My company's health care premiums are going up due to Obamacare

I recently received the following email from the HR manager of the software company I work for:

[Our company] strives to offer a competitive benefits package in the context of continuous healthcare cost inflation. This year, due to a significant increase in claims and new fees associated with the Affordable Care Act, we are facing substantial rate increases. ... We therefore encourage you to consider switching over to the Anthem Health Savings Account (HSA) plan ... High deductible plans are the best way to control costs while offering competitive benefits at the same time. [emphasis added]

Higher premiums? My company urging me to go on a plan with a high deductible? Thank you, Obamacare.

Another momentous change made by Democrats with no bipartisan support

Today, Senate Democrats made another momentous change to American political life with no bipartisan support. By a 52-48 vote, with all Republicans voting nay, the Senate changed its filibuster rules to allow Senate confirmations to proceed with just 51 votes. Since 1975, 60 votes had been required to invoke cloture (end of debate), and before that 66. This rules change will, of course, make it easier for Democrats to ram through various nominations along party lines. As WSJ reports:

[Republican Senate Minority Leader Mitch McConnell] said the drive to change Senate rules represented a raw use of power akin to the tactic used to pass the Affordable Care Act. "They muscled through Obamacare on a party-line vote and didn't care about the views of the minority, and that's just about what they are going to do here," said Mr. McConnell.

The change is a clear sign of the increasing panic and desperation of Democratic politicians as their poll numbers plummet due to the Obamacare disaster. It is quite clear now that the Democrats will not take back the House in 2014 and are very much in danger of losing their majority in the Senate. So, their plan in the meantime is to ram through as many confirmations as they possibly can. The immediate goal of Democrats is to pack the DC Circuit Court with three additional Democratic nominees.

RealClearPolitics has to change scale of Obama approval chart

Today RealClearPolitics had to change the scale of the President Obama Job Approval chart because the President's approval rating was about to plunge right off the bottom of the chart.

I guess that's what happens when you pass the most massive redistributionist legislation in 50 years and steal an election all by lying.

Mr. President, maybe now it's time for you to go pound sand

Mr President,

Over the last couple of years, Republicans have offered numerous proposals for how to reform the health care marketplace in America. In every single case, you, Senator Reid, and Congresswoman Pelosi have told the Republicans, in effect, to go pound sand.

"The presidential election was a referendum on Obamacare and you lost!" Republicans were admonished. "Obamacare is the law of the land, was upheld by the Supreme Court, and cannot be delayed, changed, or repealed!" your Democratic talking heads shouted.

But now, with the healthcare.gov website in shambles, with the number of canceled insurance policies far greater than the number of new enrollees in Obamacare, and with Democratic approval ratings cratering and the threat of a disaster in the 2014 midterm elections hanging over your heads, you and other members of your party are proposing at the eleventh hour that radical administrative and/or legislative changes be made to the Obamacare legislation that you insisted could never be altered.

These changes are so extensive that it is questionable whether they are even consistent with the principles the law was founded on. Furthermore, these changes have been conceived in such a rush and so obviously as a result of Democratic political imperatives rather than through any kind of rational deliberation that they threaten to take an already chaotic situation and make it even more confused and uncertain.

Millions of Americans have had their insurance policies canceled or their premiums raised. They are being told that if they don't have health insurance by early next year they will be fined. And yet, they cannot even use the crippled website you assured them would be available to them so they could "comparison shop" for new coverage. All this has been brought upon us by you and the Democratic Party alone. Remember: not a single Republican lawmaker voted in favor of Obamacare. And now that you have brought the American health care system to the brink of disaster, you arrogantly insist that we all jump to our feet and support you as you blunder like a drunken sailor down your newest policy path. Once again you will be demanding, I am sure, that we need to pass your new proposals so we can find out what's in them.

Obamacare has been plagued from the outset by a lack of bipartisan support and serious consideration of the best ideas from all sides. I am confident that if you will be willing to sit down with Republican congressional leaders and discuss in a rational manner their entire range of objections to Obamacare, they will be quite willing to cooperate with you. In the meantime, since the mess you have created threatens so many people as deadlines approach, it is obvious that all of Obamacare needs to be scrapped and we need to start over, together.

If, however, you are unwilling to sit down with Republicans and are unwilling to listen to their ideas and incorporate some of their suggestions into new healthcare legislation well, then, Mr President, it's time for you to go pound sand.

Never mind

Bill Clinton now says:

I personally believe, even if it takes a change in the law, the President should honor the commitment the Federal government made to those people, and let them keep what they got."

So, after 3 years of preparation for the implementation of the most disruptive and politically divisive social policy America has seen in the last 50 years, the Democratic Party is doing a 180 and saying: Never mind, you can keep the health plan you had before.

But, if everyone keeps what they had before, then, what is the change that Obamacare brings about? What are the implications for the rest of the program? Have you ever seen such a cluster fuck?

It will take months

In a blog post entitled The Obamacare Rollout: The Administration Needs a Plan B––Now!, health policy expert Bob Laszewski reports:

It is now becoming clear that the Obama administration will not have Healthcare.gov fixed by December 1 so hundreds of thousands, or perhaps millions, of people will be able to smoothly enroll by January 1.
...
It's time for the Obama administration to get real. It takes months to properly test a complex data system like this. Two things are obvious:
1. When they launched on October 1, very little of the testing had been completed.
2. They are now in the midst of that many months long testing and fixing period. It is clear they don't have a few weeks of work left; they have months of work left.

What does Hillary think of Obamacare

What I want to know is: What does Hillary think about Obamacare now? Does she continue to give it her unqualified support?

What does she think about the healthcare.gov website? Does she think that Kathleen Sebelius is doing a good job or that she should be fired? Does she think that it's fair to require people to have health insurance when the website through which they are supposed to sign up is riddled with bugs?

Does she think it's acceptable for millions of people to have received cancellations of their health care insurance as a result of the provisions of the Obamacare legislation? Does she think that insurance policies that have higher deductibles, more limited doctor networks, and coverage that individuals don't need are "better" for them? Does she think that it's "fair" for the young and healthy to be forced through higher premiums to pay for the costs of the old and sick?

Again and again, the mainstream media must force the next Democratic candidate for President to go on record about what she thinks of this enormous mess, foisted on us by the Democratic Party.

The pathetic attempt to pin the blame for Obamacare on Republicans

Larry Summers published a truly pathetic piece in WaPo today, taking Republicans to task for trying to “subvert” Obamacare:

[F]airness requires recognizing the equally important, and in some ways more fundamental, factor behind the problems implementing Obamacare: the systematic effort of the president’s opponents to delegitimize and undermine the project. … There is a line that must be respected between political opposition and conscious subversion. Everyone understands that when the country is at war, even a war a person may oppose, vigorous oversight is essential, but, in the end, there is an obligation to support American troops. In the same way, history will not judge kindly those who, having lost political debates over policy, go beyond vigorous oversight and seek to subvert enacted programs.

Sanctimonious Harvard president bloviation! You can always tell when a Democrat is about to try to pull the wool over your eyes or pick your pocket, because he begins his peroration with "Fairness requires ..."

Healthcare.gov is an ongoing disaster. The President's repeated assurances that Americans would be able to keep their insurance plans and doctors if they liked them have been exposed as premeditated fraud. It is inconvenient facts like these, Mr Summers, that have delegitimized and undermined Obamacare, not the opposition of a few Republicans.

More to the point: Why should anyone be surprised by the continued attempts of Republicans to derail the implementation of Obamacare? Not a single Republican Congressman or Senator voted for Obamacare. Why does Mr Summers think that their opposition should stop with the passage of the law? Of course Republicans will do everything in their power to subvert Obamacare. They should unashamedly shout their ongoing opposition to Obamacare from the rooftops!

The Democrats have no one to blame but themselves. Deep-rooted opposition is the inevitable result of the fact that Obama, Pelosi, and Reid rode roughshod over Republicans and rammed the legislation through without bipartisan support. It is the height of hypocrisy for Mr Summers to bemoan the lack of bipartisan support now when there was no mention of the need for bipartisanship in 2010.

And, as for all of his talk about supporting American troops in time of war, Mr Summers conveniently forgets that Democrats in the Senate, including Hillary Clinton, threatened in 2007 to withhold funding for the war in Iraq if President Bush did not agree to a timetable for withdrawal. As WaPo reported at that time:

Within hours, Senate Majority Leader Harry M. Reid (D-Nev.) declared that Bush will not get more money to pay for the wars in Iraq and Afghanistan this year unless he accepts a plan to complete troop withdrawals by the end of next year.

Finally, as for the question of whether Republicans will be judged kindly for their continued efforts to subvert Obamacare, the midterm elections in 2014 will go a long way towards answering that question. And right now things are looking increasingly rosy for the Republicans and increasingly bleak for the Democrats (with the spread between those disapproving and approving of President Obama's performance having ballooned to over 10%).

Mr Summers: Democrats, not Republicans, passed Obamacare. You own it. Your attempt to pin the blame for Obamacare's failures on Republicans is truly pathetic.

Obamacare = a gun held to the head of the American people

On November 3 I predicted that there was no way the healthcare.gov website would be running smoothly by December 1, as the Administration assured us it would. Here's an update as reported in WSJ today:

In updates for reporters on Thursday and Friday, the Affordable Care Act's lead repairman Jeff Zients more or less conceded that the website three years in the making won't work until sometime after the end of this month. He explained that every problem that is resolved and taken off the "punch list"—already several hundred items long—reveals new problems that the tech people didn't know about. "Where we are is not where we want to be," he said.

Anybody who is surprised that things are playing out this way knows nothing about the software development process. You just don't roll out a major release of a complex enterprise software system and then a couple of months later roll out another major release. All you need to do is ask yourself how frequently Microsoft rolls out major releases of the Windows operating system to understand the rhythm which with such releases typically happen. The simple fact that the Administration claimed the website would be working by December is just another sign that they are utterly incompetent. Either that, or once again they are telling bald-faced lies to the American public.

But, even if these technical problems with the website eventually get ironed out, what is not fixable in Obamacare and what will cause its eventual failure is the incentives it creates and the coercion it exercises: it incentivizes the sick, old, poor, and uninsured to sign up for Obamacare; it coerces the healthy, young, and affluent to pay higher premiums to cover the additional costs.

During the government shutdown, the President said that he would not negotiate with the Republicans with "a gun held to the head of the American people." Well, what is the individual mandate if not a gun held to the head of the American people? Enroll in Obamacare or pay a fine. Take your new plan that the government in its infinite wisdom has decided is "better" for you (with its higher deductibles, more limited doctor networks, and coverage you don't want), or leave it and pay a fine. Coercion plain and simple. Bang!

Obamacare's back end

In a previous blog post, I wrote about what I fear are the most significant problems facing the Obamacare system, namely, potential weaknesses in its business model and back-end business processes.

When customers fill in data, click on buttons, and so on, in the Obamacare portal, backend business processes will be set in motion. It is one thing for software to capture data in a form, send that data over a wire, and store that data as a transaction in a database. It is quite another thing for the backend business processes to make sense of and reconcile all this data, to take appropriate actions based on the data, and, to operate in such a way that all the transactions taken together aggregate and add up to a net benefit to users. In short, once a user has enrolled in a policy, the entire lifetime of that policy, including premium billing over the long term, must be administered in a consistent, auditable way.

Now, Jon Kingsdale, who oversaw the Massachusetts health insurance exchange from 2006 to 2010, reports on some of the challenges in these back-office processes:

The first [challenge] is to get enrollment, billing and premium collections working smoothly. In 2006, when we launched the Massachusetts Health Connector, which became the prototype for insurance exchanges under the ACA, my team encountered start-up problems. Tracking billing and collections was a much bigger challenge than getting our Web site to work.

Here’s why: Enrollees are not covered until their first month’s premium is received. In the individual insurance market, premium billing and collection is difficult to track. Folks frequently pay late or in weekly installments, or send too little or even too much. And when they stop paying, they often do not notify the insurer; the company must determine whether it is an intentional termination, an oversight, or a lost or late payment. Unlike most of today’s 15 million direct enrollees, who pay premiums on their own, an estimated 27 percent of those who will be eligible for tax credits under the ACA do not have checking accounts. So they must use cash, money orders or prepaid debit cards to pay their share of monthly premiums.

Under the health-care law, premium billing and tracking will be even tougher. There are hundreds of prices across each of the thousands of plans in the federal marketplace. Having enrollees pay partial premiums, and the IRS issue tax credits for the rest, means twice as much billing. Calculating subsidies based on personal income tax filings also creates security issues: In addition to the problems with verifying consumers’ identities online, which have created delays on HealthCare.gov, tens of thousands of unlicensed “navigators” are fanning out across the country to help folks enroll. Many of these people don’t have to submit to thorough background checks, although they will gain access to personal financial information. And consumer protections for low-income enrollees who miss payments require complex notifications over 90 days before an insurer can end coverage. ...

In Massachusetts, we received about 100 visits to the site for every one enrollment. If the tens of millions of hits for the federal exchange in October eventually translate into millions of customers, the accuracy of the enrollment data — and insurers’ ability to correctly split premium billing between millions of enrollees and the IRS; track premium remittances; and chase, reconcile and report on accounts receivable — will be tested under the pressure of high volume. If insurers cannot track and collect premium dollars each month, the extra work of doubling back with customers and insurers will frustrate consumers and delay coverage. And a mounting backlog could eventually compromise the fiscal integrity of the exchange. [emphasis added]

To think that all of these back-end business processes are going to be working by December 1 is sheer fantasy. And, if they are not working, then, as Mr Kingsdale mentions and I have also pointed out in other blog posts (for example, here and here): "a mounting backlog could eventually compromise the fiscal integrity of the exchange." That is, a poorly functioning exchange will create more and more data that must be revisited and manually corrected until the amount of reworks will simply overwhelm the system.

Paper applications will only add to the problems

And then there is the Administration's specious claim that filling out a paper application with the assistance of a "navigator" is an adequate alternative to enrolling in Obamacare on the healthcare.gov website.

In order to understand how the use of paper applications will only increase problems, imagine for a moment the system architecture of healthcare.gov. We can think of it as consisting of two main components:

1. a website that serves up pages that allow users to enter information and make selections;
2. a back-end server that communicates with a variety of external systems; imagine a giant wheel with healthcare.gov's server sitting at the hub, various external systems sitting at the end of the spokes, and digital (not paper) information passing back and forth between the central hub and the external processes through the spokes.

The external systems perform a variety of functions:

1. If the external system is an insurance company, then a.) it sends to the central hub information about the policies and premium rates that the insurance company offers and b.) it receives from the hub completed, validated user applications for its insurance policies.
2. If the external system is another government agency, then it receives from the central hub queries to verify user information (entered through the website) and sends back answers; for example, the external system might be the IRS and the central hub may ask it whether the SS# 123-45-5678 is a valid SS# for John Doe and whether last year John Doe's salary was $100K; the IRS will send back a digital reply answering yes or no.

Now, ask yourself: How is all this processing going to take place with paper applications? In particular:

1. How will users get the information about the policies and premium rates of various insurance companies? Will the navigator have access to all the latest information?
2. How will information the users provide be verified? Will the navigator call up all the various governmental agencies to verify the user's information?
3. How (and how securely) will completed user applications be forwarded to insurance companies?

Also, remember that eventually user information will need to be read off these paper applications and entered into computer systems by data processing personnel. After all, we live in a digital world. The information on the forms will often be incomplete, unverified, and even illegible and the data processing person will likely not have the applicant sitting next to them to supplement/correct the information on the application.

In fact, filling out paper applications will just add to the enrollment process steps that have the potential to introduce additional error and even fraud into the system. The whole reason for having a centalized healthcare.gov website was so that we could avoid all the inefficiencies and errors and invalid data that result from paper applications. And now people are being told that paper applications are an adequate alternative. On the contrary, paper applications will simply create more problems for Obamacare to deal with.

Processing errors create even more problems

Alexis Simendinger on RealClearPolitics reports:

[HHS Secretary Sebelius] also noted that early applications launched on the wobbly site got stuck, were incomplete or in error, and the government is trying to sort out what to do with thousands of such attempts. That problem is unlikely to be resolved by next week.

I predicted this phenomenon in an earlier blog post:

And, oh yeah. If the exchanges try to go on line in spite of poorly functioning systems, the complexity of the problem will only grow, since not only will the buggy systems still need to be fixed, but also the processing errors made by the buggy systems will subsequently have to be corrected, too.

Another Obamacare prediction

Not only will the Obamacare website healthcare.gov not be ready by December 1, but the experts that have been brought in during the "tech surge" to help work out the problems with the site and its back-end systems will announce at that time that the project is so fundamentally flawed that it will have to be junked in its entirety and that the government will, in effect, have to start over from scratch.