OP-ED

King v. Burwell: Will the Supreme Court Save the Republican Party from Itself?

flying cadeuciiLast week, the Supreme Court heard arguments in the most recent and pernicious attack on the Affordable Care Act – aka Obamacare.  In the absence of a dysfunctional Congress, the case would be beneath the dignity of Court:  it addresses no complicated legal issues that might guide future decisions of lower courts.   Instead, the Supreme Court has been asked to decide whether a drafting error resulting in one unfortunate phrase in the much maligned 2000 page law –“Exchange established by the States” — means that more than 6.3 million citizens would not be eligible for federalsubsidies allowing them to afford commercial (i.e. – non-governmental) health insurance.

Ordinarily, Congress is expected to fix such drafting problems itself.  Each year Congress pass dozens of “Technical Corrections” bills to fix such errors in prior legislation.  These bills are akin to software patches that are regularly released by companies to fix unanticipated “bugs” previously release programs.  But this is no ordinary legislation.  Having spent six years vilifying for President Obama and has supporters for passing legislation that improves American lives it is far too late in the day for the Republican Congress to replace demagoguery with common sense.

So this issue is now in the lap of the Supreme Court, with its well-known partisan divide of four liberals, four arch-conservatives, and Justice Kennedy, who as the “swing vote” effectively decides many of the most divisive cases himself.  The Court can decide to gloss over this drafting error, as proposed by the Obama Administration, or apply its language to devastating effect.   Prior Supreme Court cases—i.e. “precedent” in the jargon of the law—can be found to support either position.   In the end, there have been few cases in which the Court has more judicial freedom – assuming precedent ever really binds the Court – to do whatever it wants in keeping with the Justices own political biases.

I hope the Supreme Court allows Obamacare to continue building upon its unquestionable success.  Notwithstanding specious rhetoric from Republican politicians like Senator Pat Toomey that Obamacare is “taking away our freedom,” it has freed millions of American from the fear of catastrophic illness without a health care security net.   Subsidized exchanges established by states and the federal government have allowed 13.4 million Americans to obtain health insurance and the percentage of uninsured has plummeted from 18 percent to about 13 percent.    Meanwhile, Republican alarms that Obamacare would lead to an explosion of health care costs, cataclysmic job loses, and devastating increases in the national debt have all been debunked.  When Obamacare was enacted in March 2010, unemployment was at 9.7 percent, the deficit was 8.65 percent of the GDP, and healthcare costs were rising at 3.4 percent annually.  In March 2015, unemployment is down to 5.5%, the deficit has dropped to 2.8% of GDP, and the healthcare inflation has dropped to 2.4%–the lowest in fifty years.

Part of me, however, would like to see the Court grant the Republican dream of tearing the roots out of Obamacare so soon after it has begun to bear fruit.   What will the Republicans say to the 6.3 million American who would immediately lose access to affordable health care?  Would they console them with false promises of lower deficits for their sooner to be heirs?  In fact, cutting the subsidies would do nothing further to reduce the deficit but would, like the false promise of the Bush tax cuts, make it far worse.  Eliminating the subsidies would have little, if any, effect on taxes.  There would be no tax refunds.  The only difference would be that funds previously invested in the public’s well-being and spent to pay hospitals, doctors, and other health care providers (among others) would sit in the treasury until someone devised an inevitably less beneficial use for the funds.

Republicans might try the usual tropes about federal entitlements—that government funds encourage people live on the dole rather than seek productive work.  But this malevolent meme would ring especially hollow here:  81 percent of the 6.3 million people who would lose coverage work either full or part time, and 82 percent have modest incomes, but are not poor.

Meanwhile, the unlucky states (including my home state of Pennsylvania) would devolve to the costly and self-destructive world of adverse selection in health care markets.  Subsidies encourage healthy people to buy insurance.   When only sick people would buy insurance, costs skyrocket which, in turn, makes insurance less attractive and even more costly.  According to the Urban institute, elimination of subsidies would quickly lead to a 35% increase in insurance premiums and a 69% reduction in health plan enrollment.

It is, of course, possible that the Republican Congress would fix the statutory glitch, if the Supreme Court is unwilling to overlook the error.  And hell might also freeze over in the meantime.  Far more likely is that Republicans would face the difficult task of justifying their abysmally malevolent inaction during the 2016 Presidential elections—all but assuring Hilary Clinton’s inevitable quest to retain Democratic control of the White House at the end of President Obama’s term.

Gary L. Kaplan teaches health law at Carnegie Mellon University and is a co-founder of the Pittsburgh law firm Kaplan Cook PLLC.

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Bob HertzKen KellyPerryAllan@BobbyGvegas Recent comment authors
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Bob Hertz
Guest

Note to Dr Palmer —
would it not be much much easier to say that if someone is declined for health insurance by all carriers, they can enroll in Medicare A and B. They would get a flat tax credit to help with the cost of early enrollment into Medicare.

Would this cost money on the federal budget? Of course. The question is whether the additional cost in Medicare would be greater than the cost of the subsidies that you propose? I suspect not.

William Palmer MD
Guest
William Palmer MD

Allan, do you see anything wrong in more accurately finding those in need by going back to ordinary underwriting together with assessing medical needs–some type of utilization history review–AND THEN subsidizing. By community rating we do not capture what our real medical obligations are to our poor and sick. We don’t know what our welfare costs SHOULD be, normatively. We are in the dark. So we find people who are extremeley costly?and can’t afford coverage?They are simply given more help. They don’t cause a death spiral or bankrupt their insurer because they get subsidized proportionately. The only problem I see… Read more »

Allan
Guest
Allan

Bill what you are proposing is a good way to bring two honest parties together that have divergent opinions. Thank you for helping put more light on a problem that shouldn’t be as difficult as it seems it is.

Bob Hertz
Guest

Allan, you are doing a solid job of presenting the basic facts of voluntary private insurance. But where America is struggling since the Bill Clinton era is that private voluntary insurance does not serve all citizens — and never has. Some people are uninsurable, some have no disposable income, some are irresponsible and let their insurance lapse even when they can afford it. You recognize that with your comment that 10% need special assistance. One can debate the 10% ratio, but your instinct is correct. The hard part is how to help those 10 or 20 per cent in a… Read more »

Allan
Guest
Allan

Bob, thanks for your comments. “But where America is struggling since the Bill Clinton era is that private voluntary insurance does not serve all citizens” That is true. At that time we talked about 47 million uninsured. That included a whole bunch of people that could afford insurance, but refused it, those eligible for Medicaid, and illegal aliens. If we parsed the numbers then we would have found about 8 million, maybe a bit more, that truly fell through the cracks. We could have covered a lot of those people by increasing Medicaid just like the ACA did. Instead we… Read more »

Bob Hertz
Guest

Thanks to Dr Palmer and Allen for good insights. The ugly experiences in some of the blue states with failed exchanges (i.e. Oregon) would indeed justify caution. Another factor not mentioned — some of the Southern states were wildly against the expansion of Medicaid, and in their view the state exchanges and Medicaid were all part of one package that had to be rejected. Finally — and no one has mentioned this — the timid Congressional practice for the last 20 years is to re-label spending programs as tax credits. Medicare and Social Security were real spending programs — they… Read more »

Bob Hertz
Guest

Let me raise a counter point and a question.

1. Medicare is more or less controlled by a single federal agency. It has faults but does not seem to be the disaster that you imply.

2.If the subsidy money is not coming from state coffers, then why did so many states refuse to create exchanges? Even the reddest states line up eagerly for farm price supports and federal highway funds.

Setting up exchanges is not cheap, but I think there were federal monies for a lot of that also.

Seems to me like you had a great ideological drive to deny Obama any successes.

William Palmer MD
Guest
William Palmer MD

@Hertz Sorry for the delay, Bob. Why so many states refused to set uo exchanges? This is an excellent question and I have been wandering around the internet trying to get an inkling. I think the dominant answer is that 1. “Why should we go through this giant hassle when all the actual decisions about benefits offered and prices asked and eligibility–these are the meat dishes of the exchange–will be decided by the feds? 2. The second thing I found was that the states saw the difficulty of arranging mostly federal databases to all come together in one web site… Read more »

Allan
Guest
Allan

Here in Florida I believe there were two main reasons. 1) The law would increase the number of people that would be enrolled and not covered by the feds at the rate for cases covered under the ACA. 2) After the law was in effect the feds would reduce the federal funds available for these new enrollees and the state would be caught funding the rest. Thus for a great part the decision was financially based..

3) Some states felt they could do a better job for less cost after the feds reduced their payments.

Bob Hertz
Guest

Dr Palmer, your proposals run into the same problem that has existed since FDR.. About 15 states have no desire to do anything for the working poor regarding health insurance — even with all federal dollars. In the deep south, this is a legacy of racism. In other states, it is a desire to be sure that their state is not attractive to poor people. I was not kidding when I said FDR. Read a biography of Harry Hopkins, who found Southern officials refusing to give out federal aid. Read a history of Medicaid, which was not funded with one… Read more »

William Palmer MD
Guest
William Palmer MD

@Hertz Do you believe that it would really be better for the country if all these marketplaces were supervised and more or less controlled by a sinlge federal agency? Remember that the exchange is not welfare itself, it is only handing out welfare payments sent as refundable tax credits from the Treasury. The states cannot take or divert these moneys no matter how much lingering racism or contempt they feel for the poor. The money is not coming from the state coffers. Besides, you know that the feds would soon control the benefit offerings from all the insurers, then their… Read more »

William Palmer MD
Guest
William Palmer MD

Maybe it would be better, in fact, if the exchanges were run by the states. 1. There would be more variety in benefit design. We still do not know the global answer to “What to Cover?”. State experiments help. 2. There might be less total cost to AHIPs because of more insurer participants competing. 3. Less chance for Printz v United States-effect. “Congress should not coerce the States to follow federal law.” 4. Less chance of Chevron effect. “Agencies changing the law.” 5. More innovation and experimentation. 6. More appropriate local determinants of subsidy levels. 7. More insurers = more… Read more »

William Palmer MD
Guest
William Palmer MD

But the states can get waivers and do the whole ACA-equivalent thing themselves…,as long as it is budget neutral–I guess this means federal budget–and as long as the medical job is @identical. See WSJ 3/13/15, yesterday. This probably means the states can establish their own subsidies. But also, if the loss of federal subsidies affects too many folks, don’t you think that Congress would do a bi-partisan fix? Some say “this Congress would let it rot in hell”. I’m trying to see why the Pubs would lose anything by fixing it. They could say their effort was akin to palliation,… Read more »

Bob Hertz
Guest

The beneficiaries of federal subsidies are a diverse and scattered group. They do not constitute a voting bloc. I worked first hand on ACA enrollments this past winter. Our office processed about 900 applications, and virtually all involved subsidies. These 900 people would not scare any Republican candidate even if they hated the candidate and made sure to vote against him or her. Many of the 900 probably would not vote. In about 2996, Tennessee slashed its Medicaid rolls by over 200,000 persons. Tennessee has been electing Repug-Nicans ever since. As much as I would hate to see it, the… Read more »

@BobbyGvegas
Guest

Interesting points, Bob. But, assumes that only the poor and low-income strata would be significantly adversely affect by a SCOTUS strikedown of federal HIX’s in King. The NHE is pretty much a zero-sum game.

William Palmer MD
Guest
William Palmer MD

How to Grow Stare Decisis in Your Own Back Yard

SCOTUS: “It is not our job to to correct the Congress’s mistakes…but in this case we will.”

William Palmer MD
Guest
William Palmer MD

SCOTUS as the legislature of last resort.

Kennedy’s reasoning will win and a new precedent will be born:

To have meant the Act io exclude federal subsidies, Congress would be placing an intolerable unconstitutional coercive burden on the states which would lead to an insurance catastrophy, death spirals and no customers. We have decided that the federal government can not treat the states this harshly. Therefore, the Congress could not have meant this, and we will re-write the Bill.

@BobbyGvegas
Guest

“If the policy of the Government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court, the instant they are made in ordinary litigation between parties in personal actions the people will have ceased to be their own rulers, having to that extent practically resigned their Government into the hands of that eminent tribunal.”

– Abraham Lincoln

Perry
Guest
Perry

If this were a hugely popular law with both parties (yes I know unlikely) and throughout the public, would we be having this court case at all?

Allan
Guest
Allan

The ACA was a poorly drafted bill largely due to the unconventional and divisive way it came into law. Some might wish to call this process one of dubious legality. The proponents of the bill did an end run around the opponents and the usual way bills are drafted. By doing so they passed a bill that was incomplete and used the reconciliation process to prevent the bill from going back to the House. The proponents are now faced with a bill that has questionable provisions that is their fault both in the drafting and refusal to spend the time… Read more »

Peter1
Guest
Peter1

“The ACA was a poorly drafted bill largely due to the unconventional and divisive way it came into law.”

Pile of crap.

http://www.americasfairhealthcare.org/blog/entry/fact-check-how-the-health-care-law-was-made/

See below post for additional crap dispelling facts.

Peter1
Guest
Peter1
@BobbyGvegas
Guest

Nice.

HE doesn’t like it, so it’s “poorly drafted” and of “dubious legality” (gotta love that second complaint; a bill passed by Congress and signed into law by the President is presumptively “legal” until struck down by SCOTUS or subsequently re-legislated out of existence by Congress and, again, either signed by the President or via override of a veto).

Amusingly, some red state Guvs are now expressing some Buyers’ Remorse, given the potential adverse financial (and political control) implications of any looming HIX strikedown should SCOTUS go that way.

Allan
Guest
Allan

Bobby are you also going off the edge? Whether you like the bill or not do you really think this bill was well drafted? You don’t think that “*Some* might *wish* to call this process one of dubious legality.” isn’t true? Totally illegal laws can be passed and are considered legal until challenged. Isn’t that what has happened with this bill?

Ken Kelly
Guest
Ken Kelly

You suggested that the “process” by which the bill was passed might be “illegal”, but that there was nothing illegal about using reconciliation get the final bill through the Senate. And yours is the first suggestion that I’ve seen that the bill itself might be illegal: Petitioner’s certainly don’t make that claim. They merely aver that the IRS misread the statute.

@BobbyGvegas
Guest

“Bobby are you also going off the edge? Whether you like the bill or not do you really think this bill was well drafted?”

You have a reading comprehension problem. I repeat.

“Yes, AHIPcare is a Frankenstein pastiche of lobbyist-submittal staffer cut & paste plagiarism. Like any major law. What’s new?”

You also naively assume, in light of my calling BS on the disingenuousness of the King plaintiffs, that I am a fan of the ACA — ‘scuse me, “AHIPcare.” Which, btw, I followed via the postings of every draft while it was still a bill.

http://bgladd.blogspot.com/2009/08/public-optional.html

Allan
Guest
Allan

“Bobby are you also going off the edge? Whether you like the bill or not do you really think this bill was well drafted?”

You respond: “Yes, AHIPcare is a Frankenstein pastiche…”

My claim was the bill was “poorly drafted” To which you went over the edge and now agree with me. Where is the problem with reading comprehension?

Saurabh Jha
Guest
Saurabh Jha

“I love insurance.”

I know you do Allan. I never really mistook you for the “live free or die” type.

Who regulates the insurance industry? Who makes sure that they have a minimum reserve so that they don’t go bankrupt and renegade on their promises to risk averse people?

There is a crater in your knowledge base allan that is brewing recycled, poorly understood free market nonsense & an extreme paranoia of the state.

You can call this Greek. But at least the Greeks understand their dependence on big government.

Allan
Guest
Allan

I missed this earlier: Saurabh demonstrating an ever declining wit says: “There is a crater in your knowledge base allan that is brewing recycled, poorly understood free market nonsense & an extreme paranoia of the state.” Strange how when I treated the insane they sounded much like you. They think it is everyone else that is insane, not thinking about the fact that they were the one’s without the keys. “Who regulates the insurance industry? ……” I have no objection to reasonable regulation where the marketplace is preserved. I mentioned that awhile back, but I realize how difficult it is… Read more »

Saurabh Jha
Guest
Saurabh Jha

If you can overcome your Pavlovian reactionary rage because of the political inclination of this publication try to rebut the points made in this piece.

http://www.motherjones.com/kevin-drum/2011/01/free-market-healthcare

Consider specifically this point “There’s only a free market solution if you’re willing to let lots of poor people get sick and die, which most of us aren’t.”

Saurabh Jha
Guest
Saurabh Jha

“How many more times are you going to repeat this phrase”

It’s a biopsy of your logic. Specifically, this phrase:

“The alternative of direct aid to the needy upsets your balance of totalitarian rule and redistribution.”

It is true that this discussion hasn’t scratched the surface of markets in healthcare but every time I push you to deeper introspection about market failures, you get apoplectic.

So, as you are offering little substance just assertions, I may as well restrict the discussion to amusement!

If you surprise me with substance I will happily reciprocate.

Allan
Guest
Allan

Read again Ken. Take note I included an asterisk to highlight the operative words. Take note (comment #1) the reference was to explain some of the divisiveness and not to highlight whether or not the law was legal.

Saurabh Jha
Guest
Saurabh Jha

“Strange how when I treated the insane”

Allan, I’m sorry but I can’t cure your Obama Derangement Syndrome.

But I’ve heard if you pretend you are on the brink of a revolution & chant “hands off my Medicare” it has made some sufferers feel better 😉

I can help you with health Econ 101. Don’t be shy to ask!

Allan
Guest
Allan

“I can help you with health Econ 101. Don’t be shy to ask!” You might be a good radiologist, but you certainly aren’t a good economist. Your understanding of markets is appalling. “hands off my Medicare” You seem stuck on the Tea Party so let me educate you a bit. 2010 Gallup: PRINCETON, NJ — Tea Party supporters skew right politically; but demographically, they are generally representative of the public at large. That’s the finding of a USA Today/Gallup poll conducted March 26-28, in which 28% of U.S. adults call themselves supporters of the Tea Party movement. ~80% of Tea… Read more »

Allan
Guest
Allan

“If you can overcome your Pavlovian reactionary rage” Pure rubbish! One can have a marketplace and still provide for those in need with subsidies and other methodologies. I’ll skip the rest of your drivel and deal with a quoted sentence since apparently you are unable to rely upon your own. “There’s only a free market solution if you’re willing to let lots of poor people get sick and die, which most of us aren’t.” My goodness, the logic and understanding falls to a new low. The marketplace is an effective method of determining needs and distribution based upon value. It… Read more »

Saurabh Jha
Guest
Saurabh Jha

““If you can overcome your Pavlovian reactionary rage”

Clearly not!

” am glad you have you have found God in Obama.”

Allan, have you washed your Gadsden flag recently?

“”The alternative of direct aid to the needy upsets your balance of totalitarian rule and redistribution.”

And a short step to National Socialism! Ooh, don’t tread on me. Big government get out of my way, but please keep those subsidies and tax credits going, Uncle Sam!

Allan, I indulge you because you guarantee amusement – a blithering Muppet, but a Muppet nonetheless. 😉

Allan
Guest
Allan

“ have you washed your Gadsden flag… ” I don’t know how the Gadsden flag has anything to do with you finding God in Obama. Maybe you have a fetish of snakes or maybe you are just afraid of being independent. “And a short step to National Socialism!” How many more times are you going to repeat this phrase. I talked of redistribution and socialism. Suddenly you bring in National Socialism for some inane reason. I guess you have trouble debating ideas like a marketplace that provides jobs and improvement of one’s socio economic standing where the needy can be… Read more »

Allan
Guest
Allan

“If you can overcome your Pavlovian reactionary rage” Pure rubbish! One can have a marketplace and still provide for those in need with subsidies and other methodologies. I’ll skip the rest of your drivel and deal with a quoted sentence since apparently you are unable to rely upon your own. “There’s only a free market solution if you’re willing to let lots of poor people get sick and die, which most of us aren’t.” My goodness, the logic and understanding falls to a new low. The marketplace is an effective method of determining needs and distribution based upon value. It… Read more »

Allan
Guest
Allan

“If you surprise me with substance I will happily reciprocate.”

That is untrue, but what I should expect. In prior discussion you kept telling us how you would reveal everything and … poof …nothing. Your answer is redistribution and mindless banter.

Markets have proven their value in creating wealth all over the world. Your methods have been proven as well only not as a benefit, rather as a curse to enslave people and deny them their ability to succeed.

You have run out of ideas. Go back to Obama for more. It’s time for you to prey.

Saurabh Jha
Guest
Saurabh Jha

“Markets have proven their value in creating wealth all over the world.”

Indeed they have.

But I am talking about markets in healthcare and/ or healthcare insurance.

I did warn you it is a nuanced issue, and might shake your cerebral vault more than you are accustomed to.

“It’s time for you to prey.”

Pray?

Never mind. If you wish to explore market failures in HC you know where to find me.

If I need to be entertained, I know where to find you!

In the meantime I hope you have been trying my prescription to overcome ODS.

Allan
Guest
Allan

“But I am talking about markets in healthcare and/ or healthcare insurance” Over time it has been announced that virtually every sector of this economy is different. The truth is all sectors are different from one another, but they all do better with marketplaces. You keep talking about nuances, and post after post you promise to provide us with new revealing information. What an absolute disappointment you have been. You repeat the same garbage over and over again without apparent understanding of what you say or the responses by the others around you. The quote was “Go back to Obama… Read more »

Allan
Guest
Allan

“Pile of crap.” The spin has gotten to you Peter1. That is all you seem to read. I can understand if you like the ACA. I can understand if you believe the Supreme Court will rule in favor of the government, but to say that “The ACA was a poorly drafted bill largely due to the unconventional and divisive way it came into law.” is a pile of cr-p tells us to the depths you have fallen. The bill wasn’t passed in an unconventional way? The bill’s passing wasn’t divisive? The ACA wasn’t poorly drafted? No matter what you think… Read more »

Saurabh Jha
Guest
Saurabh Jha

Peter & Allan:

Between loving the ACA unconditionally & loathing it reflexively is there no middle ground?!

Lord, I miss the independents!

Allan
Guest
Allan

Saurabh, what are you talking about? It is a bill, one that a person favors or doesn’t. This is not one of these all or none phenomenons you like to create. In fact in the past I made mention of some items in the bill that I felt were leading us in the right direction. What you are doing is making every discussion into a divisive one. Why? I don’t loathe the ACA. I just think it is a bad bill that does more harm than good and shouldn’t have been passed. I am not against everyone carrying insurance nor… Read more »

Saurabh Jha
Guest
Saurabh Jha

I commend your efforts at finding middle ground.

Let me help you out.

Allan, please list the features of the ACA you like.

Allan
Guest
Allan

Since I am answering your questions now and have done so time and time again in the past (something you all too frequently avoided) it is now your moral obligation to respond to questions as well. Your response or lack of response doesn’t reflect on a legal issue, only a moral one. Additionally you need not help me out (“Let me help you out.”) for you aren’t now and haven’t in the past. This is a gratuitous comment that you don’t wear well. The ACA has led the way for high deductible insurance by making high deductible insurance acceptable. High… Read more »

Saurabh Jha
Guest
Saurabh Jha

Allan McCarthy accusing me of being gratuitous!

Who says irony is dead!

Allan, you maybe a thin-skinned Muppet struggling to sell earnestness for rigour but you’re an endless source of amusement!

” should insurance and employment be irrevocably tied up?”

No. But I challenge the GOP to touch ESI or Medicare & prevail in next election. I dare them to test rugged individualism. Go on. Make my day!

“Third party payer is one of the biggest problems we face and the tax law helped create third party payer.”

Agree, to an extent.

Allan
Guest
Allan

“Allan McCarthy accusing me of being gratuitous!” The comment was gratuitous. I don’t think your use of the word is correct. I assume you are talking about Joe McCarthy who you probably know little about. I don’t know what type of man Joe McCarthy was, but one thing that has been proven, Joe McCarthy was right. But go ahead and utilize demonization instead of argument. That is where you excel. At least we have found agreement to some extent on third party payer. That is a step forward. There were two other items, high deductible and private insurance, but ending… Read more »

Saurabh Jha
Guest
Saurabh Jha

McCarthy was dead wrong.

It wasn’t subversives that would expand the state but people’s want of security. Healthcare is exhibit 101.

This is why the GOP wouldn’t dare touch ESI or Medicare with a barge pole.

It was Khrushchev who actually nailed it. Offer piecemeals of the state as pieces of candy. Then you can’t take it away.

Lament as much as you want Allan. The government will never shrink. People won’t allow it.

Rugged individualism is a myth, like Bigfoot

Allan
Guest
Allan

“McCarthy was dead wrong.”

Joe McCarthy’s claims was that there were communists in sensitive positions of the government. He wanted those individuals shifted away from sensitive positions until they were demonstrated not to be a threat. He was proven right many times over. The Venona papers revealed it again when they were finally released almost 50 years later.

You remind me of Bullwinkle and his Fractured Fairy tales that my children used to watch.

Why not get back to the ideas behind the ACA that most of us find desirable.

Saurabh Jha
Guest
Saurabh Jha

Sorry, I should have bridged the first two sentences with a conjunction!

GOP won’t touch Medicare, won’t shrink government. You know that don’t you, allan? Which is why you will vote for them. Because they will keep their hands off your Medicare!

I’ll write about Uncle Allan’s limited government fairy tale one day.

Allan
Guest
Allan

Saurabh, let me let you in on a little secret. I don’t speak for Republicans.

“I’ll write about Uncle Allan’s limited government fairy tale one day.”

But first you have to know what you are talking about and be able to distinguish truth from fiction.

Saurabh Jha
Guest
Saurabh Jha

The fairytale will be about Allan Galt.

He is a rugged individual who refused to buy health insurance and then refused emergency treatment for a compound fracture of the femur whilst mountain biking, because he did not wish to diffuse costs to those who bought insurance.

Stuff of legends, this Allan Galt! He wrapped his leg in a Gadsden flag.

Don’t tread on me, said Allan Galt.

Je suis Allan!

Allan
Guest
Allan

That is a real fairy tale Saurabh. I love insurance and am probably overinsured. Not only that but I would see to it I got the best treatment possible for that fracture. Since I believe in voluntary insurance the diffusion to others is limited by a voluntary agreement between the insured and the insurer.

Vous êtes bullwinkle!

Saurabh Jha
Guest
Saurabh Jha

“I love insurance”

I know. That’s why I because big

Saurabh Jha
Guest
Saurabh Jha

“I love insurance”

I know. That’s why I became big

Allan
Guest
Allan

Your latest reply needs to be annotated.. That will prevent your Bullwinkle Mythology from reaching the size of the original 3 volume Mythology of ancient times.

Sometimes what you say is Greek to me.

Allan
Guest
Allan

Among other things insurer’s look for Profit margin Market Share Longevity If they are not in synch with the community competition will erode their viability. They use actuaries to handle the math. How they handle the end product depends upon what is happening in the marketplace. One of the things about the marketplace that frequently is not understood by those that push collectivist enterprises is that the market place is self correcting. Thus if the profit margins, waste, and efficiency leave room for other entrants the new entrants will push prices down and/or reduce prices and/or improve efficiency. “My question… Read more »

Saurabh Jha
Guest
Saurabh Jha

Allan, I’m seeking someone to demonstrate the classic Dunning Kruger effect. Will you volunteer?

Allan
Guest
Allan

How appropriate. I could say you fit so well into Dunning-Kroger, but how will this advance the nature of the discussion? It won’t, but you will persist in being a blowhard and continue this line of discussion. I’ll attempt to put a stop to that by a short contrast of opinion where the collectivist ideology is removed. 1) One might be afraid of the marketplace solution because one might feel too many people fall through the cracks. 2) One might be afraid of the government approach because they will inhibit innovation, reduce personal freedom, increase costs and a whole host… Read more »

Saurabh Jha
Guest
Saurabh Jha

“How can one meld the two together? Offer free market care for the 90+ percent where it works and offer subsidies of one kind or another to those that fall through the cracks.”

What stops insurers from cherry picking the healthiest, to lower the premiums in order to entice the healthiest?

Allan
Guest
Allan

Risk adjustment, high deductibles, increased policy length, etc.

Saurabh Jha
Guest
Saurabh Jha

“Risk adjustment”

Just so that we are on the same page, people should pay a higher premium for pre-existing conditions. Right?

Allan
Guest
Allan

What else does risk-adjustment mean when one is talking about health insurance? One way or another higher premiums have to be taken into account for higher risk, but higher premiums that are unaffordable can still be managed.

The ACA does that by throwing more people onto Medicaid, narrowing networks, offering subsidies, etc, but one should look at how much the deductibles, premiums, co pays and out of pocket costs add up to. That sum total is too much for many of the ACA patients to bare.

Saurabh Jha
Guest
Saurabh Jha

Should the risk-based pricing be unregulated or are there limits to how much an insurer should charge someone who is, for example, mildly hypertensive a higher premium?

Allan
Guest
Allan

Think about your question and why risk-adjustment exists.

Are there limits to how much an insurer should charge someone who is a low risk? What is the essential difference between your question and this question? (hint, there is very little difference in how the insurer creates the pricing.)

Saurabh Jha
Guest
Saurabh Jha

“Think about your question and why risk-adjustment exists.”

Actuarial fairness. To ensure the purpose of insurance remains compensating for unknown events.

“Are there limits to how much an insurer should charge someone who is a low risk?”

Should the risk-based pricing be unregulated or regulated?

Allan
Guest
Allan

“Should the risk-based pricing be unregulated or regulated?” Some regulation always exists, but assuming no monopoly in the normal marketplace there is no need for government to set prices. I said: “Think about your question and why risk-adjustment exists.” You responded: “Actuarial fairness. To ensure the purpose of insurance remains compensating for unknown events.” “Actuarial fairness”: Somewhat of a fantasy since there are so many parameters that define ‘fairness’. “To ensure the purpose of insurance remains compensating for unknown events.” A bit better, but I believe there are a bunch of better answers. In the context of this discussion a… Read more »

Saurabh Jha
Guest
Saurabh Jha

“A bit better, but I believe there are a bunch of better answers. In the context of this discussion a better answer might be to prevent death spirals.”

Please explain how risk-based pricing prevents a death spiral.

Allan
Guest
Allan

“Please explain how risk-based pricing prevents a death spiral.” Understanding that there is no such thing as 100% certainty under what circumstances do you believe that risk-based pricing wouldn’t prevent a death spiral? We see risk based pricing whether the insurance is life insurance, fire insurance, maritime insurance, etc. Nothing is 100% certain, but if the premiums are set actuarially based upon risk and the actuary did the job he was hired to do then the premiums will cover the payments that have to be made plus overhead and there won’t be a death spiral. In a way it makes… Read more »

Saurabh Jha
Guest
Saurabh Jha

“Nothing is 100% certain, but if the premiums are set actuarially based upon risk and the actuary did the job he was hired to do then the premiums will cover the payments that have to be made plus overhead and there won’t be a death spiral.”

I think we are nearly there, even though there are too many “ifs.”

You are saying that if there is risk based pricing the healthy won’t be charged high premiums and be less likely to leave the market. Right?

Allan
Guest
Allan

I don’t know why you think there are too many ‘if’s’. It sounds like you are looking for things that do not exist. “ if the premiums are set actuarially… ”. That is how insurance works. Businesses always function with a degree of uncertainty, but that is a good thing. Bad producers go out of business and are replaced by better more innovative businesses that continuously improve to meet the needs of those that hired them. That is a lot better than what happens with government programs that can survive even if the program and its managers are incompetent. In… Read more »

Saurabh Jha
Guest
Saurabh Jha

” “ if the premiums are set actuarially… ”. That is how insurance works.”

There are three statements.

Insurers CAN set premiums actuarially.

Insurers SHOULD set premiums actuarially.

Insurers WILL set premiums actuarially.

My question is:

Why WOULD insurers set premiums actuarially?

How WOULD the market self-correct excessive premiums charged to those with pre-existing conditions?

Would a new entrant to the market try and attract healthy, sick or very sick?

Allan
Guest
Allan

Reply Above.

Saurabh Jha
Guest
Saurabh Jha

“Reply Above.”

Still challenged by the difference between “should” and “would”, allan.

Don’t worry, many just can’t get their heads around the difference, so you are not alone. But you do need to make the distinction for us to move ahead with the discussion.

“simply promoting your own agenda. The latter doesn’t create the environment for a good discussion.”

Don’t be so silly and permanently paranoid allan! There is no agenda, other than curiosity.

Curiosity, old chum, curiosity. As I’ve said before, you should try it sometime.

Saurabh Jha
Guest
Saurabh Jha

My apologies Allan. I did not see your more considered response (located high up in the thread).

I thought you were simply referring me to a previous response rather than writing a new one!

In any case I’ll read & respond

Allan
Guest
Allan

“Still challenged by the difference between “should” and “would”, allan.”

As an intelligent person you should know from many of my responses that ‘should’ can be coercive and ‘would’ is meaningless for how would anyone know what another would do in the future. Can it be that you really don’t understand what a free marketplace (willing buyer/ willing seller) means?

“Curiosity”, what a nice word you are using trying to play it safe. But, you need not be curious about me. All you have to do is read an economics textbook that believes in the marketplace instead of collectivism.

Allan
Guest
Allan

It looks like the postings are getting mixed up. Maybe if you choose to reply again it should be done at the bottom to prevent further confusion.

Saurabh Jha
Guest
Saurabh Jha

“Can it be that you really don’t understand what a free marketplace (willing buyer/ willing seller) means?” I have to admit that I’m not convinced that health insurance is not different. On the contrary, I think it is significantly different. Many economists believe so. Some believe so because they are against markets. Some believe so despite being pro-market. The best I can garner in reading the literature is that a free, partially regulated market, will result in market segmentation. Equilibrium in competitive insurance markets: an essay on the economics of imperfect information Q J Econ, 90 (1967), pp. 629–649 The… Read more »

Allan
Guest
Allan

To those that work in a field or have a need, their field or need is different requiring special favors along with a host of other things that they feel no one but they require. It seems we are hearing more of the same here from a doctor and a potential patient regarding the healthcare sector. Argument after argument has fallen by the wayside and now you have provided one more, market segmentation. What country doesn’t have its share of market segmentation in health care? Does market segmentation have to be bad? What sector of our economy doesn’t have some… Read more »

Saurabh Jha
Guest
Saurabh Jha

“There will always be pain in the short run and the long run no matter what we do so what you are saying is meaningless.”

Not meaningless to the GOP who will be carefully wondering whether their plans to increase market forces in healthcare will not trouble the voters to the extent that they will vote Democrat instead.

Not meaningless to the citizens of your country who will be assessing the short run, rather than wondering what will happen in the very long run.

You’re arguing with yourself allan, with reality, not with me.

Allan
Guest
Allan

Saurabh, you seem more concerned over politics and ideology than people. That is not my priority. I care about healthcare, jobs, the economy and the people. We should be discussing the end product we desire rather than political ends and what we agree upon and where we stray.. From that agreement/ disagreement with recognition of the economic facts of life, barring ideology, we should be able to come to some type of agreement. All I have heard from you are collectivist derived arguments where you duck out of the debate as soon as that argument is challenged. Market segmentation (as… Read more »

Saurabh Jha
Guest
Saurabh Jha

“collectivist derived arguments”

You’re paranoid allan!

Anyone asking how and why healthcare is different must have a socialist agenda! That would include Ken Arrow and George Akerlof! I seem to be in good company.

The sum total of your argument is thus:

“Saurabh is a socialist.”

Bravo, old chap!

Allan
Guest
Allan

“You’re paranoid allan! Anyone asking how and why healthcare is different must have a socialist agenda!” I never said that. This is typical of your responses that rewrite history and what other people say or don’t say. What I said was quite different and is in black and white in the responses above. Every step of the way you provide arguments against the consideration of a marketplace solution (with subsidies). Every time one of your arguments is addressed “you duck out of the debate as soon as that argument is challenged… each and every argument you have presented you offered… Read more »

William Palmer MD
Guest
William Palmer MD

The states could go ahead and establish their own PPACA exchanges.
The Congress could go ahead and fix the law.
The states could, and some have, established their own non-PPACA exchanges with locally determined subsidies.
The HHS could deed their exchanes over to the states.
The insurers in federal exchanges could charge spuriously low premia and devise federally granted re-insurance schemes to prevent death spirals.

@BobbyGvegas
Guest

Pretty interesting to me how many millions have been wasted arguing over the willful blindness red herring phrase “established by the state.” Yes, it’s right there. Stipulated, Your Honor. Plaintiffs have glommed onto SEC. 1401. REFUNDABLE TAX CREDIT PROVIDING PREMIUM ASSISTANCE FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN. (a) IN GENERAL.—Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by inserting after section 36A the following new section: ‘‘SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN… ‘‘(2) PREMIUM ASSISTANCE AMOUNT.—The premium assistance… Read more »

@BobbyGvegas
Guest

“the much maligned 2000 page law”

974, actually. With 2.5″ margins.