"Universal Coverage:" A Most Brilliant Analysis

[Welcome Industry Radar and City Journal readers!]

No, not ours: Peter Huber's. IB readers may recall our last post about one of his articles, "Cherry Garcia, Lipitor & You (and me, too!)." Well, as terrific as that article was, his recent IBD piece on Universal Care is even more insightful (and that piece is actually a shortened version of one in City Journal).

Since starting this blog (coming up on 3 years in a coupla months), I've read literally hundreds (if not thousands) of articles and blog-posts on health care and health insurance. Some have been really, really good. And some have been, well, awful.

This, though, may be the most brilliant, perfectly crafted, well-reasoned article on the folly of "universal care" yet. Now, with a set-up like that, there's a real danger that any given piece will fail to meet one's expectations. But having re-read it now for a fourth time, I really doubt that will happen.

Okay, to the chase:

One of the most important observations that our Mike Feehan has made, and which has become something of a mantra for us here at IB, is that "health insurance costs increase because health care costs increase." While this may seem self-evident, many people continue to conflate the two, and others still believe (erroneously) that health insurance drives health care. The point of Mike's assertion is that, unless and until we find a way to control health care costs, we're never going to rein in health insurance costs.

And that is completely of a piece with Peter's observation that "(t)he cost of health care has a big, direct impact on both the cost of labor and the marginal tax rate. If California defies the new medicine's economics by requiring insurers to ignore everything but age and geography, firms can flee to Texas or Shanghai." Think of health care costs as a balloon: squeeze it at one end, and the air moves to the other. Squeeze it in the middle, and the air moves to the sides. But it's still the same volume of air: you've done nothing to shrink the size of the balloon (or the amount of air inside of it, for that matter).

What Universal Coverage (UC) doesn't do is to contain costs; it simply controls access. Anyone who's bought gloves knows that "one size fits all" is only half a sentence: the rest is "but not very well." And so it is with UC, or socialized medicine, or whatever the current buzzword happens to be. Put more simply, "universal health requires steadfast public support...[but] you have the pedestrian problem of costs that rise forever."

A key element in Peter's deconstruction of UC is that it fails to take into account "the human factor." That is, the choices we make, and whether or not we're ready and/or willing to live with the consequences of those choices. An example: "For health-conscious people, skipping the Cherry Garcia may be difficult, but it's cheap, and Lipitor at almost any price is much cheaper than a heart attack."

The point is, it costs very little (in fact, it's a net savings) to just not buy (or eat) a carton of ice cream (I prefer Graeter's), and the cholesterol pill is relatively inexpensive. Of course, downing the whole pint (or quart) isn't terribly expensive either, but the results are part of what continues to drive up health care (and hence health insurance) costs. But unless we pass laws banning ice cream ("if double-fudge swirl is outlawed, only outlaws will have double-fudge swirl"), folks who don't think these things through, or have direct costs (like higher deductibles and/or premiums) aren't going to be motivated to change their behavior. It will fall to the rest of us to "rescue" them.

The problem with that, of course, is that, as Peter observes, "(t)he health-careless skip only the pill, not the ice cream, and end up in desperate need of what helps the least and costs the most." And, eventually, those who are what Peter calls "health-healthy" will begin to resent, and resist, paying for the poor choices their less responsible fellows make.

In short [ed: yay!], a Universal Care system must find a way to control the costs of care, or risk major shortages (which we've documented many times here at IB). But such a system, which is mandated to cover everyone, simply can't do that by fiat, and so costs will continue to rise. Again, think of the balloon. And it affects other segments of the economy, as well: "Efficient labor markets require efficient health insurance, which will be found only where actuaries are allowed to find out as much as the rest of us can, and craft policies accordingly."

But in a nationalized system, where does one go? Well, those that can afford to will take advantage of the burgeoning world of "medical tourism." But what of those who can't?

In the insurance business, we see a certain phenomenon play out over and over again: XYZ Mutual sells health coverage. Thousands of folks (most of whom are reasonably healthy) sign up. As the years go by, people have claims, and the rates go up. Pretty soon, the rates go up enough that most (if not all) of the healthy folks find cover elsewhere, leaving the sickest (who can't move) in an ever-shrinking pool with ever-increasing claims. We sensitively call this the "Death Spiral."

Is that what awaits us at the end of the UC tunnel? Peter has some thoughts on this, as well (although he doesn't use that particular term). As they say, read the whole thing.

Oh, Sure: NOW They Get It!

[Welcome Industry Radar readers!]

For some 4 and a half years, IB's most significant and oft-repeated message has been that health care costs drive health insurance costs. Finally, it appears that someone has listened, but whether or not it's too little or too late remains to be seen:

"Leaders of the health care industry have offered $2 trillion in spending reductions over 10 years. The goal is to make insurance more affordable so the government does not create a system to enroll middle-class workers and their families that directly competes with the health care industry."

That translates to an average of $200 billion per year, which is a non-trivial amount. Is it enough? Good question. A better one would be: and from where would these cuts come? Providers are already screaming about reduced reimbursements from both Medicare and insurers. The reality is that this seems both irresponsible and unlikely.

How's that, you ask?

Well, let's deal with the latter:

"The groups concede that their prices are not going down, they are merely slowing the rate of growth. But economists say the move would create breathing room to help provide health insurance to an estimated 50 million Americans who now go without it. "

Kudos to the economists who seem to "get" that health insurance costs are driven, to a large extent, by health care costs. Raspberries, however, to the folks who think that merely slowing the rate of growth (by how much is left unspecified) will significantly impact the problem. Yes, it's a step in the right direction, but until there's a push for more personal responsibility (and accountability) in both the delivery and financing of health care, we're merely slowing down, not changing direction.

The irresponsible part is neatly summed up about halfway through the Fox piece:

"There's no detail on how the savings pledge would be enforced. And, critically, the promised savings in private health care costs would accrue to society as a whole, not just the federal government. That's a crucial distinction because specific federal savings are needed to help pay for the cost of expanding coverage."

This is a policy statement, not a plan of action (which seems to be the MO of our current political class). Just how does one go about implementing these lofty goals? An email I (perhaps not coincidentally) received this morning reported that "UnitedHealth Group Executive Vice President Simon Stevens spoke about how health care coverage for all Americans is attainable and can be funded by slowing the growth in health care spending in the United States." He made this statement late last month while addressing the Illinois Chamber of Commerce Employer Health Care Conference in Chicago.

If we posit that health care spending will slow, generating enough funds to attain "universal coverage," who's responsible for the "universal" part? It certainly implies that there will be some kind of mandate requiring everyone to buy insurance, whether they want to or not. Does this mean that carriers will be forced to issue coverage on everyone? We've seen how well that works: in every instance, the cost of health insurance skyrocketed. Where are the (alleged) savings then?

Why is it that we see no concrete insurance policy criteria? How about we delete some (maybe even most) of the expensive mandated benefits, and increase deductibles? And if we must require certain benefits, how about some that benefit everyone, not just a politically-connected few? Preventive care benefits, for example, can help to cut costs over time.

As we've seen time and again, there seems to be no move to address the underlying premise: when someone else is paying for our care, money and responsibility are no object. How about we take a look in the mirror, instead of at Washington?

The (True) Cost of Health Care

An overarching theme here at IB has been that health care costs drive health insurance costs. While this may seem obvious to us, it bears repeating.

Why, you ask?

Well, a fundamental precept of ObamaCare© is that by controlling health insurance costs, health care costs can be better controlled. This is patently and (more important) demonstrably untrue:

"What Anderson might not know, however, is how Sutter's battle for market share in her corner of suburbia is affecting her bottom line. Hospital prices in the Sacramento region are among the highest in California, driven in large part by the negotiating clout of the hospital chain Sutter Health."

The Anderson family lives in a suburb of Sacramento, California, but their plight is far from unique or geo-specific. As hospital "chains" grow, competition is reduced, and prices increase. That's basic economics, of course, but a lesson lost on many folks who continue to believe that "reforming" health insurance will have any impact on the cost of care. In fact, the opposite is true. As we've previously discussed, ACO's (Accountable Care Organizations) threaten to dramatically change how health care is delivered, and the price we pay for that delivery. Bob sent me an interesting link, from an outfit called American Medical News, which underscores just how insidious these new entities really are. Here's what they want us to see and believe:

"Accountable care organizations ... generally involve a combination of physicians and hospitals taking responsibility for a defined population, working together to improve care and cutting costs."

Can you see the problem in that very short statement? A "combination" implies a partnership of co-equals. But that's laughable on its face. In any such "relationship," the hospital (and more likely, the chain of hospitals) is going to be the Big Dog, and is going to determine how the organization behaves. The doc is simply another vendor in this equation, with precious little say-so in how (and how much) health care is delivered.

And there's this little tidbit:

"Though ACOs are primarily defined as cooperative agreements between hospitals and physicians, health plans are keenly interested in the model and need to keep on top of developments because they will be the ones to reimburse the new entities for care."

Once again, what they want you to see and what's really happening are two very different things. The primary problem is that there's still that pesky third-party (the insurer) sandwiched betwixt the provider and the patient. Let's ignore for a moment the lack of consumer participation in this equation; if consumer-centric health care is predicated on choice (and it is), then it's DOA when it comes to ACO's. That is, what choice does one have when, as in the Anderson's case, there are only one or two plans that include the biggest ACO, er, hospital chain in the area?

And then apply that to the whole country.

This is a recipe for economic disaster: less choice (competition) means higher health care prices, which means higher health insurance premiums. And, as Bob's pointed out, this is exacerbated by the looming shortage of carriers.

Talk about your death spiral.

[Hat Tip for NPR item: FoIB Holly R]

Show Me the Money, Show me the Doc's

In a rare show of insight, physician's attending the recent AMA gathering in Obamaman's old stomping ground actually let loose a chorus of boo's. Admittedly, this was for a rather self-serving issue: "limits on jury damages in medical malpractice cases." Still, it shows a developing wedge between health care delivery folks and the gummint's efforts to nationalize their industry.

And it gets better (or worse, depending on whose ox is being gored): the Congressional Budget Office (itself not known for underestimating the cost of government-run programs) projects that the administration's health "reform" plans will cost a cool $1 trillion over the next ten years. Of course, it will ostensibly cut the ranks of the uninsured; the problem is that, as usual, that number is grossly inflated. Based on our own and other's research, we estimate the actual number of those eligible Americans who are chronically uninsured at about 25 million. That comes to some $40,000 per person (or $160,000 for a family of four). Of course, that also presumes that the $1 trillion is truly the ceiling, instead of the (more likely) floor.

But even if we take the Obamaman at his word [ed: quick, call Ripley's!], the $1+ trillion price tag does nothing to decrease the number of uninsureds.

How's that, you may ask?

Well, let's go back to the CBO, whose head honcho had this to say about "The Plan:"

"According to our preliminary assessment, enacting the proposal would result in a net increase in federal budget deficits ... When fully implemented, about 39 million individuals would obtain coverage through the new insurance exchanges. At the same time, the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent), and coverage from other sources would fall by about 8 million, so the net decrease in the number of people uninsured would be about 16 million or 17 million."

No matter how you spin this, it means that more people will lose employer coverage than gain gummint-sponsored health insurance. It's essentially rearranging deck chairs, shuffling folks from one type of plan to another, dropping many altogether, with the net result being a net loss. Somehow, I don't think this is the change folks were hoping for.

We've also heard how the adminsitration is going to cut Medicare and Medicaid expenses (i.e. reimbursements) to help offset the cost of this new initiative. Again, it'll be interesting to see how (or, perhaps, if ) that actually plays out.

Unfortunately, none of these proposals tackle the underlying problem: increasing health care costs. These are driven by a number of factors, the most critical of which is "skin in the game." As long as someone else is paying the lions' share of health care costs (be that the government or your insurance carrier), there's little incentive to not consume care. That, in turn, leaves us free to indulge our whims, often to our own detriment. As Bob has pointed out numerous times, many (most?) health care expenses could be reduced, or even eliminated, if we made healthy lifestyle choices.

Perhaps we could take a page from our P&C colleagues: auto insurance, for example, is based almost exclusively on behavior: get a lot of tickets, or wreck a lot of cars, or drink and drive, and you'll pay more. I've never heard of anyone seriously protesting this (well, except those who get dinged for their own misbehavior), and it seems to work out just fine. So why can't health insurance be more like that?

Well, it can:

Safeway, the grocery behemoth, put in place a health insurance plan that's priced directly relative to risk. That is, it's based on the actual behaviors of its participants. They observed several facts:

"The first is that 70% of all health-care costs are the direct result of behavior. The second insight, which is well understood by the providers of health care, is that 74% of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes and obesity). Furthermore, 80% of cardiovascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable."

Participating employees agree to be screened for such things as tobacco, weight, blood pressure and cholesterol levels, and their premiums are then adjusted to reflect the increase or decrease in risk. Seems simple enough, and fair, too. After all, shouldn't folks be rewarded for keeping health costs (and hence, insurance premiums) down? Why couldn't these principles be applied in the broader marketplace? If the goal is to reduce costs, and thus premiums, wouldn't that ultimately lead to a reduction in the number of folks who find health insurance unaffordable? And of course, there's the added bonus of quality of life, as well.

Now that seems like a win-win to me.

Skin in the Game

A longstanding meme here at IB is that health insurance costs increase because health care costs increase; a corollary to this is that, because we are insulated from the true cost of health care, we have little or no incentive to demand its efficient delivery. That is, since the majority of (private) health insurance is subsidized by employers, we don't really know what it costs, and since most of us have some kind of co-pay plan, we don't know the true cost of the care we receive.

If, for example, your employer covered a third of your car payment, would you really know (or care much) what that payment is? And if your car insurance covered oil changes, would you know (or care much) what your mechanic charges?

Human nature suggests that the answer would be "no, not really." After all, if someone else is fronting the bill, we don't have much (or any) incentive to question it or look for a better "deal." We saw this most graphically in the lobster dinner allegory, and now Investors Business Daily puts hard numbers to the phenomenon:

"Nearly 60% of American adults are covered by an employer-based plan ... Because Americans who have employer-based coverage see little money coming out of their pockets when they visit a doctor or go to the hospital, they have little incentive to keep costs down."

Or, to put it more bluntly, "(a) primary reason why health care costs are soaring is that most of the time when people enter the medical marketplace, they are spending someone else's money," as Devon Herrick (of the National Center for Policy Analysis) notes.

There are certainly times, of course, when careful shopping is inappropriate: in the ambulance when suffering a heart attack, the CareFlight helicopter at the scene of the crash. But for the most part, and especially when it comes to routine and maintenance claims, why aren't we more involved?

Another example: the typical prescription drug card now carries a $15 co-pay for generics. But who pays $15 anymore? After all, (almost) all can be found for $4 at Walmart or CVS or Krogers (to name a few); yes, it may involve a little time and travel, but it's once a month (or every three months). Even at $3 a gallon, how far would you be willing to drive to save $11 per scrip? And if you're on several such meds, the cost is even less. So why aren't we using this model for other aspects of health care?

Here's why:

"According to Herrick, for every dollar of hospital care that is consumed, a patient pays only 3 cents. The rest is paid by a third party ... When a patient visits a doctor, less than 10 cents of every dollar of care consumed is paid by the patient. Again, a third party pays the balance."

That "third party" is, of course, one's insurance carrier. But even that's not completely accurate: for the most part, the routine claims are really just a transfer of one's premium to the provider; it's not the "house's money." Still, it obscures the actual cost of the care itself, which then further exacerbates the increase in those costs.

And, as IBD points out (and as we've noted), "Medicare and Medicaid have also had an impact on spending, as they too are third-party payers that ... hide from patients the true cost of medicine." These two schemes actually represent a double-whammy: the first (as IBD notes) is that they pick up the bulk of the tab, which hides the cost from the beneficiary. But that cost doesn't go away: a goodly portion of it is shifted to the private insurance sector, which must then recoup that cost by raising premiums.

So what's the solution?

Herrick takes a novel (and, I think, effective) approach: he considers the case of the plastic surgeon. In almost all circumstances, plastic surgery is elective, and thus not available for insurance reimbursement (and, as we've noted, ineligible for network discounts, as well). So the real cost is very easy to determine: it's what the doctor bills you. One would think that, since so few of these expenses are "outsourced," demand would remain fairly level (or even decrease as folks' disposable income plummets in this economy). But that's not the case:

"1.7 million cosmetic surgical procedures were performed in 2008, "more than 40 times the number performed two decades ago." Yet cosmetic surgeons' fees, he says, have remained relatively stable, rising only 21% from 1992 to 2008."

So there are two effects at work here: on the one hand, patients' demand is higher than ever, but the cost of the care isn't. Why is that? Well, it's pretty simple: when folks are spending their own money (as they almost certainly are in this instance), they have an incentive to find the best "bang for the buck." And since providers are truly at the market's mercy, there's an incentive to keep costs as low as possible. The key is that the patient, not a third party, is in control.

Isn't it time we took control of our other health care needs, as well?

Public Plan or Public Enemy? Our Conclusion

In Poe's The Purloined Letter, the thief hides the stolen item in plain sight. He knows that most folks tend to overlook the obvious, and takes advantage of that fact. In much the same way, members of our political class are using the innocuous sounding title "Public Plan" to (not so) surreptitiously implement a gummint-run health system.

How's that, you ask?

Well first, let's review the premise behind the so-called "Public Plan" (PP): the government will institute an "alternative system to private insurers, much like some states already use for their employees;" the PP would offer certain plan designs at set rates, presumably subsidized for those who can't (or won't) pay the higher premiums. Of course, the gummint has a poor track record in predicting how its policies will actually work in real-time. Case in point: current unemployment numbers. You may ask, "what's that got to do with gummint and health care?" The reality is that the Spendulus was supposed to create (and/or save) scads of jobs, and yet the latest unemployment figures show that we're worse off than if there'd been no Spendulus. Why would anyone think the Feds would be any more successful in anticipating the effects (and costs) of a nationalized health care system?

Meanwhile, we still have the unanswered question of how the PP will supplant the private sector.

First, the PP must recognize that health care costs drive health insurance costs, and that absent some downward pressure on the former, the latter's just going to continue to climb. There are only a few ways to control costs, and comparable systems we've explored (cf: the MVNHS© , Canada, et al) have done so through rationing, generally at the expense of those in their Golden Years.

Second, while the PP is advertised as being an alternative to insurers, it is in reality a substitute for them. How can we state this so unequivocally? Because we saw in the recent mortgage debacle that when the government meddles in private sector financial issues, we get mandated loans to folks who have no way of repaying them. And how does that apply to insurance? Well, when the government is buying and selling health care, it can use the power of the state to get its way, and thus the whole "level playing field" theory becomes a myth. How can private insurers hope to compete against the government, especially when the state can reduce fees at will, rather than through negotiation?

As mentioned in Part 1, I was particularly intrigued with Stuart Butler's term: "the down the road." First, the so-called "wall of separation" between the government and the market becomes blurred (Hello! GM, anyone?), and as costs continue to mount, there's every reason to believe that the government will continue its tradition of tinkering with systems about which it has no real experience or understanding. It becomes, in essence, the team manager and the umpire. What could possibly go wrong?

Mr Butler also observed that what people "heard" during the election is not at all what we're seeing proposed: that if one is currently insured, that wouldn't change. But of course, it must: as we've seen with Medicare [ed: did we mention that that's going bust in less than 10 years?], the gummint has, and uses, the power to shift costs to the private sector (insurance). Of course, when it's expanded to the population writ large, the problem is then magnified.

There are those who would argue that the PP is simply an extension of already-existing state employee programs. This would be disingenuous: no individual state has anything like the power of the Federal Government. Indeed, a national PP would control costs simply by controlling how much is paid, a sure-fire way to force health care rationing.

They say that a picture's worth a thousand words (and we're already up to 600+), so we'll conclude with this video, which neatly summarizes the inherent problems of a Public Plan. Or is that Public Enemy?

[Thanks to Lyndsi Thomas for the video link]

Going Up? [UPDATED]

As we've long maintained, health care costs drive health insurance costs. It follows, then, that any decrease in the former should be welcome news to us all. And it appears that, in at least a few areas, the increases in health care costs have slowed:

"U.S. healthcare spending rose at the lowest rate on record in 2008..."

The article then goes on to repeat some discredited memes, but it does point out an interesting conundrum: while "U.S. healthcare spending rose 4.4 percent in 2008," the lowest such increase in the last half century, "federal healthcare spending increased 10.4 percent in 2008 over 2007 levels." [emphasis added]

So what does that tell us?

Well first, that the private sector is much more adept at controlling costs than the public (d'oh!). This should (but probably won't) give pause to all those who advocate granting the government control over our health care.

Second, despite the Medicare cuts already in place - let alone those "in the queue" - the gummint still can't reduce its cost of health care.
Tell me again how handing these folks the keys to the whole shebang will have a happy ending?

UPDATE: Want to know why the government can't (or won't) keep health care costs in line? Well, here's a textbook example:

"A woman says Medicaid is wasting thousands of dollars on a clunky device to help her speak that an iPod application can do much more easily and much less expensively."

Claudia Burrows, whose son is autistic, has a significant speech impediment as a result of ALS. Between her speech issues and her son's health problems, she has difficulty communicating with him. So, "Medicaid insisted on spending $8,000 for a large medical device to do essentially the same task that the iPod and software can do for $375."

That's right, a better, more efficient and cheaper (by a factor of 2,000) solution is readily available, but "rules is rules." Heaven forfend that common sense, let alone a sense of responsibility for tax-payer dollars, should play any part in gummint-run health care.

[Hat Tip: Neal Boortz]

Life is short...

About two years ago, we took a gander at the cost of end-of-life-care:

"$33,382 for one hospital stay. $43,711 for the next. And a final $14,022 for the last three days of life. This is the cost of dying in America"

One imagines that these figures haven't changed much, and certainly that they haven't gone down. Still, it's something many of us have faced or will face, whether for ourselves or (often) a loved one. When to "pull the plug" is rarely an easy decision, but a company called Vital Decisions may be on to something:

"Imagine you're at home. Maybe that's in Florida, Wisconsin, Rhode Island, wherever. You have cancer. You just had another round of chemo, and the phone rings ... This is no telemarketing call - it’s about the end of your life."

Vital Decisions employs 50 social workers who reach out to folks to offer counseling and other assistance, even offering to reach out to the patient's health care provider or other family members.

The service is paid for by the insurer.

It's an interesting article, and a fascinating story, but there are a few details that remain unclear to me:

First, although it mentions that the service is provided and paid for by insurance companies, it doesn't say how Vital Decisions gets looped in./ One imagines that a participating carrier has a set of criteria, and once an insured hits a certain point (discernible from their claims history), the file is forwarded to Vital Decisions. According to the article, this practice is permissible, but I'm a little wary of that. I also wonder how amenable the health care providers are to discussing case details with the service, regardless of the patient's approval.

One can see why an insurer would want to bring in a 3rd party: it would seem, well, a bit self-serving for the carrier itself to suggest less-than-heroic measure, however rational that may actually be. By subcontracting this out to another party, there's a sort of arms-length quality to the discussion.

And there's this:

"By Daitz’ own rough estimate, the company’s services have resulted in about $10,000 less in health care spending per patient, “$100 million to the health care system in 2014.”

That's a lot of health care dollars not being spent, which may well be a good thing. But I'm also wary of looking at one's life as a series of calculations. No question that many folks would suffer a great deal less if they moved from acute to palliative care, and Vital Decisions claims that this is at least partly because "critical conversations about end-of-life care just aren't happening enough and the company's goal is to foster them."

That in and of itself seems pretty admirable. On the other hand, I can't help but think that insurance companies are not hiring companies like Vital Designs in order to just spend more money: they have a real incentive to cut costs. And that's also not a bad thing: again, look at those numbers from 2012. Since health care costs drive health insurance costs, it's to everyone's benefit to look for meaningful, justifiable ways to rein in spending.

What say you? Is this a good way to encourage end-of-life-care decision-making, or simply another way for carriers to cut costs?

New Wave Carrier Trick

[Warning: Long post ahead]

Recently, I attended a training session for United HealthCare's new line of small-group (2-50 lives) products. As these things go, it was reasonably well-done: not too long or wonky, plenty of time for questions, and cookies and brownies available to help pass the time. For me, though, the most important part was the concepts and vision that I see embodied in this new line; regular readers know that I'm no shill, but there are some important lessons to be gained, and a number of questions that will be resolved only with the passage of time.

Basically, "Multi-Choice" (as it's called) seems to be an evolutionary (not revolutionary) outcome of UHC's All Savers program. For many, many years now, the basic principle of group health insurance has been "defined benefit;" that is, we look at what's covered, what the co-pay amount and deductibles are, that kind of thing. Then we tweak those to fit the employer's (and, to a lesser extent, the employees') budget. Hence, shopping every year at renewal.

Multi-Choice (M-C) works a bit differently. First, UHC considers this a "strategy" as opposed to a "product." And indeed, that seems apt: in this market, the carrier (like most others) offers a dizzying array of configurations (up to 150!). By contrast, M-C offers but two: Package A and Package B. What they've done is cut the 150 different options down to 30 or so, and then bundled them. Each "package" offers a couple of dozen or so different plan designs, from low deductible co-pay plans to high-deductible HSA's (and pretty much every point in-between). An employer picks a package, and then chooses a few different options that will be offered to his employees. For example, he might choose Package A, and select plans 3, 7 and 15 as choices for his employees. Each person chooses whichever plan design best suits, and that's that. The employer is obligated to pay a percentage of the premium, but his total cost is understood and agreed upon at the outset: he doesn't much care who chooses which product because his contribution has already been defined.

I think we're moving in that direction anyway: there aren't, for example, many "defined benefit" retirement plans out there. Instead, we see IRA's and 401(k)'s which are predicated on the contribution, not the expected benefit. So it goes with health insurance, as well. This is actually a pretty smart survival move: how better to cope with Obamacare©'s taxes on "rich" benefit designs?

Well, actually, the most cost-efficient way will be "none of the above."

The other interesting, and perhaps unnerving, thing is how prescription drugs will be covered. Currently, an employer chooses an underlying health plan and one of several different rx options. That will go away under M-C: there will be just the one option, called "Specialty Pharmacy." I must confess that I don't yet fully understand all the intricacies of this particular new design, but I'll do my best to communicate the general idea: medication is one of the biggest drivers of health care costs (and, as we know, health care costs drive health insurance costs). According to UHC, "specialty medications" (e.g. injectibles) are used by less than 1% of its insureds, but represent an astonishing 20% of its pharma claims (I suspect that this ratio holds pretty much true with other carriers, as well).

That's a lot of expensive med's.

So the new design has whatever out-of-pocket (OOP) accrues to the underlying medical plan, plus an additional OOP for med's. This is true of not only the co-pay plans (to be expected), but the HSA plans, as well. So one could meet one's high deductible health plan's deductible, and still experience additional costs for specialty medications.

Is this fair?

I really don't know.

On the one hand, I'm reluctant to use the term "fair" when talking about insurance, but in this case, I have to give it some weight. I don't have a problem charging more for smokers, or the morbidly obese, or those who engage in other less-than-healthy lifestyle choices. And I kind of like the idea of rewarding those who exercise regularly.

But:

One of my clients has MS. We've been trying to move that group for a while now, but have always run up against at least one of two problems: either the rate for the new carrier was higher than even the existing plan's renewal, or the new carrier's policy on MS med's was much more restrictive. Sometimes both. Obviously, Tom is one of those "1%ers" and, as such, a part of "the problem." No argument. My problem, though, is that MS, unlike, say, lung cancer or HIV, is not a behavior-driven or -caused medical condition. There's no food that he should have avoided, or loaded up on. No special exercise regimen or other lifestyle choice that will ward off MS. It's like blue eyes or brown: it's not something over which one has any control.

But that means that, under one of these new plans (and I'm not picking on UHC here: I truly believe that this is where we're heading, and Medicare already does this) Tom's total out-of-pocket could be an additional $3500 over and above the high deductible built into his employer's HSA plan.

And there it sits: I don't have a resolution. I understand that pharma represents a huge chunk of health care (and hence, insurance) costs. And one way to rein that in is by taking the high-end med's for very small subsets of insureds "off the table" (or at least to a different end of the table). But there's no "magic bullet," no operation or lifestyle change that would alter Tom's medical predicament.

ObamaCare© doesn't solve it, either, by the way: inherent in that scheme is the even more draconian solution of rationing.

Told Ya So...

One of our mantras here at IB is that health care costs drive health insurance costs, which is one reason why we espouse transparency and accountability, and frown upon benefit mandates. We look at utilization as one measure of health care cost; that is, how often, and under what circumstances, a given procedure is used.

The prototypical example of this is hysterectomies: back in the day, there was quite a controversy regarding elective versions of this procedure. Part of the problem was that it was a fairly simple yet lucrative process, and so held great appeal to a certain segment of the physician community.

More recently, we learn that carriers are cracking down on what they perceive to be a similar burgeoning case of over-utilization: medical scanning technology. This would include PET and MRI scans, for example, as well as CT and even x-rays. The tech for these has dropped in cost, and as a result, we have a lot of these machines that need to be paid for. I understand, for example, that we have more MRI machines here in Ohio than in all of Canada. Is that necessarily a bad thing? Of course not, but then one must ask: "who pays for this tech?"

The answer, of course, is that we all do.

But that may be changing:

"Insurance companies are taking a harder look at advanced medical scans like CT scans, citing spiraling costs and safety concerns. And some doctors agree there’s emerging evidence that these scans are being over-prescribed."

Buying, maintaining and operating all this equipment isn't free, and the cost is reflected, in part, in increased insurance premiums (see, health care costs more, thus health insurance does, too). In order to rein in some of these costs, insurers are starting to take a closer look at whether they're justified, and justifiable.

Folks who've bought into Consumer Driven Health Care (CDHC) already know this: it's their own money that pays for MRI's instead of x-rays, for example. So it's no real surprise that carriers have begun to second-guess their use, as well.

And there's this:

"Insurers fear some patients are being exposed to dangerous radiation levels from having repeated CT and PET scans, which use many times the radiation of a regular chest X-ray...Doctors, too, are concerned about patients getting excessive radiation exposure when they receive scans that aren’t needed or are ordered as “defensive medicine” to protect against possible lawsuits."

Not to mention the conflicts of interest when physicians also own the "imaging facilities" to which they refer their patients.

O Brave New World, indeed.

(Hat Tip to Holly Robinson)

Are health care and medical care the same? (Part I)

This is in two parts and kinda long.  Sorry.

So-called pundits, thought leaders and politicians have confused medical care with medical insurance so often and for so long, one almost wearies of calling them out.  I think there's another confusion of terms that may seem innocuous, but which is equally careless, mistaken and damaging to analysis: that health care and medical care are the same

I think it’s useful to point out the obvious - that despite popular usage, health care and medical care are not the same.  I think this insight enables clearer understanding of our medical cost problems.  For one thing, you'll notice that health care is free, it’s medical care that’s expensive. But there are many more, some less-obvious, things to notice.  Important things

For example, people who aren’t careful about their health tend to have higher medical expenses. Second, despite our medical ability to treat far more effectively, American public health has been deteriorating for decades.  Part of the reason is that we Americans are failing to be careful about our own health. Deteriorating public health has become a huge driver of medical costs. Third and most important, when we fail to understand – or choose to ignore - that health care and medical care are not the same, I think we make it harder to diagnose our problems and set ourselves up to miss significant opportunities to improve the public health and at the same time save overall medical costs.

When pundits, thought leaders and politicians use health care and medical care interchangeably, it’s natural for people to believe that e.g., a physical exam delivered by a medical professional is health care.  But is it?  It’s also common thinking that an exam delivered to a “well person” is not medical care.  But is that true? In what way exactly is an exam health "care"?  Besides, it’s not logical to believe that the way to care for our health is to visit an office someplace and get an exam “delivered” by a licensed professional.  I don’t know how much you may have read about the effectiveness of regular physical exams in the early detection of disease; the marketing pieces are rosy but the peer-reviewed literature is not so encouraging. 

Sure, medical professional may advise you about healthy behaviors.  But here is the key distinction: those behaviors are UP TO YOU.  Health care is fundamentally what you do to take care of your own health.  In other words, you are responsible for your diet; your sleep habits; your exercise; whether you smoke; whether you abuse alcohol or other drugs; whether you drive carelessly or recklessly, whether you follow your doctor’s advice, etc, etc.  Your health care is fundamentally not some service you must pay for, provided to you by someone else.  That’s nearly a definition of medical care.  Instead, your health care is mainly the sum of your own behaviors that bear on your own health.  And unlike a medical professional’s services, health care - your own behavior - is free.  You don’t get a bill for quitting smoking; for avoiding junk food; for getting plenty of exercise and so forth.  Your behavior is free.

[Click here for Part 2]

Monday LinkFest

■ Remember that promise that The ObamaTax wouldn't add "one dime" to the deficit? Well, that may be literally true, but:

"Figures from the Government Accountability Office suggest that the Patient Protection and Affordable Care Act will in fact add 62 trillion dimes over the next 75 years."

Ooops.

Now, 75 years might seem like a long time, but don't be fooled, that's almost a $1 trillion dollars a year over and above any other spending.

■ We've written about rate increases in the Long Term Care insurance market, but what happens when a state forbids a carrier from doing so?

Well, Nutmeg State consumers (and would-be consumers) are about to find out:

"The Connecticut Insurance Department has rejected efforts by a unit of MetLife ... to increase rates on 5,800 long-term care insurance (LTCI) policies about 58 percent."

Their position is that, since Connecticut policy-holders haven't had a lot of claims, they shouldn't be subject to national rate increases.

Interesting ploy.

■ FoIB Holly R reminds us that, just because we have access to more health care information than ever before, we're not necessarily driven to access or use it:

"Consumers have access to more information than ever on the cost of their health care.Just one problem, according to a new study: They’re not interested."

Since we know for a fact that health care costs drive health insurance costs, this doesn't bode well for future health insurance premiums.

■ So the folks who are (allegedly) implementing the Exchanges think that there's no real role for agents going forward:

"The beauty of the exchange system is that if it works, you don’t have to use an agent,” said Jay Angoff, the first head of Office of Consumer Information and Insurance Oversight at the Department of Health and Human Services" [emphasis added]

"If it works."

Aye, thar's the rub!

■ And finally (Yay!), more news on the doc shortage front:

"[The ObamaTax] is gradually making the local doctor-owned medical practice a relic. In the not too distant future, most physicians will be hourly wage earners, likely employed by a hospital chain ... will almost certainly make the practice of medicine more expensive."

So, health care (and thus health insurance) becomes more expensive, efficiency and choice plummet, and we're worse off than before.

Hunh.

Obama Doesn't Read InsureBlog

[Welcome FoxNews and Kaiser Network readers!]

Else he would know the difference between health insurance and health care. He would also understand that health care costs drive health insurance costs, and that simply extending insurance coverage to more people does nothing to cut the cost of health care.

So why is this important?

Because he's recommending that Congress spend an additional two-thirds of a trillion dollars to expand health insurance coverage.

Well, that's not quite right either: as we've pointed out many times here at IB, the gummint doesn't actually have any money: it simply takes funds from one group of people and redistributes them to another. This is called "taxes," and it's the primary means by which Congress can "pay for" such schemes.

The problem is that this is a well that can quickly dry up, especially as those folks targeted for additional taxation -- "the rich" -- stand by helplessly as their actual worth goes plummeting down the memory hole as the stock market continues its downward plunge. Then, too, there's the indisputable historical fact that higher taxes result in lower revenue for the gummint, thereby short-circuiting the process.

Historically, too, such programs inevitably outgrow their initially estimated size (cf: Medicare), and become cures which are worse than the underlying disease. Thus, a big problem becomes an even bigger one, with little hope of slowing down. Our political class has always been loathe to cut out programs which exhibit these traits (again, cf: Medicare), why would we believe that this one would somehow break that cycle?

The President is said to rely on "eight principles to guide his health reform effort," including freedom of choice as regards health care providers. But that flies in the face of experience: there are already two national health care schemes extant, Medicare and the VA. Both of these restrict that choice; why would any other program be any different? Indeed, how could another such system be any different?

The underlying problem is that the administration's “goal is still to bring down the cost of care and to get universal coverage." The problem is that it ignores the third leg: quality of care. As the saying goes, "you can have it fast, you can have it cheap, you can have it good. Pick any two."

Which ones would you choose?

Paging Dr Bernanke!

Today's McPaper has an interesting report on what the Fed's Chairman, Ben Bernanke, thinks about the state of health care and the economy. According to Dr Ben, "(S)pending on health care is the single-largest component of overall consumer spending — larger than spending on either housing or food."

Bravo!

IB regulars are familiar with our anthem: Health insurance costs increase primarily because health care costs increase. To hear the Chairman of the Federal Reserve esentially endorse that position is indeed wonderful, but we won't let it get to our heads.

That increase is driven primarily by heavy and growing demand, and the rather counter-intuitive notion that increasing tech doesn't drive down the cost of health care.

[ed: To understand why that's counterintuitive, consider PC's. As they've gotten more powerful, with more features, they've actually gone down in price. Not so with health care]

And that increase shows no sign of slowing down. According to Dr Ben, "(t)o buffer the effects of rising health-care costs on household budgets, the government may have to absorb an increasingly large share of the bill for those costs." Hunh? The government may have to absorb these costs? Um, no: we will absorb them: the gummint has no money. It must confiscate...er, uh, tax us to aquire it.

And gummint spending in the health care sector is a major driver of these increasing costs: "Medicare for retirees and Medicaid for low-income people — takes up 23% of federal spending that is not for interest payments." Ouch!

Food for thought.

Economy Tanks; Hospitals, Patients Hardest Hit

As we pointed out yesterday, changing the way we finance health care (i.e. insurance) does nothing to solve the problem of providing it; it's akin to rearranging deck chairs on the Titanic. Further proof of this comes to us today from the American Hospital Association:

"Six out of ten hospitals nationally are seeing a greater proportion of patients without insurance coming through their emergency departments ... At the same time, nearly half of hospitals reported they have cut staff."

This from a recent survey undertaken by the aforementioned American Hospital Association (AHA).

Notice that the statement very carefully states "a greater proportion," not a greater number of such patients. So what's the problem? Perhaps this observation, buried further down in the release, offers a clue:

"(M)any hospitals are seeing more patients covered by Medicaid and other public programs for those in need."

Now we see reference to total quantity; in other words, more folks are covered by the gummint, which means at little or no cost to themselves. When something's essentially free, there's a greater demand for it. That's basic economics, which seems to have passed under the radar for so many in our political class.

Lest you think that you're the only one doing major belt-tightening, we learn that "the economy is affecting hospitals with nine in 10 hospitals making cutbacks to help weather the economic storm." Again, I see no indication that they're cutting costs, just expenses. Since we know that health care costs drive health insurance costs, perhaps we're seeing a glimpse of the future. Under a government-run health insurance scheme, everyone gets their coverage "free" (or nearly so), fueling demand, and leading to fewer resources. Fewer resources means more expensive resources, further fanning the financial fire [ed: enough with the alliteration!].

There's another element at work here, as well: the ER is arguably the most expensive room in the hospital (in terms of overall cost for services), yet "(t)he majority of hospitals reported fewer patients are seeking inpatient hospital care or elective care." Again, the wording leaves us wondering if the number of patients overall is shrinking; is it possible that they're simply bypassing the less convenient inpatient services (which require a "reservation") for the more readily accessible ER? The release doesn't say so, but it seems a reasonable inference.

Finally, there's this:

"Many hospitals are struggling to make ends meet with over 40 percent expecting losses in the first quarter of 2009, jeopardizing their mission of caring for their communities."

Again, while it's easy to point at lower reimbursements from insurers, it's important to remember that those reflect reimbursement levels from Medicare. The gummint sets those rates, which hospitals really can't refuse, shifting costs to those with private insurance (or none). Imagine those levels if the state calls the shots for both providing and financing health care.

Ouch!

Does Wellness Work?

Got an email the other day from the General Agency through which I write most of my group business. They have an electronic "newsletter" with various announcements from the carriers with which they work. One of these, Medical Mutual of Ohio, recently completed a study with the University of Michigan's Health Management Research Center; the study concerned MMO's own employees' experience with company-sponsored wellness programs.

I would prefer to have a link to the study for our readers to check the results against the conclusions, but have been unable to find one. I did contact the media folks at MMO, who directed me to the Research Center's Dr Dee Eddington. I emailed Dr E requesting either a link or a copy of the findings, but he has not yet responded. I'll update this post if/when I receive a reply.

According to the newsletter, MMo has been tracking certain employee health metrics, beginning in 2003. These include "employee health and fitness. Wellness for Life programs include the Rewards Program, the Health Risk Assessment, on-site health screenings, participation in Weight Watchers and online Healthy Living Programs."

In 2008, they turned their data over to Dr E and his team for analysis. The findings seem pretty optimistic:

■ The number of employees at high and medium risk of developing chronic disease decreased, while the number of employees at low risk increased by fi ve percent. Lowering the number of risk factors that lead to disease means employees are getting healthier.

■ The number of employees at high risk for chronic disease associated with a low level of physical activity decreased by seven percent. In fact, in 2008 over half of MMO’s employees made use of the Wellness Center or their own community fitness center.

■ Medical costs increased less year-over-year for employees who participated in Wellness for Life activities compared to non-participants. The increase in medical costs was $268 less for employees who participated in wellness programs versus those who did not.

Now, I'm generally reluctant to even write about these kinds of things because they lack corroboration. But I think the subject's important enough to at least report, and will leave its credibility to the judgment of our readers. If true, this may indicate that such programs, if properly implemented and incentivized, show promise in reducing health care utilization. Larger groups, which are more likely to be self-funded, may even see some health insurance savings.

From a broader perspective, this could have positive effects on insurance rates in general (although they'll likely be subtle and broad-based): if it's true that health care costs drive health insurance costs (and we've demonstrated that they do), then lowering the cost of care should have some mitigating effect on rates.

Time will tell.

Exit question: were stop-smoking prescription meds included in any of the "Wellness for Life" programs and, if so, were they helpful? Further question: if they were included, and helpful, will they be added to the covered rx list?

MVNHS© vs Transparency

Thanks to Dr Paul Hsieh at We Stand Firm, we've finally managed to combine two favorite IB themes: the Much Vaunted National Health System© and Health Care Transparency. Turns out, a bunch of Brit docs have decided not to tell their cancer patients about potentially life-saving treatment options because....wait for it...."some of those options would not be permitted under the government system."

Hooray for gummint-run health care!

Not content with denying care to British victims, er, citizens at home, these docs refuse to tell their patients that they could obtain necessary treatment abroad. Of course, these compassionate care givers have a perfectly valid rationale: "such a discussion might "distress, upset or confuse" their patients."

Well, we can't have any of that.

As we've noted many times here at InsureBlog, health care costs drive health insurance costs, and one factor in this equation is that consumers have been kept unaware of just what those costs really are. Now that transparency in health care is gaining momentum, folks are becoming more aware of those costs, and cost efficient alternatives. These British physicians, on the other hand, seem to be tilting away from such transparency. By keeping information about treatment options hidden away from their patients, they are, in effect, artificially depressing costs at the expense of their own patients.

I share Dr Hsieh's conclusion that "what makes the system especially evil is not the fact that it allows a few doctors to act badly, but rather that it takes good doctors and turns them into bad physicians willing to betray their patients."

Indeed.

[Hat Tip: Elizabeth A. Terrell]

D'Oh! Who Didn't See THIS Coming?

[Welcome Derek's Twitter readers!]

According to NPR, " (s)ome people can't buy health insurance because they have a pre-existing medical condition. But for most of the nation's 47 million uninsured, cost is the big obstacle — especially if they don't work for a company that pays part of the premium." No argument, but hardly news: we've been pointing this out for over 4 years.

But something else we've been singing from the rooftops (metaphorically, of course) is that most folks don't have any real clue how much insurance should cost, and balk at the high price when they finally bother to get a quote (usually for coverage they don't even need). As NPR reports, "even if they could find an affordable health plan, many are not used to building that cost into their monthly budget."

No kidding.

Of course, many (most?) of these folks have no trouble building their budgets around cell phones and web access, not to mention cable. As the political class contemplates requiring everyone to be covered, the dirty little secret is that most of these folks are completely unaware of how much such coverage will cost. Again from NPR:

"Two out of three uninsured Americans say they'd be willing to pay no more than $100 a month for coverage. But, according to the Kaiser Family Foundation, the average individual health plan costs about $400 a month, and a family policy costs more than $1,000."

Three things jump out at me from this:

First the wording is quite curious: "two out of three uninsured Americans..." Is NPR finally admitting that a huge swath of the uninsured are not, in fact, "Americans" at all, but indeed are illegal immigrants? We've made that point numerous times; is it possible that the wonks at NPR are secret IB readers?

Second, it's nice that uninsured folks are willing to pony up "$100 a month for coverage." On the one hand, if they're talking about individuals, that may well be "doable" through the use of High Deductibe Health Plans and perhaps a rollback of some of those expensive mandated benefits. If they're talking about $100 per family, well, rotsa ruck with that. By the way, how much is that digital cable bill each month?

Finally, the folks at Kaiser (quoted in the NPR story) continue to throw out that IB-trounced canard that "a family policy costs more than $1,000." Well sure, if we're talking low deductibles and co-pays for office visits, But if we could just get our fellow citizens to understand that health care costs drive health insurance costs, perhaps they'd cut back on the cigs and Big Macs, and the low deductibles and co-pays that encourage over-utilization (and thus drive up costs).

D'Oh!

[Hat Tip: Holly Robinson]

We get mail!

A reader sends along this link to Avik Roy's take on the ObamaTax Medicaid expansion, and asks:

"What was that again [about] how medical costs cause premium hikes?"

Of course, we always welcome feedback, and appreciate the opportunity to reinforce our long-stated (and well-proven) positions.

I replied:

"Interesting article - Thanks!

Still don't see how that contradicts our position: increasing medical costs cause higher insurance costs. And of course other things also cause increased insurance costs. But the reverse is not true: increasing insurance costs don't cause higher health care costs.

Again, nothing in that article contradicts this very basic, very obvious observation."

Mike had a slightly different take:

"I think your correspondent is just being obtuse.

Of course increasing enrollment increases overall insurance expense.  Doesn't it always?  Specifically, ACA will cause Medicaid enrollment to increase.  This means the overall medical cost for the Medicaid population will be greater than its overall medical cost is today.  Why would it be otherwise?

[Avik] Roy makes the point that ACA - by increasing the Medicaid population - will increase the cost shift to private insurance, so private insurance premiums will experience higher trend and therefore private insurance premiums will be higher.

In other words, higher private sector insurance cost result directly from the Medicaid medical costs shifted to the private sector.

And so, it's medical cost that drives insurance cost.  Exactly what we have been saying for years and years.

The difference here - which your correspondent does not recognize - is that additional Medicaid medical cost will be shifted to private insurance.  That means the private insurance premiums will bear the impact.  Clearly that doesn't prove medical costs don't drive medical premiums.  Instead, it illustrates that very point.  And it reveals once again the ongoing failure of government meddling to accomplish anything constructive about overall medical costs in the first place."

Bob also weighs in:

"About that cost shifting ...

Medicaid = lower reimbursement = cost shift to private patients = higher insurance premiums

Of course we all (should) know this, but Medicaid is a Catch 22:

If the government doesn't provide health insurance for those people, they still get sick and those unpaid bills are shifted to private pay. With Medicaid, only a portion of the bills are shifted to private pay with the rest picked up by taxpayers.

Rearranging the deck chairs.

The issue with Medicaid expansion is, even though DC will print magic money to fund the expansion for 5 years (or whatever the time frame is) after that point the burden falls on the states their "fair share."

As I said, I have the best co-bloggers.

On the Oregon Trail

FoIB Holly R forwarded the link to this story, about which I can only ask "on what planet is Hannah Wallace living?" It is so full of inconsistencies and outright misinformation, one wonders how The Onion could possibly do better.

Let's start at the beginning, shall we?

"For a writer living in New York state, there were plenty of reasonably priced plans"

Really? The actual numbers tell a different story.

Ms Wallace continues apace:

"That’s largely because in Oregon, “medical underwriting”—during which insurance companies cherry-pick healthier customers ... it’s one of five states with so-called “guaranteed-issue” laws that mandate insurance companies cover anybody regardless of health status."

(See above)

“The last thing we want to be doing as a state is hampering that sector with high insurance costs. It’s exactly the wrong way to stimulate the economy ... Yet this is precisely what Oregon is doing by not providing affordable health insurance options."

We've written about Oregon's insurance situation before; they have a very effective (if lethal) way of dealing with increased health care costs (which, of course, drive health insurance costs).

But wait, there's more!

"The only plan I can find here that would cover my pre-existing condition costs more than half my rent"

This is another of those little "throwaway" canards that's never made any sense to me: what does one's rent have to do with one's insurance? If Ms Wallace lived with her parents, then her insurance would be infinitely higher than her rent, yet that is no more meaningless (or meaningful) than her comparison.

She continues:

"I don’t want just so I don’t become one of the 51 million Americans who are uninsured."

And again with the oft-debunked number of uninsured (anyone else notice how that number keeps growing, despite the advent of wonderful ObamaCare©?). It's a bogus number to begin with; that it keeps growing is itself a wonder.

Are we done yet? Of course not:

“What really needs to happen for you is that it needs to be 2014 ... when the new Patient Protection and Affordable Care Act ... will eventually force insurance companies to cover everyone, pre-existing conditions or not. They have had to cover sick children since September; adults, however, have to wait until January 1, 2014—three long years away."

Except they haven't; healthy kids hardest hit. And if you want to see what's in store for '14, you need look no farther than the current ObamaPool© programs. These are guaranteed issue plans which cover all pre-existing conditions (sound familiar, Hannah?), yet their reception has been, well, underwhelming. Why would any rational person believe that's going to change in 3 years?

Bu the very best (well, funniest) line comes near the end:

"For freelancers ... Massachusetts is mecca"

Oh, absolutely, it's just been so successful! If that's Mecca, then one shudders to think what Armageddon looks like.