Tag Archives: health insurance

Average Joe SCOTUS: Maine Community Health Options v. United States

So, we all remember this monstrosity, the Affordable Care Act, also known colloquially as Obamacare, right?

Well, one of the piece of shit parts of this piece of shit law, was a Risk Corridor provision they added to insure the previously uninsurable. Listen to this bullshit. Are you ready?

They told insurance companies to insure these people, and they would reimburse them if they incurred losses. And they would get the money to reimburse them from companies who were making higher profits and not incurring such losses.

This was a scheme brought about because the government wanted all people insured, but the insurance companies rightly argued that these people who were previously deemed uninsurable have no data for us insuring them previously, for us to figure out a fair rate that covers them.

So the government basically told them, “do your best” on figuring out a rate, and if you lose money, we’ll reimburse you.

The plan was to give them three years to figure out a proper rate during this period, then the risk corridors would go away.

Here’s the rub. These idiots literally thought somehow that insurance companies would make as many profits to cover the losses from insuring people with pre-existing conditions, and other life-long medical needs. Because apparently, not one of these 538 assholes ever took a fucking math class.

Anyway, the insurance companies did what they were told, but then as usual, Congress was full of shit, and denied paying such claims, because “Surprise!” they didn’t recoup enough profits from other insurance companies to cover all these crazy high claims.

So now Maine Community Health Options (MCHO) is suing the Fed for what they’re owed, or the repeal of this stupid fucking law. May a god I don’t believe in be with them.

SCOTUS’ job is determine if the law passes constitutional muster since the government isn’t fulfilling their obligation, but yet expect these insurance companies to comply nonetheless, basically putting them in an untenable position.

At one point, Justice Roberts seemed to clearly grasp the idea that the government’s argument was a load of shit.

John G. Roberts, Jr.

I vaguely recall the government arguing on several occasions that unenacted bills are entitled to some weight in the interpretation process, but you don’t question that these insurance companies would not have participated in the risk corridor program but for the government’s promise to pay?

Edwin S. Kneedler

I — I don’t — well, it’s not about participating in the risk corridor program.

The question is they participated in the — in the marketplaces that were set up, the exchanges, and they had a number of business incentives.

This was a vast new market for customers, many of whom, 90 percent of whom would get tax subsidies.

John G. Roberts, Jr.

— customers who otherwise were largely uninsurable.

Edwin S. Kneedler

Yes.

But they — but it was a mark —

John G. Roberts, Jr.

Well, that’s no great business opportunity for them.

Edwin S. Kneedler

Oh — oh, no, it — it is, because Congress provided tax credits to subsidize the — the — the persons who — who purchased insurance on the exchanges.

John G. Roberts, Jr.

No, it’s a good business opportunity for them because the government promised to pay.

If you’re wondering what the state’s argument in all this is, as near as I can tell, they’re saying that the duty to pay was contingent on a “subject to appropriations” clause. Meaning that in the law, it basically argues they’ll pay if any future congress of the time agrees to appropriate the funds.

So get this straight.

Government MANDATED private insurance companies do something on a promise to pay them later. But then congress said, “well, we’ll pay if we agree to, anyway.”

What the fuck is that?

Even Elena Kagan, who is often deemed a more left-leaning justice seemed to think it was ridiculous.

Elena Kagan

Mr. Kneedler—are insurers obligated to pay in if they have excess profits?

Edwin S. Kneedler

Yes, it is a user fee.

Elena Kagan

So this is one where the “shall pay in” is obligatory but the “shall pay out” on the part of the government is not obligatory?

Edwin S. Kneedler

The  pay in is not subject to an appropriations question.

It is an obligation.

And that part of the arrangement, the reciprocity in the program still exists, the payments in and payments out, which is how I think most —

Elena Kagan

I mean, you pay in, that’s obligatory.

We commit ourselves to paying out.

It turns out if we feel like it. What — what kind of — what kind of a statute is that?

In an 8-1 decision, SCOTUS agreed with Maine Community Health Options. The government has to pay these insurance carriers the money they fucking owe them. And by government, it means you and I, the taxpayer, in case you weren’t aware.

Alito, the only dissenter argued that the majority’s opinion “infers a private right of action”, but that wasn’t in the law created by congress. I believe he may be on crack.

The often overlooked issue with the Affordable Care Act

Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

Much like oil, natural gas, and other industries with products we simply can’t often forego, insurance companies operate on a pretty thin profit-margin; on average about 3%. We know this because most are publicly held entities, and must report their earnings. While this seems to be too thin of a margin to be true, it is in large part due to these industries not being subjected to the whims of the market as much as others. They don’t need to build up money in the good times to survive the bad—their business is fairly constant.

For instance, jewelry sales, an industry with profit margins that are significantly higher, often tank in a bad economy—that diamond necklace can wait when times are tough. But, you still need gas and insurance no matter what the economic conditions are.

With that being said, if insurance companies could achieve higher profit margins, they owe it to their shareholders to do so. So why don’t they? The problem is that “pesky free-market capitalism.” If one company raises their rates and another doesn’t, the former better be offering something the latter doesn’t or while their profit margins may rise, their actual profits will sink like a mobster with cement shoes.

So now let’s look at the Affordable Care Act (ACA), because a coworker asked me if I was for or against the law.

First let me point out that I can’t say that I’m completely against the law, it’s 9,625 %$#@ pages, depending on how you count it! I don’t know one hundredth of what is in it. There could be 20 pages worth of things that literally say something to the effect of, “…and The Logical Libertarian blog is to receive a $100,000 monthly stipend” for all I know. In which case, my opinion has just evolved in light of new evidence.

Mitch McConnell Standing Next To A Facsimile Of Obamacare In Print Form
Mitch McConnell Standing Next To A Facsimile Of Obamacare In Print Form

But when I consider that the U.S. Constitution is only six pages long, and it’s a damn-effective framework for a whole country to operate from, I’m pretty comfortable in saying the ACA is probably the quintessential Rube Goldberg of legislation—massively overcomplicated.

However, as people complain about this law for various reasons, one thing that is often overlooked is the intent behind it.

Most of the people behind the ACA take issue with private health insurance companies. While it’s hard to paint a doctor as an uncaring jerk, it’s quite acceptable among the ignorant to attack those evil insurance companies; just watch Bob Beckel on FNC‘s The Five on any given day. The left have conditioned generations of people to forget that insurance companies are simply composed of people with equal unalienable rights as the rest of us, who offer you their money to buy a risk you cannot afford to take yourself. They are not a diabolical monolith hell-bent on draining your blood and back account in one fell swoop.

Bob Beckel - Democratic Strategist on Fox News' The Five
Bob Beckel – Democratic Strategist on Fox News’ The Five

But here’s where the people behind this bill and their atrocious math come in. The ACA was aimed squarely at health insurance costs, not healthcare costs. Since insurance companies are operating on a 3% profit-margin, that means that for every $100 you spend on health insurance, $97 goes to the doctor, medical staff, and insurance company operating costs (something that will have increased, not decreased, to comply with new regulations), $3 goes to the health insurance company’s bank account.

Now lets imagine that this bill completely eradicated every single dollar of health insurance profit, your $100 health insurance bill would now be $97. I don’t know about you, but if I’m trying to reign in burgeoning costs of a bill that’s divided up 97:3, I think I’d focus my efforts on lowering the $97 portion before worrying about the $3 one.

So why didn’t they? I believe there are two issues at play.

Many lawmakers are lawyers by trade, including the president. Legal reforms such as limiting frivolous lawsuits, loser-pays legislation, or my proposal to indemnify people from punitive damages for immediate acceptance of liability (proposed in a previous post here) would severely reduce the income of the ambulance-chaser sub-species of legal counsel.ambulance-chaser_1407[1]

But if we consider the idea that a group of lawyers in Washington are going to pass reforms that would negatively affect the livelihoods of some of their former schoolmates, chances simply aren’t that good. There’s always going to be a sense of loyalty to their fellow law school alum, and sadly it seems to have overridden their oath of office and loyalty to their constituents. These proposed reforms are about justice for those who are being abused by a litigant using the court system as a method of intimidation and ill-gotten gains. There is no rational explanation to oppose them if justice is your goal.

Barack Obama - Harvard Law School
Barack Obama – Harvard Law School

If lowering health care costs isn’t important, just the health insurance costs, they could have opened up insurance markets to increase competition across state lines, dropped coverage requirements, etc., but they didn’t do this either. Capitalism has only been effective for hundreds of years, I’d link to think it has proven itself.

But this bill was passed by people who largely want socialized health care; something they know the populace isn’t willing to accept. They call it “single-payer” because they know “socialism” carries quite the stigma, but I refuse to allow them to rename poison to get me to swallow it.

These lawmakers are offended private health insurance companies even exist because they believe a right to life, and a right to health care are synonymous, and therefore a duty of government. I appreciate the altruism behind it, but that doesn’t make it any less nonsensical.

The problem is that health care isn’t just a thing that exists in the world like food, air, and water that people can consume as needed. It is a service provided by someone who has spent large sums of money and eons of time on education in the field. One person does not, nor ever will have the right to the time and effort of another in a free country.

So if that’s true, and we agree doctors deserve to get paid, why am I against government paying them as a collective then? As cold as it may sound, if I was not physically responsible for you being in a wheelchair, I should not be financially responsible for your wheelchair.

If you want help—ask for it. If I can afford and desire to, I will—it’s called charity, and it’s abundant here. What shouldn’t happen is me being pilfered at the point of government’s gun.

Now that the website is failing, rates are going up, and people are losing their plans that Obama promised they wouldn’t, I think it’s fairly clear that mistakes were made and lies were told. The only way Obama wasn’t lying about being able to keep your plan is if he honestly didn’t know what was in the bill either. The new higher coverage-requirements literally guaranteed this would happen by law.

But maybe they were crazy like a fox all along. Because these policy drops and rate increases, while induced in their entirety by big government, will assuredly be blamed on the evil insurance companies, and then used to promote a healthcare system former Mother Russia would be proud of.

So as we complain about the failed website, the assaults on liberty, the tort reform that didn’t happen, the deregulation promoting competition that were left on the cutting-room floor, and the host of other issues with this law, lets not forget that even if it had been 100% effective, it would still have only lowered costs by a measly 3%, because there was nothing to address health care costs, only health insurance costs; proving once again that math, logic, & reason and big government liberalism are still perfect strangers.

The Insurance Mandate. What’s your paradigm?

Gary Nolan (and THE Scrappy Doo)
Gary Nolan (and THE Scrappy Doo)

I had a debate with a friend of mine about the insurance mandate. He professes to be a limited government guy that supported Reagan, yet he recently voted Democrat twice, is a proud union employee of the state, and supports socialized medicine. You know—a traitor. (I am kidding; he is a friend, just a misguided one from where I sit.) Needless to say, he and I don’t agree on much these days politically.

My work history includes years in the insurance business, so I have to say that the argument for the health insurance mandate makes mathematical sense—sort of. We pay at an early age into insurance we will rarely use while we’re young and healthy, so that later in life when we start to need it more, that money is there waiting for us. Think of it as health savings and insurance.health_benes_claim_form1[1]

By doing so, we increase the insurance company’s revenue now—and thus reduce their losses which results in lower rates for everyone later. In an odd sort of way, it’s the same as the argument that lowering taxes increases revenue because the economy grows; it’s just that the cause and effect are swapped.

But the argument is only logical because it is based on an assumption I cannot agree with—the assumption that everyone has a right to health care. If we as a country feel that people have a basic right to health care, then the insurance mandate is necessary and mathematically sound.

I however, am quite annoyed with the idea that health care is a substance like air and water, that we should all have access to. I instead know that health care is a service provided by people who spent a lot of time and money in order to earn a living. And, you don’t have a right to that service if you cannot pay for it.

cons
The United States Constitution

Our Constitution gives you the right to life, not the right to health care. A right to the life that genetics, nature, and dumb luck provides you.

Health care is a service that can extend that life, provided by professionals that offer that service, in order to earn a living. If you want a better and longer life, you have to pay them for it. Otherwise, when your time comes, that’s your time to go. It may seem heartless, but the circle of life is that all living things feed off of other living things and then eventually die themselves. Nothing gets out alive.

Let’s imagine a scenario where lives aren’t on the line for a minute. Your car breaks down, and you really need your car to get to work. So you take it to the mechanic. They advise you that you need a $500 repair, but you don’t have that kind of cash. Do you get to demand they help you and you’ll pay them later if you can?Auto_Repair-generic[1]

Well, doctors are ultimately mechanics for humans. If they are willing to help for free, for a lesser fee than they’d charge medicare (Which is currently prohibited by law, believe it or not), or for a promise to pay in the future, then that’s great. Otherwise, the person needing care needs to find another doctor or accept the consequences of the life they chose and/or the bad fortune that befell them.

We have been taught that caring for others is just the right thing to do, and I agree, entirely. But, I don’t believe that doctors are heartless people who would never help anyone, and history shows this to be true. While some patient-dumping was common practice, it certainly wasn’t a unilateral action. Remember that many of them joined that profession because they love helping people.

But all free people should have the right to choose who we wish to help, who we can afford to help, and who doesn’t deserve our help. And the chronic meth head, alcoholic, and serial moocher are not on my list of acceptable benefactors.drug-overdose[1]

Socialized medicine proponents often paint the picture that everyone who needs health care and can’t afford it are victims of society. But this is a false argument. Often, society is a victim of them, since we’re forced to pay for their care through higher prices, benefit fraud, and tax subsidies.

I think we all know people who can’t keep a good job because they drink too much, abuse their body, voluntarily miss work, don’t apply to begin with, and aren’t motivated to be successful—the type of people who work the hardest at how to afford work.

So then the abuse on their body catches up with them, and because they don’t have a job, they don’t have insurance. Now they need care because of their life choices, and they can’t afford that help. They are responsible for the life they’ve led, and they either need to find a way out of their troubles, or they will die as a martyred good example for others to not to be like them. Yet, under our current system, the rest of us become financially liable for them.

I’ve had a few people like this in my life because I don’t always hang out in the ritziest circles. I like some of these people dearly, but I also know that they are their own worst enemy, and the idea that society should take care of them is nonsense.

There is a phenomenon called the Peltzman Effect which says that the more safety you provide someone, the more risky behavior they will engage in. If you’ve seen someone driving like an idiot in the snow because they have a 4wd, you’ve seen the Peltzman Effect in action. If we want everyone to be self sufficient, we need to stop allowing people to so easily be dependent on others.

I believe that the only way to truly reduce health care expenses is to take away that safety net of guaranteed health care, take away government regulations that hinder competition, give doctors rights to work for a reduced rate if they choose to help the poor, introduce loser pays legislation and other legal reforms, and generally get the government out of the way of the health and insurance industry, letting the free market do what it does best; drive down costs.