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ObamaCare Having Predictable Effects on Healthcare Market

health-costs-money-stethoscope

Dave Schuler has noted a pretty significant development that’s off the radar because of Campaign 2016 shenanigans and the rash of police shootings: the ObamaCare compromise of trying to mandate health coverage while maintaining the status of for-profit insurance companies is, quite predictably, failing.

In his Tuesday “Healthcare Reform Status Report,” he points to a piece by Jason Johnson at The Root noting that prescription drug prices are skyrocketing.

The Affordable Care Act had two main stated goals: The first was to increase the number of Americans who have some form of health coverage, and the second was to make health care more affordable. The first goal has been accomplished. While there are caveats, most private analyses show that about 16 million Americans have gained health care coverage through the ACA. Most of these people are poor, under 30 and minorities. However, on the cost end, the ACA has driven up costs for millions of Americans, a reality that has a disproportionate impact on minority communities, especially when it comes to pharmaceuticals.

Where is the problem starting? With a little-known middle man known as the pharmacy benefits manager. In theory, PBMs (as they’re called) are like in-house pharmacists at your job. They negotiate deals with drug companies and your health care provider to help employees, whether they’re public school teachers or IT professionals, get a better deal. In theory. What’s actually been happening, though, is that these folks have been taking kickbacks from drug companies, picking and choosing which employees get the best drug choices, and basically destabilizing a system that was supposed to help everyone.

This new layer of health care management is particularly tough on African-American consumers, many of whom live in pharmacy deserts where their options for drug assistance, care and advice are limited. In other words, seven years later, the Affordable Care Act has empowered insurance providers and middle management over consumers, and neither the presumptive Democratic nominee nor the Republican nominee has really suggested what to do about it.

In yesterday’s follow-up, “The Insurance Business Is Hard,” he points to a WaPo report that co-ops are all but out of the plan:

The number of insurers carrying out one of the Affordable Care Act’s most idealistic goals continues to plummet, with just seven nonprofit member-run health plans set to take part in the law’s fourth enrollment season this fall.

That’s down from 23 such plans — co-ops, as they are commonly known — that started in 2014. Eleven are still in business, but four in Oregon, Ohio, Connecticut and Illinois will fold soon because of financial insolvency. Just Tuesday, the Land of Lincoln Mutual Health Insurance Co. was ordered to close by Illinois regulators.

Dave notes that this is a big deal because the co-ops fill an important niche:

My interpretation of that is that the the healthcare insurance business is quite difficult under the restrictions imposed by the Affordable Care Act. It’s hard for experienced, established carriers and it’s that much harder for newcomers.

It won’t be a disaster if no co-ops continue to participate. The for-profit insurance companies will still be there. The open question is what happens if nobody is offering insurance in some of the markets? Nobody really knows.

His analysis from the earlier post strikes me as spot-on:

As the number of insurers continues to dwindle, expect more calls for increased federal subsidies. I can’t justify private insurers dependent on federal subsidies. I think that fully government-provided insurance (perhaps I need to put double-quotes around the word “insurance”—what’s being proposed does not sound like insurance to me but like a benefit) would probably be preferable to public-private hybrids. I can’t honestly tell whether advocates really believe their neoliberal fantasies or whether it’s a mere cynical hat-tip.

As he and I both argued on the late, not-much-lamented OTB Radio show as the debate was unfolding in 2009, the hybrid system created by ObamaCare seemed the worst of all options.  You simply can’t take a for-profit insurance system, mandate that they cover everything for everybody (including those who are already gravely ill at the time they start paying premiums), and simultaneously drive down costs.

Dave notes that President Obama is starting to tout the obvious alternative:

I’ve also seen renewed calls for the “public option”, including by the president himself yesterday. The argument as I understand it is that in markets in which there is only one insurer the federal government should step in to provide “competition”. How a public insurer that depends on the taxpayer can be characterized reasonably as competition for a private company is unclear to me.

 

Given that the way this has unfolded was not only predictable but predicted, including by decided non-experts like myself, I’ve argued going back to 2009 that then-Speaker Nancy Pelosi and the Obama administration saw it as a feature, rather than a bug. The political will existed in 2009 to “do something” about the vast number of people without health insurance coverage—a number artificially boosted by the Great Recession—but not to do the logical thing, which was indeed some sort of public option.  Instead, they passed a system which did a number of things that were predictably going to wreck the extant system:  mandating coverage while doing nothing to control prices and creating “exchanges” to wean us off of the notion that businesses should be responsible to providing health coverage for their employees.  It seems to be working but few are paying attention.

While I’ve moved from the right to the center on a number of issues over the last decade or so, this isn’t one of them: I’ve been well left-of-center on this issue going back at least as far as my College Republicans days three decades ago. Perhaps because I grew up in an Army family, where privates and generals and their families all had essentially the same health coverage, it has always seemed absurd to me that basic access to medical care was something that should depend on how financially successful the family was. While there are certainly market benefits to be had from open competition, a sick person is hardly in an effective bargaining position.

Given that the country is, remarkably, even more polarized than it was in 2009, I haven’t the foggiest as to how we’re going to muster the political will to craft a reasonable solution to this one. But, if anything, the need to do so is actually increased since then. While ObamaCare doubtless helped some significant number of people get coverage, it has also exacerbated many of the underlying problems it ostensibly set out to solve. Then again, I suspect that was intentional.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He earned a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. Tony W says:

    However, on the cost end, the ACA has driven up costs for millions of Americans

    I keep hearing this stated as fact – but with no data to back it up.

    I suppose if millions had zero costs and now they pay for subsidized coverage that’s “millions of Americans” but that feels disingenuous.

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  2. David M says:

    A significant number of co-ops are failing because of delays in the risk corridor payments, something that is 100% the fault of Republicans, and not something anyone predicted earlier. Note that it’s not a reduction in the money they are owed, it’s simply a delay, so there are no cost savings, just pain for insurance companies.

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  3. michael reynolds says:

    Back in 2009 on Dave’s site and elsewhere as various people pushed various plans my position was that in the end all that really mattered was that health care coverage was moved into the government’s “In” box.

    No one thought Obamacare was perfect. No one with any sense thought what it replaced was tolerable. But we have these creatures called Republicans who are pathologically incapable of ever doing the sensible thing which was (duh) some version of what every other developed country has – government health care.

    So now it is in fact, the government’s problem. We could deal with it, but so long as Republicans still have any grasp on power neither health care nor anything else (immigration, education, defense, drug policy, abortion, race, and where people pee) can be dealt with intelligently. And yet, in the end, despite the best efforts of Republicans to destroy the United States government through nonfeasance, misfeasance, malfeasance and all-around imbecility, we will have to do something.

    We will of course have wasted a lot of time and even more money, but then, that’s the Republican party: they never miss an opportunity to the stupidest possible thing for the most contemptible of reasons.

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  4. michael reynolds says:

    @Tony W:

    Personally, my costs are down. A drug that used to set me back 6k a year is now free, my premiums (with a Cadillac policy) are a bit lower for far more reliable benefits.

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  5. Davebo says:

    Prescription drug costs have been skyrocketing since 1998 or 99, in fact the rate of increase in over all spending has slowed since 2009 despite more people having access to the drugs under ACA..

    But it is definitely a problem. The government is the number one spender on prescription drugs yet with the exception of the VA they are not allowed to negotiate prices.

    @David M: pointed out a major reason so many coops are failing but I’m not surprised Schuler missed it.

    I applaud your call for a single payer system James, it’s really a no brainer. But we both now that’s not going to happen anytime soon and it was never going to happen when the ACA was passed.

    Given that the country is, remarkably, even more polarized than it was in 2009, I haven’t the foggiest as to how we’re going to muster the political will to craft a reasonable solution to this one.

    This is absurd. Polarization is the problem? Laughable really. How did the country become so polarized? Is the average American, Liberal, Conservative or Moderate opposed to the Feds negotiating prescription prices? Of course not.

    We all know what the problem is James, and you’re part of it.

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  6. Pch101 says:

    “Health insurance” is a misnomer. Insurance is supposed to encourage you to mitigate your risks and modify your behavior so that you are not inclined to make claims. For example, car insurance policies are designed to make you think twice before boozing it up prior to driving — they will drop you like a bad habit following a DUI conviction.

    In practice, it is difficult to motivate humans to modify their behavior with respect to their health. More importantly, it is almost inevitable that health will eventually deteriorate, either due to age or else to some predisposition to illness. So claims payments are both inevitable and desirable — it’s just a question of when and how much those claims are, and we should want sick people to be treated for the sake of it when they need it.

    Obamacare is an improvement, but one of its basic failings is that it allows health providers to pick and choose their customers based upon price. That will necessarily give them added pricing power that will drive up the costs, just to a lesser extent than before.

    Health “insurers” should be benefits administrators, not underwriters that are motivated to reduce their risk by pushing it elsewhere and cherrypicking their customers. A well-run “socialized” system creates what is effectively a single risk pool and use its volume buying power to negotiate prices with providers en masse, since cherrypicking is not an option.

    At the same time, Obamacare failed to expand the supply of healthcare. We should be doing more to increase the pipeline of doctors while also giving more authority to nurse practitioners, pharmacists, and the like.

    For example, it should be possible for pharmacists to serve as a first line of defense — when your ailment is minor and can be treated with a medication, a pharmacist should be able to prescribe it to you on the spot. Furthermore, a pharmacist should have the training to know when a prescription alone is inadequate and more expertise is required. This would ease the demand for physician time, which should reduce costs, while providing better service to patients because they’ll be seen more quickly by providers who are less costly and more conveniently located. This sort of thing is already being done abroad, so why shouldn’t it happen here?

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  7. Dave Schuler says:

    If my position on healthcare reform is not clear from the posts linked above, I’ll take this opportunity to clarify it. I think that Republicans’ ideas for market-based healthcare reform are a fantasy and, frankly, anybody’s neoliberal ideas for healthcare are mistaken.

    For thirty years or more I supported a single-payer system in the United States and I still think that’s what needed to happen 20 years ago. Now I’m skeptical that a single-payer system can be economically viable because our cost base is so unconscionably high. I’m under no illusions that my views represent anything that’s politically possible.

    I did not oppose the PPACA but have thought it was a distraction from the healthcare reform we need and in years ahead it will be thought of as a misstep that delayed the reform we needed by a generation.

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  8. Tyrell says:

    I have thought for a long time that Medicare should be available to all who want it: a basic, no frills plan.
    The government plan keeps losing money. All of those young, healthy people did not sign up. Many are still on their parents’ health plan.
    Many people on the government plan find themselves paying more and getting less coverage than what they had before. Some people had their health plans cancelled because of the new government regulations.*
    Millions can’t afford the government health care, but don’t qualify for subsidies. They are hung out to dry and up the creek without a paddle. What about them ?
    Doctors complain about new regulations. One doctor told me that he now spends more time entering information in a laptop than he does talking to patients. Appointments run way behind. My doctor says he is not going to do all that new stuff.
    * “If you like your plan you can keep it ” (the President )

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  9. Guarneri says:

    Setting aside the ritualistic and childish “it’s all the Republicans fault,” the system was clearly designed to fail, so we can set aside notions that proponents “cared” or were “smart” as well. Depraved would be more like it.

    The coops suffer from a bad population. The high cost to insure have been sequestered here and Medicaid, and therefore unit costs are high. Mixed with the general population you would see private premiums escalating more rapidly.

    I think James implicitly answers one of his own queries with the notion of “basic” coverage. Aw, shucks, it’s only basic. I know of no government program of any matter in which politicians have not or will not do what they do best: increase benefits. And as one commenter fools himself, it’s”free.” More accurate would be ask which one of his neighbors is paying for his drugs now. The notion that a sick patient is not in a good negotiating position is also faulty logic. You don’t secure homeowners insurance during a home fire or as the hurricane blows away your house either. You prepare ahead. Argue about the difficulty of accessing information if you like, but not some notion of a gun to your head.

    The old system suffered from two fundamental flaws, portability and the free rider. We should have great sympathy for the former and addressed that in any insurance reform. The latter is a self inflicted wound. Obamacare, because of its modest penalties, did pretty much nothing for the free rider problem. It would be a prodigious task to convince any sane person that the entire debacle of Obamacare was required to address portability. No, there were other motivations. Back to depravity. As a last thought, the argument that other countries – and people really mean Europe by and large – do it so it’s good is again kindergarten logic. In case no one has noticed, Europe and it’s welfare state is flat damned
    broke, and they haven’t even had to finance, ahem, their fair share of defense spending.

    Real answers lie somewhere other than Obamacare.

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  10. C. Clavin says:

    The Republican Congress fights to keep drug prices up. Got a problem with that…vote Democratic.
    Or do what I do…don’t use drugs.
    Doc says my glucose is high…stop eating sugar. Or you could take a drug…which is going to cost money.
    Doc says my BP is high…get some exercise. Or you could take a drug…which is going to cost money.
    How may people out there are on cholesterol meds, or type 2 diabetes (the most over-diagnosed disease in history) meds or whatever…just because they refuse to make lifestyle changes.
    Personally…I think my way is the Conservative approach.

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  11. DrDaveT says:

    As with all such cost studies, the correct baseline for comparison is “what would health services costs and prescription drug costs* be today if Obamacare had not been enacted?” Those are difficult questions, but not beyond the reach of sound economic analysis. But just comparing costs today against costs then, when costs were already skyrocketing when the law was enacted, is fatuous.

    *I distinguish because they have different cost drivers, and different levels and types of subsidy.

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  12. Jeremy R says:

    ‘Intentionally wrecking the system’ makes for an interesting conspiracy theory, but somehow I suspect these sorts of outcomes are far more reflective of what the ACA’s advocates had in mind:

    http://www.nytimes.com/interactive/2014/10/29/upshot/obamacare-who-was-helped-most.html

    Obama’s Health Law: Who Was Helped Most

    The data shows that the law has done something rather unusual in the American economy this century: It has pushed back against inequality, essentially redistributing income — in the form of health insurance or insurance subsidies — to many of the groups that have fared poorly over the last few decades.

    The biggest winners from the law include people between the ages of 18 and 34; blacks; Hispanics; and people who live in rural areas. The areas with the largest increases in the health insurance rate, for example, include rural Arkansas and Nevada; southern Texas; large swaths of New Mexico, Kentucky and West Virginia; and much of inland California and Oregon.

    Each of these trends is going in the opposite direction of larger economic patterns. Young people have fared substantially worse in the job market than older people in recent years. Blacks and Hispanics have fared worse than whites and Asians. Rural areas have fallen further behind larger metropolitan areas.

    http://www.nytimes.com/2016/04/18/health/immigrants-the-poor-and-minorities-gain-sharply-under-health-act.html

    Immigrants, the Poor and Minorities Gain Sharply Under Affordable Care Act

    The law’s passage, without a single Republican vote, capped decades of efforts to enact a broader health insurance system. Medicaid and Medicare passed in the 1960s, but did little to help workers who did not receive insurance through their jobs. Presidents Nixon, Carter and Clinton all tried and failed to win approval for expanded coverage, and the number of uninsured Americans grew to nearly a fifth of adults under the age of 65 by 2010, the year the Affordable Care Act passed.

    “From the vantage point of the poor and working poor, Obamacare has been profound,” said Jim Mangia, president of the St. John’s Well Child and Family Center, a federally funded health clinic in South Los Angeles that has enrolled 18,000 new patients under the law, nearly all of them Hispanic or black and the vast majority in Medicaid. The clinic reported a 44 percent increase in cervical cancer screenings, a 25 percent increase in tobacco cessation therapy, and a 22 percent increase in the share of patients with controlled hypertension since 2014, the result, he said, of more patients having insurance.

    Gains for blacks were muted because they disproportionately live in states that chose not to expand Medicaid. About 60 percent of poor blacks live in states that did not expand Medicaid. While the share of poor blacks covered by Medicaid did rise by two percentage points in those states, the rate rose by six points in states that expanded the program.

    In all, minorities gained more than whites, making up two-thirds of the increase in insured adults across the country, and 70 percent of the increase in private insurance.

    Care and peace of mind for those most in need, but for whom the political process has historically failed / shunned.

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  13. Tony W says:

    @Jeremy R:

    Care and peace of mind for those most in need, but for whom the political process has historically failed / shunned.

    A sentence which also succinctly explains the right’s problem with the whole thing.

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  14. Just 'nutha ig'rant cracker says:

    @Pch101: Because the AMA is, essentially, a guild, and the first task of any guild is to impose limits on the total number of craftspeople allowed in to preserve the value of the craft for the sake of the craftsperson. The fact that inadequate numbers of craftspeople can lead to shortages and price the public out of the market is not a bug, it is a feature. The fact of this particular pseudo-market not having any actual stakeholders on the consumer side–virtually all of the people who use this service either have 3rd-party insurance (which in 90%+ of cases, they have not selected) or virtually unlimited wealth, concentrates all of the economic decision-making power into the hands of the guildmembers. This is also a feature, not a bug.

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  15. Monala says:

    @Pch101:

    Obamacare is an improvement, but one of its basic failings is that it allows health providers to pick and choose their customers based upon price. That will necessarily give them added pricing power that will drive up the costs, just to a lesser extent than before.

    This isn’t true. One of the key provisions of the ACA was that health providers could no longer pick and choose customers. Costs under ACA are now based on age plus market (market meaning geographic location), along with customer-chosen level of price increases based on level of service (i.e., bronze, silver, gold, & platinum plans), but many of the pre-ACA factors that health providers used to choose customers (such as gender, health history, or pre-existing conditions) were no longer allowed to be considered. So in other words everyone within a certain age group living in the same geographic area pays more or less the same price for the same type (say, silver) of plan.

    That doesn’t mean that premium costs are not still too high (they are), or that subsidies shouldn’t be higher. But it does mean that “picking and choosing customers” based on costs is no longer the case.

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  16. al-Alameda says:

    However, on the cost end, the ACA has driven up costs for millions of Americans, a reality that has a disproportionate impact on minority communities, especially when it comes to pharmaceuticals.

    Many people would have us believe that increases in health insurance costs did not exist until ACA became the law. Nothing could be further from reality. Where were these people from 1995 to 2009 when every year health insurance premiums were increasing, on average, at a rate of approximately 3 to 4 times the rate of inflation?

    I know a lot about this because as senior finance manager at 3 previous organizations, an important part of my responsibilities was in managing and administering our employer-provided health insurance benefit plans. For nearly 15 years I received annual notices of increases in premium rates for our health insurance offerings ranging from 9% at the low end to 21% at the high end. We were constantly changing the blend of our plan offerings – PPO, HMO, HSA versions of each plan, all in scrambling to achieve cost containment while minimizing the impact to our staff.

    As for pharma and pricing to market? Does anyone else remember when the Bush Administration got the Medicare Part D prescription drug program was passed, Republicans specifically wrote into the bill that the government was prohibited from negotiating prices?

    I definitely believe that, like social security, there should be a national health insurance tax, shared by employers and employees, that would fund a national health insurance plan, one that was passed by congress, and to purchased by the people from the insurance carrier of their choosing, and profit would be restricted to 3-4%, and if people wanted coverage beyond the national plan they could buy excess coverage on the market.

    I’m not sure that we (collectively) have the will or the ability to have an intelligent ‘non-Death Panel’ discussion on this topic. Politically? One party is moving in the direction of reducing “entitlements” like Medicare, the other is afraid of the electoral consequences of presenting a positive national health insurance alternative.

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  17. the Q says:

    Guarneri wrote…..”As a last thought, the argument that other countries – and people really mean Europe by and large – do it so it’s good is again kindergarten logic. In case no one has noticed, Europe and it’s welfare state is flat damned broke.”

    Bad comparison. Europe/Japan/Canada all pay 10% of their GDP or LESS for universal coverage of all their population and personal bankruptcies over health bills is almost non-existant.

    The USA by contrast is spending almost 18% of our GDP on a broken system that works only for share prices (HMO’s up over 300% since 2010, the DJIA up 145% by contrast).

    So Guarneri, my question to you…how much better would those “socialist” healthcare systems be if those countries spent 80% – 100% MORE on their systems to reflect the same % of GDP that we spend on ours.

    Even a dipschitt wingnut can answer that question logically.

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  18. Pch101 says:

    @Monala:

    You need to understand how provider networks work.

    Let’s say that I’m a doctor. (You can call me Jekyll.) The rep from ABC insurance company pays me a visit.

    On offer is a pool of clients in an employer-based PPO pool. ABC has set a price of $110 for a consultation, which is split in some fashion between patient and insurer (and not particularly relevant to me since I’m getting $110 in total.)

    ABC also has a separate ACA pool. It pushes down its costs to its patients by paying less for services, including these consultations. In this example, that pool will pay $90 for the consultation instead of $110.

    If I need the volume, then I may take the deal with the $90 and $110 patients. But if I have enough patients from the $110 pool and my other providers, then I will take the higher priced employer-based patient pool while avoiding the less lucrative ACA pool.

    Meanwhile, if DEF Insurance is paying $125 and GHI Insurance is paying $130 and I have enough patients to keep me going from those guys, then I may not deal with ABC at all.

    And this process happens every year, so you may be an ABC customer who finds out the hard way that I used to be in your network but no longer am. That will expose you to yet a whole different price and pricing structure if you go out of your network to use my services.

    This is why you want to put everyone in a single pool. If Uncle Sam had one pool with 300+ million customers and paid $90 for all consultations, then the doctors are going to take the $90 because the alternative is to have virtually no customers or to find a new profession.

    But in the system that we have now, the $90 ACA pool can be avoided and there are incentives to avoid it. So the ACA patient is left with fewer options, which is made worse by the fact that ABC, DEF and GHI compete against each other to build their networks by paying more to Jekyll and the other providers. Those insurers are competing to get providers, not patients

    What you don’t want is to provide physicians with the ability to pick and choose their pools. There should be one single pool and the pricing power that comes with it.

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  19. Tyrell says:

    Health costs have indeed been going up for years – no doubt about that. Think about this : a doctor said that the American people are over medicated, over tested, and over doctored. Doctors call people in just for a chat. There are multiple, overlapping, repetitive tests. And all the specialists. No one sees the big picture.
    Next year double digit price increases are going to hit most insurance plans. People are going to have so much sticker shock they’ll think they’re in a Donald Trump car dealership !
    Read “Art of the Deal” (Trump)

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  20. Jenos Idanian says:

    Damn. I remember a whole bunch of people who predicted that ObamaCare would first destroy the existing system, so there would be no going back. Then ObamaCare would fall apart, once it had destroyed the existing system. And once it started falling apart, the supporters would then say that the only option left would be single payer.

    How DARE those bastards have been correct! It must have been some kind of wild coincidence, or they somehow sabotaged ObamaCare so it would fall apart. I’m not quite certain how they did that, because it was passed without a single Republican vote or any Republican input, but somehow they sneaked in the parts that are making it fall apart.

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  21. David M says:

    It’s worth noting that Obamacare has been an extraordinary successful program, even with the GOP sabotage. Millions more people have health insurance and access to health care. The finances for Medicare are now in better shape than they were, and the government is spending much less than projected on health care.

    None of the GOP fearmongering about the program has come true, but they have no shame, so their lies continue.

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  22. wr says:

    @Jenos Idanian: Yes, Baby Jenos, how much better the system would be if we all handled our health care in the same responsible manner you chose — to run up huge bills and then run away and refuse to pay them.

    Really, of all the topics for you to be weighing in on, this is the dead last.

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  23. Jenos Idanian says:

    @wr: Aw, poor little wr. If someone were to take away your unfounded and meaningless ad hominem attacks, what would you have left?

    All those people who made those predictions, and you and yours insulted and mocked and derided them. And now those predictions are coming true, so you have to try your best (which is pretty pathetic) to get them to shut up. Because you will do anything to deny that they were right all along, and you — as usual — were totally full of crap.

    Those ObamaCare co-ops that were supposed to be so wonderful? 23 were set up. 14 have failed, and more are failing. Illinois’ is teetering.

    If the people who set this up didn’t see this coming, they were morons. Even dumber than you.

    If they were smart, then they knew it was going to fail. Which means that this is exactly what was intended.

    As a lot of us predicted. Designed to fail, to set up Single Payer as the only option. Which they promised was never on the table.

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  24. stonetools says:

    @David M:

    A significant number of co-ops are failing because of delays in the risk corridor payments, something that is 100% the fault of Republicans,

    Indeed. Marco Rubio congratulated himself on spearheading a move to block risk corridors. Republicans did this although private insurers specifically lobbied for risk corridors. Anything to sabotage the signature program of the black man in the White House.
    As to how to fix the problem, it’s simple, James. We need to vote out the insane party wherever they are in power and vote in Democrats. There would be a legislative fix in days. Just saying’.

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  25. Jenos Idanian says:

    @stonetools: Then maybe the Democrats should have made sure the funding for those “risk corridors” were set when they set up the program.

    The Democrats said we’re going to pass this huge program, we’re going to do it all on our own, we’re going to lock out any and all Republicans and shove it down their throats, and we’re going to gloat about how we did it all ourselves, without them.

    And then, when some of the fatal flaws that Republicans and others noted at the time and were called liars and told to shut up (like wr is trying to do now) come to pass, we’ll just demand that the Republicans help us try to fix those flaws. Which won’t work, either, but will give the Democrats even more excuses to blame the Republicans while they bring out Single Payer.

    These efforts are band-aids, trying to deal with traumatic amputations and sucking chest wounds. It won’t be enough. There isn’t enough to save it. It was doomed from day one.

    As intended.

    Next stop? Single payer!

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  26. David M says:

    The co-ops were counting on the risk corridors, as the law was written. The payments are now delayed and require litigation before they will be made. This is a case where the GOP succeeded in sabotaging Obamacare for no reason, just out of spite. They can’t stand the fact that that it might work and people might like the law.

    Plenty of people warned the GOP that the risk corridors were required to help get the markets established, but it didn’t matter, because the GOP was only interested in making it harder for people to get health care.

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  27. David M says:

    The law did fund the risk corridors, or the GOP would not have had to add the provision to cut off the funding in 2014.

    Anyway, the funding does not matter, as it’s quite clear the companies were promised the money. So it will eventually all be paid, just after many of them go out of business.

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  28. Jenos Idanian says:

    @David M: The co-ops were counting on the risk corridors, as the law was written. The payments are now delayed and require litigation before they will be made.

    So, the government made a promise, and people depended on that promise, and ended up in trouble when that promise wasn’t kept? Gee, that’s NEVER happened.

    Except for all the times it has. Like with the Indian treaties. Or our deal with Muammar Kadaffi. Or our pledge to the people of South Vietnam. Or the former slaves in the South. Or closing Guantanamo. Or Obama getting our troops out of Iraq and Afghanistan. Or Ambassador Stevens having his safety assured.

    The Democrats had no business making that promise, but making bullshit promises they know they’ll never keep is the core conceit of their agenda. And I have no sympathy for anyone who actually relied on their promises.

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  29. David M says:

    And people wonder why the GOP gets rightly described as actually wanting to kill people rather than see Obamacare succeed.

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  30. stonetools says:

    @Jenos Idanian:

    The law was written works fine. In states like California Obamacare is doing great. But the law isn’t going to work properly if the Republicans set out to sabotage the law out of spite and hatred for poor people and for the black man in the White House who beat them twice.
    In Virginia, the Republicans refused to expand Medicaid for no discernible reason and as a result, a friend of mine who is suffering from skin cancer can’t afford to go to doctor. Right now, she is relying on homeopathy (IOW, nothing) and is hoping she can make it to 65 when another program Republicans hate, Medicare, will kick in.
    This is what happens when your friends the Republicans set out to wreck Obamacare. I hope you are proud of their efforts to wreck the lives of as many people as they can, over nothing but spite.

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  31. bill says:

    @Tony W: mine has gone up yearly, the main increase is the freakin deductibles. but then i doubt you’d believe any study that showed the aca has been a financial disaster for the middle class- which it has.

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  32. David M says:

    And “the law as written” idiocy that rejects all improvements or fixes is how nothing has worked ever before, and is possibly the stupidest, most juvenile argument ever made against Obamacare.

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  33. Mikey says:

    @al-Alameda:

    I definitely believe that, like social security, there should be a national health insurance tax, shared by employers and employees, that would fund a national health insurance plan, one that was passed by congress, and to purchased by the people from the insurance carrier of their choosing, and profit would be restricted to 3-4%, and if people wanted coverage beyond the national plan they could buy excess coverage on the market.

    This is almost exactly what Germany has (except IIRC their carriers are mandated non-profit) which isn’t perfect but certainly works a hell of a lot better than the disaster we Americans have to accept.

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  34. Just 'nutha ig'rant cracker says:

    @al-Alameda: Earlier than that. In about 1988–if I recall correctly–the Teamsters contract that I had worked under changed from a “Fee for Service” plan to an HMO. Not a bad idea, you understand, but the reason for the change was that premiums for Fee for Service health care were no longer affordable in a plan that at the time I was working had been a Rolls Royce among Cadillac plans.

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  35. Gustopher says:

    @Pch101:

    Insurance is supposed to encourage you to mitigate your risks and modify your behavior so that you are not inclined to make claims. For example, car insurance policies are designed to make you think twice before boozing it up prior to driving — they will drop you like a bad habit following a DUI conviction.

    That’s just not true. Not the auto-insurance will drop you after a DUI, but the behavior modification.

    Insurance is the price you pay to protect yourself against catastrophic losses, generally beyond your control. It is priced a touch above the expected value of the policy — risk times payout — but it’s worth it because it controls your risk. The “risk pool” is the set of people with about the same risk as you — you all collaborate so none of you faces the full economic consequences of bad luck.

    You can afford to replace the DVD player out of pocket, so you don’t buy the extended warranty crap. You cannot afford to replace your house out of pocket, so you insure the house.

    Health insurance isn’t insurance, but for entirely different reasons than you mention. If you have diabetes this year, you’re going to have diabetes next year. There’s no independent risk year over year, so risk pools are skewed.

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  36. Just 'nutha ig'rant cracker says:

    @Jenos Idanian: I lived for the previous 8 years before I returned to the States in a country with single payer health care. Worked fine, in fact, I got better care there than I had gotten in the US before I left–and at less total cost, both out of pocket and premium cost to my employer.

    I don’t happen to be in favor of a sudden conversion to single payer here, a la Bernie, for example, but mostly because the ACA created a large consolidation of control by the insurance industry and an expansion of its business base (which, incidentally, is what Donald [even a blind hog can find a truffle] Trump was referring to when he made the commentMy that he was no longer in favor of single payer because the timing was no longer good). The economic costs to the shareholders (who I care little about even though I am one) and to the employees who will be laid off in the change over from an industry that sells primary policies to one that sells supplemental policies only seems to drastic to me.

    My suggestion would be to get more information about what you are discussing before shooting your mouth off, but given that you’re only an anonymous cypher who uses a false name to troll on the interwebs in the quixotic and mistaken idea that you are exposing hypocrisy, so it doesn’t make sense to expect anything.

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  37. Jenos Idanian says:

    @Just ‘nutha ig’rant cracker: (click)

    You see, that’s how it works — you wait for the person to address you, then do the (click) thing. Just going (click) as a response to a general comment, or a comment directed to someone else, is pointless.

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  38. Pch101 says:

    @Gustopher:

    The “risk pool” is the set of people with about the same risk as you

    No, that’s wrong. The risk pool includes whoever the insurer decides to insure. Their risk profiles may be similar or they may not be, depending the insurer’s appetite for risk.

    In the world of car insurance, car insurers in a given state have essentially two pools: the regular pool that includes virtually everyone from safe middle-aged folks to their not-so-safe teenagers and a second assigned risk pool that is mandated by the government for those who are particularly undesirable (DUIs, etc.)

    Some car insurers are more risk tolerant than others, but the risk profile of those in the regular pool will vary quite a bit. The insurers adjust for these differences in risk by charging higher prices to the risky ones and by encouraging them to share more of the burden (higher deductibles, etc.).

    Health insurance does not have this one pool. Instead, individual insurers have numerous pools whose risks are segregated from each other, and insurers build separate provider networks based upon those different pools. (In contrast, your state probably has a law that bans the creation of provider networks of body shops; cars get a better deal than the humans.)

    One of the mistakes of Obamacare is that it should have forced insurers to lump the ACA policyholders with all of the rest of the policyholders. But that isn’t what we have; instead, insurers are free to avoid ACA entirely if they wish or to group ACA policyholders together into a separate pool that offers lower payments to medical providers who are in turn free to reject a given insurer’s ACA insureds while accepting the rest. The system allows insurers to treat ACA policyholders as second-class citizens if they choose, and they often do.

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  39. Tyrell says:

    There are large numbers of people who can’t afford the costs of even the cheapest plan, do not qualify for a subsidy, and then have to face the throne of the IRS . They have been starched, dry cleaned, and hung out to dry by the government.

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  40. Jenos Idanian says:

    Let’s try a thought experiment here. When Dick Cheney needed his heart transplant, what would have happened if they had gone out and found an 18-year-old healthy black youth, killed him, and harvested his heart for Cheney? If anyone protested, they could just say “you just wanted Cheney to die!” and “Cheney is still alive, healthier than ever, and you hate that, don’t you?”

    Just because you can point to a good outcome doesn’t excuse you from having to look at the costs of that good, and explaining how it was worth that price.

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  41. Jenos Idanian says:

    The arguments here are hysterically immature. Let me paraphrase:

    “After all the years of calling Republicans soulless monsters who are literally worse than Hitler, how could we know they’d actually act like it?”

    “Hey we won the fight and declared victory and said it was THE LAW OF THE LAND. Why didn’t the Republicans just accept that, and instead use the completely legal process to keep fighting?”

    “Just because we totally shut them out, wrote the law entirely ourselves, passed it, and did all the ball-spiking we could imagine, how dare they not help us go back and try to fix it?”

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  42. Jenos Idanian says:

    @Pch101: One of the mistakes of Obamacare is that it should have forced insurers to lump the ACA policyholders with all of the rest of the policyholders.

    And if, in return, the insurers simply said “no, thanks” and decided to go out of the health insurance business and focus on other lines of business, what would you do next?

    And no, this is not just an idle speculation.

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  43. @Gustopher: There are three basic components of what is paid for in any Qualified Health Plan:

    a) Routine maitenance ( PCP visits, vaccines, annual OB/Gyn for women etc)

    b) Chronic disease conditions. In any given year, this seems more like a pre-payment of expected costs for people who are already diagnosed with Condition X and the payment is effectively a bulk discount buyer’s club.

    c) Catastrophic acute incidents (Cancer Dx or a car crash etc).

    C can often transition into B and B can transition into C without enough of A. From a multi-year perspective, B is effectively insurance against the possibility of future acquisition of a chronic condition but the risk transfer mechanisms are not particulary good at capturing that.

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  44. Jenos Idanian says:

    @Tyrell: There are large numbers of people who can’t afford the costs of even the cheapest plan, do not qualify for a subsidy, and then have to face the throne of the IRS . They have been starched, dry cleaned, and hung out to dry by the government.

    Omelet. Eggs. You’re just a hater who wants poor people to die.

    There, I just saved a bunch of the regulars a whole bunch of time.

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  45. Mikey says:

    @Jenos Idanian: Ironic considering it’s your side of the political aisle that has killed Medicaid expansion in many states, the action that led directly to the situation Tyrell describes.

    The eggs are being broken by the GOP.

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  46. Hal_10000 says:

    Healthcare costs, after a brief respite during the recession, are rising again (Obama claimed credit for bending the cost curve … before O-care started. He can claim credit for the rebending). Insurance premiums are going up, sometimes by double digits. The co-ops (and by extension any public option) can’t function without subsidies. Insurers are pulling out of the system. The bill did absolutely NOTHING about markets like Alabama, where one insurer controls 90% of the market. All of this is running into the reality that opponents of the bill stated at the beginning and were vilified for saying: you can’t insure lots of sick people and cut health care costs. Choose one.

    We’re also not seeing the huge improvements in health outcomes we were promised. If it were really true that lack of insurance were killing tens or hundreds of thousands of people per year, we’d be seeing that show up already. It isn’t. The most we’ve seen is that healthcare costs aren’t as much of a financial burden. This is nice, but not exactly compatible with the “You psychos want people to die in the streets!” narrative pre-OCare.

    But sure, let’s call it a success. Because Republicans are bad or something.

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  47. Hal_10000 says:

    Forgot to include links:

    Health care costs rising, as expected when the economy is no longer in collapse.

    Health insurance premiums rising. Some experts think this will stabilize. I am dubious as they’ve been predicting that for several years now. And as more insurers leave the market, that only increase the pressure on the remaining ones.

    I am relieved that people are finally admitting that Obamacare is intended to get us to single payer. I’m old enough to remember when saying that got you denounced as a crazy Republican tool of the insurance companies (who support O-Care).

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  48. Tony W says:

    @bill: Try me. I’d love to see a neutral study on the subject. I’m perfectly willing to change my mind about the success of the Republican program that Obama somehow got named after himself.

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  49. Tony W says:

    @Jenos Idanian: That is ridiculous. Cheney would never settle for a black man’s heart.

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  50. al-Alameda says:

    @Mikey:

    This is almost exactly what Germany has (except IIRC their carriers are mandated non-profit) which isn’t perfect but certainly works a hell of a lot better than the disaster we Americans have to accept

    Thanks Mikey. Yes, and Switzerland, albeit a much smaller population country, has a similar type of funding and insurance policy system. It is also worthwhile to note that those countries have not socialized the healthcare delivery system.

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  51. David M says:

    @Hal_10000:

    Obamacare seems to be reducing people’s medical debt: http://www.nytimes.com/2016/04/21/upshot/obamacare-seems-to-be-reducing-peoples-medical-debt.html?_r=0

    And you can’t argue that that premiums and costs (utilization) are rising too fast and also argue that Obamacare isn’t making much of a difference in people’s health. They can’t both be true.

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  52. Jenos Idanian says:

    @Tony W: That is ridiculous. Cheney would never settle for a black man’s heart.

    You got anything to back up Cheney being racist, or are you just flinging feces?

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  53. Jenos Idanian says:

    @Mikey: Ironic considering it’s your side of the political aisle that has killed Medicaid expansion in many states, the action that led directly to the situation Tyrell describes.

    Would that be the Medicare expansion that the feds said “we’ll pick up the tab for the first couple of years, then you’re on your own?”

    What kind of heartless bastard or stupid moron would refuse such a deal?

    “Hey, buddy, here are the keys to a new house. We’ll cover the down payment and the first year of the mortgage, but after that you’re on your own.”

    OK, never mind, I see how that did fly…

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  54. David M says:

    As a reminder, the federal government picks up 100% of the cost of the Medicaid expansion for the first several years, and then it’s reduced to 90%, but not lower. So an extremely good deal for the states slowly changes to a very good deal for the states. The horror.

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  55. Jenos Idanian says:

    @David M: As a reminder, the federal government picks up 100% of the cost of the Medicaid expansion for the first several years, and then it’s reduced to 90%, but not lower. So an extremely good deal for the states slowly changes to a very good deal for the states. The horror.

    And what’s to keep a future Congress from changing that?

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  56. David M says:

    @Pch101:

    One of the mistakes of Obamacare is that it should have forced insurers to lump the ACA policyholders with all of the rest of the policyholders.

    The on-exchange policyholders are in the same risk pool as off-exchange policyholders. So the individual market actually does function this way, although individual policies are not in the same risk pool as group policies.

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  57. Pch101 says:

    @David M:

    You still end up with group plans getting better access than ACA plans (which was also the case prior to Obamacare with individual plans, as group plans have always had more leverage.)

    My point remains that there should be one national pool, with insurers serving as claims administrators who don’t take on pool risk. Pay them a percentage for managing the administration, and let them compete based upon customer service instead of network building. Remove them from the underwriting game entirely and abolish the networks in the process so that switching between insurers is a seamless process.

    Obamacare treated this as an insurance problem — a relatively conservative way to view it — instead of as a healthcare cost and access problem. That’s an improvement but only a partial solution.

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  58. JKB says:

    The Dictatorial, Anti-Democratic and Socialist Character of Interventionism

    Many advocates of interventionism are bewildered when one tells them that in recommending interventionism they themselves are fostering anti-democratic and dictatorial tendencies and the establishment of totalitarian socialism. They protest that they are sincere believers and opposed to tyranny and socialism. What they aim at is only the improvement of the conditions of the poor. They say that they are driven by considerations of social justice, and favour a fairer distribution of income precisely because they are intent upon preserving capitalism and its political corollary or superstructure, viz., democratic government.

    What these people fail to realize is that the various measures they suggest are not capable of bringing about the beneficial results aimed at. On the contrary they produce a state of affairs which from the point of view of their advocates is worse than the previous state which they were designed to alter. If the government, faced with this failure of its first intervention, is not prepared to undo its interference with the market and to return to a free economy, it must add to its first measure more and more regulations and restrictions. Proceeding step by step on this way it finally reaches a point in which all economic freedom of individuals has disappeared. Then socialism of the German pattern, the Zwangswirtschaft of the Nazis, emerges.

    von Mises, Ludwig (1947). Planned Chaos (LvMI)

    Of course, there are reasonable proposals that won’t be considered, such as government kicking in after annual medical expenses reach a certain percentage of income/wealth. Or government providing catastrophic coverage, but leaving non-catastrophic to the individual.

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  59. Mikey says:

    @Jenos Idanian:

    Would that be the Medicare expansion that the feds said “we’ll pick up the tab for the first couple of years, then you’re on your own?”

    David M beat me to it, but it wasn’t “you’re on your own,” it was “we’ll still cover 90%”

    The GOP-run states’ assertion this was why they turned it down was a bogus pretext, anyway. They certainly have no problem with cost sharing on stuff they like. They just wanted the PPACA to fail, and if the reason it failed also helped keep the worthless poors from getting health insurance, then so much the better.

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  60. David M says:

    As for the worry about future a Congress reducing the matching funds for the Medicaid expansion, I think that’s a very good reason to vote Democratic.

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  61. Just 'nutha ig'rant cracker says:

    @Jenos Idanian: “…It is a tale told by a madman, full of sound and fury, signifying nothing.”

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  62. Jenos Idanian says:

    @Mikey: The GOP-run states’ assertion this was why they turned it down was a bogus pretext, anyway.

    Those stupid states. The same administration that ran the national debt from $11.9 trillion to $19.1 trillion will just wave its magic wand and keep the money flowing forever, and won’t cut it back or cut back in other areas of state funding to keep the magic dollars coming.

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  63. Jenos Idanian says:

    @Just ‘nutha ig’rant cracker: “A most notable coward, an infinite and endless liar, an hourly promise breaker, the owner of no one good quality.”

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  64. David M says:

    There is no danger that the federal government or “Washington” will cut Medicaid. If the funding is reduced in the future, the GOP will be the ones who are responsible. So it’s incredibly dishonest to insinuate that the GOP actually care about providing health care, but aren’t able to. Republicans and their sycophantic trolls are perfectly happy to watch American citizens die, in their attempts to sabotage Obamacare.

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  65. Mikey says:

    @Jenos Idanian: Like I said…bogus pretext.

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  66. Just 'nutha ig'rant cracker says:

    @Jenos Idanian: Yes! That’s you to a T. Congratulations on the dawning of self-awareness. Use it wisely, young padawan!

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  67. Hal_10000 says:

    @David M:

    And you can’t argue that that premiums and costs (utilization) are rising too fast and also argue that Obamacare isn’t making much of a difference in people’s health. They can’t both be true.

    Yes you can, because the connection to healthcare spending and actual health is weak. There seems to be a threshold over which more spending has diminishing returns. I *think* it’s Finklestein’s work at Harvard that showed this, but I could be wrong.

    And given that the entire motivation for healthcare reform is supposedly getting more for less money, it stand to reason that you can get less for more money.

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  68. Jenos Idanian says:

    @Just ‘nutha ig’rant cracker: Wow, you actually used the “I know you are, but what am I?” gambit? Pee Wee Herman is on line 3 about a copyright infringement lawsuit…

    (click)

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