No Hope Left for Obamacare’s Website, Techies Say.

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No Hope Left for Obamacare’s Website, Techies Say

Flickr/DolanH/The Fiscal Times

 

The Fiscal Times

November 13, 2013

Nearly a month and a half into the dismal Obamacare rollout, Center for Medicare and Medicaid Services communications director Julie Bataille told reporters on Tuesday that CMS has begun emailing at least 275,000 people who had gotten “stuck” attempting to create accounts on the glitch-ridden HealthCare.gov, asking them to come back to the site and “try again.”

Bataille refused to say whether all 275,000 people would be able to use the exchange at the same time without crashing the system. Instead, she dodged specifics about the progress programmers have been making on the website’s repair efforts and how CMS would be able to meet its Nov. 30 deadline — the day the Obama administration has promised to have the site up and running “smoothly for the vast majority of users.”

“The system is getting better each week,” Bataille said. She didn’t specify whether the website would be completely fixed and glitch-free, though. Instead, she pointed to other ways consumers could sign up for insurance through the exchanges “whether that is via direct enrollment with insurance companies to meet the pent up consumer demand or … calling the call centers or enrolling in person.”

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The Obama administration’s repeated refusal to provide specifics on when the site would actually be functioning after the end-of-November deadline is not surprising given the wide-ranging technological and operational problems with the site.


It’s even more discouraging since less than 50,000 people have signed up for health insurance through the federal exchange, according to unofficial estimates reported by the Wall Street Journal.

And it doesn’t appear to be getting better.

According to tech experts, the sorry state of the current website does little to inspire confidence that it can be fixed and functional in less than three weeks.

“When I visited HealthCare.gov on October 1, that was the worst piece of software I’ve ever experienced in my life,” said Luke Chung, founder and CEO of the software company FMS. “It had nothing to do with too many users. It couldn’t serve one user.”

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According to Sumit Nijhawan, CEO of Infogix, a data security firm working with private insurers, even if the White House can fix the problems associated with the site, they’re going to find new ones immediately. Nijhawan also warned that the systems that allow CMS and health insurance companies to exchange information are nowhere close to being ready, meaning tech problems could last years.

 

“What we’ve seen so far is the first set of problems that come up,” he said. “Then you have the next set of problems. It’s one set of issues leading into another.”

Nijhawan, whose firm is working to verify information submitted by users, said that they’re receiving volumes of bad information, to which he attributed one of three factors:

  • Human error, meaning the user entered incorrect information or made a mistake using the web interface. However, Nijhawan didn’t blame the user for these mistakes. “It’s not that someone mistakenly puts in wrong information. These guys haven’t bought insurance before and they don’t understand what the terminology is,” he said. “It’s quite possible they enter wrong info because they don’t understand.”
  • Data access errors related to the federal hub. In these cases, the hub provides incorrect information from one of the host of federal agencies it’s pulling from. “There’s a lot of data for the first time flying around across different firewalls. The potential for doing something wrong is really high,” he said.
  • Technical issues related to the construction of the website.

Chung, who is testifying in front of the House Oversight committee today, said these technical issues are the most frustrating.

 

“I have contended all along that this is not that difficult of a project,” he said. “It doesn’t provide health care, it doesn’t even provide insurance. It’s just a form to apply for a subsidy to get health insurance. It’s automating a paper form. It shouldn’t be that hard.”

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“Technically, this is not that difficult,” Chung added. “It shouldn’t cost more than $10 million. And it should be something that can be done in a couple of months.”

According to both Chung and Nijhawan, even if the White House can build a functional website by the end of the month, new problems would appear almost immediately.

“The idea that it would be perfect is never. All systems are never perfect. It’s never perfectly secure or functioning,” Chung said. “If you discovered hundreds of bugs on the initial launch, there are hundreds more or multiples of that that haven’t been discovered yet.”

Nijhawan also touched on a problem that has yet to be widely addressed. He said the exchanges that are expected to allow insurance companies to share information with the federal government are not close to being ready. Without this information, CMS would not know who enrolled in the plans.

“As soon as these enrollment issues get ironed out either by December or March, you have other issues relating to the back end, where there’s a lot of reconciliation that needs to be done between health care and CMS,” Nijhawan said.

When asked why these exchanges weren’t completed before the rollout, he said, “They were trying to desperately get ready for the rollout.”

IN OTHER NEWS:

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Every one of us knows America needs revival.  But what would that look like?  America has changed so much that it is no longer possible to give the usual answers to that question.  Here is a conference that combines 4 voices that will give a face, a definition and substance to revival in our nation.

The Conference is called R.I.O.T. an acronym for REVIVAL IN OUR TIME.  It begins this Thursday night November 14th at 7 PM appropriately at the American Revival Center in Martinez,  California.

Who is this conference for?  It is for every any pastor, evangelist, leader or concerned believer who is contending for a moral awakening in the United States.

Why should I attend? You should attend because you will not find a more deliberate attempt to understand and release revival anywhere.  You should attend because the very atmosphere of the RIOT itself will burn out doubt fear and confusion about revival.  You should attend because of the voices that are coming together to speak at the RIOT.

JUST LOOK AT THE SPEAKERS:

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Evangelist Mario Murillo: will host the conference and minister in every session.  Mario has seen true revivals in the most unlikely places in America.  His book Reaching Critical Mass  has been required reading in over 50 schools, colleges and universities including the Bethel School of Supernatural Ministry.

Richard Summerlin Thursday night November 14th at 7PM and Friday November 15th at Noon.

Not far from the scene where Trayvon Martin was killed God is growing a multiracial miracle in an airplane hangar. Richard Summerlin is building the next generation of revival congregations in America.  Thousands have been swept up into the Kingdom of Christ

Richard was a bounty hunter who went after dangerous felons and then became an expert alligator wrestler until he decided to blend his skills and become a pastor.  God has graced Richard with a wisdom and leadership mantle way beyond his young age.  There is no doubt that his preaching and miracle ministry will be an explosive encounter for leaders and all believers.

Sean Smith Friday Night November 15th 7PM

Sean Smith was just a boy when his father was murdered in inner city Oakland California.  Out of the ashes of unimaginable despair and pain God raised up a unique voice to this generation. It began when heaven deposited fire in his soul while he was a student at the University of the Pacific.  This fire turned his pain into the fuel for excellence. Just two years after his total transformation through Christ at the University of the Pacific he led a student movement.

Then the Holy Spirit promoted Sean Smith to full time crusade ministry. He became a global voice and a supernatural gift that devastates the powers of darkness.  He has written several books including the groundbreaking volume I Am Your Sign.

On Friday night at R.I.O.T Sean Smith will bring a word from the Lord that is best described by his mission statement: CARE: Captivate for Christ the hearts of a generation; Activate the army of God to fulfill its destiny; Reach out to and reap lost souls; and Equip the body of Christ to meet the challenge of the Great Commission.

Winkie Pratney Saturday November 16th at Noon and again at 6PM.

After more than three million miles of global travel and sometimes speaking to more than half-a-million annually, Winkie has wide experience in motivating leaders, ministers, educators and young people. Winkie is a mavin, a researcher and public communicator with ability to take existing ideas, break them down to simpler forms and make them practical and freely available to others.

Winkie is considered the greatest living authority on revival. A featured speaker at major conferences, conventions, festivals and other gatherings, his “scholarship on fire” approach has impacted multitudes around the globe, and resulted in the creation or formation of new works to effectively reach, encourage and train young people.

There is no charge for the conference.  Childcare is provided in each session.  There is no doubt that this conference will take revival from the theoretical and the mystical and make it more real than you ever imagined.  See you at the RIOT!

RIOT INSERT FOR BLOG

Has a man ever delivered a baby?’

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Here is a report of how it is going so far at the Sebelius hearing

Ellmers: ‘…has a man ever delivered a baby?’

Sebelius had a sharp exchange with Rep. Renee Ellmers (R-N.C.), who asked if it was true that under the Affordable Care Act, men would have to buy maternity coverage?

“This is why premiums are going up, because we are forcing people to buy coverage they will never need,” Ellmers said.

Sebelius responded that insurance policies cover many things people may never need, and that many of these men may need such coverage for their spouses.

“To your knowledge, has a man ever delivered a baby?” Ellmers asked before the chairman cut her off because she had run out of time.

 

Hearing may continue for a while

In an indication that the hearing may go on for a while longer, Chairman Fred Upton (R-Mich.) told Sebelius that he was going to try to get her out of there by 12:30 p.m. Chuckles arose from the room.

“Is that a joke?” Sebelius said.

Sandhya Somashekhar
12:20 PM

Gardner to Sebelius: ‘Why aren’t you losing your insurance?’

Rep. Cory Gardner (R-Colo.) told Sebelius that he and his family buy their health insurance on the private market, and like other people in his boat, got a notice saying his plan was being discontinued this year. He said he chose to reject his congressional insurance to be more like people in his district.

“Why aren’t you losing your insurance?” he demanded of Sebelius. “Why won’t you go into this exchange?”

Sebelius responded that she is not eligible, because people who get affordable coverage through their employer may not apply through the marketplace.

“I would urge you to be like the American people,” he said, before asking for a waiver from the health-care law for his Colorado district.

Gardner also referenced this ad from Colorado.

Sandhya Somashekhar
12:14 PM

We’re off to see the wizard…

Several members of the Energy and Commerce Committee compared the launch of Obamacare to the classic movie “The Wizard of Oz.”

“There is a famous movie called the ‘Wizard of Oz,’ and in the ‘Wizard of Oz’ there is a great line,” said Rep. Joe Barton, (R-Tex.). “Dorothy at some point in the movie turns to her little dog Toto and says, ‘Toto, we’re not in Kansas anymore.’”

“Well, Madam Secretary, while you’re from Kansas, we’re not in Kansas anymore. Some might say that we are actually in the ‘Wizard of Oz’ land given the parallel universes we appear to be habitating.”

Sebelius did not seem amused by the Kansas reference.

Rep. Mike Pompeo (R-Kansas), Rep. Frank Pallone (D-N.J.) and  Rep.  Greg Harper (R-Miss.) also made references to the “Wizard of Oz.”

Pompeo said that when the characters in the “Wizard” got to the end of the yellow brick road, “at the end of the day, and they pulled back the curtain,” what they found wasn’t any different than something they already had.

Vincent Bzdek
12:06 PM

Sebelius: Obama not responsible for botched Obamacare rollout

(AP Photo/ Evan Vucci)

Secretary of Health and Human Services Kathleen Sebelius said Wednesday that President Obama is not responsible for the botched rollout of his signature health care law.

“No, sir,” Sebelius said when asked directly whether Obama is responsible at a House hearing.

Instead, Sebelius pointed to the department she leads, HHS.

“We are responsible for the rollout,” she said.

Noonan: ObamaCare Takes On Water.

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ObamaCare Takes On Water.

By Peggy Noonan

We should not lose The Headline in the day-to-day headlines. This is big history, not small. The ObamaCare rollout is a disaster for the White House, not a problem or a challenge or an embarrassment, not a gaffe or a bad few weeks. It is a political disaster, and the only question is whether it is partially recoverable, meaning the system can be made to work in a generally satisfactory way in the next few weeks. But—it has to be repeated—they had 3½ years after passage of the Affordable Care Act to make the program into something the American people could register for and feel they were benefiting from. Three and a half years! They had a long-declared start date: It would all go live Oct. 1, 2013, and everyone in the government, every contractor and consultant, knew it. The president put the meaning of his presidency into the program—it informally carries his name, it is his brand. It was unveiled with great fanfare, and it didn’t work. For almost anybody. Crashed systems, frozen screens, phone registration that prompted you back to the site that sent you to the 800 number, like a high-tech Möbius strip.

All this from the world’s greatest, most technologically sophisticated nation, the one that invented the computer and the Internet. And from a government that is able to demand and channel a great deal of the people’s wealth.

So you’d think it would sort of work. And it didn’t. Which is a disaster.

Even though it’s huge, and those who are reporting the story every day are, by and large, seasoned and have seen a few things, no one seems to know how it will end. Because it’s new territory. Does anyone believe the whole technological side can be fixed quickly? No. The president may eventually accept a brief delay in implementation—it is almost unbelievable that he will not—but does anyone think that the economics of the ACA, the content as set out and expressed on the sites, will flow smoothly, coherently, and fully satisfy the objectives of expanding health-insurance coverage while lowering its cost? You might believe that, but early reports of sticker shock, high deductibles and cancelled coverage are not promising. Does anyone think the president will back off and delay the program for enough time not only to get the technological side going but seriously improve the economics? No. So we’re not only in the middle of a political disaster, we’re in the middle of a mystery. What happens if this whole thing continues not to work? What do we do then?

It hardly matters if anyone is fired. That’s the fifth paragraph in the Wikipedia history, or the 10th. Yes, a firing would be good democratic form, and it would acknowledge the idea of accountability—someone or some persons failed on a historic level and were removed. It would take some heat off the White House—”Look, we’re doing something!”—so it’s surprising they haven’t done it and odd the Republicans are clamoring for it. But who would want to be the new HHS secretary? Who would take that job?

 

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Martin Kozlowski

It was Bill Daley—accomplished political player, former commerce secretary and, most killingly, former chief of staff of President Obama, who Thursday, on “CBS This Morning,” admitted the scale of the problem. Asked whether Kathleen Sebelius should be fired, he said: “To me that’s kind of like firing Captain Smith on the Titanic after it hit the iceberg.”

The Titanic. Some will see his comments as disloyal. Actually they were candid and realistic. Although in fairness, the Titanic at least had three good days, and Edward Smith chose to go down with the ship.

He didn’t deny the waters were icy; he failed to slow his ship, failed to show heightened concern. Mrs. Sebelius did not show overwhelming confidence in the days before the debut—there was no “God himself couldn’t sink this program.” She repeated her lines in a way that seemed almost furtive, appearing not confident but confused, and almost guiltily stubborn. Her message was almost always the same: There are no icebergs ahead.

Norman Ornstein in National Journal this week reminds us of Democratic Sen. Max Baucus’s iceberg warning—actually “train wreck”—at a hearing six months ago, in April. He warned implementation of ObamaCare could be a disaster. He told Mrs. Sebelius: “I understand you’ve hired a contractor. I’m just worried that that’s going to be money down the drain because contractors like to make money more than they like to do anything else. That’s their job.” A lot of agencies are involved, he said, people are going to get confused, more simplicity is needed.

He was right. I happened to reread his warning while the House Energy and Commerce Committee questioned the four major contractors on the ObamaCare sites. The most pertinent query came from Rep. Marsha Blackburn, who asked the contractors to put on paper, and under oath, exactly how much money they had made from the federal government so far, and exactly how much they stand to make now, as they fix the sites, and in the future.

There are more questions on the failure to launch. Did Mrs. Sebelius and her top staffers know that the system was not ready and likely to fail? If they knew, did they not tell the White House? If they didn’t know, how did it happen that they didn’t? If the White House knew of the likelihood of a coming failure, why did they go full steam ahead? And if they didn’t know, why?

Was there some degree of fabulism, or magical thinking, or reliance on blind luck within the White House and the greater administration? Many important people in the administration, and those contracting with it from the outside, would have had to ignore various signs of a coming failure. Did some of them know or have reason to know problems were both present and coming, and mislead or fail to inform their peers or superiors?

And there is the enduring mystery of why the president, who in his career has attempted to persuade the American people to have greater faith in and reliance on the federal government’s ability to help, continues to go forward with an astounding lack of interest in the reputation of government.

He talks but he doesn’t implement, never makes it work. He allows the IRS under his watch to be humiliated by scandal, waste, ill judgements prompted by ideological assumptions. He allows his signature program, the one that will make his name in the history books, to debut in failure. In response he says bland, rounded words that leave you wondering what just got said.

We’re all reading of Jack Kennedy. He stayed up nights with self-recrimination after failure. “How could I have been so stupid?” he asked about the Bay of Pigs. A foreseeable mistake and he’d blown it, listened to the wrong people, made the wrong judgments. That man suffered over his missteps. He worried about his reputation, and the reputation of his government, and of America.

It is disorienting to not see this in a president. It is another thing about this story that feels not only historic, but historically strange.

OBAMA WILL BE FORCED TO DELAY OBAMACARE.

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First the news from NBC.

Brian Williams opened NBC Nightly News Wednesday evening with the breaking news that the Obama Administration is planning to move the deadline for individuals to sign up for health care as part of the Affordable Care Act up to six weeks due to ongoing problems with the HealthCare.govwebsite.

NBC News reporter Tom Costello delivered the details to Williams. “The White House tells NBC News it plans to move the deadline for individuals to be required to buy health insurance by as much as six weeks,” Costello said. “As the law stands now, to avoid a tax penalty the uninsured need to start the process by February 15th. With this change the administration is trying to allow people to start the enrollment process by March 31st to avoid any financial penalty.”

Costello added that the work to fix the website problems is a “top priority” for the White House. The news comes one day before congressional hearings into what went wrong with the website are set to begin.

According to NBC, the lead federal contractor CGI “will testify that the website passed eight technical reviews prior to going live on October 1st, but also that a late government decision to require customers to register their personal information before they could check insurance prices contributed to the glitches.”

Mario’s note:NBC is only telling you a half truth. 

Democratic Senators are jumping ship because it is now certain that Obamacare will sink their reelection.   They are going to join Marco Rubio who is introducing a bill Thursday to delay all of Obamacare indefinitely.   Obama will not be able to stop this nor will Obama risk vetoing a totally bipartisan bill because it will cost him a massive loss of support from his own party.

Democrats know that the public is not thinking about Ted Cruz, The Tea Party or Conservatives.  Millions have had their health insurance cancelled, everyone will see their insurance rates jump and the website for Obamacare cost 620 million dollars and the site was only able to sign up 51,000 people in 7 days!

Consumer Reports: ‘Stay Away From HealthCare.gov’.

Consumer Reports: ‘Stay Away From HealthCare.gov’

By Alec Torres   October 21, 2013 9:56 AM

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Consumer Reports, which publishes reviews of consumer products and services,advised its readers to avoid the federal health-care exchange “for at least another month if you can.” “Hopefully that will be long enough for its software vendors to clean up the mess they’ve made,” the magazine said, having tested the site themselves over the course of the past three weeks.

Noting that only 271,000 of the 9.47 million people who tried signing up in the first week managed to create an account, Consumer Reports then provided a few tips to those attempting to slog through the application process. From attempting successive logins because “error messages . . . may not always match reality” to checking one’s inbox frequently because missing an e-mail a user will be timed out of the site and forced to start from square one, none of the suggestions guaranteed success.

The magazine has also released a string of scathing reviews. On October 1, the day the Obamacare exchanges went online, the magazine told people to be patient: “Don’t worry if you can’t sign up today or even within the next couple of weeks.” A week into enrollment, they urged again to “wait a couple weeks and hope that the site irons out its many problems” because the HealthCare.gov is “barely operational.”

As the editors continued to review the website over the next few days, they only had one positive statement: “On the plus side,” they noted, “consumers coming to HealthCare.gov are no longer stopped cold by an error message or a screen saying they’ve been put in a waiting line.”

Now three weeks into the exchanges, having offered reviews and advice, Consumer Reports said that “if all [these suggestions] are too much to absorb, follow our previous advice: Stay away from Healthcare.gov,” at least for the time being.

 

A Bad Law gets worse: Obamacare woes widen as insurers get wrong data.

Obamacare woes widen as insurers get wrong data.

By Christopher Weaver and Louise Radnofsky

Insurers say the federal health-care marketplace is generating flawed data that is straining their ability to handle even the trickle of enrollees who have gotten through so far, in a sign that technological problems extend further than the website traffic and software issues already identified.

 


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Emerging errors include duplicate enrollments, spouses reported as children, missing data fields and suspect eligibility determinations, say executives at more than a dozen health plans. Blue Cross & Blue Shield of Nebraska said it had to hire temporary workers to contact new customers directly to resolve inaccuracies in submissions. Medical Mutual of Ohio said one customer had successfully signed up for three of its plans.

The flaws could do lasting damage to the law if customers are deterred from signing up or mistakenly believe they have obtained coverage.

“The longer this takes to resolve . . . the harder it will be to get people to [come back and] sign up,” said Aetna Inc. AET -2.87%  Chief Executive Mark Bertolini. “It’s not off to a great start,” he said, though he believes the marketplaces are “here to stay.”

 

 Timothy W. Martin and Joel Schectman contributed to this report.

No, Obamacare Is Not A Good Deal For Young People In The Long Run, Not Even Close

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No, Obamacare Is Not A Good Deal For Young People In The Long Run, Not Even Close

Chris ConoverChris Conover, Contributor
A Picture of an Staples, Inc. easy buttonA Picture of an Staples, Inc. easy button (Photo credit: Wikipedia)

Progressives are becoming increasingly concerned at the prospect of millions of uninsured young people deciding to push the easy button next year by simply paying a very small fine[1]rather than obtain health coverage. Consequently, they have turned to a new argument to get those under 30 to act against their self interest by signing up for the Exchanges. Now we are being told that Obamacare will be a good deal for young people in the long run since whatever short-term losses they incur in the form of higher premiums will be more than made up later when they are older and get to pay lower premiums than they would in today’s market.

But those making these arguments haven’t offered any analysis to back up their claims. The conceptual point evidently is supposed to be intuitively obvious. As Ezra Klein puts it:

Young people grow old. Healthy people get sick. Rich people become poor. The people overpaying to keep costs low today are the people underpaying 10 or 20 years from now.

As a health policy skeptic, I know that lots of intuitive ideas—such as thatprevention saves money—turn out to be false upon closer examination. So when I did some actual analysis of this latest idea, it did not surprise me to learn that this claim is dead wrong.  Once the time value of money is taken into account, the average young person will be worse off under Obamacare even if they live long enough to be a near-elderly person who pays premiums that are well below actuarially fair rates.

In the short run, millions of young will be better off without Obamacare

recent study by the National Center for Public Policy Research shows that:

  • About 3.7 million of those ages 18-34 will be at least $500 better off if they forgo insurance and pay the penalty.
  • More than 3 million will be $1,000 better off if they go the same route.

Consequently, many more will opt to pay the extremely modest tax rather than fork over many thousands of dollars to purchase coverage that became substantially more expensive for young people thanks to the misguided pricing rules imposed by Obamacare. The risk that the law will fail in an “adverse selection death spiral” thus has gotten much larger. This claim is not in dispute. Instead, progressives argue it is too narrow. If only young people would consider the long run—when they too are old—they would discover that enrolling in Obamacare is in their self-interest.

But in the long run, the story is the same

It is relatively straightforward to test this claim empirically. My purpose is not to compare today’s premiums with those that will exist under Obamacare, since at least part of the expected increase in premiums is related to filling in purported gaps in coverage, such as eliminating lifetime limits and providing preventive health services without any cost-sharing. I don’t want to cloud the discussion with claims that these added benefits are somehow “worth” the higher premiums. Instead, I want to focus on the claim that the “pay me now, we’ll pay you later” adjusted community rating structure under Obamacare actually is a good deal when considered on a lifetime basis.

My strong preference for health reform—shared by highly reputable health economists such as Mark Pauly and Patricia Danzon at Wharton School, several others at Harvard (Amitabh Chandra, Michael E. Chernew, Anupam B. Jena Stanford (Jay Bhattacharya), University of Chicago (Anup Malani, Tomas J. Philipson) and University of Southern California (Dana Goldman, Darius Lakdawalla)[3]—is that health insurers be allowed to price risk. Community rating can be shown (both theoretically and empirically) to be both inefficient and unfair. It is inefficient because it encourages low risk individuals (think young people) to remain uninsured rather than over-pay for health insurance. It is unfair because it ends up transferring resources from healthy poor people to unhealthy wealthy people. But this unfairness aspect might be undercut considerably if it turned out that from a lifetime perspective, young people who overpaid when young were more than compensated by their future savings from community rating once they got old.

So I first created a set of experience-rated premiums for every single year of age between 18-64).[2] I then calculated the present value of these premiums over a lifetime—which in this case meant ages 18-64 since even under Obamacare, people are assumed to enroll in Medicare at age 65. I examined 4 different groups of young adults (age 18, 22, 25, and 30) using different discount rates. I then created a parallel set of premiums that were constrained to meet the Obamacare modified community rating rules, namely, that the premiums for the oldest plan members can be no more than 3 times as high as the premiums for the youngest members. If the present value of the Obamacare premiums is lower than the comparable figure for experience-rated premiums, then one could reasonably say that the intuition of Obamacare enthusiasts is correct: young people are better off under Obamacare since they ultimately will save enough on their premiums in old age to offset whatever “excess” premiums they are forced to pay in their young adult years. But as you can plainly see, for most age categories and most discount rates, the reverse is true. The lifetime cost of Obamacare is higher than under market-driven premium rates.

The only instance in which Obamacare is consistently a better deal is using a 0% discount rate. But a 0% discount rate implies that young people are indifferent about getting $1,000 today or $1,000 50 years from now. I challenge readers to find just one person who, when confronted with such a choice, would choose to take the payment 50 years from now instead of today. Most people—young or old—are not that patient. They would far prefer to have money today than to receive the comparable amount far in the future. Which is why banks, corporations and the U.S. government have to pay interest to people in order to induce them to put their money into bonds rather than spend it. Interest rates simply represent the time value of money. In a present value calculation, the discount rate is what is used to a future dollar into an amount comparable in value to today’s dollars.

Individuals Generally Have a High Rate of Time Preference (They Are Impatient). Many economists think U.S. society has a long-run discount rate (i.e., social rate of time preference) of 3% since that figure is comparable to the inflation-adjusted rate of return on long-term U.S. Treasury bills. But individual rates of time preference typically are much higher than societal rates, with double-digit rates not being at all uncommon in the vast literature that has sought to estimate their size.[4] This makes sense because, for example, the U.S. government presumably has a lifespan longer than that of individuals. If someone is uncertain about living long enough to get their money back in 40 years, they will generally expect to be paid a higher interest rate than if survival were a certainty. Thus, from the standpoint of the average young adult adversely affected by Obamacare, I would argue that the figures using a 10% discount rate come much closer to the truth than do the figures using a 3% rate. And you can see from the chart that using that 10% rate, Obamacare is not a good lifetime deal even for people as old as 30 [and if I had used a much higher discount rate of say, 17%, Obamacare would turn out to be an even worse deal for young people]. For 18 year olds, Obamacare essentially is imposing a tax of 18.3% on the premiums they would otherwise pay under the more market-oriented reforms favored by many conservatives and Republicans.

These estimates are very conservative

I cannot emphasize enough how conservative my estimates are. I have ONLY accounted for for the “pure” effects of modified community rating–i.e., the fact that young people on average pay higher premiums while older people pay lower premiums. In calculating the increase in premiums required for young people to make this transfer work (i.e., for the number of extra premium dollars needed among young people as a group to exactly balance the amount of premium reductions given to older people) I have taken into account the first order impacts on how many people will demand health insurance (i.e., fewer young people and more older people will sign up for coverage under modified community rating than if insurers been allowed to fully price risk the way they do in auto, life and homeowners insurance). This meant I had to adjust the rates for the young even higher in order to provide enough additional premium reductions to finance the additional number of older people in the pool. However, I did NOT account for adverse selection at all: that is, I assumed that average spending by year of age among pool members remained the same. In reality, it would be the healthy young who would be most likely to drop out as premiums for that age group rose and the unhealthy old who would be most likely to join as premiums for that age group fell.

In short, I have bent over backwards to prove the claim of progressives andstill found their hypothesis wanting. If I were an actuary capable of incorporating the adverse selection effects, the increase in lifetime premiums for the average young person would be considerably higher than shown in my chart.  This is why the various estimates of rate shock estimated by Avik Roy (64-146% in California, for example) and others provide a much more accurate depiction of the premium increase for 18 year olds, for example, than the 35.4% figure I derived from my more limited calculations.[5]

What’s so bad about modified community rating?

Modified community rating essentially is an excise tax on people who buy health insurance. Those who choose to go bare avoid the tax entirely, but for those who do buy coverage, the tax is highly discriminatory, imposing the highest burdens on those who are young. Can anyone name another tax that works this way? Imagine a state that tried to impose a sales tax in this fashion, where everyone would have to show an ID card and the amount of tax charged to 18 year olds would be 18% while those age 30 would only have to pay 5% and seniors would get a rebate!)[5]  How kooky is that?  If we as a society have decided that some group needs help in paying for their health insurance, shouldn’t we make those subsidies visible for all to see instead of burying them in someone’s health insurance bill? Moreover, shouldn’t we be relying on taxes that are visible and fairly distributed rather than using “taxation by regulation” of health insurance? If older people need subsidies, why should young people (who are far from being the wealthiest in society) be disproportionately burdened with bankrolling what should be a social responsibility?

People rationalize modified community rating on grounds that what goes around comes around. “Don’t worry kid. Someday you too will be old enough to enjoy premiums subsidized by youngsters your age. It all works out in the wash.”  But it is now plainly evident that for typical young adults who have very reasonable time preferences, it does not all work out in the wash after all.Obamacare is a bad deal, plain and simple.

Instead of spending millions of hundreds of millions of taxpayer dollars to bankroll vacuous appeals (“make you feel like a winner.“ Seriously?) and trot out sports stars and Hollywood celebrities to fast-talk young people into signing up for Obamacare, how about instead using that money to educate them about the truth of how the health law treats them as a cash cow for older folks? Sadly, this administration can’t handle the truth since they know that once  young people wake up and smell the coffee, it’s game over for Obamacare. Far better to stay the course with a mad scramble to put the law into place even though a) the bureaucrats responsible for implementing it arebegging for more time; and b) haste will greatly inflate the risks of privacy violations on a wide scale.

At the risk of sounding like a broken record, is this really the best we can do? Perhaps we owe it to young adults to delay the entire law for a year so we can straighten out some of these problems. At minimum, it would give them an extra year to save up for the rate shock they will face on Day One of the exchanges.  If young people knew as much about Obamacare’s adverse impact on them as they know about how to work their cell phones, this law would be in deep doo-doo. Sadly, this is the very demographic that is most ignorantabout the freight train headed their way. Until and unless these same young adults get educated on the facts quickly and start urging their members of Congress for a one year delay, that train may be headed for a wreck.

Obamacare Will Increase Health Spending By $7,450 For A Typical Family of Four.

Obamacare Will Increase Health Spending By $7,450 For A Typical Family of Four

Chris ConoverChris Conover, Contributor
WASHINGTON, DC - MARCH 26:  Ron Kirby holds a ...Ron Kirby holds a sign while marching in protest of the Patient Protection and Affordable Care Act in front of the U.S. Supreme Court on March 26, 2012 in Washington, DC. (Image credit: Getty Images North America via @daylife)

It was one of candidate Obama’s most vivid and concrete campaign promises. Forget about high minded (some might say high sounding) but gauzy promises of hope and change. This candidate solemnly pledged on June 5, 2008: “In an Obama administration, we’ll lower premiums by up to $2,500 for a typical family per year….. We’ll do it by the end of my first term as President of the United States.”  Unfortunately, the experts working for Medicare’s actuary have (yet again[1]) reported that in its first 10 years, Obamacare will boost health spending by “roughly $621 billion” above the amounts Americans would have spent without this misguided law.

What this means for a typical family of four

$621 billion is a pretty eye-glazing number. Most readers will find it easier to think about how this number translates to a typical American family—the very family candidate Obama promised would see $2,500 in annual savings as far as the eye could see. So I have taken the latest year-by-year projections, divided by the projected population and multiplied the result by 4.

 

Simplistic? Maybe, but so too was the President’s campaign promise. And this approach allows us to see just how badly that promise fell short of the mark. Between 2014 and 2022, the increase in national health spending (which the Medicare actuaries specifically attribute to the law) amounts to $7,450 per family of 4.

Let us hope this family hasn’t already spent or borrowed the $22,500 in savings they might have expected over this same period had they taken candidate Obama’s promise at face value. In truth, no well-informed American ever should have believed this absurd promise. At the time, Factcheck.org charitably deemed this claim as “overly optimistic, misleading and, to some extent, contradicted by one of his own advisers.”  The Washington Post less charitably awarded it Two Pinocchios (“Significant omissions or exaggerations”). Yet rather than learn from his mistakes, President Obama on July 16, 2012 essentially doubled-down on his promise, assuring small business owners “your premiums will go down.” He made this assertion notwithstanding the fact that in three separate reports between April 2010 and June 2012, the Medicare actuaries had demonstrated that the ACA would increase health spending. To its credit, the Washington Post dutifully awarded the 2012 claim Three Pinocchios (“Significant factual error and/or obvious contradictions.”)

The past is not prologue: The burden increases ten-fold in 2014

As it turns out, the average family of 4 has only had to face a relatively modest burden from Obamacare over the past four years—a little over $125. Unfortunately, this year’s average burden ($66) will be 10 times as large in 2014 when Obamacare kicks in for earnest. And it will rise for two years after that, after which it hit a steady-state level of just under $800 a year. Of course, all these figures are in nominal dollars. In terms of today’s purchasing power, this annual amount will rise steadily.

But what happened to the spending slowdown?

Some readers may recall that a few months ago, there were widespread reports of a slow-down in health spending. Not surprisingly, the White House has been quick to claim credit for the slowdown in health spending documented in the health spending projections report, arguing that it “is good for families, jobs and the budget.”

On this blog, Avik Roy pointed out that a) since passage of Obamacare, U.S. health spending actually had risen faster than in OECD countries, whereas prior to the law, the opposite was true. Moreover, to the degree that U.S. health spending was slowing down relative to its own recent past, greater cost-sharing was likely to be the principal explanation. Medicare’s actuarial experts confirm that the lion’s share of the slowdown in health spending could be chalked up to slow growth in the economy and greater cost-sharing. As AEI scholar Jim Capretta pithily puts it:

An important takeaway from these new projections is that the CMS Office of the Actuary finds no evidence to link the 2010 health care law to the recent slowdown in health care cost escalation. Indeed, the authors of the projections make it clear that the slowdown is not out of line with the historical link between health spending growth and economic conditions (emphasis added).

Obamacare poison

In the interests of fair and honest reporting, perhaps it is time the mainstream media begin using “Affordable” Care Act whenever reference is made to this terribly misguided law. Anyone obviously is welcome to quarrel with the Medicare actuary about their numbers. I myself am hard-put to challenge their central conclusion: Obamacare will not save Americans one penny now or in the future. Perhaps the next time voters encounter a politician making such grandiose claims, they will learn to watch their wallet. Until then, let’s spare strapped Americans from having to find $657 in spare change between their couch cushions next year. Let’s delay this law for a year so that policymakers have time to fix the poorly designed Rube Goldberg device known as Obamacare. For a nation with the most complicated and expensive health system on the planet, making it even more complicated and even more expensive never was a good idea.

Footnotes

[1] The Medicare actuary first issued a report carefully estimating the cost impact of Obamacare on April 22, 2010. Its annual national health expenditure projections reports for 2010, 2011 and 2012 all have contained tabulations showing that Obamacare will increase health spending over the next 10 years compared to a counterfactual scenario in which the law was never enacted.

House Defunds Obamacare, Keeps Govt Open. Only Obama wants to shut down the government.

House Defunds Obamacare, Keeps Govt Open

Image: House Defunds Obamacare, Keeps Govt Open

Speaker of the House John Boehner is cheered on Sept. 20 after the House of Representatives passed a bill that would prevent a government shutdown while crippling Obamacare.

Friday, 20 Sep 2013 11:27 AM

The U.S. House voted to finance the federal government through mid-December and choke off funding for President Barack Obama’s healthcare law, setting up a showdown with the Senate and the White House.

The Republican-controlled House today passed, 230-189, a stopgap measure to fund government operations after current authority expires Sept. 30. The bill preserves across-the-board spending cuts at an annual rate of $986.3 billion and permanently defunds the Affordable Care Act.

“The fight to delay Obamacare doesn’t end next week. It keeps going on until we get it,” Representative Paul Ryan, a Wisconsin Republican and his party’s 2012 vice presidential nominee, told reporters today in Washington.

 

The spending measure now will be sent to the Senate where it will pass without defunding the healthcare law, Majority Leader Harry Reid of Nevada said yesterday. Obama administration officials said the president would veto the House bill if sent to him by Congress.

If the Obama administration and lawmakers can’t agree on the stopgap funding, most, though not all, operations would come to a halt in less than two weeks. Republicans are using the stopgap spending bill as a vehicle to try to choke off funds for the health program the party has opposed since 2009.

Sen. Ted Cruz, a Texas Republican and chief Senate opponent of the health law, said he’s willing to do “everything necessary and anything possible,” including holding a filibuster, to block action on the spending measure as a way to end funding for the health-care law.

The Senate is expected to start considering the legislation on Sept. 23 with goal of finishing by Sept. 26.

Procedural Tactic

Democratic leaders are considering a procedural tactic that would put Cruz and his allies in an awkward spot and upend their efforts.

Under Senate rules, they could have a simple majority vote that would strip the health-care defunding language once they end debate on the House measure.

House Republicans haven’t decided how to proceed once the Senate passes the measure after stripping out the health language.

If Boehner allows the Senate bill to proceed, he would need enough Democratic votes join Republicans to pass it and avoid a government shutdown.

House Republican leaders also could decide to continue revising the measure and send the amended version back to the Senate for a vote, complicating the process and raising the risk of a shutdown as time runs out.

Debt Ceiling

The House spending measure also includes a provision directing the Treasury on how to prioritize payments if the debt ceiling is breached.

House Republicans said today they’d start working next week on legislation to raise the nation’s debt limit and attach a one-year delay in the health law, cuts to entitlement programs and approval for the Keystone XL pipeline.

“The next 10 days are very important for our country,” said Representative Tim Graves, a Georgia Republican, who has pushed for defunding the health-care law.

Ryan of Wisconsin said the measures Republicans will attach would reduce the U.S. budget deficit in the long term.

Related article:

Rubio: Only Obama Wants to Shut Down Government

Rubio

Wednesday, 18 Sep 2013 01:51 PM

By Jim Meyers and John Bachman

Republicans should do “anything and everything” to prevent the “disaster” of Obamacare, Sen. Marco Rubio tells Newsmax. But he insists it can be done without shutting down the government.

The Florida Republican asserts that President Barack Obama actually wants a government shutdown to achieve a “political win,” and the administration is going to fight to the bitter end to defend its healthcare reforms.

Elected in 2010, Rubio is considered a rising star in the Republican Party. He delivered the GOP’s response to Obama’s State of the Union address in February and has been mentioned as a presidential candidate in 2016.

 

His committee assignments include the Committee on Small Business and Entrepreneurship.

In an exclusive interview Wednesday with Newsmax TV, Rubio discusses efforts to stop Obamacare and the possibility of a government shutdown.

“Every single member of the Republican conference agrees that Obamacare should be stopped, but the disagreement is about the tactic,” he says. “I’m not in favor of shutting down the government. The president appears now politically to be in favor of shutting down the government.

“I’m in favor of funding the government at the levels that were agreed to last year in the Budget Control Act and not spending a single penny more of hardworking taxpayer dollars on a disaster, which is Obamacare.

“Actually, the administration has admitted it’s a disaster because they’ve had to delay major portions of it. Labor unions that strongly supported Obamacare are now asking to be exempted from it.

“So we should be doing anything and everything we can to prevent this law from going into effect, because once it starts to hurt people, it’s going to hurt our economy in ways that are very difficult to undo later.”

The House will pass a plan to delay and defund Obamacare but to keep the government  open, Speaker John Boehner says.

“That’s very positive news,” says Rubio. “It’s now going to call attention to the fact that we can keep the government open, we can fund the government, but we don’t have to shut down the government, and we don’t have to fund Obamacare.

“It’s the president who’s threatening to shut down the government because he is saying, and it’s the position his allies in the Senate so far have taken, that unless they fund Obamacare, they won’t fund the government.

“The president’s basically looking for a political win, and I guess his political people have told him that this is a political win: shut down the government and blame the Republicans. The problem is that’s not the Republican position.”

obama_angry_2012_8_6

Rubio predicted that the House will pass a short-term budget to keep the government running.

“If in fact the government shuts down, it will be unfortunately because the president and his allies believe that Obamacare is so important to them that they are willing to shut down the government over it.

“That’s shortsighted, primarily because they are going to fight to the end to defend a disaster, something that even their own allies and labor unions are asking to be let out from.”

 

OBAMA’S PLAN TO DESTROY AMERICA HATCHED AT COLUMBIA SAYS CLASSMATE

OBAMA’S PLAN TO DESTROY AMERICA HATCHED AT COLUMBIA SAYS CLASSMATE

Apr. 19, 2013 12:01am

obama_angry_2012_8_6

Wayne Allyn Root is a Capitalist Evangelist, entrepreneur, and Libertarian-conservative Republican. Wayne began his career as a sports handicapper, and has gone on to host and appear on many of the biggest television and radio news networks including: FOX News Channel, FOX Business Network, CNBC, and radio shows like Glenn Beck, Michael Savage, Jerry Doyle and Mancow Muller. He is a former Libertarian vice presidential nominee. Wayne’s latest book is out on April 15, 2013: “The Ultimate Obama Survival Guide: Secrets to Protecting Your Family, Your Finances, and Your Freedom.”

The economic news has gone from bad to worse. First we found out the jobs numbers are collapsing. Then retail sales figures were released- they showed across the board contraction. Next we found out U.S. business inventory figures were a disappointment. Finally consumer confidence not only collapsed, but it was the largest miss from expectations in U.S. economic history. What exactly is our president’s plan? Because it’s certainly not working. Or is it? It depends on what the plan is.

Shouldn’t the American people have a right to know what our president’s real economic agenda is? Is he out to help us, or hurt us? With things getting worse, don’t we have a right to ask these questions? I have a story that sheds light on that life or death question.

President Obama and I were college classmates at Columbia University, class of ’83. I know all too well how mindlessly leftist the students and faculty of that institution can be, and Barack Obama is certainly no exception. My time at Columbia made it crystal clear: leftists always believe they are morally superior. While they publicly state that their mission is to save the world from prejudice, patriotism, racism, greed, and inequality, they are, in fact, hostile and resentful towards anyone who has achieved self-made success through American values.  It is in this cesspool of intolerance that Obama and his Marxist cronies hatched their plan to destroy our country.

There are two things you need to know about Obama at Columbia University. First, he was Pre -law and a Political Science major- just like me. I thought I knew everyone studying Political Science during my four years at Columbia. Not Obama. I never met him, never saw him, never even heard of him. Strange.

Barack Obama

Same major, same career path, and graduated on the same day– where was he? Was he busy attending communist party meetings? No need to guess. In his autobiography he proudly admits attending Socialist Party meetings at Cooper Union in downtown Manhattan. He also admits publicly in his own book to not wanting to meet or befriend anyone at Columbia who wasn’t black, Hispanic, gay, or a Marxist professor. His words- in print. So it’s possible he was so busy attending communist meetings and trying to avoid guys like me (white, straight, a guy who loved America) that our paths never crossed. Unlikely, but possible.

But, it’s the second thing you really need to know about Obama at Columbia. He says he graduated Class of ’83. Let’s give him the benefit of the doubt. I always have. Well then Obama had to attend the same Political Science classes as me. I can tell you, almost to a man, my classmates in the Class of ’83 proudly called themselves Marxist, communist or socialist. They bragged of being “radical” like a badge of honor. They openly hated America- calling it racist. They hated capitalism- and vowed to bring “the system down.”

In my class the typical Columbia political science student vowed to destroy capitalism, bankrupt business owners, and vaporize what they called “the white power structure.” For the most part these were spoiled brat white students of privilege and power. They were children of wealth, given everything on a silver platter and all they felt was anger and guilt. Their goal was to destroy their own fathers. They talked about it all day long.

So let me tell you a story that says it all. Back in 1981 I was sitting in a political science class. The president at the time was Ronald Reagan, a man reviled by the left just as viciously as any Republican is today. Suddenly our lecture was interrupted by a door swinging open violently—whereupon a breathless fellow student raced into the room screaming, “The president has been shot! They’ve just assassinated President Reagan.”

Ronald Reagan was my hero. The news hit me like a ton of bricks. I instantly felt sick to my stomach, and tears flowed down my cheeks. But it was the response of the rest of the class that I will remember for the rest of my life. They cheered. They clapped, they yelled, they high-fived, and whooped in sheer unadulterated joy. My fellow classmates, the ones I was naively trying so hard to befriend despite their radical leftist views, were HAPPY that my hero President Ronald Reagan was dead (or so they thought). They were celebrating what they thought was the assassination of America’s president. Incidently, if Obama actually went to Columbia, he’d almost certainly have to have been in that class leading the cheers. Feel like you need a shower yet?

FEC IRS blog copy

Lest you think I’m exaggerating, British leftists just celebrated and cheered upon hearing of the death of Margaret Thatcher only days ago. It was all over the news. Some Brits held parties celebrating her death. This is revolting and disgusting.

But wait, the most frightening and eye-opening revelation is still to come. You see political science students at Columbia were taught a detailed plan designed by two former Columbia professors named Cloward and Piven to bring down “the system,” destroy capitalism, and turn America into a socialist state. We discussed it in class, wrote about it, and debated it outside class. It was a hot topic of discussion around the halls of Columbia for four years.

The plan was revolting, but brilliant. Cloward and Piven taught that America could only be destroyed from within. Only by overwhelming the system with debt, welfare, and entitlements could capitalism and the America economy be destroyed. So the plan was to make a majority of Americans dependent on welfare, food stamps, disability, unemployment, and entitlements of all kinds. Then, under the weight of the debt, the system would implode and the economy collapse, bankrupting business owners (i.e. conservative donors). Americans would be brought to their knees, begging for big government to save them. Voila – you’d have a new system.

A system based on fairness, equality and social justice. It’s called Socialism.

Sound familiar?

verizon spy blog copy

Lo and behold, one of my classmates was elected as president and it’s clear as a bell that he is using that plan to destroy America, capitalism, and the U.S. economy right in front of our eyes. It’s the exact plan hatched at Columbia University in our college days. Exact in every way.

Under Obama, 660,000 Americans dropped off the job rolls…just last month. 90 million working-age, able-bodied Americans are no longer in the workforce. 90 million. The workforce participation rate is the lowest since 1979. For men it’s the lowest since 1948 (when record keeping began).

New economic numbers were out last Friday. Retail sales contracted. Business inventories were disappointing. Consumer confidence collapsed- the worst miss in the history of the U.S. economy. This economy isn’t getting better, it’s getting worse by the day. Obama isn’t “saving” us, he’s destroying us with every move he makes.

Almost 50 million Americans are on food stamps (20% of all eligible adults). Fourteen million are on disability. Millions more are on welfare, unemployment, housing allowances, aid to dependent children, or 100 other free government  programs. Now, add in free healthcare plus 22 million government employees. Record-setting numbers of Americans are emptying their retirement accounts to survive. Student loan debt is a national disaster- with defaults up 36% from a year ago. Over 16 million Americans live in poverty…in the suburbs. Every day under Obama the private sector shrinks, while the government grows like a toxic malignant tumor.

Obama promised to cut the deficit in half; instead he gave us five consecutive trillion dollar deficits. He promised to spend responsibly; instead now owns the title of biggest spender in world history. He called Bush’s $4 trillion in debt over 8 years reckless, then proceeded to pile on $6 trillion in only 4 years. He swore to be on the side of small business, but he added 6,118 new rules, regulations and mandates in just the last 90 days. He claimed taxes are low, yet he just raised taxes to the same level as bankrupt EU countries like Greece, Spain, Italy and France. Our federal income taxes are now far higher than former Soviet Republics.

Now I ask you- Does this sound like a man trying to “save” us?

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Folks, this is Cloward and Piven. This is Karl Marx, who despised the middle class and vowed to wipe it out. This is Saul Alinsky,who dedicated his book (Obama’s favorite book) to Lucifer, the devil.

This is no accident, or the work of an economically inept liberal. This is a purposeful plan to drown the nation in debt and hook a majority to government handouts, happening in front of our eyes. It’s crystal clear Obama’s plan was hatched in our college days, at Columbia, Class of ’83.

While I never met Obama at Columbia, I can certainly put him at the scene of the crime. He either went to Columbia, or he didn’t. If he didn’t, he’s a fraud. If he did, he knew the Cloward and Piven plan like the back of his hand. He studied it and his goal- like almost all my classmates- was to use it to bring down the U.S. economy and destroy capitalism to create what they consider to be “equality, fairness and social justice.”

Why would anyone want to purposely collapse the economy you might ask? Saul Alinsky taught the ends justify the means. A bankrupt America wipes out the middle class and small business. That wipes out the majority of donors to conservatives causes- meaning Obama has no opposition. It creates “equality”- by putting everyone on equal footing (shared misery). It causes panic- and in panic, voters often make hasty decisions- like choosing big government to save them.

Stimulus

The destruction and devastation we see happening right now is classic Cloward and Piven. It’s the plan we learned, studied, and discussed day and night at Columbia. This is no coincidence. This is the Marxist attack from within. This is a purposeful attempt to take down the economy, collapse the middle class, wipe out small business, bankrupt the wealthy (conservative donors), and addict the country to big government Nanny State socialism.

And it’s working. I believe it’s now clear that Obama has been working on his plan for 30 years (our 30th Columbia class reunion is next month). Now it is time for us to get to work- to save America and to save ourselves.