Obamacare Schadenfreude - "I'm Melting, Melting!"

What little bit of snush that fell yesterday is slowly melting under the influence of a 34 F rain.  Another lovely day in slower MD.  At least we have power.  Now about that Obamacare Scadenfreude:

Federal exchange sends unqualified people to Medicaid

The federal health care exchange is incorrectly determining that some people are eligible for Medicaid when they clearly are not, leaving them with little chance to get the subsidized insurance they are entitled to as the Dec. 23 deadline for enrollment approaches.
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Here's what happens: When consumers applying for insurance put their income information into subsidy calculators on HealthCare.gov — the exchange handling insurance sales for 36 states — it tells them how much financial assistance they qualify for or that they are eligible for Medicaid. If it's the latter, consumers aren't able to obtain subsidies toward the insurance, although they could buy full-priced plans.

If the Medicaid determination is wrong, consumers should file an appeal with the federal marketplace, says Department of Health and Human Services spokeswoman Joanne Peters, but she says she does not have an estimate on how long that would take.

No word on when it is determined that the Medicaid determination is wrong, but we may safely assume that a large number of them will occur after the "open season" when people go to use their benefit.

One of the stories that has been persistent through this Obamacare enrollment process has been that, at least initially, the needier people that were inspired to try to sign up for ACA early in the process were to a large extent, shunted into the expanded Medicaid.  Now we find out that many of these determination are likely incorrect, and will not hold up after the enrollment ends.  How convenient!

More news on the Medicaid front.  So many people are signing up through Obamacare and winding up on Medicaid that it will likely bankrupt the states and/or federal government: ObamaCare created a Medicaid time bomb

The good news, if you want to call it that, is that roughly 1.6 million Americans have enrolled in ObamaCare so far.

The not-so-good news is that 1.46 million of them actually signed up for Medicaid. If that trend continues, it could bankrupt both federal and state governments.

Medicaid is already America’s third-largest government program, trailing only Social Security and Medicare, as a proportion of the federal budget. Almost 8 cents out of every dollar that the federal government spends goes to Medicaid. That’s more than $265 billion per year.
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The Congressional Budget Office projects that, in part because of ObamaCare, Medicaid spending will more than double over the next 10 years, topping $554 billion by 2023.

And that is just federal spending.

State governments pay another $160 billion for Medicaid today. For most states, Medicaid is the single-largest cost of government, crowding out education, transportation and everything else.

New York spent more than $15 billion on Medicaid last year, roughly 30% of all state expenditures. The Kaiser Foundation projects that over the next 10 years, New York taxpayers will shell out some $433 billion for the program.

But none of these projections foresaw that so many of ObamaCare’s enrollees would be Medicaid eligible. . . .
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But that's OK, because it helps people stay healthy, right?  Well, maybe not so much.

The Oregon Health Insurance Exchange study, the first randomized controlled study of Medicaid outcomes, recently concluded that, while Medicaid increased medical spending increased from $3,300 to $4,400 per person, “Medicaid coverage generated no significant improvements in measured physical-health outcomes.”

Other studies show that, in some cases, Medicaid patients actually wait longer and receive worse care than the uninsured.

But the big story for Obamacare for the week is "Doc Shock".  Have something unusual, and you want consult the best in the business?  Your Obamacare plan will not likely cover that:

New Affordable Care US health plans will exclude top hospitals

. . .Amid a drive by insurers to limit costs, the majority of insurance plans being sold on the new healthcare exchanges in New York, Texas, and California, for example, will not offer patients’ access to Memorial Sloan Kettering in Manhattan or MD Anderson Cancer Center in Houston, two top cancer centres, or Cedars-Sinai in Los Angeles, one of the top research and teaching hospitals in the country.

Experts say the move by insurers to limit consumers’ choices and steer them away from hospitals that are considered too expensive, or even “inefficient”, reflects the new competitive landscape in the insurance industry since the passage of the Affordable Care Act, Barack Obama’s 2010 healthcare law. . .

So,  if you like your doctor, you can keep your doctor, as long as you're willing to pay extra.  Funny, I didn't see any footnotes Obama said it over and over.  But according to one of Obamacare's main architect, you were just supposed to assume it:



How Obamacare will become a major incentive for tax cheats

Dept. of Maybe-Not-So-Unintended Consequences: Doesn’t Obamacare create a big new incentive to fudge your income on your tax returns? The subsidies available on the health care exchanges seem to be based on adjusted gross income (line 37 on Form 1040)– and there’s a huge, conspicuous difference between the subsidy available at, say, a $25,000 income and a $46,000 income. (The subsidy cutoff of is $45,960 for a single person). In California, for the “bronze” policy I’m interested in, at $46,000 I’d pay $507 a month. At $25,000 I’d pay … $63. A difference of $444 a month.

Sure there’s always an incentive to cheat on your taxes (assuming you don’t get caught). But people in this income range don’t pay much in income taxes to cheat on–this is basically the 15% bracket. Lower your income by $20,000 and you save $3,000. They also pay FICA payroll taxes (though they get something in exchange–more Social Security benefits). FICA taxes are a maximum of about 15% for the self-employed in that range. Lower your earnings from $46,000 to $25,000 and you save another $3,000 and change. The Obamacare cheating bonus–$5,328, in the above example–dwarfs either of those incentives, and almost doubles the payoff for understating your income. Save on income taxes and FICA and get near-free health insurance too!

 You would think the government would try to discourage cheating, but no. . .

if you go onto the California Obamacare web site (www.CoveredCa.com) and tell them you have an income of $46,000 you get a helpful little notice:

Your Annual Income is just above the boundary for premium assistance – please be sure you have entered an accurate income.

Translation: “Are you sure you don’t want to cheat us just a little?” (wink wink). ** Maybe that visit to your girlfriend in Florida was really a trip to scout business leads. Yeah, it’s all coming back now! If you can get your AGI down by just $100 to $45,900, your Obamacare subsidy jumps from 0 to $225 a month.