Thursday, October 31, 2013

Advertising the ACA During the First 31 Days: “Bandwagon in Reverse”?

If one recalls, proponents of ACA, mostly using other people’s money, decided upon a media blitz to promote Obamacare (ACA) with particular focus upon the unveiling of the insurance exchange aspect.

If one promotes and decides upon a media blitz, one has to buy advertising space ahead of time, one has to test advertisements, produce video, re-produce video, prepare fliers, etc. and basically consider content of all sorts and variety and commit to advertising type, kind, quality and quantity far ahead of time. Once one’s media blitz is compiled the blitz is unleashed on a specific day to coincide with the event promoted. Such media blitz is concentrated, repeated and coordinates between media.

What if one’s product is a smashing failure? One is stuck with the advanced marketing and purchased media spots. Is one then advertising a loser? Are you increasing the failure, via word of mouth, as an unintended media consequence? Word of mouth is a very powerful advertising media.

Focusing on the marketing/advertising, is there another such case one can point to of a product being a smashing failure and the associated media blitz increasing the failure? Can big promotion, subsequent failure, and word of mouth, cause an item to fail quicker?

‘In November 1956, Ford settled on a name for its new line of mid-priced automobiles: It would be called the Edsel, after the son of the firm’s founder. Launched the following September, the Edsel was an utter flop, and has since become an exemplar of a product gone wrong, of how seemingly omnipotent firms and advertisers can be laid low by grass-roots consumer antipathy.

“Documents held by the Hagley Library help make sense of the Edsel debacle. Two months after the Edsel’s launch, Ford hired Ernest Dichter, then the nation’s leading market-research analyst, to help the company determine how to increase sales. Dichter's frank assessment, laying out the extent of the Edsel’s troubles, offered only a few glimmers of hope for the company.

“The Edsel, he bluntly told Ford, suffered from "a bandwagon in reverse" with a "quite negative” word-of-mouth campaign. Edsel owners seemed not only unenthusiastic but even embarrassed by their choice. "I guess I just don’t talk about my cars much," one told Dichter, but "it seems I talk even less since I got an Edsel." Another complained that if he told others about buying an Edsel, "they make a wisecrack and that’s it."

Non-owners adamantly didn't want one. "I sure wouldn’t want to own a car that would make a freak out of me," one explained. "You see an Edsel and you see everyone turn around and look at it as though it was a monster of some kind." ‘ (1)

“One of the biggest problems with the Edsel was that it was competing against itself, matching retail value on many of the cars in Ford’s established Mercury line without bringing anything new to the table. Another problem was the economic recession of 1957. And still another was the fact that it was a jumble of both Ford and Mercury parts with zero quality control since there was no separate Edsel manufacturing facility. This lead to a number of mechanical issues that killed demand.” (2)

“The Edsel is most notorious for being a marketing disaster. Indeed, the name "Edsel" became synonymous with the "real-life" commercial failure of the predicted "perfect" product or product idea. Similar ill-fated products have often been colloquially referred to as "Edsels". Since the Edsel program was such a debacle, it gave marketers a vivid illustration of how not to market a product. The principal reason the Edsel's failure is so infamous is that Ford had absolutely no idea that the failure was going to happen until after the vehicles had been designed and built, the dealerships established and $400 million invested in the product's development and launch. Incredibly, Ford had presumed to invest $400 million (well over $4.0 billion in the 21st century) in developing a new product line without attempting to determine whether such an investment would be wise or prudent.

The prerelease advertising campaign promoted the car as having "more YOU ideas", and the teaser advertisements in magazines only revealed glimpses of the car through a highly blurred lens or wrapped in paper or under tarps. In fact, Ford had never “test marketed” the vehicle or its unique styling concepts with potential, “real” buyers prior to either the vehicle’s initial development decision or the vehicle’s shipments to its new dealerships. Edsels were shipped to the dealerships undercover and remained wrapped on the dealer lots.” (3)




(1) Commemorating the Ford Edsel’s Historically Bad Launch: Echoes, Bloomberg, 11/29/2011


(2) 15 Worst Marketing Blunders of All-Time, US Data Corporation, 08/15/2011


(3) Edsel and its failures, Wikipedia

Monday, October 28, 2013

Darrel Issa Regarding Obamacare Web Site: Forced to Register Rather Than a Simple Shopping experience

Note 2:05 - 2:34 of video clip regarding consumers forced to register on Obamacare web site rather than a simple shopping experience to compare price, coverage and network of providers. Also note 0:43 - 0:58 that 2500 US counties (58%) only have two or just one insurer to choose from i.e. no competition which is the reverse of the competition promised to drive down price

Saturday, October 26, 2013

ACA Web Site Debacle (You Can’t Make this Stuff Up!): Fixing the Site Using the Same Company that Developed the Most Troubled Components of the Site? Huh?

“The Obama administration said Friday that it would fix problems in the federal health insurance marketplace by Nov. 30, just two weeks before the deadline to sign up for coverage to replace health insurance policies being canceled because they do not meet new federal standards.”

“Jeffrey D. Zients, President Obama’s troubleshooter on the project, said the general contractor, Quality Software Services Inc., a unit of the UnitedHealth Group, would now “manage the overall effort,” like a general contractor on a home improvement project. Notably, that company had a role in developing one of the most troubled components of the marketplace, which helped verify the identities of those registering.” - Promised Fix for Health Site Could Squeeze Some Users, NYT, 10/25/2013

Link to entire article appears below:

Oh No! ACA Strikes Again! Federal Exchanges and Subsidies vs. “Established by the State”

Opponents of the federal health-care law can move forward with a lawsuit challenging some subsidies for people who buy health insurance, but the financial assistance will remain in place while the case proceeds, a federal judge said Tuesday.”

“Under the 2010 Affordable Care Act, most Americans must carry health insurance or face a tax penalty. To ease the financial burden, the law provided for subsidies to make coverage more affordable to low- and middle-income individuals.

The plaintiffs in the lawsuit include four people who don’t want to buy the level of health insurance required by the law.

The act says people can qualify for subsidies if they buy health insurance through an exchange “established by the state.” A majority of states, however, chose not to set up their own marketplaces, leaving the federal government to run some or all of the exchanges in 36 states.

The challengers contend the subsidies don’t apply to consumers who buy insurance through federally run exchanges. And they say the Internal Revenue Service contravened the text of the law when it said last year that the subsidies would be available to individuals who bought insurance on either type of exchange.

The Justice Department, defending the law in court, argued Congress plainly intended for the subsidies to be available to all consumers. The department said challengers shouldn’t be allowed to proceed with a legal effort that runs counter to the law’s aim of making insurance affordable.” - Judge Allows Suit Challenging Health-Law Subsidies, WSJ, 10/22/2013

“Under the Affordable Care Act, subsidies are only available for state exchanges. But through regulation the Internal Revenue Service has extended subsidies to federal exchanges too.”

The text of the Affordable Care Act states that people who buy health insurance from state exchanges get subsidies if they earn under 400% of the poverty line, currently $94,000 for a family of four. Most applicants will qualify for some subsidy.

According to the law, subsidies are available to those who get their health insurance “through an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act.” Or, in another section, those “enrolled in through (sic) an Exchange established by the State under section 1311.”

Congress put state subsidies in place to encourage states to set up exchanges. Still, only 16 states and the District of Columbia took the carrot and set them up, fewer than anticipated.

A different section of the act (Section 1321) allows the federal government to set up exchanges in states that have not done so. It is these federal exchanges that have made headlines due to their technical problems. But nowhere does the law say that people on these federal exchanges can receive tax subsidies.

No problem, said the IRS in a May 2012 ruling. The IRS extended the subsidies to those getting health insurance on any exchange by defining an exchange as a “State Exchange, regional Exchange, subsidiary Exchange, and Federally-facilitated Exchange.”

This IRS ruling may have had the unintended consequence of discouraging states from setting up exchanges. States had nothing to gain, and a lot to lose, if the exchanges did not work efficiently. Governors may well have calculated that if Uncle Sam were going to set up exchanges and give their residents the same level of subsidy, why set up their own exchanges? If problems occur, as is happening now, the federal government takes the blame, not the governor or Legislature.

Two groups of Virginia and District of Columbia residents are suing the government, arguing that extending the subsidies to federal exchanges puts them at a disadvantage.

Without the subsidy, their attorneys argue, the cost of health insurance would be greater than 8% of their income, meeting the definition of unaffordable coverage. This would enable them to receive a certificate of exemption from the requirement to purchase health insurance. It would also enable them to buy catastrophic health insurance, low-cost insurance against major illness.

Otherwise, lower cost catastrophic health insurance is only available to those under 30 years of age.

In response, the Department of Justice stated that the law is ambiguous, so the IRS had the right to extend subsidies to the federal exchanges. Plus, the government attorneys say, the plaintiffs are not being hurt by being provided with subsidized insurance. With the subsidies in the federal exchanges, the plaintiffs would pay $20 monthly for insurance, rather than hundreds of dollars monthly for catastrophic health insurance.

Judge Friedman disagreed with the Justice Department. Ruling from the bench, he denied the request for a preliminary injunction to block the subsidies, but made it clear that he understands the timing and intends to expedite the case to final judgment. That is the ideal approach, because it means he will rule on the merits by mid-February, and whoever loses can appeal to the D.C. Circuit Court of Appeals.

The denial of the government’s motion to dismiss was the important development, because the government was desperate to avoid having any court consider the merits of the case. However Friedman and Spencer resolve the issue, it will ultimately be up to the appellate court (or Supreme Court) to decide. This week’s actions ensure that will happen in the next two months, rather than in six months, or a year, or in 2017 (as the government wanted).

One major question is spending authority. If Congress did not authorize subsidies for federal exchanges, does the IRS have the right to spend the money? - Court could block Obamacare subsidies in 34 states, WSJ, Market Watch, 10/25/2013


Link to the above articles appear below:










Thursday, October 24, 2013

Welcome to the ACA: Hundreds of Thousands Receive Health Insurance Cancellation Letters. No Way! Way!

Health plans are sending hundreds of thousands of cancellation letters to people who buy their own coverage, frustrating some consumers who want to keep what they have and forcing others to buy more costly policies.”

“But the cancellation notices, which began arriving in August, have shocked many consumers in light of President Barack Obama’s promise that people could keep their plans if they liked them.

“I don’t feel like I need to change, but I have to,” said Jeff Learned, a television editor in Los Angeles, who must find a new plan for his teenage daughter, who has a health condition that has required multiple surgeries.

An estimated 14 million people purchase their own coverage because they don’t get it through their jobs. Calls to insurers in several states showed that many have sent notices.

Florida Blue, for example, is terminating about 300,000 policies, about 80 percent of its individual policies in the state. Kaiser Permanente in California has sent notices to 160,000 people – about half of its individual business in the state. Insurer Highmark in Pittsburgh is dropping about 20 percent of its individual market customers, while Independence Blue Cross, the major insurer in Philadelphia, is dropping about 45 percent.” - Thousands Of Consumers Get Insurance Cancellation Notices Due To Health Law Changes, Kaiser Health News, 10/21/2013

Update 10/26/2013

“Hundreds of thousands of Americans who purchase their own health insurance have received cancellation notices since
August because the plans do not meet Obamacare's requirements.

The number of cancellation notices greatly exceed the number of Obamacare enrollees.”

“Several states have released Obamacare enrollment data, however, revealing extremely low rates. South Dakota reported that only 23 people enrolled in the exchanges, a mere 0.0000276 percent of that state’s population. North Dakota enrolled only 20 residents.

Alaska, meanwhile, comes in at seven total enrollees, or 0.000957 percent of Alaskans.” - Health insurance cancellation notices soar above Obamacare enrollment rates, The Daily Caller, 10/24/2013


The prior individual plans would all be "private" plans hence one would expect such plans to have a rather wide negotiated network of providers. If one receives the letter and buys "off exchange" from the same insurer (assuming the insurer sells off exchange policies), meaning one is purchasing another private plan, then the network would be rather wide as it is the same negotiated network of the same insurer.

If one dumped the current insurer and purchased from another insurer, in an off-exchange situation, one would need to examine the network but more than likely it is the particular insurer's negotiated network they have been cultivating for years.

However, say one receives the cancellation letter and goes to the ACA exchange and buys. Those networks are much more narrow as supposedly, according to insurers, the narrower network lowers price. Here is a situation that is bound to happen and one may do one's self a disservice:

(1) cancel letter arrives,

(2) one has an income that precludes a subsidy,

(3) however, rather than going off-exchange one merely goes through the ACA exchange. No subsidy is forthcoming but anyone can use the exchange regardless of subsidy or no subsidy,

(4) one applies and is approved,

(5) one has just been approved for a narrow network rather than the broader network available in the "off-exchange" world.


The entire Kaiser Health News article and Daily Caller articles appear in the links below:

Updated 11/05/2013

Flowchart of President Obama’s “You can keep your plan, period” defenses - Keith Hennessey, 11/04/2013

Saturday, October 19, 2013

ACA: The Carrot and the Stick. Potential Purchasers Directed to the Subsidy Before the Sticker Shock?

“What has happened, at least so far, presents itself in several layers. One key problem, which to date has been the most prominent in public, has to do with a late-in-the-game decision to require users to go through a complex account-creation process before even reaching any coverage options. Administration officials apparently went back and forth several times on this question, and the ultimate decision required the creation of a series of patches over an already developed site in a very short time. Most of the problems people have faced so far are a function of that decision, and have had to do with creating user accounts and so getting through the very first steps involved in purchasing coverage. Some journalists and analysts have speculated that this decision was made in order to prevent people from seeing premium costs before they could also see any subsidies they might be eligible for, so that the shock of higher prices could be contained and so that simply curious observers and journalists couldn’t get a picture of premium costs in the various states. This explanation strikes me as plausible, and it struck several of the people I spoke with as plausible, but none of them could confirm it. It may be true, but it’s surely not the only possible explanation. Whatever the cause, that decision has created crippling problems that are still largely unresolved.”

“The calculation of subsidies continues to fail tests, and it’s pretty clear that some actual consumers have made actual purchases with bad information, which will become apparent to them when they get their first bills. If the interface problems are addressed and the volume of purchases increases, this calculation problem could become a huge concern.” - Assessing the Exchanges, NRO, 10/17/2013

“What happens if tens of thousands of consumers get their first insurance bill and discover they’re paying more than they thought? Or get a notice from the IRS that the subsidy they thought they were getting is incorrect? Imagine: pitchforks, tar, and feathers.” - Is the White House Now Thinking the ‘Unthinkable’ about Obamacare?, 10/19/2013,

Links to above articles appear below:

Updated 10/28/2013:

A lot of people may be in for a rude awakening if they foolishly trust the new-and-improved government website to accurately estimate their monthly premiums. What are the actual premiums people will have to pay if and when they're ever able to sign up for Obamacare? Someone unearthed this spreadsheet earlier today, and it's been making the rounds for a few hours now. At first glance, it appears to list every plan and every monthly (pre-subsidy) premium within Obamacare's federal exchanges. Time will tell if this data is genuine -- but weren't these numbers supposed to be hidden behind a registration wall? The idea was to hide the sticker shock from consumers until their government assistance could be calculated to soften the blow. An independent analysis performed by National Journal concluded that the "vast majority" of individual market consumers would see costs rise, even after subsidies are factored in.”

“As President Obama promises to fix, his administration is touting what it calls “improvements” in design, specifically a feature that allows you to “See Plans Now.” White House press secretary Jay Carney has said, “Americans across the country can type in their zip code and shop and browse.” Industry analysts, such as Jonathan Wu, point to how the website lumps people only into two broad categories: “49 or under” and “50 or older.” Wu said it’s “incredibly misleading for people that are trying to get a sense of what they’re paying.” Prices for everyone in the 49-or-under group are based on what a 27-year-old would pay. In the 50-or-older group, prices are based on what a 50-year-old would pay. CBS News ran the numbers for a 48-year-old in Charlotte, N.C., ineligible for subsidies. According to, she would pay $231 a month, but the actual plan on BlueCross BlueShield of North Carolina’s website costs $360, more than a 50 percent increase. The difference: BlueCross BlueShield requests your birthday before providing more accurate estimates. The numbers for older Americans are even more striking. A 62-year-old in Charlotte looking for the same basic plan would get a price estimate on the government website of $394. The actual price is $634.” - Fail: New Obamacare Website Snag 'Dramatically Underestimates' Health Costs,, 10/23/2013


Friday, October 18, 2013

ACA Exchange Web Site: You Enrolled! Oops! You Enrolled Twice. Oops! Wait, You Were Un-Enrolled. Wait, You Were Re-Enrolled. Huh?

Related:  Health Website Woes Widen as Insurers Get Wrong Data, WSJ, 10/17/2013

ACA Exchange Web Site vs. The State of Michigan: Zero for 9,883,360.

Note: According to a U.S. Census estimate of 2012, the population of Michigan is 9,883,360. (1)

‘Two weeks after the launch of the Michigan Health Insurance Marketplace, it’s still unclear how many Michiganders have been able to buy insurance there.

Comments earlier today by the chief deputy of the Michigan Department of Insurance and Financial Services underscored the lingering confusion over health insurance exchanges, the centerpiece in each state of the federal Affordable Care Act.

Ann Flood, who on Nov. 1 will become the director of the department, said she checked with her staff and “we actually do not have any confirmation of anyone (in Michigan) signing up on the exchange.” ‘ - Glitches continue to frustrate efforts to sign up for health insurance in Michigan, Detroit Free Press, 10/17/2013

Link to the entire article appears below:




Thursday, October 17, 2013

ACA: The Least Wealthy Group, The Young, Subsidize the More Wealthy Group, The Old.

“Experts say the administration has until mid-November to iron out the problems or risk jeopardizing its goal of signing up 7 million people in the first year of the Obamacare marketplaces. The number includes 2.7 million healthy young adults whose participation will help offset the higher cost of insuring sicker and older beneficiaries.” - Obamacare site improves, but new problems emerge, msnnews, 10/16/2013 (1)

“The number includes 2.7 million healthy young adults whose participation will help offset the higher cost of insuring sicker and older beneficiaries.”

Certain political elements make a concerted effort to court young people. This same element, in the main, wants to charge the young to cross subsidize the old in regards to health insurance. Cross subsidization is by no means a new tactic e.g. Social Security and Medicare at this juncture are basically pay-as-you-go with the young paying for the old. But the new tactic is: The blatant advertising of the cross subsidy stratagem.

Hence certain political elements that court younger people with promises of political solutions to economic problems i.e. social justice are advocating the younger subsidize the older. Why wouldn’t each age group merely pay for the risk they themselves represent? Why would the least wealthy group, the young, pay for, in the main, the more wealthy older group? Reverse social justice?

Beyond social justice being a mirage [F.A. Hayek], younger people might want to examine Director’s Law:

Director's law states that the bulk of public programs are designed primarily to benefit the middle classes but are financed by taxes paid primarily by the upper and lower classes. The empirically derived law was first proposed by economist Aaron Director.

The philosophy of Director's law is that, based on the size of its population and its aggregate wealth, the middle class will always be the dominant interest group in a modern democracy. As such, it will use its influence to maximize the state benefits it receives and minimize the portion of costs it bears. (2) (3)

Moreover, a media barrage has begun aimed at the young with the by-line of: you must purchase as it’s the “law”. Is it "law" or is merely manmade legislation created by the stroke of a pen and can be voided by a stroke of a pen? Legislation is top-down edict of the few whereas law is emergent order of the many which emerges over long periods of time. Adding the label of "law" to manmade/mandated legislation of the few, is merely a political attempt to give the weight of law to legislation. (4)

Maybe the young, those that feel they are being railroaded, should consider reading Thomas Lambert's, law professor at the University of Missouri, essay entitled How the Supreme Court Doomed the ACA to Failure. Why would the young want to read such essay? The essay includes the quintessential ACA work around of when to pay the tax [penalty] and when to buy the insurance. Lambert offers charts, examples and includes a to-the-point discussion.

The link to Lambert’s essay appears below:




(2) Director’s Law's_law

(3) (4) Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice, F.A. Hayek


Wednesday, October 16, 2013

The Fortunate Few ACA Applicants -or- The Unfortunate Few?

Consider for a moment if one had a web site that supposedly has massive web page hits. Consider said web site is simultaneously massively malfunctioning. Would hackers be attracted? Rather likely.

Is one lucky or unlucky to have managed to navigate the broken ACA web site and have fed in the massive personal information which is demanded in the application process? Succeeding in applying for coverage on the ACA web site may be hazardous to your financial health.

Take a gander at the video above and note John McAfee's comments.

Updated 11/10/2013:

Exclusive: Users Warn of Security Risk, Breach of Privacy,, 11/02/2013

Monday, October 14, 2013

ACA Web Based Application Becomes the Old School Paper Application. No Way! Way!

“Up first, the law's administrators are resorting to an anachronism, paper applications, in a desperate attempt to enroll consumers. Obamacare's exchanges were breathlessly billed as -- ahem, "simple and user-friendly" -- Travelocity-style websites for healthcare. Amid the endless shinola-storm of glitches and technical meltdowns, here we stand:

The dead-tree version of health insurance enrollment is turning out to be surprisingly popular. Unable to use new government insurance Web sites that have been plagued by technological problems, those tasked with helping the uninsured sign up for health coverage are bypassing the sites altogether, relying instead on old-fashioned paper applications. It is a slow and labor-intensive substitute for what was supposed to be a snappy online application, similar to Amazon or Travelocity. But faced with a flood of people eager to get health benefits for the first time, what had been considered Plan B has become the plan — at least until the sites are operating more reliably, according to consumer guides and community groups. It is one way the frustrating, persistent glitches on some state Web sites as well as the main federal portal serving 36 states have had a ripple effect around the country.

Er, the only reason old-fashioned paper is "surprisingly popular" is because the entire web system, which the government had three-plus years to prepare, is hopelessly broken. The Post story goes on to reveal that those who "sign up" the old-school way...aren't actually enrolled. I'll let Allahpundit explain why:

"Solution” suggests that people are now being successfully enrolled via paper applications. Not so. Turns out that the info on those applications needs to be input into the same wheezing, error-riddled computer system that’s forced website users into using paper in the first place. The “solution,” in other words, is simply to create a paper backlog that will need to be manually entered into the ObamaCare database by the insurance companies themselves if/when the system ever becomes stable enough to let them do that.“ - Trainwreck: Obamacare Officials Now Resorting to Paper Applications As New Flaws Emerge,, 10/14/2013

Link to the entire article appears below:

Sunday, October 13, 2013

Happy Valentine‘s Day! Send Money! Obtain Qualifying Coverage by Valentine’s Day, 2014 or Face the ACA Tax [Penalty]

"You'll have to get coverage by Valentine's Day or thereabouts to avoid penalties for being uninsured, the Obama administration confirmed Wednesday.

That's about six weeks earlier than a Mar. 31 deadline often cited previously.”

“The Jackson Hewitt tax preparation company first pointed out the wrinkle with the health care law's least popular requirement.

An administration official confirmed it. The official spoke on condition of anonymity because they were not authorized to speak publicly.

It's the latest tweak involving complex requirements of President Barack Obama's health care law, known as the Affordable Care Act. Previous adjustments have ranged from the momentous to the mundane. The biggest one was a one-year delay of a requirement that larger employers offer coverage, announced this summer. More recently, the administration has postponed some Spanish-language capabilities of its enrollment website, as well as full functionality on the site small businesses use to sign up.

Brian Haile, senior vice president for health policy at Jackson Hewitt, said government agencies initially had different interpretations of the enrollment deadline. The Health and Human Services department, which is taking the lead in implementing the law, kept referring to a Mar. 31 deadline. But the Internal Revenue Service, which handles most of the financial aspects, suggested that the deadline had to be in February.

"There were inconsistencies," said Haile, adding it took several inquiries by Jackson Hewitt over the last few weeks to clear up the uncertainty.” - Administration: Penalties for Obamacare Kick in on Valentine's Day, Newsmax, 10/09/2013

Link to entire article appears below:




Saturday, October 12, 2013

Obamacare Exchanges Offer Medicaid-Type Provider Networks? Glorified Medicaid?

“Think of an insurance plan as having three main components: (1) a premium, (2) a list of covered benefits and (3) a network of doctors, hospitals and other providers. Under the Affordable Care Act, there is very strict regulation of benefits—right down to free contraceptives, questionable mammograms and non-cost-effective preventive procedures. At the same time health plans have been given enormous freedom to set their own (community rated) premiums and choose their own networks. They are using that freedom in yet another way to attract the healthy and avoid the sick.

In the ObamaCare exchanges, the insurers apparently believe that only sick people (who plan to spend a lot of health care dollars) pay close attention to networks. Healthy people tend to buy on price. Thus, by keeping fees so low that only a minority of physicians will agree to treat the patients, some insurers are able to quote very low premiums. They are banking on attracting the healthy and they may even have the good luck to scare away the sick.

Community rating is what makes this strategy work. In the ObamaCare exchanges, if I am healthy why wouldn’t I buy on price? If I later develop cancer, I’ll move to a plan that has the best cancer care. If I develop heart disease, I’ll enter a plan with the best heart doctors. And these new plans will be prohibited from charging me more than the premium paid by a healthy enrollee. (See a more comprehensive analysis.)

As a result, we are getting a race to the bottom on access—with private plans in the exchanges looking increasingly like Medicaid, just as they do in Massachusetts.

The Obama administration doesn’t seem to be bothered by this development. In fact they have been touting the fact that the premiums have been lower than expected, even though the reason is that the networks are narrower and skimpier than expected.

Think how different this is from what we were promised. During the 2008 election, every serious candidate for the Democratic presidential nomination repeated the “universal coverage” mantra repeatedly—and on the left “universal coverage” means universal access to care. No candidate even hinted that access to providers might not be any better than it is under Medicaid. - Obamacare’s Insurance Exchanges Will Foster a Race to the Healthcare Bottom, John C. Goodman, The Independent Institute, 10/03/2013

Link to the entire article appears below:

Updated 11/14/2013:

Think ObamaCare Is Bad Now? It Gets Worse Next Year,, 11/12/2013


ACA: All Schemes Unravel, But What About Scheme-Finance-Unraveling?

“Advocates marketed the Affordable Care Act (ACA), known colloquially as "Obamacare," to the American public as a way to "bend the cost curve" of soaring health care costs downward. But despite its supporters' hopes, the 2010 legislation was fiscally reckless, markedly increasing the government's already-unsustainable health spending commitments at a time of record deficits. Three years later, the fiscal harm stemming from the ACA is as bad as-and even worse than-many experts predicted. The problem lies with the nature of the law itself, promising trillions in new government benefits while relying on dubious financing mechanisms. These problems were not only foreseeable, they were indeed widely foreseen.

Even before the president signed the ACA into law, non-partisan analysts demonstrated that the belief it would reduce federal deficits was based on a misunderstanding of government accounting. The ACA's projected savings from Medicare payment reductions were in effect being doubly committed: once to extend Medicare solvency and a second time to fund a massive coverage expansion. Both the Congressional Budget Office (CBO) and the Medicare Chief Actuary alerted Congress to the problem at the time. By counting projected savings only once, my own subsequent study demonstrated that the ACA would add roughly $340 billion to federal deficits in its first decade.

The reality was always likely to be worse than that estimate. The positive case for the ACA's financial integrity hung on two improbable outcomes: that all of its cost-savings provisions would work exactly as hoped, while none of its spending provisions would cost more than envisioned. Yet CBO warned at the time that many of the law's cost-saving provisions "might be difficult to sustain," while the Medicare Chief Actuary also warned that projected savings "may be unrealistic." My own conclusion after the law's passage was that, "the proceeds of such cost-savings cannot safely be spent until they have verifiably accrued."

No sooner was the ink dry on the ACA before these warnings began to prove correct. Many of the law's financing mechanisms started to unravel, while pressure mounted to expand its new spending programs. One of the first provisions to bite the dust was the CLASS long-term care program, suspended in 2011 due to its financial unsoundness. This wiped out a revenue source counted on to produce $70 billion during the first decade to help finance the ACA's coverage expansion.

The 2012 U.S. Supreme Court decision further complicated the law's financing. The original idea under the ACA was that states would expand Medicaid while more generous federal subsidies provide for others to buy health coverage from newly established exchanges. But the Court rendered Medicaid expansion optional for states, thus giving them an incentive to let the federal government shoulder the entire cost of subsidizing more generous insurance coverage for those above the poverty line. Many states are now taking advantage of this latitude, likely increasing federal costs for the exchanges.” - Obamacare's Financial Unraveling: Predictable, and Predicted, Real Clear Markets, 10/09/2013

Link to the entire article appears below:




Friday, October 11, 2013

Riddle: What Has a $93 Million Price Tag That Became a $500 Million Price Tag, Yet Doesn’t Work? Answer: ACA Exchange Web Sites. No Way! Way!

“It’s been one full week since the flagship technology portion of the Affordable Care Act (Obamacare) went live. And since that time, the befuddled beast that is has shutdown, crapped out, stalled, and mis-loaded so consistently that its track record for failure is challenged only by Congress.”

“The reason for this nationwide headache apparently stems from
poorly written code, which buckled under the heavy influx of traffic that its engineers and administrators should have seen coming. But the fact that can’t do the one job it was built to do isn’t the most infuriating part of this debacle – it’s that we, the taxpayers, seem to have forked up more than $500 million of the federal purse to build the digital equivalent of a rock.”

“While GAO states that the “highest volume” of that $394 million was related to the development of “information technology systems,” a more detailed look at that cost shows that a portion that $394 million was spent on things like call centers and collection services. Take that out, and you’re left with roughly $363 million spent on technology-related costs to the healthcare exchanges – the bulk of which ($88 million) went to CGI Federal, the company
awarded a $93.7 million contract to build and other technology portions of the FFEs.” - We paid over $500 million for the Obamacare sites and all we got was this lousy 404 [updated],, 10/08/2013

Link to the entire article appears below:


ACA: Strange Encounters of the Unsolicited Junk Mail Kind

“FRESNO, Calif. (KMPH) - A Fresno mail carrier has been fired for throwing away mail. The United States Postal Service says the mailman admitted he threw away letters about "Obamacare."

People who live at a Central Fresno apartment complex snapped pictures of the inside of the dumpster filled with mail about "Obamacare". Witnesses say the mail was dumped in the garbage by their mailman.”
- Fresno Mail Carrier Fired For Throwing Away Mail About Obamacare, 10/08/2013,

Link to the entire article appears below:

Wednesday, October 9, 2013

Jon Stewart Interviews Kathleen Sebelius about Obamacare: “well, maybe she’s just lying to me.”

"Health and Human Services Secretary Kathleen Sebelius likely thought her interview with Jon Stewart on “The Daily Show” Monday night would be an easy setting to pitch the Obamacare exchanges to young people. Instead, she ended up getting accused of being a liar by the popular comedy host.

During his interview with Sebelius, Stewart repeatedly sought an answer from the secretary on why big businesses got a delay in their Obamacare mandate to provide affordable health insurance to their employees, while individuals did not get a delay in their Obamacare mandate making them purchase health care or face a penalty.

In a rare monologue at the end of the show, Stewart said he remained confused and that he suspected that the secretary may have been lying to him." - Jon Stewart accuses Kathleen Sebelius of lying to him about Obamacare, The Daily Caller, 10/08/2013

Link to the entire article appears below:

Tuesday, October 8, 2013

ACA Exchanges: Sloppy Software, Stray Codes and Poor Web-Efficiency Techniques

“The website is troubled by coding problems and flaws in the architecture of the system, according to insurance-industry advisers, technical experts and people close to the development of the marketplace.

Among the technical problems thwarting consumers, according to some of those people, is the system to confirm the identities of enrollees. Troubles in the system are causing crashes as users try to create accounts, the first step before they can apply for coverage.

Experian PLC, an information-services firm, holds a federal subcontract to support that system. The company declined to comment.

Information technology experts who examined the website at the request of The Wall Street Journal said the site appeared to be built on a sloppy software foundation. Such a hastily constructed website may not have been able to withstand the online demand last week, they said.

Engineers at Web-hosting company Media Temple Inc. found a glut of stray software code that served no purpose they could identify. They also said basic Web-efficiency techniques weren't used, such as saving parts of the website that change infrequently so they can be loaded more quickly. Those factors clog the website's plumbing, Media Temple said.”

“So far, Web-traffic problems are allowing only a small trickle of buyers, said John Gorman, chief executive of Gorman Health Group, an insurance-industry consulting firm with clients selling policies on the exchanges.

Large insurers have seen enrollment figures totaling in the hundreds each, said Sumit Nijhawan, chief executive of Infogix Inc., a data-integrity firm that works with such insurers as WellPoint Inc., Aetna Inc. and Cigna Corp.

So far, many tens of thousands of people had started the application process but the number of those who were able to create accounts and shop for coverage is likely in the low thousands, according to people with knowledge of the situation and estimates by insurance-industry advisers.

The administration has declined to say the total number of enrollees.” - Software, Design Defects Cripple Health-Care Website, Wall Street Journal, 10/06/2013

Link to the entire article appears below:




Monday, October 7, 2013

ACA Web Sites Shut Down: Not to Fear, Outsource is Here!

"Bedeviled by technology glitches that frustrated millions of consumers, the Obama administration is taking down its health overhaul website for repairs this weekend.

Enrollment functions of the site will be unavailable during off-peak hours this weekend, the Health and Human Services Department said Friday. The website will remain open for general information.

Technology problems overwhelmed the launch of new health insurance markets Tuesday, embarrassing the administration just when the health care law was supposed to be introduced to average consumers." - Obamacare Website to be Shut Down for Repairs, Newsmax, 10/04/2013

Why are there so many problems? With three years to design and test and seemly unlimited funds, why so many problems? Not to fear outsource is here!

“Computerworld - Some state governments are willing to hire offshore IT service providers to work on healthcare IT projects under controversial contracts that don't bar use of temporary foreign labor, or workers on H-1B visas.

Two multimillion-dollar government healthcare IT projects, one in Illinois and the other in the District of Columbia, illustrate what's going on.

In Illinois, Cognizant was awarded a $74.1 million contract in June to upgrade the state's Medicaid systems to meet the requirements of the Affordable Care Act (ACA), also known as Obamacare.

In January, the District of Columbia awarded Infosys a $49.5 million contract to develop a health benefit exchange and replace its Medicaid and eligibility systems.

H-1B visa holders may already be working on municipal computer systems in Washington. In Illinois, state officials say that no H-1B workers are working on its project -- for now.

Illinois said that Cognizant has assigned 13 workers, all U.S. citizens or permanent U.S. residents with Medicaid experience and expertise, to work on the project. Seven of the staff members are former state of Illinois employees with extensive knowledge of the state's Medicaid system, according to spokeswoman Kelly Jakubek, communication manager for the Illinois Department of Healthcare and Family Services.

Cognizant has submitted paperwork to hire 60 or more visa holders to work on the project -- a proposal that the state wasn't aware of, Jakubek said.

Computerworld sent Illinois officials emails with copies of the paperwork that Cognizant filed with the U.S. Department of Labor to hire 60 senior system analysts at a pay rate of $76,814. The documents, known as Labor Condition Applications (LCA), are part of the H-1B approval process and are used in salary determinations. As a general rule, though, the filing of an LCA doesn't mean that a visa worker in on the way.

The state controls the hiring process for the project, said Jakubek, though she could not say whether it will require the contractor to exclude temporary visa workers from the effort.

Asked about the paperwork filed with the Labor Department, Cognizant said it would take on visa workers if needed.

"Due to the shortage of qualified talent in many parts of the U.S., we routinely file LCAs when we anticipate a large contract to ramp up," Cognizant said in a statement. "Our first course of action is always to seek out qualified U.S. workers to fill these positions. We file LCAs as a fallback measure in the event that we are not able to find qualified U.S. workers."

Ron Hira, a public policy professor at the Rochester Institute of Technology and a researcher who studies tech immigration issues, said that Cognizant "is able to piggyback off of the false claims of a dire shortage of U.S. IT workers," adding that "Microsoft and others are providing cover to firms like Cognizant by making broad-based claims of IT shortages."

Cognizant, which is based in Teaneck, N.J., but has operations worldwide and conducts a major share of its work overseas, has been one of the largest users of H-1B visas, getting more than 9,000 approvals last year, according to government records.” - H-1B workers in line for Obamacare work,, 09/25/2013


Link to the above mentioned articles appear below:



Saturday, October 5, 2013

Chad Henderson and Obamacare: Former Obama Campaign Worker and Active Volunteer with Organizing for Action Sort of, Kind of, Maybe…Oh Darn…Did Not Buy Obamacare Coverage. Who’d a Thunk It?

"Chad Henderson is the media’s poster boy for Obamacare. Reporters struggled this week to find individuals who said they had been able to enroll in one of the law’s 36 federally run health-insurance exchanges.

That changed yesterday, when they found Henderson, a 21-year-old student and part-time child-care worker who lives in Georgia and says that he successfully enrolled himself and his father Bill in insurance plans via the online exchange administered at

But in an exclusive phone interview this morning with Reason, Chad's father Bill contradicted virtually every major detail of the story the media can't get enough of. What's more, some of the details that Chad has released are also at odds with published rate schedules and how Obamacare officials say the enrollment system works.

The coverage of Chad Henderson has been massive. He was featured in The Washington Post Thursday as “the Obamacare enrollee that tons of reporters are calling.” He was also profiled in The Huffington Post as someone who “beat the glitches to sign up for Obamacare.” He was interviewed by Politico, multiple local news organizations, and, according to his Facebook feed, was asked to be part of a conference call hosted by the Department of Health and Human Services.

Chad's story was tweeted out by the official Obamacare Twitter feed. It was promoted to the media by Enroll America, a health-care activist group headed by a former White House communications staffer, as a sign of Obamacare’s success. Henderson told reporters at multiple news outlets that after a three-hour wait to sign up online, he enrolled around 3 a.m. Tuesday morning in an unsubsidized private insurance plan that would cost him about $175 a month. He also said that his father enrolled in separate coverage plan that would cost about $250 a month after factoring in the subsidies for which his father qualified on his approximately $24,000 annual income.

Chad’s decision to purchase his own, separate plan might surprise some. A monthly premium of $175 would represent about 30 percent of his pre-tax take home pay—about $583 a month on the $7,000 part-time income he claimed. And he could have chosen to be covered by his father’s plan, which, under the Affordable Care Act, would have been required to cover dependents up to the age of 26. Chad said his father encouraged him to be covered under his own plan, even though the cost was higher. "He's old school, so he wants me to take responsibility," Chad told The Huffington Post.

Henderson’s story was promoted as proof that the new health law can work for individuals. That was exactly how Chad intended it. He was a volunteer with President Obama’s campaign last year, and his LinkedIn page still lists him as an active volunteer with Organizing for Action, the former campaign organization which now advocates for the president’s legislative agenda.

He told The Washington Post that he was sharing his story because he wanted the new health law to succeed.

"I've read a few articles about how young people are very critical to the law's success," he said to The Post. "I really just wanted to do my part to help out with the entire process."

But details of Chad's story proved difficult to verify. And in a phone interview conducted this morning, Chad’s father Bill contradicted major details of Chad’s story. I reached Bill Henderson by following a series of links at Chad's Facebook page, through which I was able to speak directly to the father.

Bill Henderson told me that both he and his son were interested in getting coverage, but that he had not enrolled in any plan yet, and to his knowledge, neither had his son. He also said that when they do enroll, getting the most coverage for the least money would be the goal, and that he expects that he and his son will get coverage under the same plan.

Bill told me that Chad had been looking into plans online. “He told me that there’s different plans. And we haven’t decided which plans to enroll in yet.” Updated: Obamacare Poster Boy Chad Henderson and His Dad Didn’t Really Buy Insurance,, 10/04/2013


Link to entire article appears below: update (2.54pm ET): Washington Post reporter Sarah Kliff writes that she "spoke with Chad over the phone about this situation. He told me that he has indeed not purchased coverage but doesn't believe he was lying. He said he told reporters that he completed an application for coverage and knows what plan he would like to purchase, but has not, as of yet, enrolled in that insurance plan." Read more here.