The Mandate Update: Evil AND a Tax

Looks like Aunt Nancy was wrong on this: we didn't need to "see the plan to know what's in it" as regards the (evil) Individual Mandate:

"In order to protect the new national health care law from legal challenges, the Obama administration has been forced to argue that the individual mandate represents a tax -- even though Obama himself argued the exact opposite while campaigning to pass the legislation."

Whoa – The Obamaman lied about ObamaCare©?!

I'm shocked, shocked I tell ya!

Well, not really, since we had already made that call early on. This is a significant development, though, because it not only puts the lie to claims that the mandate is not in fact a tax, but that it is an unprecedented one, at that.

Until now, taxes were levied on things we bought or owned, but this is a tax on merely existing. Unlike the red herring that auto insurance is mandated, being taxed because one demurred from participating means that you'll be taxed simply for being a living American. I used to joke that these folks would tax the air that we breathe if only they could; turns out, this piece of ObamaCare© does just that.

If there's a bright side, it's that as more and more "clarifications" come forth, an overwhelming majority of Americans want this train-wreck repealed. It remains to be seen, of course, whether or not that translates into action, but it's a hopeful sign that folks understand just how bad this is, and that the pro-ObamaCare© forces are being forced to defend the indefensible.

Employer Mandate Under the Radar

And under the gun.

The (Evil) Individual Mandate continues to garner the lion's share of press, but the (also Evil) Employer Mandate is beginning to get some (dis)respect:

"Whereas other suits hinged mostly on a challenge to the law's "individual mandate" ... the Liberty University case also challenged similar requirements on employers to extend coverage to workers."

Currently, employers are under no requirement (other than market forces) to offer group health insurance to employees. Under ObamneyCare©, that all changes: employers will be forced to install ever-more expensive group health plans or face a stiff penalty.

As we've long remarked, this is a no-brainer for employers: given the burdensome new minimum health insurance packages required under ObamneyCare©, any fines (aka taxes) will look like a bargain.

Remember that phrase "if you like your insurance, you can keep your insurance?"

Good times, good times.

A disturbing ObamaTax thought...

"House Republicans received a boost from Democrats on Wednesday during votes to delay ObamaCare’s individual and employer mandates ... Twenty-two Democrats joined Republicans in a vote to delay the individual mandate"

This in response to the Obamastration's unilateral suspension of the (Evil) Employer Mandate a few weeks ago. The premise seems to be "if employers are off the hook, why shouldn't individuals be off it, as well?"

Which may well be "fair," but it raises a disturbing point: having looked high and low, I can find no evidence that either side is also proposing a moratorium on the Guaranteed Issue provisions of the ObamaTax.

Now you may be wondering, why is this a big deal, Henry?

Here's why: as of January 1, insurers will no longer be able to decline coverage to unhealthy people. In fact, they must write anyone and everyone who applies, regardless of health status. But if no one is required to "buy in," it seems likely that only the least healthy among us will do so. After all, absent the (evil) individual mandate, healthy folks have no real incentive (other than personal responsibility) to sign up. But "sick" people have ample motivation, and will likely do so in droves, further driving up rates for those already insured, and presumably causing some (many? most?) to drop their increasingly unaffordable coverage.

ObamaTax supporters, of course, consider this a feature, not a bug.

The (Evil) Individual Mandate: It's Expensive, too

Although it's not often mentioned, the individual mandate isn't just unconstitutional, but it's darned expensive, too:

"Sen. Tom Coburn (R-Okla.) on Tuesday sent around the Congressional Budget Office's June estimate for repealing the mandate. The bottom line, according to CBO: Doing so would bring in $202 billion from its 2014 start date to 2019"

But at what cost?

Well, according to the CBO, it "would also cause the number of uninsured people to increase by 16 million."

Not so fast there, fella: first, it presumes that these are folks that wouldn't buy insurance of their own volition. It certainly can't be because they're "uninsurable:" after 2014, there's no such animal. According to the Census Bureau, there are about 307 million (legal) Americans; 16 million represents about 1/2 of 1% of that total. $200,000,000,000 seems like a pretty big price tag for such a statistically insignificant-sized group.

Which is not to say that their individual needs are insignificant (least of all to themselves), but it's further proof that ObamaCare© is not, and never has been, about seriously cutting the cost of health care.

The Individual Mandate is Evil [UPDATED]

The other day, I had breakfast with an old friend and mentor. In the course of discussing ObamaCare, he asked me which part I considered the most egregious. I think I surprised him when I said it wasn't coverage for abortions or illegal aliens, or even the so-called "Public Option" which most offended me.

It's the individual mandate.

Now, one might think that, because I sell insurance for a living, I'd be all for a law that required folks to buy what I sell. But I'm an American first, and I find this particular idea repugnant and, frankly, unAmerican. Here's why:

There is no precedent for requiring us to buy a product or service simply for living. There are those who argue, incorrectly, that we're required to buy automobile insurance. But they neglect to finish the sentence: "if one chooses to own and/or operate a car." Many folks go through life relying on public or alternate transportation, never having the need or requirement to buy auto insurance. But there are no choices here: simply being alive would require one to buy insurance.

Second, this is far beyond a slippery slope: if the government can require you to buy something you don't need or want, then it can require you to do anything. There simply is no limit.

Third, a friend of mine recently raised a First Amendment issue: what about those folks who, because of their religion, don't use medical services? Would Scientologists and the Amish (for example) be exempted from this requirement? If not, then they're paying for something that they cannot use due to their faith. This is a gross infringement on their 1st Amendment rights. If they are exempt, then how many folks will join (or claim to join) one of these faiths in order to avoid the mandate, and how would that square with its goals?

There is just no valid case to be made for such a law, and its adoption would be a very, very bad thing.

UPDATE: It appears that the most egregious penalties vis: the Individual Mandate have beentoned down in Dr Harry's version of ObamaCare:

‘‘(C) INDEXING OF AMOUNT.—In the case
5 of any calendar year beginning after 2017, the
6 applicable dollar amount shall be equal to $750,
7 increased by an amount equal to—
8 ‘‘(i) $750, multiplied by
9 ‘‘(ii) the cost-of-living adjustment de
10 termined under section 1(f)(3) for the cal
11 endar year, determined by substituting
12 ‘calendar year 2016’ for ‘calendar year
13 1992’ in subparagraph (B) thereof.
14 If the amount of any increase under clause (i)
15 is not a multiple of $50, such increase shall be
16 rounded to the next lowest multiple of $50."

In other words, a penalty far less than called for by Nurse Nancy's edition.

And it also appears that they've dropped the threat of jail-time:

"WAIVER OF CRIMINAL AND CIVIL PENALTIES AND INTEREST.
—In the case of any failure
12 by a taxpayer to timely pay any tax imposed by this
13 section—
14 ‘‘(A) such taxpayer shall not be subject to
15 any criminal prosecution or penalty with respect
16 to such failure,"

That subsection goes on to say that penalties will be that the gummint gets to keep any tax refunds, that kind of thing.

On the other hand, it will still be illegal to choose to be uninsured. So the principle that one will be required to buy insurance remains unchanged.

And here I thought these guys were pro-choice.

[Update Hat Tip: Ace of Spades]

On Severability

We first noted this issue way back in 2010:

"[A] federal judge in Virginia has ruled the (Evil) Individual Mandate unconstitutional ... Since the judge has ruled that the precept of "severability" does not attach"

Um, Henry, what's your point?

Well, it actually involves The Lone Star State (and 19 of its closest buds), The Constitution, and the law. Severability simply means that if one part of a particular law is deemed unenforceable, the rest of it could still be fine. But its absence would mean that if one part is tossed, then the rest is, too  (baby, bathwater, you understand). Most legislation includes a "severability clause" that essentially says "hey, even if Part 2 is deemed non-enforceable, the rest of this law still stands." It's pretty standard wording.

Unless you're the Party in Power©, in which case you ram through a hastily written revampling of our entire healthcare financing and delivery system, and decide one's not necessary [ed: we would also accept "You're the Party in Power© and are too stupid to catch its absence"]. And here's where it gets .... interesting:

The theory behind the suit is that, since Justice Roberts (et al) deemed the Mandate 'kosher' as a funding mechanism, and since  the  Tax Cuts and Jobs Act of 2017 explicitly set that funding at $0, the entire platform on which ObamaCare was built is null-and-void.

Whoa there, Henry, went a little fast there, didn't you?

Okay, remember that "severability clause:" we discussed? Well:

"Once the heart of the ACA — the individual mandate — is declared unconstitutional, the remainder of the ACA must also fall."

Of course, the Supremes will do what the Supremes will do, but this seems like at least a viable argument.

ObamneyCare© meets SCOTUS

One supposes that we'd be remiss in not remarking on this news:

"The U.S. Supreme Court will hear a challenge to President Obama's signature law on health care ... The challenge in the case, brought by 26 states out of Florida, is based on the constitutionality of the individual mandate in the Patient Accountability and Affordable Care Act, which requires that all Americans purchase health insurance."

The case at hand is the "biggie" comprising 26 of the 58 states, and which argues that the (Evil) Individual Mandate is unconstitutional.

Dunh.

At this point, all we know is that the Supremes have agreed to hear the case, presumably next Spring. Given the Court's current make-up, and recognizing that IANAL, it's anybody's guess how they'll eventually rule.

Shall we set up a pool?

Contract Law vs ObamneyCare©

When I first posted on this late last month, I was skeptical that it would gain much traction.

As regards the (Evil) Individual Mandate that ostensibly free citizens must buy a product from a private vendor:

"[T]the age-old caveat that a contract entered into under duress is non-enforceable. Their stance is that, because insurance is, in fact, a contract, forcing one under penalty of law to sign on the dotted line renders it moot."

Now comes George Will, noting in the Washington Post that:

" [T]he elegant scholarship and logic with which it addresses an issue that has not been as central to the debate as it should be ... The individual mandate is incompatible with centuries of contract law. This is so because a compulsory contract is an oxymoron."

So maybe it is picking up steam.

Monday LinkFest

As is so often the case, these are items of interest which don't seem to merit their own, dedicated post. Still, we'd hate to miss mentioning them:

■ Buckeyes Buck BambiCare©?

Maybe so:

"More than 540,000 voters in the state have signed petitions in favor of a ballot initiative to amend Ohio’s state constitution to directly conflict with Obamacare’s individual mandate."

Assuming those half-a-million-plus signatures prove valid (and sufficient), there's a good chance that we'll see this on the ballot in a few months. The initiative is doubly-interesting: in addition to contesting the (Evil) Individual Mandate, it's worded to prevent the state from passing its own version of the federal train-wreck. Not that there's any great rush to do so: just check out our last item (below).

■ One of the major "accomplishments" of ObamaCare© is to move more folks off of their own private (and group) health plans and onto Medicaid. Whether or not that's such a great idea economically is, of course, a matter of great debate. What's not so debatable, though, may be whether or not it's good for our physical health:

"[S]tudies that show big mortality impacts from being uninsured show even bigger mortality impacts from being on Medicare and Medicaid, even after controlling for age and income: you are more likely to die if you are on government insurance than if you have no insurance at all." [emphasis added]

Ooops!

■ Clunkers and Insurance

Government Motors has added a new "service;" in addition to selling, servicing and financing your new car purchase, they'll even throw in free insurance:

"To spur sales, General Motors is offering a year's worth of car insurance along with any new GM car purchased in the states of Washington or Oregon ... The insurance ... includes both liability and physical damage coverage."

I'm reminded of an old saying.

■ Slow and Easy Does It (Not)

Whether or not Ohio voters are successful in blocking implementation of ObamaCare© here, at least one piece is facing an uphill battle in at least a few of the other 57 states:

"State insurance exchanges are not being set up fast enough to meet the 2014 deadline set by the healthcare law ... a number of state legislatures are at risk of handing over the central component of the reform effort to the federal government."

If your state hasn't set up its version of the notorious Exchange by '14, HHS Secretary Shecantbeserious is set to do so, like it or not. How that would play against any state-specific law barring such a move I'll leave to the lawyers to ponder.

Words. Fail. Mandate. Lives.

While we've never been fans of the (Evil) Individual Mandate, we've recognized that it's limited in how draconian its enforcement is allowed to be. Worst case scenario, a big check to Uncle Sam (and even that's difficult to actually enforce).

But as terrible as the (Evil) ObamaCare Mandate is, it pales in comparison to the new iteration recently passed by the Rocket Surgeons in the District of Columbia:

"DC Passes Law Requiring People To Buy Health Insurance Or Have Their Property Seized"

So, "nice house you've got there, be a shame if something happened to it because you passed on buying health insurance."

Worse yet, it doesn't appear that there's a carve-out for Direct Primary Care or Health Care Sharing Ministries (as there is in the ACA).

Yikes, indeed.

ObamneyCare© Mecca

We've noted before that certain religious groups have been granted ObamaWaivers© as regards the (Evil) Individual Mandate. Exactly how that's legal has been unclear, though.

Until now:

"[ObamneyCare©] uses the Social Security language of the Internal Revenue Code to determine who is eligible for “religious conscience” objection to the insurance mandate."

That is, since Moslems consider insurance as "haraam" (forbidden), they're not going to be required to buy health insurance. Other religions, including the Amish and Christian Scientists, are also being given free passes on the Mandate.

I find this fascinating: after all, mandate is defined as "[a]n authoritative command or instruction." I googled around, and couldn't find it defined as "[a]n authoritative command or instruction. Unless it's inconvenient or offensive."

Funny, that.

The Commonwealth vs ObamaCare©: What's it mean?

As I'm sure our readers already know, a federal judge in Virginia has ruled the (Evil) Individual Mandate unconstitutional. There are a lot of legal eagles already dissecting the various legal implications, but I'd like to share some thoughts about the ruling from the perspective of risk management. Of course, these are not incompatible, so please pardon my use of some legalistic terminology in this analysis.

Let's start with this: if one presumes (as I do) that the true goal of ObamaCare© is to destroy the health insurance system that over 85% of us currently enjoy, then this ruling is a boon to those who favor it. Since the judge has ruled that the precept of "severability" does not attach, then we are left with a system that will require insurers to ignore pre-existing conditions while driving away healthy folks who would represent a "cushion" against increased claims. As insurers face more expensive and frequent claims from those who are ill, premiums will escalate even faster than they already do, driving away healthy folks who know that, if and/or when they get sick, coverage will be readily and immediately available. What possible reason would they have to remain insured?

Of course, since we already know that this is the desired outcome of those who favor ObamaCare©, it makes perfect sense: once enough people leave the system, and premiums increase beyond our wildest imagination, the government will have little choice but to step in. Whether that's through price controls or simply moving everyone to a nationalized scheme, the result will be an insurance system far different than what we have now. The problem, of course, is that "different" doesn't necessarily mean "better;" as we've seen from (for example) the MVNHS©, such a system does little beyond rationing to rein in increased health care costs, while subjecting its victims, er, insureds to lengthy waits and poorer outcomes.

Obviously, Judge Hudson's ruling is merely a stepping stone; there are still approximately 4.8 million other lawsuits currently wending their way through the judicial system. I do appreciate that at least one jurist has "seen the light" regarding the Evil Mandate, but I'm less sanguine that this represents a meaningful step forward. Still, it's preferable to a ruling approving the mandate.

Absent imposition of severability, I give it a B-.

Death and Taxes (But Mostly Taxes)

As might be expected, we tend to look at the insurance (and health) aspects of ObamaCare©, but as Bob's pointed out, there are some pretty significant tax issues, as well. Some are hidden, of course, but two readers, Bob D and Sam B, have drawn our attention to some of the more overt tax increases contained in the bill we had to pass to see. As we've discussed before, the (Evil) Individual Mandate is a tax, as is the (Stupid) 1099 Rule. But these are only two examples of the tax perfidy to which we're about to be treated. Here's a handy cheat sheet to many others:

Last year saw a $2.7 billion tax on indoor tanning, and a $22 billion hit on drug innovation companies.

This year will see the implementation of a $5 billion "Medicine Cabinet Tax" (on generic med's under HSA, FSA and HRA plans) coupled with a $1.4 billion spike in HSA withdrawal penalties. We'll also be treated to the new Employer reporting requirements (more on this issue here).

In '12, we'll see the roll-out of much-despised and derided "Corporate 1099-MISC Information Reporting" requirement, expected to cost over $17 billion.

2013 looks to be a "banner year" for ObamaTaxes©: we'll see the $123 billion Surtax on Investment Income [ed: which has to do with healthcare, how?], an $86.8 billion increase in the Medicare Payroll Tax, a new cap on Flexible Spending Accounts as they relate to special needs kids (why does Barry hate the children?), a $20 billion tax on manufacturers of medical devices (why does Barry hate sick people?), an increase in the itemized deduction requirements that's expected to cost taxpayers an additional $15 billion, along with the elimination of the deduction for employer-provided prescription med benefits that looks to cost $4.5 billion.

Looking ahead to 2014, we see the much anticipated (and Evil) Individual and Employer Mandates in full swing, along with a new tax on certain insurers. That last little goody's looking to cost insurers $60 billion. Wait, did I say "cost insurers?" Just kidding! It looks to cost insureds $60 billion.

And waaay down the road - 2018, to be exact - we have a shiny new, $32 billion Excise Tax to look forward to.

Isn't it grand that we had to pass it to learn all this?

ObamaCare© and the *Other* Constitutional Problem

We've spent a great deal of time explaining why the (Evil) Individual mandate doesn't pass Constitutional muster, but there's an even more (potentially more damaging) issue: the General Welfare Clause. To fully appreciate its relevance to ObamaCare©'s fate, we'll need to rewind all the way back to the beginning of the year, and the shameful "Cornhustler" deal:

"Under the terms of a deal Nelson cut with Senate leaders to secure his crucial vote for the health care package, Nebraska would be exempted from having to pay for the coverage of its new Medicaid enrollees ..."

And therein lies the kernel of the problem: ObamaCare©'s numbers rest almost entirely on the fact that it increases the Medicaid burden on the states (and definitely see Bob's explication of how this applies in the real world outside the Beltway). The case currently popping in Florida, wherein 20 of the 57 states are challenging ObamaCare©'s legality, rests almost entirely on this issue.

But what, exactly, is the General Welfare Clause? Since I'm not a lawyer (nor do I play one on TV ), I'll defer to the Wall Street Journal's Barnett and Oedel, both professors of constitutional law at prestigious universities:

"Although the constitutional objections to its individual insurance mandate—the requirement that any person who isn't provided insurance by his employer buy it on his own—have gotten all the public attention, the law also has a "general welfare" problem ... But the Court also acknowledged that "in some circumstances, the financial inducement offered by Congress might be so coercive as to pass the point at which 'pressure turns into compulsion'" ... ObamaCare won't alter Medicaid in a relatively small way. It's an "all in or all out" proposition ... but a threat of losing 100% of the single largest federal outlay to the states."

A 100% loss is, in the words of our silver-tongued Vice President, a Big...Deal.

How big, you ask?

How about:

"The annual federal spending on Medicaid is now over $250 billion, more than all federal spending on transportation and education combined, and it is climbing quickly. States on average devote about 18% of their tax revenues to Medicaid, typically funding between 40% and 50% of their state's total Medicaid costs."

Now take that last to 100%, and that initial 18% is, well.

The problem is that, although ObamaCare© does, in fact, have an "escape" (or opt-out) clause for the states, the penalty for exercising it is that aforementioned 100% onus. And it's that burden that lies at the crux of the current Florida case. You see, all that money that would have gone to, for example, Texas, will now flow instead to, for example Michigan. And that's welfare only to the Wolverine State. It's a "heads I win, tails you lose" proposition.

And that, too, is a Big...Deal.

[Hat Tip: Ace of Spades]

More Stupidity from Ezra [UPDATED]

Alleged health blogger Ezra Klein, noted rocket surgeon extraordinaire, continues to double down on the stupid. Today he opines that even the Father of Our Country liked him some mandates. As reported on Twitter:

"In 1798, Congress mandated that sailors buy health insurance. John Adams signed it into law."

The twit (tweet?) directs the unwitting to Ezra's latest contrivance, wherein he demonstrates profound difficulty discerning the difference between forcing all citizens to purchase a product as a condition of citizenship and specifying that certain individuals must buy a product in order to serve in the military.

Seems pretty clear to me.

In order to show that he really doesn't get it, Ezzie doubles down by citing a 1790 Congressional mandate that "ship owners buy medical insurance for their seamen." Perhaps noticing that there's a pretty glaring logical fallacy here [ed: is there any other kind with this guy?], he observes that "in 1798, Congress ... enacted a federal law requiring the seamen to buy hospital insurance for themselves."

Again, one can choose whether or not to be a sailor. But the [Evil] Individual Mandate applies to all citizens (well, almost all). How come you don't talk about those exceptions, Ezra?

[Hat Tip: FoIB Holly R]

UPDATE/IRONY ALERT: I can't believe I missed this before posting. Ezra Klein relies on legislation from the 18th Century to make his "point?" Is this the same Ezra Klein that pooh-poohs the Constitution because it's "not a clear document. Written 100 years ago, when America had thirteen states and very different problems, it rarely speaks directly to the questions we ask it?"

Why yes, yes it is.

The stupid burns strong in that one.

Joe Barton Hits, Misses

Over at RedState, Rep Joe Barton (R-TX), opines on the potential future of ObamaCare© under the (not so) tender ministrations of a Republican House. He scores with his suggestion that the bill itself be repealed [ed: fat chance of that, for now], and offers what he considers some good alternatives for future consideration. It's with some of these "suggestions" that I take issue:

■ "ban insurers from rescinding coverage when their policyholders get sick and need to use their insurance."

This is an oft-repeated but discredited canard. The reality is that there are already laws in place which prohibit this. About the closest one can find to a "real life" example might be association plans, but these are not, in fact, contractual agreements between the carrier and the insured.

■ "an updated Patients’ Right to Know Act makes sense so that patients can know the actual price and quality of the care when making their healthcare decisions."

Again, we've been vocal and vociferous proponents of transparency for many, many years. The reality is that it doesn't take another gummint mandate for this to occur - the marketplace itself has already begun to ensure its widespread acceptance. It also fails to recognize that these tools, in and of themselves, are of limited value.

■ "Purchasing health insurance across state lines"

This is another problematic "solution:" the very first roadblock on the way to that utopia is called McCarran-Ferguson, which our own Mike Feehan explains "was enacted primarily to maintain each state’s right to regulate insurance issued for its residents ... Complete repeal of McCarran-Ferguson would remove the limited exemption from federal antitrust regulation this law requires for the insurance industry . It would of course pave the way for complete federal regulation of insurance." Which would apparently put Rep Barton squarely in the ObamaCare© camp. Ooops.

I would also add that his gratuitous slam that "Only in the restrictive world of health insurance do we find that goods and services don’t flow from one state to another state without restriction" is demonstrably false.

On the other hand, his call to revisit (and rescind) the draconian cuts in Medicare bear consideration, as does his support of the Medicare Advantage program.

Finally, he he specifically targets the (evil) individual mandate, as well as abortion funding and the employer fine. Unfortunately, he completely misses the MLR (Medical Loss Ratio), which is (at best) a dubious metric.

Over all, a good, solid B-, which means that there's great potential for improvement. Looking forward to that.

DPC Insurance? Maybe, maybe not [UPDATED]

[Scroll down for Update]

One of the "hot new(ish) things" is something called Direct Primary Care (DPC); the "ish" is because we actually blogged on this a few years ago in our interview with Dr Rob Lamberts. But it's gaining increasing traction of late, primarily due to a new (and as-yet unavailable) insurance product that would seem to answer some major objections. More on that in a moment.

First, let's define what DPC is (and isn't):

DPC is often conflated with "concierge" medicine; the major difference between the two models is that concierge is essentially a pre-paid subscription service that promises enhanced access to one's provider. These fees can range from a few hundred to tens of thousands of dollars (a month!). Some concierge providers also accept insurance.

DPC providers also charge a fee (although it is usually much lower than their concierge cousins'), but don't accept insurance; in fact, one of the model's primary goals is to service the uninsured.

One of the immediate problems that one encounters with either model is that, since insurance is not a pre-condition of membership, there seems to be a problem with the ACA tax penalty fine. That is, if one can eschew insurance and still gain provider access, then one is by definition skirting the (Evil) individual mandate.

Or is one?

According to Dave Chase, writing at Forbes, the model is unequivocally empowered by the ACA itself (Section 1301 (a)(3):

(3) TREATMENT OF QUALIFIED DIRECT PRIMARY CARE MEDICALHOME PLANS.—The Secretary of Health and Human Servicesshall permit a qualified health plan to provide coveragethrough a qualified direct primary care medical home plan thatmeets criteria established by the Secretary, so long as thequalified health plan meets all requirements that are otherwiseapplicable and the services covered by the medical homeplan are coordinated with the entity offering the qualifiedhealth plan.

So, seems legit, and an interesting, perhaps even viable alternative to an expensive ObamaPlan, which satisfies the mandate. What's not to love?

Well, the problem with the DPC and concierge models is that they provide for only one provider's care. They don't have any mechanism to pay for one's oncologist or nephrologist, or the ER doc, for that matter. Neither do they pay for the surgeon or anesthesiologist, or the hospital charges themselves. Nor, of course, one's insulin or Lipitor. What to do?

Well, up until now, perhaps, not much: the ObamaTax has effectively killed off the mini-med market, and if one chooses the DPC route then no HSA for you. One could, of course, still purchase an ObamaPlan, but this defeats the purpose of DPC, no? After all, the ObamaPlan already includes first-dollar preventive care, and its own (typically hefty) price tag and additional out-of-pocket exposure. Not to mention, a DPC plan would be subsidy-ineligible. Oops.

Enter Pan-American Life, which recently announced a partnership with MedLion (a sort of DPC co-operative, which seems to have a price transparency problem of its own). Pan-Am has announced a new "wrap around" product that seems to promise an answer to the conundrum named above,  namely: what about non-preventive care?

According to the company's press release:

"Pan-American Life’s U.S. Benefits division will administer a supplemental “wrap” insurance program exclusively for MedLion Direct Primary Care clients."

And that's it. Not exactly long on details, is it?

So, we reached out to Pan-Am, but they were unwilling to share any information about the plan itself. Which is, of course, their call to make, but leaves us a bit doubtful about the product. Plus, such an arrangement means two expenses: the DPC fee plus the "wrap-around" plan (and any additional out-of-pocket exposure that such a plan may also entail).

And there's this: the kind of policy that would be needed to supplement the DPC plan is likely illegal. Which may be why Pan-American is reluctant to share details.

'Tis a bummer. [SEE UPDATE BELOW]

Which is not to say that the idea lacks merit: we're all for any product (or products) that offers a viable ObamaPlan alternative.

I just don't see this one accomplishing that.

Yet.

Look, I like the DPC model. It's just very obvious that this is an experiment that should have been tried pre- (or, wishcastingly, post-) ACA. And let's be frank, it was never going to have the kind of impact that its proponents claim: at most, 20% (and more likely less than 10%) of total health care expenditures are PC-related. So reducing PC costs by even substantial amounts (quite uncertain) wasn't going to impact overall expenditures all that much.

UPDATE/CORRECTION: Just spent a very fruitful half hour with Pan-American VP Carlo Mulvenna, who brought me up to speed on how the wrap plan works, and why.

I'll put up a full separate, complete post on the program shortly; suffice it to say, it does what the press release says it will do.

I'd add that it also doesn't do what I mentioned that it wouldn't. Stay tuned.

[Special IB Thanks! to Jason S, David W and co-blogger Patrick]

About that Individual Mandate (Video)

As we've long noted, the Individual Mandate is evil. The folks at Amendment63 show us why:



[Hat Tip: RWN]

Shecantbeserious hits bottom, keeps digging

It's becoming ever more difficult to take HHS Secretary Kathy Shecantbeserious, well, seriously. To wit:

"We pay 2 1/2 times what anybody else pays in the world, and our care outcomes look like we're in a developing country.”

Leaving aside the obvious logical disconnect inherent in that statement, to which 3rd world country is she referring? Great Britain? Canada? Sweden?

She goes on to say that "(i)t takes about 17 years from the identification of a procedure, to have it fully incorporated into the medical community. But in health care, we say that's OK."

What's your point, Kathy? That the FDA takes too darned long to approve new procedures and med's? Well, how about taking that up with your counterparts at that agency? How does adding even more bureaucracy move that ball forward?

And referring to the (evil) individual mandate, this is priceless:

"I do think it's a precarious notion of not having some kind of individual responsibility."

This from a member of the least fiscally responsible administration in memory (if not history). Pot, meet kettle.

Dodging the Mandate Bullet

As we noted earlier this year, the recent tax law essentially neutered the (evil) Mandate:

"Quite simply put, the mandate still exists. It's still in the law. What has changed is the penalty for not purchasing health insurance has been zeroed out"

Note well, however, that:

1) This applies to plan year 2019 and after; the tax/penalty/fine remains in place for 2018, and

b) It's a certainty that the tax/penalty/fine will be reinstated should the Congress change hands in November.

That being said, there is some other good news out of DC:

"The Centers for Medicare & Medicaid Services announced on Wednesday a new opportunity for those who failed to comply with the individual mandate in 2018 to avoid the corresponding tax penalty.

The new policy allows hardship exemptions to be claimed without "the documentary evidence or written explanation generally required."

That is, "because I say so" becomes a legit deferral mechanism. And since this is an implementation under the Executive branch, it seems pretty Congress-proof to moi.

Sweet.

[Hat Tip: FoIB Steve Downey]