Saturday, April 19, 2014

ACA/Obamacare: New Zeniths In Suspect Data

Math Quest!

‘President Barack Obama said Thursday that eight million people had picked health-insurance plans through the Affordable Care Act, a number that significantly outstripped initial projections and emboldened him to step up criticism of Republicans seeking to repeal the law.

The president, in a surprise Thursday afternoon appearance in the White House briefing room, employed markedly more aggressive rhetoric in defending his signature legislative achievement, language that should help bolster Democratic candidates who have been on the defense.

The eight million sign-ups go beyond earlier projections by the Congressional Budget Office that six or seven million people would enroll through the exchanges in 2014. Mr. Obama pointed to the number to declare the law a success and that Republicans should stop trying to overturn it.

"The point is, the repeal debate is and should be over," the president said. "The Affordable Care Act is working and I know the American people don't want us spending the next 2½ years refighting the settled political battles of the last five years."

Some 35% of those who signed up through the federal health-insurance exchange were in the coveted under-35 demographic, Mr. Obama said. The participation of younger, relatively healthy people is needed to balance out the cost of medical claims from older and sicker ones.

The announcement contained few other new details about enrollment. Republicans quickly pointed to missing information—such as the number of people who had actually gained coverage after being uninsured, as opposed to those replacing an existing policy—to suggest the figures could be overblown as a measure of success.’

‘GOP lawmakers continued to emphasize information not contained in the numbers, including how many people have paid their first month's premium, the final step in enrolling for insurance.

"How many of those who have signed up were among the millions who had their plans canceled? How many were already insured but forced to sign up for an Obamacare plan?" said Sen. Lamar Alexander (R., Tenn.). "This law promised to insure the uninsured, let those who liked their insurance keep it, and lower the cost of insurance—let's talk about what the law was supposed to do instead of how many millions of people the president has so far forced into Obamacare."‘

‘The president's announcement didn't include state-by-state information about enrollment, which will be key to determining premiums for 2015 and beyond since each state's insurance market is different and rates are based on the makeup of people who sign up within each.

White House officials said Thursday that 28% of the enrollees in the federally run exchanges serving 36 states are in the 18-34 demographic. Some 7% are children covered by family plans. The administration didn't release demographic information for the 14 states running their own exchanges.

Insurance officials previously said 80% to 85% of enrollees paid the first month's premium, a proportion that would suggest the administration will ultimately hit enrollment targets for the exchanges for 2014 even if some people drop out or have picked more than one plan and are overrepresented in the numbers, especially since some people who have a change in their life circumstances such as a divorce or job loss are still allowed to sign up after March 31.

The figures represent a slight increase in young people compared with the previous five months. The administration said earlier that through Feb. 28, about 4.2 million people were covered by plans picked via the federal and state-run exchanges. Of those, 25% were 18 to 34, and 6% were children covered by family plans.

The mix of younger people buying coverage is considered by health plans to be crucial in determining future insurance prices. Under the law, insurers no longer can charge premiums based on health histories, and are restricted in how much more they can charge older consumers.’ (1)


Those Pesky Math Problems

‘You can't manage what you don't measure, as the great Peter Drucker used to say, and for the White House that seems to be the goal. Out of the blue, the Census Bureau has changed how it counts health insurance—at the precise moment when ObamaCare is roiling the insurance markets.

Since 1987, the Current Population Survey, or CPS, has collected information on the health-insurance coverage status of Americans. The annual reports are widely cited because their large sample sizes improve accuracy, the data are gathered constantly, and they tease out state-by-state details. But this year the Census revamped the CPS household insurance questions, muddying comparisons between the pre- and post-ObamaCare numbers. The results of the new method will be disclosed this fall.

The FDA would never approve a new drug whose maker completely changed the clinical trial protocol in the middle of the experiment, yet that is what the White House has done. How many people gained or lost insurance under ObamaCare? Did government crowd out individual insurance? What about employer-sponsored insurance? It will be much harder and in some cases impossible to know.

Robert Pear of the New York Times obtained internal Census documents that note that the new CPS system produces lower estimates of the uninsured as an artifact of how the questionnaire is structured. One memo refers to the "coincidental and unfortunate timing" and that, "Ideally, the redesign would have had at least a few years to gather base line and trend data." (2)


Those Pesky Math Problems Part Deux

‘The White House and its media phalanx are claiming the Census Bureau fracas is nothing more than a search for a conspiracy where none exists. Yet revising its health insurance survey design will make it harder to measure ObamaCare's performance over time, and now we've learned that the choice to do so is even worse than we first wrote.

The White House is right that the new questions have been in the works since the Bush Administration, and the Current Population Survey (CPS) revisions are said to produce better estimates of how many people lack coverage. The problem is that resetting the insurance CPS in this year of major insurance disruption means that the old data series can't be compared to the new one going forward. It's a statistical break that prevents researchers from identifying before-and-after trends with precision and validity.

It would have been less disruptive to either delay the update or else to run the old and new CPS in parallel for a few years. As we wrote Wednesday, the second option would preserve the value of three decades of old information, while still producing more accurate statistics going forward.

We've since learned that this hybrid method is precisely what the Census Bureau proposed to do for its data collection about income and poverty in the Annual Social and Economic Supplement, or ASEC. Census announced this change at the same time it proposed the new health insurance questions in the Federal Register in September 2013.

Let the Census explain: "The ASEC 2014 data collection instrument will have a split-design structure, with two separate treatments for the income-related section. . . . Five-eighths (5/8) of the sample will have income questions from the 'traditional' design, while three-eighths (3/8) will have income questions from the 'redesigned' ASEC. This split-design will enable Census Bureau analysts to create a 'cross-walk' when analyzing the effects of the redesigned ASEC on income and poverty estimates."

So why not follow the same procedure for asking about health insurance, erring on the side of more information, not less? The new questions were road-tested in previous surveys in 2010 and 2013, though the CPS is viewed as reliable because it has produced a stable baseline for comparison for so long. Other surveys of insurance, both public and private like Gallup, are more volatile.’ (3)

Checking The Long Form Division

‘Barack Obama wasted little time last week declaring victory as the deadline for enrollment in Affordable Care Act exchanges expired – well, more or less, anyway. The White House celebrated as it announced that 7.1 million consumers had signed up for health insurance through the federal and state exchanges, slightly exceeding their original goals and significantly outpacing expectations after the disastrous rollout of Obamacare last October. “The debate over repealing this law is over,” President Obama told the press on April 1. “The Affordable Care Act is here to stay.”

Last week, that sounded like wishful thinking. Two new studies released this week prove it.

Before we get to these studies, though, we should recognize why we need outside organizations to validate White House claims in the first place. The Department of Health and Human Services still has no way to quantify important data about those consumers signing up for health insurance through state and federal exchanges.

More than six months after the initial rollout of Obamacare -- and four years after the ACA’s passage -- the systems designed by HHS still cannot determine basic and critical information about enrollments such as whether a premium payment has been made. Without a premium payment, a sign-up in the web portal does not mean coverage has been extended.

Furthermore, the systems were not designed to collect important demographic information such as pre-existing coverage, current health status, or even definite age ranges, even though the success of the Obamacare structure depends on getting previously uninsured healthy Americans locked into expensive comprehensive insurance.

Without the “young invincibles” providing new funding for risk pools that now have to cover older and less-healthy consumers under “community pricing” restrictions, premiums will escalate rapidly, forcing more consumers out of the system and triggering the dreaded “death spiral” for insurers.

In order to determine the scope of the celebration, then, we need outside surveys to give us an idea of the size and composition of the actual enrollment population in Obamacare. The first of the independent studies comes from the RAND Corporation, which studied the changes in the health insurance market between September 2013 – just before the rollout of the state exchanges – and the end of the open-enrollment period at the end of last month.

While the White House can claim credit for a net increase of 9.3 million insured and a lowered uninsured rate from 20.5 percent to 15.8 percent, the data provides a significantly different picture than that painted by President Obama and the ACA’s advocates.

First, a significant amount of this increase comes from Medicaid enrollments, not private insurance. Almost six million people enrolled in Medicaid, and earlier studies showed that a relatively small number of those came from the expansion built into the ACA; most of these would have been Medicaid-eligible prior to the reform.

Another 8.2 million more people enrolled in employer-provided health care, as 7.1 million left the “other” category and another 1.6 million left the individual insurance markets. Only 3.9 million actually enrolled in insurance plans through state or federal exchanges – not 7.1 million as claimed by Obama. That number falls far short of even the lowered expectations issued by HHS and the White House earlier this year.’ (4)


‘Today President Obama announced that as of April 15, 8 million people have enrolled in the insurance exchanges set up by Obamacare. But that’s not all. According to a White House fact sheet:

3 million young adults stayed on their parents plan,
3 million more people had enrolled in Medicaid, with more on the way, and
5 million people enrolled in plans outside the insurance exchanges.

The news was so good that even Republicans should, in the president’s words, admit that the Affordable Care Act is working.

Maybe not. What the administration has not told us is how many of those 19 million people already had coverage and lost it because of the Affordable Care Act. Or how many of them would have been covered by insurance this year and changed plans to get a big subsidy. Or how many of them thought they were going to get a better health plan but found out that their doctor is not in the network. Or how many of them spent more on insurance than they felt they could afford because there were no lower-cost alternatives. Or how many will find out that the taxpayer subsidy they are receiving will turn out to be too high—they might get a raise in a few months or work some overtime and will make a little too much money this year, or it might just be that the government’s computers didn’t get it right—and will have to repay the Treasury hundreds and perhaps thousands of dollars?’ (5)




(1) Obama Says Health-Insurance Enrollees Reach 8 Million, President Criticizes GOP, Saying 'Repeal Debate Is and Should Be Over' - WSJ, 04/17/2014



(2) Cooking the ObamaCare Stats, Suddenly, the Census Bureau changes how it counts insurance - WSJ, 04/16/2014


(3) None Dare Blame ObamaCare, The Census Bureau's statistical changes are worse than we thought - WSJ, 04/17/2014


(4) Two New Studies Raise Red Flags on Obamacare, The Fiscal Times, 04/10/2014

(5) Lots of sign-ups for Obamacare — and almost as many questions, American Enterprise Institute, 04/17/2014




Wednesday, April 16, 2014

ACA/Obamacare: More Fall Out From “If you like your plan keep your plan”

“While the federal government was trumpeting the benefits of Obamacare to boost enrollment earlier this year, about 1,800 families in New Jersey were receiving letters telling them their children would be losing their health coverage last week.

The Affordable Care Act — the federal law that mandates everyone have insurance — effectively killed FamilyCare Advantage, a low-cost option for kids in New Jersey created six years ago for parents who earned too much to qualify for Medicaid and other subsidized programs but too little to buy on a policy on their own. The state program was the first of its kind in the nation.

Horizon Blue Cross Blue Shield of New Jersey was the only insurance carrier that agreed to offer the FamilyCare Advantage plan, which covered most medical, dental and vision needs for the relative bargain of $144 a month per child.

But it didn’t offer mental health treatment and several other services Obamacare requires, and that was the fatal flaw, said Sen. Joseph Vitale (D-Middlesex), who sponsored the law creating the program.

Vitale said he tried for several months to broker a deal between Horizon and the U.S. Centers for Medicare and Medicaid Services, but neither side could agree on how to make it affordable and legal. The program ended last week.

People who tried to buy a plan on the health exchange would have been hit with sticker shock, Vitale said. FamilyCare Advantage had no deductible, compared with the less generous Horizon plan on the exchange that has a minimum deductible of $1,500. And most people would not have qualified for subsidies through the exchange because they earned too much money, he said.

“This is enormously disappointing. New Jersey was always ahead of the nation on health coverage for children and parents,” said Vitale. “It was $5 for doctor visits, $1 for pharmacy and no deductible or cost sharing.”

Vitale noted the irony that the program created to extend universal health care access to all New Jersey’s uninsured children was done in by federal health care reform.” - Obamacare eclipses low-cost NJ health plan for middle-class kids,, 04/06/2014

Link to the entire article appears below:


Sunday, April 13, 2014

Obamacare/Medicaid Enrollment Numbers, the Price and “Backed by the Full Faith and Credit of the U.S. Government.”

Obamacare is based upon insuring an estimated thirty million uninsured through ACA Exchanges and Medicaid. The CBO now projects the price of Obamacare to reach in excess of two trillion dollars. (1) (2) (3)

One has to fully appreciate that the few have decided to introduce a new entitlement and expand an existing entitlement through an entity that is seventeen plus trillion dollars in debt. Stated alternatively, the political power purveyors of a de facto bankrupt entity have introduced a new entitlement and expanded an existing entitlement. Not to worry as the spendthrift, the spendthrift to the tune of seventeen trillion plus dollars in debt, can fund the new and expanded entitlement. How so? (4)

These entitlements, other entitlements and a myriad of other U.S. government programs are “backed by the full faith and credit of the U.S. government.” Makes one feel warm and fuzzy, huh?

Then again, how valuable is such a promise? Maybe one should worry.

Yes, the government has the ability to tax or borrow to make good on its promises. Problem is: one would need to tax at near 100% to make good on all the debt and unfunded entitlements. One can not tax at 100% as private economic activity would end. A 100% tax on zero taxable revenue is zero. Borrowing? One has already borrowed the unfathomable sum of seventeen trillion dollars. (5) (6) (7)

What exactly does “backed by the full faith and credit of the U.S. government” mean when the phrase is constantly deployed to assure detractors that a proposition, a proposition brought into being by politicos through the mechanism of government, is solvent? One must appreciate that political power purveyors of a de facto bankrupt entity, that can not tax at a rate to make itself solvent, constantly rely on “the full faith and credit” each time one of their many, many, many existing propositions are questioned as to solvency.

When one aggregates all existing propositions and one considers the solvency of the aggregate, exactly how much meaning is conveyed when the supporter of any one of the propositions states: “backed by the full faith and credit of the U.S. government”?



(1) Obamacare Now Estimated to Cost $2.6 Trillion in First Decade, The Weekly Standard, 07/11/2012

(2) Estimated Cost of ‘Obamacare’ Is Now $2.6 Trillion — Nearly $1.7 Trillion More Than Obama Promised, Yahoo News, 07/11/2012

(3) New CBO health law estimate shows much higher spending past first 10 years, Fox News, 03/14/2012

(4) US Debt Clock

(5) Full faith and credit, investor

(6) full faith and credit - Investment & Finance Definition,

(7) The Laffer Curve: Past, Present, and Future, Art Laffer, 06/01/2004














ACA/Obamacare: A Closer Inspection of the Much Anticipated RAND Study

“Last week, I wrote about an article in the Los Angeles Times, on a then-as-yet unpublished report from the RAND Corporation. The report indicated that only one-third of Obamacare’s purported 7.1 million exchange sign-ups were from the previously uninsured. But Noam Levey, the author of the Times article, didn’t disclose RAND’s actual findings as to the actual number of previously uninsured exchange enrollees. Well, now we know why. RAND published the full report yesterday; it indicates that Obamacare’s exchanges only enrolled 1.4 million previously uninsured individuals.

That 1.4 million is out of a total of 3.9 million exchange enrollees overall. That is to say, a little over a third of enrollees—36 percent—were previously uninsured. RAND’s figures don’t take into account the last few weeks of the Obamacare open enrollment period, and they contain a substantial margin of error, due to the study’s small sample size. (RAND surveyed 2,425 individuals aged 18 to 64; the 1.4 million figure has a margin of error of 700,000, meaning that there is a 95 percent probability that the actual number is between 700,000 and 2.1 million previously uninsured enrollees.)

If you assume that 80 percent of signer-uppers will eventually pay their premiums, the true number of previously uninsured exchange enrollees is likely closer to 2 million. That’s far from what the Congressional Budget Office has projected; the CBO estimated that 80 to 90 percent of the first-year enrollees would come from the previously uninsured population. Instead, it appears to be more like 24 to 36 percent.

Because the RAND survey is quite small—a comparable survey by the U.S. Census Bureau surveys around 250,000 individuals—its results aren’t as reliable. But the RAND authors, Katherine Grace Carman and Christine Eibner, perform a useful service, because they break out how people of varying insurance statuses in 2013 fared in 2014. For example, of the 40.7 million people they consider to have been uninsured in 2013, RAND can break out the fraction of those who gained insurance via the exchanges, via Medicaid, via employer-sponsored insurance, et al.

RAND finds that, overall, 9.3 million more U.S. residents have health insurance in 2014 relative to 2013. That figure has a margin of error of 3.5 million. But that’s not the interesting part. The interesting part is that 8.2 million of that comes from growth in employer-sponsored insurance. Labor force participation has been steadily declining, especially among younger individuals, which would seemingly make this result unlikely. Other surveys from ADP and Aon Hewitt have found that employer-sponsored coverage among the young has been flat to down.” - RAND Comes Clean: Obamacare's Exchanges Enrolled Only 1.4 Million Previously Uninsured Individuals, Forbes, 04/09/2014


Link to the entire article appears below:



Thursday, April 10, 2014

ACA/Obamacare: Kathleen Sebelius Resigns.

“Kathleen Sebelius, who oversaw the bug-ridden rollout of a federal health insurance program that she herself called "miserably frustrating," is resigning as secretary of Health and Human Service, U.S. officials told NBC News on Thursday.

The officials said President Barack Obama on Friday will nominate Sylvia Mathews Burwell, currently director of the White House Office and Management and Budget, to succeed Sebelius, 65, the former governor of Kansas, who was an original member of the Cabinet that Obama appointed when he took office in January 2009.” - Kathleen Sebelius Resigning as Health Secretary, NBC, 04/10/2014

Link to the entire article appears below: