the debt yoke. And officials act as if this sort of thing is desirable as long as they can pretend it’s “affordable”. This cheery statement comes from that Department of Education release:

“The growing number of students who have defaulted on their federal student loans is troubling,” U.S. Secretary of Education Arne Duncan said. “The Department will continue to work with institutions and borrowers to ensure that student debt is affordable. We remain committed to building a shared partnership with states, local governments, institutions, and students—as well as the business, labor, and philanthropic leaders—to improve college affordability for millions of students and families.”

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The Young, the Shutdown, Austerity, and Wealth

I can not help but wonder if Friedman takes delight in the predicament of the Young and Baby Boomers as he writes about Druckenmiller excursions on to college campuses . I envision  a bit of Schadenfreude as evidenced by his choice of titles for his latest column. October 15, 2013, Tom Friedman writes in the NYT about the young being screwed by the baby boomer generation and trumpets  for rebellion against the kicking of the can down the road of higher costs and taxes due to Social Security, Medicare, Medicaid, and entitlements. Tom Friedman’s NYT article “Sorry Kids, We Ate It All” masks the real threat to student and their productivity going into the future.

“as our politicians run for the hills the minute someone accuses them of ‘fixing the deficit on the backs of the elderly’ or creating ‘death panels’ to sensibly allocate end-of-life health care. Could this time be different? Short of an economic meltdown, there is only one thing that might produce meaningful change: a mass movement for tax, spending and entitlement reform led by the cohort that is the least organized but will be the most affected if we don’t think long term — today’s young people.” “Sorry Kids, We Ate It All”

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“Kill Grandma” ? Appeal to young people

by Dale Coberly

TOM FRIEDMAN LIES
THROUGH HIS GREAT BIG TEETH

TELLS KIDS
“KILL GRANDMA”

You see, the Wolf (his friends call him Tom) had no reason to
disguise himself as Grandmother. He had already met Little Red
Riding Hood and talked to her like a friend. She saw him as the nice
man in the very nice suit who told her he would help her become wise
and rich like him.

So when he met her outside Grandmother’s house and handed her an axe
and said, “Grandmother is really a big, bad, wolf, and she is going
to eat you up if you don’t take this axe and kill her,” he didn’t
need a disguise, and she believed him.

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