Thursday, January 21, 2016

How About a Little More Obamacare Schadenfreude?

I hate to do a and an Obamacare Schadenfreude on the same day, but here we are anyway:

Wombat-socho's "In The Mailbox: 01.18.16" links that almost always sensible Megan McArdle's Gaming Of Obamacare Poses A Fatal Threat . .
I don’t want to overstate the threat here. But I really can’t. Unless it’s gotten under control, this sort of behavior poses an existential threat to the exchange marketplaces. The more people game the system, the more people will have to game the system. People who game both incur more in costs than regular consumers do and pay less in premiums, which means everyone else has to pay more. As the insurance gets more expensive, those regular consumers will be increasingly tempted to convert to gamers themselves, and the marketplaces may well collapse.
. . . as well as the Weasel Zipper's When Bernie Argues For Single Payer, Remind Him What Happened In Vermont. As we've seen previously, when Vermont tried socialist medicine, they ran out of other people's money before they could get it working:
. . . reality hit last month. Governor Peter Shumlin released a financial report that showed the cost of the program would nearly double the size of the state’s budget in the first year alone and require large tax increases for residents and businesses. Shumlin, a Democrat and long-time single-payer advocate, said he would not seek funding for the law, effectively tabling the program called Green Mountain Care.
Stephen Green, the VodkaPundit has this to say about Megan's gentle treatment:
Where to begin?

Megan's an honest broker, but I have to wonder about a couple of her phrases in the passage I quoted. There was that line about the death spiral being "thought safely in the grave." And that "a consensus developed" around the idea that the law had made "the system too hard to game."

Maybe those lines were merely the rhetorical sugar required to make the medicine go down easier for the typical Bloomberg reader.

Or maybe the Blue Coastal Enclave Echo Chamber is so tightly sealed that from the inside, it really did seem as though ♡bamaCare!!! was too tough to game, and that the threat of a death spiral really had passed.

That's not what it looked like to us outside the Blue Coastal Enclave Echo Chamber, as readers here can attest. . .
Massachusetts Obamacare co-op struggling to stay afloat
Minuteman Health, the Massachusetts CO-OP (which stands for consumer operated and oriented plan) is a non-profit insurer that was supposed to provide lower-cost insurance in local markets, but according to the latest estimates, Minuteman is facing serious financial issues.
. . .
Minuteman was one of the 23 insurers launched two years ago as part of Obamacare, with $2.4 billion in seed money from taxpayers. Minuteman got $156 million to get off the ground, a now they’re facing the same struggles that have led to more than half of the CO-OPs shutting down.

In yet another moment of candor, Massachusetts’ most notorious health advisor, Jonathan Gruber, said that “the CO-OP program was a risky venture from the outset, given how difficult it is for new companies to develop provider networks and compete with established insurance companies. But he said it was a risk worth taking,” because “it could pay off by giving consumers access to affordable insurance.”
. . .
In order to keep prices down, Minuteman’s “network of doctors and hospitals excludes the state’s biggest providers, including Partners HealthCare and Beth Israel Deaconess Medical Center.” This may be one of the reasons for lower than expected enrollment.
So they had a terrible product, and hardly anyone wanted to buy it.

Another big player stares into the abyss: UnitedHealth loses $720 million offering plans under Obamacare, may withdraw next year
The nation’s largest insurer said it booked $720 million in losses last year by offering plans under Obamacare, and warned Tuesday that it might still withdraw altogether from the health law by next year.

UnitedHealth Group told investors that it expects more losses due to Obamacare in 2016, countering an otherwise upbeat earnings report for the company, and serving as a challenge to President Obama, who wants to leave the law on firmer footing.
. . .
“By mid-2016, we will determine to what extent, if any, we will continue to offer products in the exchange market in 2017,” UnitedHealth Group President and Chief Financial Officer David S. Wichmann told investors.
Ignoring his legislature, Wyoming Governor Matt Mead pushes for Medicaid expansion
As the fate of Obamacare and its Medicaid expansion program grows bleaker every day in Congress, Wyoming’s Gov. Matt Mead has decided it’s time try and push the massive expansion of welfare on his state once again.

Mead didn’t get the message when the Wyoming legislature rejected his plans in 2015, or when they rejected Obamacare’s expansion a whopping six times in 2014. In fact, the legislature moved to tie Mead’s hands further and ensure he doesn’t act on expansion without their approval.

Wyoming’s legislators have had plenty of reasons to be reticent about expanding Medicaid, as experiences in other states have shown how expensive all that ‘free money’ is.

A recent Forbes article by Josh Archambault and Jonathan Ingram laid out the grim reality of expansion in other states.
“In Ohio, Medicaid expansion ran $1.5 billion over budget in its first 18 months. The state of Washington had to increase its biennium budget by $2.3 billion to deal with higher than expected expansion costs and, having now surpassed even those revised projections, overruns will only continue to climb. Illinois’ expansion ran $800 million over budget in 2014 and has now signed up more able-bodied adults than state official predicted would ever even be eligible. And in Kentucky, Medicaid expansion was estimated to run a combined $1.8 billion over budget in fiscal years 2014 and 2015.
These states weren’t outliers. They were the norm.
In states with available data, actual expansion enrollment surpassed initial projections by a whopping 91 percent. Worse yet, each of these states also blew past their projected maximum enrollment, by an average of 73 percent.”
No matter what the pro-expansion camp says, Medicaid expansion isn’t free, and its costs are going up. The last time Wyoming’s legislature turned down Mead’s expansion, the feds were still picking up 100 percent of the treatment costs for newly-eligibles (which is really just code for working-age adults without disabilities). And even though President Obama is pushing to extend that match indefinitely, it would need approval by Congress, and with their recent votes defunding Obamacare, that’s highly unlikely.

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