Wednesday, November 20, 2013

Release the kraken Death Spiral!

What, you might wonder, does Obamacare have to do with schlocky aughts cinematography?  Actually, if you are asking this you much be new here.  Bear with me.

The biggest threat to Obamacare (after voter rage at massive increases in premiums and deductibles and restricted selection of doctors) is the "Death Spiral".  Since Insurance companies cannot legally sell policies to sick people at a higher price than to well people (the whole "pre-existing conditions" thing), the fear is that higher premiums will discourage younger, healthier people from signing up.  Since the customer base will skew to sicker (and higher payout) customers, Insurance Company profits will turn to losses and companies will have to raise rates.  This will drive more healthy people away until only sick people are left, when the whole thing collapses.

So let's look at hospitals and uncompensated care.  It's actually wrong - as a matter of law - to say that the uninsured in the USA do not have access to health care.  By law, Emergency Rooms cannot turn people away, even if they cannot pay.  This "Uncompensated Care" is a major existing cost currently borne by the insured (via higher policies).  Ignoring the fact that this more or less guts the entire rationale for Obamacare, what incentives does the Obamacare statute give to Hospitals to game the system?

How about buying insurance for the uninsured patients who make up the bulk of their uncompensated care?
In this case, the Administration was faced with questions from Representative Jim McDermott.  He asked if exchange-sold health plans were considered Federal Qualified Health Plans (QHP) under the law.  If so, he pointed out that several of the things the Administration had discussed (e.g. allowing insurers to offer monetary inducements to customers who maintained good health habits) could be illegal under anti-kickback provisions.

As usual, it was pretty clear the Administration had no answer.  Or more accurately, had five different answers from five different people and agencies.  Kathleen Sebelius wrote back to McDermott that no, exchange sold plans were not QHP's and so the anti-kickback law did not apply.  This tactically solved McDermott's issue.  But it created large new issues, since it is the anti-kickback law that would have prevented hospitals from buying exchange plans for their most expensive patients.  If exchange plans are not QHP's, then hospitals considered that buying such plans was now legal.
Oops.  Now that the Democrats voted for it, Secretary Sibelius is finding out what's in it.  This whole redistribution thing is a lot more difficult than they had thought.

Oh honestly, it really is pointless trying to do this if you're going to cheat ...


Goober said...

The law of unintended consequences is ever present whenever our elected betters attempt to twist the knobs.

How many times are they going to make things worse while attempting to fix them before the American public figures it out and demands that they stop trying amd just figures it out for themselves?

Oh, how long to wait for such a day....

William Newman said...

It would be nice to have some kind of shorthand for "solemnly denied easily foreseeable consequences." Referring to "unintended consequences" for something like this is giving too much credit to people who intended the cause and whose claim not to have intended the foreseeable consequences is either a bald lie or a confession that their plans to avoid the foreseeable consequences were based on the unicorn cavalry coming over the hill.

Something gently sarcastic might do: "unwished-for consequences," perhaps, politely leaving off the obvious "that no one, absolutely no one, could possibly have foreseen". Or we could just use the ordinary terms such "bad consequences" or "downsides" or "drawbacks".

Goober said...

I like the term unintended. Unintended does not mean unforeseeable. It simply means a consequence that was not intended.

They could have fully known this was going to be a consequence. As long as they didn't intend for it still unintended. Technically.

William Newman said...

They may not be the goal, they may not be desired consequences, but they were foreseeable consequences of actions taken; it seems like a stretch to call them unintended. Or at least it's a stretch when applied to the movers and shakers; I grant that some sizable fraction of the useful idiots genuinely didn't foresee foreseeable consequences, sometimes for innocent reasons like just not being very good at thinking things through or not being very good at judging who to trust.

I'm no great admirer of Ayn Rand's literary work, but I don't dismiss it with a sneer either. Among the things she did in _Atlas Shrugged_ (with a scowl and a dumptruck full of radwaste) was what Orwell did (with a grim flourish and a saber) in _Animal Farm_: captured some patterns of villainy that we see over and over again in the world, but which don't seem to have had earlier catchy literary archetypes. One of James Taggart's characteristic traits is claiming that foreseeable downsides of his decisions aren't his fault (e.g. "nobody can blame us" on p. 16 of my copy here). It's a pretty common pattern, and it contributes to a lot of problems, so it seems unfortunate we're not better at smacking it down.