More Spendulus Fallout: EMR ASAP

As we've noted noted before, one of the little-publicized "gotcha's" in the Spendulus was this little gem:

"The bill’s health rules will affect “every individual in the United States” (445, 454, 479). Your medical treatments will be tracked electronically by a federal system. Having electronic medical records at your fingertips, easily transferred to a hospital, is beneficial. It will help avoid duplicate tests and errors."

Now, that sounds fairly benign, until one realizes that it's Washington, DC ('dah capital') in charge of processing that information. And by "processing," we mean "selling:"

"The economic stimulus law plans for every American to use an electronic health record (EHR) and allows those records to be sold for research and public-health purposes – without patients' consent," says Sue Blevins, presient of the Institute for Health Freedom.

[ed: the IHF is a not-for-profit, non-partisan think tank founded in 1996]

So-called "data sharing" has been around for a long time, of course (cf: "do not call list"), but this takes on a whole new meaning, perhaps an ominous one. After all, if the gummint is in charge of keeping and disseminating your information to health care providers, it's also able to sell that data to drug manufacturers, employers (and potential employers), anyone it chooses. On the one hand, that's a nice revenue stream (to offset some of Washington's other expenses), but at what cost?

Ms Blevins claims that "her goal is not to be alarmist." But why not? This is an alarming development. No, we're not talking black helicopters and tin-foil berets, but how easy would it be for this information to be abused? Or mishandled, or lost or stolen? The answer is probably "no more than if it was underatken by private industry." And that would be about right.

The problem is "accountability:" when private companies (e.g. credit card issuers, mortgage holders, etc) screw up, they're sued and fined. But one can't (easily) sue the government. And there's the rub: what good are assurances when there's no way to enforce them?

The question now is whether it's too late to derail this particular train.

Once Again, Facts Trump (DC) Fantasy

Consider this graph:

[Courtesy Innocent Bystanders]

Again, the light blue line represents what the gummint told us would happen if we didn't hurry up and pass the Spendulus; the dark blue represents how well the Spendulus was supposed to work, and the red line shows what really happened. Not a pretty picture.

And these folks want to run our health care system?

Somebody definitely inhaled.

Doctors are Stupid (Updated)

[Welcome Industry Radar readers!]

[ed: File this under "great" (?) minds think alike - before I had the chance to push the "Go!" button on this post, my colleague Bill Halper had his take on the Spendulus Package. Please be sure to read it. And it appears that Bob will also be sharing his thoughts on it a bit later.]

Yup, that's what I said: as a group, doctors are stupid.

That bears repeating: as a group, physicians are stupid.

And on what do I base this?

Well, let's look at the headlines on the front page of the AMA website:

■ AMA Cheers New Law to Get Kids Health Coverage

■ AMA Wins Legal Victory for Physicians in Privacy Court Case

■ AMA Wins Victory with Record-Breaking Settlement in case against insurer

Not one word on the Spendulus package, which contains even more pieces of a nationalized health care system As Bloomberg News' Betsy McCaughey reports:

"The bill’s health rules will affect “every individual in the United States” (445, 454, 479). Your medical treatments will be tracked electronically by a federal system."

And:

"One new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective."

So let's review those AMA headlines in this new context, shall we:

■ AMA Wins Legal Victory for Physicians in Privacy Court Case. Nope, you can kiss that privacy goodbye. After all, the gummint's proven so adept at keeping private information private.

■AMA Wins Victory with Record-Breaking Settlement in case against insurer. And that goes the way of the dodo, as well: can't sue the gummint. So when the bureaucrats in Washington say "jump," the doc's only response will be "how high, boss?"

These are folks who willingly gave up major chunks of their lives to study, work, even brreathe medicine. many of whom make (very) nice wages for these efforts. Yet they willingly risk throwing all of that away to make, what, a political point?

Okay, that's certainly their right and prerogative.

But it's also proof of my original thesis.

And there's this: If you're a "seasoned citizen," be aware (and beware) that this bill dramatically reduces your choices (and chances), as well:
"In 2006, a U.K. health board decreed that elderly patients with macular degeneration had to wait until they went blind in one eye before they could get a costly new drug to save the other eye."

[ed: as we reported last summer]

According to Ms McCaughey, "seniors in the U.S. will face similar rationing." Talk about an uncertain future.

Carnival, anyone?

Oh, and for Economies With "Performance Issues," there's this:

[Hat Tip: Joe Kristan]

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]

The "Leadership" That Can't Shoot Straight

Once again, it's time to point out just how disingenuous our country's "leadership" is when it comes to making the case for government-based solutions:

[Graph courtesy Innocent Bystanders]

The light blue line represents what the gummint told us would happen if we didn't hurry up and pass the Spendulus; the dark blue represents how well the Spendulus was supposed to work.

The proof, though, is in the red line, which shows what really happened, and paints a much starker picture. It's sort of a reverse-Midas Touch. And yet these same rocket surgeons expect us to believe that they can control health care spending.

Uh-hunh.

Medical Costs, ObamaCare and Reality

One of the claims made by supporters of (the various incarnations of) Obamacare is that nationalizing health care and health insurance will reduce overall costs of both. In short, "we're from the government, and we're here to help you" is cited as a valid reason to trust that the folks in DC have a clue about economic principles, and a proven track record on them.

Well, to be precise, a "proven track record of being correct on them."

The reality? Not so much:

The dark blue lines represent what Obamington claimed unemployment numbers would be under the Spendulus, and the light blue what the pols claimed would be the unemployment numbers sans the Spendulus.

Those red ones?

Reality.

And yet, we're supposed to trust them to get the health care numbers right?

Sure.

[Hat Tip: Innocent Bystanders]

Health Wonk Review: The Anti-Spam Edition

In honor of all the "spamblog" submissions I received for this outing, I thought it appropriate to include some useful spam tidbits. And so, each post this week is accompanied by a relevant, and yet tasty, Spam© concoction.

Enjoy!

(Oh, and if that doesn't work, try this)

■ We start off with a Singapore Salad, in honor of Pizaazz blogger Glenn Laffel's post reminding us that not all talk of health care reform is taking place here in the US: China's system is undergoing some changes, as well.

Careful though, about an hour after you read this post, you'll want to re-read it.

■ Moving on to the appetizer course, Sarah Axeen of the New Health Dialogue blog argues that we can both save the economy and reform our health care system, all in one fell swoop.

■ For those interested in lighter fare, we present Fiona Gathright's post at the Employee Wellness blog. She contends that folks are more likely to lose weight if they are paid for it, and that this weight loss would then translate to lower health care costs.

■ Sometimes, Puffs are a great idea. But David Williams, proprietor of the Health Business Blog, warns that looking for bargains in healthcare can lead to puffed up claims, particularly for uninsured and underinsured patients.

■ In a nod to our new president's heritage, we have a Hawaiian Spamburger, courtesy of Musings of a Distractible Mind's Dr Rob Lamberts.

The good doctor is thoroughly unimpressed with the state of Medicare, and in an Open Letter to the President, he explains why.

■ For a south of the border taste, we look to Nursing Degree blog. Looking to mix travel with surgery? Erika Collins has an indispensible guide to what she considers the Top 50 (and then some!) resources for Medical Tourism.

■ Interested in something that may sound good on paper, but might just be overreaching? Our own Bill Halper gives us his take on the "Stimulus" package (known around these parts as "The Spendulus"). Bill takes a look at all the health care provisions, and worries about their impact.

■ Like this recipe for incomparable corn chowder pot pies, Health Care Renewal guru Roy Poses has his own take on the comparative effectiveness research imperative in the recently passed "Stimulus" bill: if done right, he's all for it.

■ Sometimes, it's important to remember the basics, like a classic baked Spam loaf. Jason Shafrin, the Healthcare Economist, reviews some important healthcare statistics. These are classic, too, like health care spending that is expected to grow to almost 20% of GDP in 2017.

■ Remember when Egg McMuffins were first introduced, and folks wondered what they were? Well, just what is the Certification Commission for Healthcare Information Technology, and why should we care? Healthcare journalist Neil Versel explains both, including what they have in common with Bernie Madoff.

■ Is the Kaiser Family Foundation's recent report a bit cheesy? Disease Management blogger Jaan Sidorov thinks so, and gives the KFF a thorough fisking for its disingenuous criticism of insurance coverage for cancer patients. The good news, Jaan assures us, is that his own "pic is Obama-esque."

■ When grilling kabobs, managing heat is critical. So, too, is managing patient care, as Dr Rich reminds us in this "meditation" on why patients who receive stents are so poorly informed, and how policy decisions (i.e, how doctors are "managed") may play a role.

■ Talk about heartburn in a bowl: Blogger Merrill Goozner takes aim at the Atlantic Magazine's apparent misrepresentation of comparative effectiveness. Ouch!

■ This Mexican Extravaganza is sure to cause some gastric pain. And while we're thinking of it, does the level of pain you experience while recovering from surgery have any relationship to the type of coverage you have? Jon Coppelman of Workers' Comp Insider makes the case that it sometimes does.

■ If you're on a budget, these BLT Bites might be just the ticket. But, as Medicaid Front Page's Brady Augustine reports, the new SCHIP legislation may leave states scrambling to stay within their own budgets.

■ Bet you never expected to see the words 'Spam' and 'cupcake' together, did you? Canadian Medicine blog's Sam Solomon reports on a similar surprise: the Canadian Medical Association is lobbying to reform the country's healthcare system to make it look more like one of the mixed public-private European systems.

■ These Tuscan Spam Bites aren't the only things with (metaphorical) fangs; Anthony Wright opines that the benefits of COBRA shows the complete disaster that is the individual insurance market.

■ Just as this Seven Layer Dip has many levels, Louise at Colorado Health Insurance Insider reports that the Stimulus Package [ed: referred to as "The Spendulus" here at IB] includes some not so obvious ingredients, including some that she hopes will help to ameliorate the problem of so many uninsured.

■ And for dessert, something both sweet and tart. THCB's Brian Klepper reports on a recent appeals court decision that held against the advocacy organization Consumers' Checkbook, and with the AMA and HHS. The latter two are looking to keep Medicare physician data secret, but this may conflict with increased efforts at transparency in health care.

Be sure to check out the comments for some great fireworks, um, debate.

Thanks for stopping by; be sure to catch the next edition when Brady Augustine hosts at MedicaidFrontPage.

MLR vs SCOTUS: Under the radar

As we wait breathlessly for the SCOTUS decision on ObamneyCare©, I'll engage in some completely baseless (but fun) speculation. We've written extensively on the stupidity that is MLR (Medical Loss Ratio), and FoIB Holly R sent us this link on the latest:

"Health insurance plans owe $1.1 billion in rebates ... Millions of consumers and businesses will receive $1.1 billion in rebates this summer from health insurance plans that failed to meet a requirement of the new health-care law"

Thus sayeth HHS Secretary Shecantbeserious.

As an aside, do "professional journalists" and/or "editors" actually proofread the stuff they spit out? It would appear not, since they seem to be saying that Madame Secretary envisions checks totaling multiples of billions of dollars ("Millions of consumers" will be getting checks for "$1.1 billion"). On the other hand, given the current regime, maybe that's just the next Spendulus.

Compounding this idiocy is that Madame Secretary and her minions have no idea how many rebates will be "earned," let alone the total dollar value. I guess we'll have to send out the checks to see how many - and how much - they are.

But here's the piece that has me chuckling: the naysayers claim that if SCOTUS scuttles ObamneyCare©, “adult children” will be booted off parents’ insurance, policies will be rescinded willy-nilly, and other assorted clamors of doom.

So here's my question: in that scenario, wouldn't those who received MLR-generated rebates have to return them to the carrier(s)? And yes, I'm quite serious. Sauce for the goose, and all that.

A Few (More) Words on AIG [UPDATED 3/17/09 AND BUMPED]

[Please scroll down for updates. HGS]

I haven't commented on the recent kerfluffle regarding the massive bonuses planned for the former insurance behemoth's executive squad, primarily because there doesn't seem to be any need to: it's getting quite enough play in the press.

But it seems to me that remaining silent might be construed as condoning the idea, and that, of course, will not do. So, for the record, while I don't believe that these execs should be forced to commit hari kiri, I do think that any bonuses should be remanded forthwith to the federal treasury, and used to help pay off the carrier's massive debt to the citizenry.

On the gripping hand though, there's this:

Current CEO Edward M Liddy avers that he has ""grave concerns" about the impact on the firm's ability to retain talented staff "if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury." And that may well be a valid point: if they can't attract, and retain, top-notch talent, what are the chances that they'll ever be in a position to repay us? Reason #14,287 why we never should have bailed them out in the first place.

UPDATE: In the comments, Bob takes me to task for missing the big picture:

"(T)his is a multi-faceted situation with no simple or direct solutions...The bigger problem with AIG is this. What did they do with the taxpayer money?

Apparently they used it to make several banks "whole". Billions were funneled back to Deutsche Bank, Credit Suisse, Goldman Sachs and others...

Sorry Hank, but targeting the bonuses misses the mark. There are MUCH bigger issues."

Well hey, it wouldn't be any fun if we agreed ALL the time. I think Bob's quite correct that there are other, perhaps larger issues at stake here. But it seems to me that even the appearance of impropriety, especially on such a volatile issue, is cause for a hard look.

UPDATE 2: It seems that not only are there contractual issues (which Rick also mentioned in the comments), there appears to be a specific, legal requirement to fulfill these obligations. Apparently, as the Senate was crafting the Spendulus last month, Sen Christopher Dodd (D-CT) "unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law." [emphasis added]

Although this is probably irrelevant, it should also be noted that Senator Dodd (D-CT) "was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org."

A lousy $100k? Sheesh, what a bunch of pikers!

More ARRA/COBRA Confusion

[Welcome Industry Radar and Wall Street Journal readers!]

Received in the mail this morning a letter which included the following:

"...small employers that are exempt from COBRA (e.g. employers with less than 20 employees) but subject to state continuation laws [ed: "mini-COBRA] will have to comply with the new subsidy requirements..."

Which we already knew, but:

"The new rules require employers to send out special notices and to allow certain individuals who originally declined coverage a second opportunity to elect to continue coverage." [emphasis added]

Now, this is from a noted expert on COBRA (in fact, he's one of our favorite CE instructors on the subject), so one might presume that this could be taken as "gospel."

Not so fast.

Let's back up a moment: as we've discussed, the Spendulus included some radical changes to COBRA, one of which extended the "subsidy" to smaller groups. From what we've learned so far, this applied only to the "subsidy" itself, not the notification requirements. Until now, Ohio (for example) had none: it was up to the (former) employee to seek out that coverage continuation. COBRA requirements in that area, however, are onerous, and almost always contracted out by employers. This is cost-effective for a larger group, but prohibitive for smaller ones.

If true, this new notification requirement would be a severe blow to any small employer's budget: under COBRA, the penalties for screwing up notifications are severe and not just applicable to the employer, but to the hapless employee who was assigned the task. So many groups (and most of the smart ones) contract with a COBRA administrator to handle this chore. That's probably not an option for a group of, say 10 or 12 employees, so the temptation to do this in-house will be great.

And unwise.

I'm still not convinced that this is the new law of the land, however. We've been keeping a very close watch on this issue, and haven't seen this particular item come in, except for this letter. So I called the Department of Insurance to see if they knew about it.

They did not.

In fact, their response was to "stay tuned" because the Department of Labor (the federal agency tasked with overseeing COBRA) was still ironing out details. Better yet, I clicked on over to the DOL, and found a brief FAQ about the new rules, none of which addressed the notification issue at the state level. Ditto at the dedicated COBRA site.

So, is this fact or urban legend?

At this point, no one seems to know. We'll keep you posted.

More from the "D'unh!" Dept

There's actually quite a bit of schadenfreude in this article, but this damning indictment of ObamaCare© is actually far, far more damaging than anything we've ever written:

"The uninsured ranks among adults over 27 years old swelled from January through April of this year, according to Gallup, with 27- to 35-year-olds seeing the highest uptick. Nearly 27 percent of them are now uninsured."

What's so interesting about that (unvetted) number is that it represents an increase from the "record 50 million in 2009."

In other words, just like the Spendulus, ObamaCare© has actually exacerbated the problem, rather than resolve it. No worries, though, everything will be just peachy keen come '14.

COBRA/Spendulus: Another Update

[Welcome Industry Radar readers!]

Just got another email from our FSA/HRA/HSA Guru, who clarifies that:

"FSAs were specifically excluded from the temporary COBRA subsidy program. There are a couple of links below that speak to the subsidy and note the exclusion of FSAs."

He also sent along this helpful link.

Thanks, Pete!

Res Ipsa Loquitur, or: Buying Len a Clue

Sometimes, the email we receive is so unintentionally funny, I just have to respond. In this case, the New America Foundation, in the person of its Director of the Health Policy Program Len Nichols, went off on a baseless and error-infested rant regarding AHIP's opportunistic ObamaCare about-face.

Having initially tied itself to the ObamaCare wagon, the self-proclaimed spokesgroup for health insurance companies has decided to untie itself, having finally figured out something we've been saying for quite some time: that Obamacare will lead to major premium increases, less competition and health care rationing. In the spirit of graciousness, we welcome the AHIP to reality.

What has Len's knickers in a wad is that AHIP finally decided that maybe it would be a good idea to have an independent organization vet the plan (such as it is), to see if it truly was the Holy Grail. To that end, they engaged the respected accounting firm Price Waterhouse Cooper to run the numbers. What PWC found is that "the typical family premium in 2019 could cost $4,000 more than projected." And as Bob has pointed out, it will also shift the cost of Medicare cuts to privately insured patients, and rate increases will disproportionally impact younger folks. What a great deal!

Len begins by constructing a straw man that would do L Frank Baum proud: "Most think tank work is funded by Foundations, which by law are nonpartisan."

That would be wrong: there is nothing that requires (or even suggests) that any "Foundation" be apolitical. And if he wants to cast stones, then he ought not to be quoting two of the most hyper-partisan such groups around, the Urban League and the Robert Wood Johnson Foundation.

Shooting the messenger is, of course, a time-honored tradition, but Mr Nichols isn't content with just shooting it, he means to obliterate it:

"Good policy research uses nationally and statistically representative data so that its conclusions reflect behavior of the actual population."

Since when?

Almost all polls are done with samples that are weighted for a specific bias. His take isn't even good statistics.

Gotta love this one:

"The report ignores the subsidies included in the Finance Committee bill." Hunh? From where does he think these "subsidies" come? Here's a clue, Len: they come from the taxpayer, including that hypothetical family of four.

And this, along the same lines:

"The report ignores the excise tax on high-cost plans." Who do you think pays those, Len? Certainly not those on funemployment, thanks in large part to the Spendulus.

This is simply amazing:

"The report assumes that all Medicare savings will be converted into private sector cost shifts."

Well, dunh! That's because Nancy, Harry and Barry have been claiming this to be one of the primary goals of the legislation. Are you calling them liars now?

And this is pure gold:

"The report ignores the fact that under the Senate Finance bill, "If you like your coverage, you can keep it."

That's because, as we've documented, you can't; this was never a goal of ObamaCare, and it's disingenuous to suggest it ever was.

It's unfortunate that Mr Nichols and his crew must resort to obfuscation to try to save this quickly sinking ship. But it's of a piece with those who believe that a nationalized health care scheme is a "good thing."

Not even close.

Well, THAT Was Fun (and Expensive)! [Updated]

Remember a while back, when we were informed that, without the Spendulus, unemployment would skyrocket? But that, through the Magic of Gummint Spending© we could avoid this potential cataclysm, restore the economy to its formerly robust state, and once again enjoy the fruit of our labors?

Turns out, not so much:

What, you may ask, does this have to do with insurance?

Glad you asked. It's pretty simple, really: if the rocket surgeons in DC got this so bone-achingly wrong, why would anyone believe they could get health care right?

[Chart courtesy Innocent Bystanders]

UPDATE: On a related note, all those TARP (Toxic Asset Relief Program) dollars that went to bail out ailing financial institutions (like AIG)? Bet you thought that, like all good gummint programs, there was some adult supervision.

You'd lose that bet:

"In his 256-page report to Congress, [TARP Inspector General Neil]Barofsky notes that the Treasury Department's failure to implement anti-fraud measures, or even to require TARP recipients to report how they used the billions Congress and the Treasury Department gave them, makes it highly unlikely that the $317 billion outstanding -- nearly half the TARP total -- will ever be returned to taxpayers."

What's that sound?

The Gang That Couldn't Count Straight: Spendulus & Health Care

Back in the day, we poked fun at then-Presidential candidate Obama's claim that he'd been to "all 57 states." Not having a Harvard Law degree, we relied on our high school teachers' claims that there were but 50. But it appears that President Obama's Spendulous efforts are indeed reaching all 57 states:

"In Arizona's 9th Congressional District, 30 jobs have been saved or created with just $761,420 in federal stimulus spending. At least that's what the website set up by the Obama Administration to track the $787 billion stimulus says."

Good news, right?

Well, not so much:

"There is no 9th Congressional District in Arizona; the state has only eight Congressional Districts."

Ooops.

But that's just a fluke, right? A one off?

Well....

"There's no 86th Congressional District in Arizona either, but the government's recovery.gov Web site says $34 million in stimulus money has been spent there."

And the list goes on from there.

Quick - Put these guys in charge of our health care!

Not Your Mother's Tea Party

Hard as it may be to believe, I have never before participated in an organized protest.

Ever.

So this afternoon proved a watershed event for me, as I mingled with thousands of fellow citizens in the brisk ( but dry!) Dayton weather. Because this was such a seminal moment for me, I'd like to share some of my thoughts and observations about my experience, while avoiding some of the more obvious politics [ed: rotsa ruck with that].

As I mentioned, I've never been to a protest before, so I really didn't know what to expect or even the appropriate time to arrive. The event was planned to officially kick off at 6:00, and I was concerned about parking (a perennial problem in our fair city). So I got downtown about 4:00, and turned into the first parking garage I saw; this was about three blocks from Courthouse Square.

As predicted, the walk didn't kill me.

When I arrived at the designated site, I found about a dozen or so other folks milling about. Several of us introduced ourselves, noting that this was our first protest (this later turned out to be a common theme). Gradually, the crowd grew, until about 5:30, when I looked around again - really looked around - and realized that there were many hundreds of people around me. I have no idea how many folks attended; the rumor was three thousand, perhaps more. Regardless, it was a lot of people.

Something else I noticed: there was a good mix of ages, with a lot of grandparents (or, at least, folks old enough to be grandparents). I found this intriguing. And it was a well-behaved crowd: folks helped each other up and down steps, that kind of thing. I was pleased that the event began with both the Pledge of Allegiance and the National Anthem.

And the signs!

I saw literally hundreds of home made signs, and a mere sprinkling of professionally manufactured ones. Make of that what you will, but I was heartened by this.

This was billed as a non-partisan event, and for the most part, it was. That is, it was not a matter of Democrat vs Republican, but it was not a non-ideological event, in that it appealed more to conservative than liberal values. Unfortunately, a lot of folks (judging by their signs) mistook Obama's recent efforts as the sole cause of our current situation. He is not: Republicans, including former President Bush, were complicit in much of what we now face.

One common chant was "Fire Them All," meaning all members of Congress, regardless of party affiliation. While I understand the sentiment, it is - let me find the right word - oh yes: stupid. Notwithstanding the legal and constitutional issues of such an idea, it fails to recognize that there are folks in both Houses, and on both sides of the aisle, who have fought against wasteful spending.

Another common sign was "Read The Bill!" Indeed, several of the speakers chastised members of congress for passing Spendulus without even reading it. This is also stupid: does anyone really think that if they'd read it, they wouldn't have passed it? Wishful thinking.

And of course, there were signs and speakers using the event to tout the Fair Tax. I have no particular disagreement with the concept of the Fair Tax, but the way it's being promoted is, you guessed it: stupid. The problem is that most people don't have a clear understanding of just how much they currently pay in taxes ("hey, I got a refund!"), and so have no particular reason to get all excited about doing away with the current code. The Fair Tax is certainly a reasonable ends, but as a means, it's, well, you know.

So, Henry, what's your solution if you think the Fair Tax "isn't all that?"

It's simple really, and would require only one bill and would cost virtually nothing to implement: merely outlaw all tax withholding. Business owners and entrepreneurs know all about quarterly filing; the average employee is clueless. If there's no withholding, everyone gets 100% of their paycheck, every week (or whatever).

That's the good news.

The bad news is that everyone would then be required to file quarterly taxes. That means writing a potentially sizeable check, every three months. I suspect that after exactly two of those checks go out, we'd see the end of the tax code as it currently exists. Then the Fair Tax may become a viable option.

Okay, back to the Tea Party. With one exception, all of the speakers were "regular folks:" homemakers, business owners, a gentleman who grew up in East Germany who spoke eloquently about this land of opportunity and freedom. The last speaker was a state representative who did a passable job of staying non-partisan. By then, the crowd had started to thin, as folks looked at their watches and headed home for (one supposes) dinner. None of these were professional speakers (save for, obviously, the pol), but they were excited and exciting, and obviously "true believers" in the cause.

As for me, I was there for a much simpler reason: my daughters and their (eventual) children, and their children. It frightens me to think that we're purposefully burdening them with even more debt; a long term, perhaps permanent "solution" to an obviously short term problem.

Will these events make a difference? I really don't know. But for me, it seems necessary that we at least try because if we don't, the alternative is frightful to contemplate.

ADDENDUM: I neglected to mention something else that bothered me about today's rally. The signs and speakers focused primarily on the massive debt and increased taxes, but very little was said (or seen) about the bail-outs or (perhaps more importantly) the government takeover of parts of two major industries: automobile manufacturing and financial institutions (including insurers).

I think that one of the wonderful aspects of this "movement" (for lack of a better term) is its lack of centralized planning or sponsorship; on the other hand, one of the challenges of this movement is its lack of centralized planning. Because it is essentially a grassroots effort, it lacks a coherent and cohesive message. Perhaps that will change as it matures and coalesces, but I think the speakers (at least at the Dayton event) missed an opportunity to spotlight the increased government control of major sectors of our economy, and the dangers that such control represent.

I certainly hope that this is corrected at future such events.

On Economic "Fixes" and Health Care "Reform"

So because of (demonstrably not "despite") the Spendulus, unemployment is now at record highs, twice what it was under the previous administration, and showing no signs of easing:

And again we ask, why would we even consider putting these guys in charge of our health care?

[Chart courtesy of Innocent Bystanders]

COBRA/Spendulus Update

[Updated - scroll down]

FoIB Bill Montgomery, CIC, points us to another "deal killer" in this bill. According to a memo from United Healthcare, "the subsidy provisions apply to state continuation coverage that is comparable to federal COBRA. That would include so-called "mini-COBRA" state laws that cover groups below the 20 employee threshold for COBRA."

Here in Ohio, groups with 2 (!) or more employees must indeed offer such an option; the key threshold is whether the (former) employee is eligible for unemployment compensation. If so, he or she may elect to continue the group coverage, at his/her own expense, for up to 6 months. Of course, this now means "at a substantial discount" for up to 6 months.

This does not bode well for small employers, who may have believed that they'd "dodged a bullet" when it appeared that these new reg's applied only to larger, COBRA compliant groups.

Of course, since "mini-COBRA" admin requirements are much less onerous than COBRA's, it's up to the (now former) employee to seek out this coverage. Still, if the extra costs are a problem for COBRA compliant groups, they could be disasterous for mom-and-pop shops.

Ooops.

Over on the Left Coast, co-blogger Bill Halper reports that California has CalCobra. He says that it "covers all group health plans (except those regulated by ERISA) with 2-19 eligible employees. The eligibility requirements are the same as Federal Cobra: as long as you are on the employer’s plan, pretty much anything short of walking in carrying an Uzi means you’re eligible. Voluntarily quitting your job, which would make you ineligible for unemployment, doesn’t affect your CalCobra eligibility. You can stay on CalCobra for 36 months; normally premiums are 110% of the employer’s premiums [ed: well, they were 110%. Now, not so much].

It’ll be amusing to see how this is implemented. Under CalCobra, the carriers are responsible for all of the administrative work. The employer notifies the carrier of a qualifying event, the carrier sends out the notice and then bills the participant and collects the premium. The employer is completely out of the loop. The Federal Law complicates things a bit.

OY! UPDATE: Just got this from one of our dental carriers: "Dental benefits are included in the health plan definitions of COBRA."

Exit question: If I didn't have dental before, will I be able to elect it at termination?

COBRA/Spendulus Update, Part 2

[ed: For background, click here and/or here]

FoIB and regular commenter Chad made this observation:

"As far as I can tell the subsidy applies to all group health plans subject to COBRA including dental, vision, HRAs, and [wait for it] health FSAs. Who wouldn't elect COBRA for their HFSA if the taxpayer is going to pick up 65% of the cost of the annual election. What a sweet deal!"

There was some discussion as to whether or not this was accurate, so I checked in with my Guru of All Things FSA/HSA/HRA, Pete Deist. He responded this morning that:

"It is but they still have to pay 35% AND have qualifying expenses to use up the money. I doubt many people will ... figure this one out."

So there you have it. For now.

And from co-blogger Bob Vineyard, this site has a plethora of up-to-date and helpful information on this complex and volatile issue.

Are WE Stupid, Too?

[Welcome Industry Radar readers!]

Recently, I noted that doctors demonstrate a remarkable lack of intelligence and sense. But I also wonder why the public at large believes that health care reform included in the Spendulus is going to have a happy ending.

As we've repeatedly noted here at IB, unless we're able to contain health care costs, our likelihood of controlling health insurance costs is a pipe-dream. And we can look at real world examples to ascertain the truth of this.

One such example, often cited as a model of health care efficacy by those in favor of such systems, is Medicare. Unfortunately, it fails miserably on all counts:

"An ambitious effort to cut costs and keep aging, sick Medicare patients out of the hospital mostly didn't work, a government-contracted study found."

Got that? A "government-contracted study." Not an insurance company or doctor's association. For many seniors, chronic illness is a way of life; the challenge is to manage it cost-effectively. Unfortunately, this gummint-run system has demonstrated no such ability:

"Most of the patients had serious, but common, age-related illnesses...Programs were set up at 15 centers...Only two cut the number of times these patients were hospitalized...None saved Medicare any money." [emphasis added]

One of the primary problems (and again, one we've mentioned many times) is that many folks have behaviors that can be changed, but too often remain unchecked: weight, excercise, smoking, etc. Without more personal responsibility, there's very little hope of change, the power of the gummint notwithstanding:

"The only way you can really do it is by changing patients' behavior and by changing physicians' behavior, and both things are really hard to do," according to the study's author, Randall Brown.

No kidding.