Tuesday, July 29, 2014

ACA/Obamacare: Great Coverage! 11 Out of 12 Fake Applicants Can’t Be Wrong!

‘The House Ways and Means Oversight subcommittee held a hearing Wednesday about an undercover investigation by the GAO that found it was able to sign up 11 out of 12 fake applicants using false citizenship/immigration and income documents.

“The initial findings are deeply troubling to me,” said subcommittee Chairman Charles Boustany (R-La.). “We’re in an area, where tax credits are being utilized to undermine the program. … These kinds of situations are intolerable, whether you are a Republican or a Democratic.”’ - Ease of fake O-Care sign-ups worries GOP, thehill.com, 07/23/2014

Link to the entire article appears below:


Monday, July 28, 2014

ACA/Obamacare: Halbig v. Burwell Upon Further Review.

Consider these three statements regarding the legislation known as Obamacare:

'Max Baucus (D-Montana), chair of the Senate Finance Committee through which the health bill flowed, insisted that reading the law wasn't necessary. “I don’t think you want me to waste my time to read every page of the healthcare bill,” Baucus said, according to the Flathead Beacon. “You know why? It’s statutory language. ... We hire experts.”' (1)

'Tom Carper (D-Delaware), who also served on the Senate Finance Committee, insisted that the legislative language wasn't important: "I don't expect to actually read the legislative language, because reading the legislative language is among the more confusing things I've ever read in my life."' (2)

'“You’ve heard about the controversies within the bill, the process about the bill, one or the other. But I don’t know if you have heard that it is legislation for the future, not just about health care for America, but about a healthier America, where preventive care is not something that you have to pay a deductible for or out of pocket. Prevention, prevention, prevention—it’s about diet, not diabetes. It’s going to be very, very exciting. But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy.”' - Nancy Pelosi (3)


Hence legislation passed without being closely read yields many unintended consequences one of which is:

“The statute clearly states that subsidies are available only through exchanges established by a state, yet the IRS, in its interpretation, expanded the availability of subsidies to all exchanges – state and federal.

Should the D.C. Circuit decision (ruling against the IRS) be upheld, the impact would have a ripple effect on the health care law. First, only individuals purchasing coverage through a state exchange would be eligibility for federal subsidies. Those individuals in the federal exchanges would likely face costly premiums and many as a result may be exempt from the individual mandate. Second, since the employer mandate penalties are linked to the availability of the subsidies, employers would not be subject to the penalty in those states that did not establish a state exchange.”

“Aside from amending the law through normal legislative processes, one obvious quick fix would be to get more states to set up state exchanges. But that may a heavy lift. Many states opted to not establish an exchange in part because by 2015 states are required by law to fund the operating expenses of the exchanges on their own. Furthermore, grant funding that was originally included in the law to help states establish state exchanges is gone, and it is highly unlikely Congress would be willing to appropriate additional funds toward this endeavor.” - (4)


One has unread legislation, language repeatedly used specifying subsidies linked to state based exchanges, “experts” and consequential legal proceedings resulting in unintended consequences. What response does one encounter from ACA/Obamacare supporters?

“We feel very strong about the sound legal reasoning of the argument that the administration is making,” White House spokesman Josh Earnest said. “You don’t need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health-care costs regardless of whether it was state officials or federal officials who are running the marketplace.” (5)


The problem with the above argument by Mr. Earnest is dissected nicely by Peter Suderman at Reason.com:

“The reasoning for this ruling was simple: That’s what the law says. The section dealing with the creation of state exchanges and the provision of subsidies states, quite clearly, that subsidies are only available in exchanges "established by a State," which the law expressly defines as the 50 states plus the District of Columbia.

Obamacare’s defenders have responded by saying that this is obviously ridiculous. It doesn’t make any sense in the larger context of the law, and what’s more, no one who supported the law or voted for it ever talked about this. It’s a theory concocted entirely by the law’s opponents, the health law's backers argue, and never once mentioned by people who crafted or backed the law.

It’s not. One of the law’s architects—at the same time that he was a paid consultant to states deciding whether or not to build their own exchanges—was espousing exactly this interpretation as far back in early 2012, and long before the Halbig suit—the one that was decided this week against the administration—was filed. (A related suit, Pruitt v. Sebelius, had been filed earlier, but did not challenge tax credits within the federal exchanges until an amended version which was filed in late 2012.) It was also several months before the first publication of the paper by Case Western Law Professor Jonathan Adler and Cato Institute Health Policy Director Michael Cannon which detailed the case against the IRS rule.

Jonathan Gruber, a Massachusetts Institute of Technology economist who helped design the Massachusetts health law that was the model for Obamacare, was a key influence on the creation of the federal health law. He was widely quoted in the media. During the crafting of the law, the Obama administration brought him on for consultation because of his expertise. He was paid almost $400,000 to consult with the administration on the law. And he has claimed to have written part of the legislation, the section dealing with small business tax credits.”

“A video of the presentation, posted on YouTube, was unearthed tonight by Ryan Radia at the Competitive Enterprise Institute, a libertarian think tank which has participated in the legal challenge to the IRS rule allowing subsidies in federal exchanges. Here’s what Gruber says.

What’s important to remember politically about this is if you're a state and you don’t set up an exchange, that means your citizens don't get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this. [emphasis added].”

“And what he says is exactly what challengers to the administration’s implementation of the law have been arguing—that if a state chooses not to establish its own exchange, then residents of those states will not be able to access Obamacare's health insurance tax credits. He says this in response to a question asking whether the federal government will step in if a state chooses not to build its own exchange. Gruber describes the possibility that states won’t enact their own exchanges as one of the potential "threats" to the law. He says this with confidence and certainty, and at no other point in the presentation does he contradict the statement in question.

In early 2013, Gruber told the liberal magazine Mother Jones that the theory advanced by the challengers in this case was "nutty." Gruber also signed an amicus brief in defense of the administration and the IRS rule. But judging by the video it is quite clear that in 2012 he accepted the essence of the interpretation advanced by the challengers.”

"Update: Earlier this week, Gruber was on MNSBC to address the Halbig ruling. He was asked if the language limiting subsidies to state-run exchanges was a typo. His response: "It is unambiguous this is a typo. Literally every single person involved in the crafting of this law has said that it's a typo, that they had no intention of excluding the federal states."

Update 2: The Cato Institute's Michael Cannon, who was instrumental in developing the arguments that laid the groundwork for the legal challenge in Halbig, responds to the video at Forbes:

I don’t mean to overstate the importance of this revelation. Gruber acknowledging this feature of the law is not direct evidence of congressional intent. But Gruber is probably the most influential private citizen/government contractor involved in that legislative process. He was in the room with the people who crafted this bill.

Update 3: Gruber says the statement in the video was "a mistake." Jonathan Cohn of The New Republic got a response from Gruber this morning. Here are a few snippets:

I honestly don’t remember why I said that. I was speaking off-the-cuff. It was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it.

During this era, at this time, the federal government was trying to encourage as many states as possible to set up their exchanges. ...

At this time, there was also substantial uncertainty about whether the federal backstop would be ready on time for 2014. I might have been thinking that if the federal backstop wasn't ready by 2014, and states hadn't set up their own exchange, there was a risk that citizens couldn't get the tax credits right away. ...

But there was never any intention to literally withhold money, to withhold tax credits, from the states that didn’t take that step. That’s clear in the intent of the law and if you talk to anybody who worked on the law. My subsequent statement was just a speak-o—you know, like a typo.

Update 4: Gruber appears to have made a second "speak-o." In a separate speech, he spoke of the "threat" posed by states declining to build their own exchanges. And he once again explicitly ties the creation of state-based exchanges to the law's tax credits (its subsidies for private health insurance).” (6)


Upon further review, if one trumpets that reading legislation is a non-starter, legislative language is unimportant and that merely passing unread legislation and unimportant legislative language to see what is inside the legislation……then one should not be surprised by the never ending cascade of unintended consequences spawned by the ACA/Obamacare legislation. Political dupery and nitwitery has a price and cost.

A question to ponder regarding the never ending cascade of unintended consequences spawned by the ACA/Obamacare legislation is an old Thomas Sowell expression regarding notional propositions such as Obamacare: What next? Then what?

Updated 07/30/2014: The Flip-Flopping Architect of the ACA, Politico Magazine, 07/28/2014




(1) (2) Maybe Democrats Should Have Read Obamacare Before They Passed It, townhall.com, 07/25/2014



(3) Nancy Pelosi: "We Have to Pass Our Bill So That You Can Find Out What Is In It", gatewaypundit.com, 03/09/2010


(4) The Obamacare Employer Mandate Could Die in Some States, dailysignal.com, 07/23/2014


(5) Federal appeals courts issue contradictory rulings on health-law subsidies, 07/22/2014


(6) Watch Obamacare Architect Jonathan Gruber Admit in 2012 That Subsidies Were Limited to State-Run Exchanges (Updated With Another Admission), reason.com, 07/24/2014










Sunday, July 20, 2014

Health-Care Supply: About Those Certificate-of-Need [CON] Statutes

by Thomas Stratmann and Jacob W. Russ

Many states have certificate-of-need regulations, which prohibit hospitals, nursing homes, and ambulatory surgical centers from entering new markets or making changes to the existing capacity of medical facilities without first gaining approval from certificate-of-need regulators. These regulations purport to limit the supply of medical services and to induce regulated institutions to use the resulting economic profits to cross-subsidize indigent care. We document that these regulations do limit supply. However, we do not find strong evidence of higher levels of indigent-care provision in states that have certificate-of-need regulations as opposed to those that do not.

Discussion and Conclusion
This paper analyzes the connection between CON laws and cross-subsidization in the health care industry. We consider CON laws as a mechanism for financing a subsidy to the medically indigent.

The theory of cross-subsidization requires that CON programs do two things: First, they must act as an entry barrier to reduce the competitiveness of regulated medical sectors and increase the profitability of existing providers. Accomplishing that, these regulations must also force firms to provide the cross-subsidy. CON laws must provide incentives for the regulated to
use their profits to provide more indigent services than they otherwise would.

We investigated indigent care with state-level hospital data and put together the most comprehensive CON-regulation database to date. We do not find any evidence of an increase in indigent care. Our coefficients are small in magnitude, not statistically different from zero, and the direction of the effect changes across specifications. Our evidence is consistent with previous studies in showing that CON programs are effective at restricting the supply of regulated medical services. It appears, however, that CON programs do not induce cross-subsidization. Since we lack measures of hospital profitability, our data do not allow us to make conclusions about whether this is because supply restrictions have not increased hospital profits, or because indigent care provision is not sufficiently enforced by the states that have these provisions.

Link to the entire paper appears below:




Monday, July 14, 2014

ACA/Obamacare: Fuzzy Funding -or- Here Comes The Funding Cliffs!

“Fasten your seat belts. Turbulence lies ahead for ObamaCare as funding streams for three programs are set to nose-dive.

Millions of children could lose coverage, and millions more insured via Medicaid or ObamaCare plans could have an even tougher time finding a doctor.

These funding cliffs weren't driven by policy but by politics: Provide short-term funding to get ObamaCare off the ground, then cut it off — at least on paper — to make the budget forecasts look better over 10 years

Now, with the money set to dry up next year, a push has begun to save funding for all three programs at an annual cost approaching $13 billion.

The first bumps could be felt at the start of 2015, when the Affordable Care Act's boost in funding for Medicaid primary care doctors is set to expire.

The law temporarily provided funds to lift Medicaid's reimbursement rates, putting them on par with Medicare's for 2013 and 2014 at a cost of $11 billion.”

“Access problems could intensify in September 2015. ObamaCare provided $11 billion over five years to boost the capacity of community health centers, a key source of care in low-income, medically underserved areas. Most of the money goes to clinics where reimbursements and co-pays often don't cover the cost of care.

The 2015 funding cliff would leave health centers unable to sustain current caseloads, sharply damaging primary-care access for the insured and uninsured alike and potentially leading to more costly increases in specialty, emergency and inpatient care," warned researchers at George Washington University's Milken Institute School of Public Health.”

“A third upcoming cliff would see funding for the Children's Health Insurance Program, or CHIP, sink from $12.5 billion in fiscal 2015 to $9.1 billion the next year and $5.7 billion thereafter.” -
3 ObamaCare Funding Cliffs Imperil Coverage, Access - Investors Business Daily, 07/07/2014

Link to the entire article appears below:


Sunday, July 13, 2014

ACA/Obamacare: Where Web Security is Job 57

‘A Romanian attacker hacked the Vermont health exchange’s development server last December, gaining access at least 15 times and going undetected for a month, according to records obtained by National Review Online.

CGI Group, the tech firm hired to build Vermont Health Connect, described the risk as “high” in a report about the attack. It also found possible evidence of sophisticated “counter-forensics activity performed by the attacker to cover his/her tracks.” ‘ - Another Security Breach for Obamacare, NRO, 07/01/2014

Link to entire article appears below:


Monday, July 7, 2014

ACA/Obamacare: Subsidies Challenged in Multiple Law Suits

'Now, a bigger and more fundamental problem may lie ahead for Obamacare. As early as this week, a D.C. appellate court could rule against the administration on the most basic question: Are the massive premium subsidies flowing to low-income people through the federal insurance exchanges legal, or should that money be cut off?

A three-judge panel of the U.S. Court of Appeals is expected to rule on a suit claiming that only those who signed up for coverage through the 14 state insurance marketplaces are entitled to subsidies. The suit, Halbig vs. Burwell, argues that the subsidies can’t be provided to people in states that signed up for the federal exchange. The impact could be huge: Only 14 states set up their own insurance marketplaces, while 36 others opted to let the federal government create and operate their exchanges. If the subsidies are ruled illegal for the federal exchanges, that could torpedo the Affordable Care Act by making insurance unaffordable for millions of people relying on the subsidies to lower the cost of their premiums.

In essence, after years of conflict over the controversial health care law, the courts could end up doing what congressional Republicans have repeatedly tried and failed to do: Dismantle Obamacare.

Roughly 8 million people signed up for Obamacare through the state and federal exchanges in the first six-month enrollment period, which ended this spring. Eighty-seven percent of those who signed up for insurance in the federal exchanges received subsidies – or about 5.4 million people, according to analyses.

Ron Pollack, executive director of Families USA and a major booster of Obamacare, has been widely quoted as calling the legal challenge to the subsidies “the greatest existential threat” to the survival of the Affordable Care Act.

In an email on Sunday, Pollack said that without the subsidies, “The vast majority would be unable to afford the premiums and would re-join or join the ranks of the uninsured.”

He added, “The loss of the subsidies would make it very difficult to enroll additional low- to moderate-income people in coverage – largely because affordability is the key issue for people when they consider whether or not to enroll in coverage.”

The legal argument, at its root, is over what Congress intended when it wrote the health law back in 2010.

Four cases, including Halbig vs. Burwell, have been brought by employers and individuals in various courts. The cases are challenging the government’s contention that Congress wanted individuals in both state and federally operated exchanges to qualify for subsidies.

On March 25, a three-judge panel of the D.C. Circuit heard oral arguments in the Halbig case. Another panel in the Fourth Circuit Court of Appeals in Richmond, Virginia, heard arguments in a similar case, King vs. Burwell, on May 14. (Burwell refers to the new Health and Human Services Secretary, Sylvia Mathews Burwell.)

Michael Cannon of the Cato Institute and Jonathan Adler of Case Western Reserve University contend in a recent analysis in Health Affairs that statutory eligibility rules for the ACA’s premium-assistance tax credits “clearly say” that eligibility “depends on the applicant being enrolled in a qualified health plan ‘through an Exchange established by the State.’”

“The rules employ that restrictive phrase nine times, without deviation,” the two scholars write. “Since the Act explicitly ties its cost-sharing subsidies, employer-mandate penalties, and (in many cases) individual-mandate penalties to the availability of these tax credits, it therefore also authorizes those provisions only in states that establish Exchanges.”

They added, “This condition was not a fluke or a drafting error.”' - Court Challenges to Subsidies Threaten Obamacare, The Fiscal Times, 07/07/2014

Link to the entire article appears below:


Update: Get ready for an even bigger threat to Obamacare, Jonathan Turley, 06/30/2014, latimes.com


Friday, July 4, 2014

ACA/Obamacare: “Inconsistencies”, Reverse Tax Cliffs and 04/15/2015 Tax Day Disaster This Way Comes

“The Obama administration is struggling to resolve data discrepancies that could jeopardize coverage for millions who sought health insurance on the federal exchange HealthCare.gov, according to a watchdog report on the still-rocky implementation of ObamaCare.

Though the system's troubles have faded from the headlines since the problem-plagued launch last October, a report from the health department inspector general provided the first independent look at widespread issues the government is having effectively fact-checking the information applicants are putting in the system.

According to the report, the administration was unable to resolve 2.6 million so-called "inconsistencies" out of a total of 2.9 million such problems from October through December 2013.

The government needs to determine applicants' eligibility in order to verify they can enroll and, in some cases, get government subsidies. Without that step, coverage could be jeopardized. Critics fear these issues also could cause chaos during the 2015 tax-filing season, as many would have to pay back subsidy money they were not entitled to.- ObamaCare coverage for millions in jeopardy as watchdog finds widespread data flaws, fox news, 07/01/2014



Keeping the above news report in mind for a moment, consider the following:

“Many of the inequities present in Obamacare stem from Section 1401 of the law, which establishes eligibility for subsidized insurance in government-run exchanges.[5] Obamacare’s formulae for allocating federal premium and cost-sharing subsidies include several “cliffs.” At these cliffs, individuals and families will actually benefit more by working less because additional earnings could cause them to lose thousands of dollars in taxpayer-funded subsidies.

For example, Obamacare subsidizes insurance premiums for individuals with incomes of up to 400 percent of the federal poverty level (FPL), which is just over $62,000 for a couple in 2013.[6] According to the Kaiser Family Foundation’s subsidy calculator, a married couple, each 50 years old, making a combined $60,000 per year would receive a taxpayer-funded insurance subsidy of up to $5,081.[7] The couple would qualify for this subsidy because their combined income would be just below 400 percent of the FPL. However, if the couple earned an additional $2,500—raising their income just above 400 percent of the FPL—they would receive no subsidy at all. Even though they receive $2,500 more in cash compensation, the couple would actually be worse off financially because they would lose more than $5,000 in federal insurance subsidies.

Similar cliffs occur elsewhere in Obamacare’s subsidy structure. As income approaches 400 percent of the FPL, the percentage of income that households are expected to devote to insurance premiums rises, and the premium subsidies under Section 1401 fall. Individuals with rising income also face the loss of federal cost-sharing subsidies established under Section 1402 of the law, which reduce out-of-pocket expenses including co-payments and deductibles. These effects are particularly acute at certain cliffs established in the statute—for instance, 150 percent, 200 percent, and 250 percent of the FPL—but they also pervade the entire subsidy structure. Overall, University of Chicago economist Casey Mulligan has concluded that Obamacare will help raise effective marginal tax rates by more than 10 percentage points.[8]

The subsidy formulae in Obamacare and the disincentives to work compound an existing system of tax credits and welfare programs that places families of low and modest incomes in a “poverty trap.” Testifying before two subcommittees of the House Ways and Means Committee in June 2012, Urban Institute fellow Gene Steuerle explained how the phaseouts of various income-linked programs—such as food stamps, housing assistance, and cash welfare benefits under the Temporary Assistance to Needy Families program—create very high effective marginal tax rates.” - How Obamacare Undermines American Values: Penalizing Work, Marriage, Citizenship, and the Disabled, Chris Jacobs, heritage.org, 11/21/2013




Upon Further Review

The reverse tax cliffs of Obamacare would likely work the same as marginal income tax cliffs in regards to tax avoidance. Tax avoidance techniques are well known. There are legal tax avoidance techniques and there are illegal tax avoidance techniques. The point being, individuals will rationally avoid tax.

For instance, James and Jane Goodfellow face/approach a marginal income tax cliff. The Goodfellow’s could merely take the months of November and December off and earn zero income during those months and avoid the tax cliff. The Goodfellow’s could continue earning income and deploy legal tax avoidance techniques. Finally the Goodfellow’s could continue earning income and deploy illegal tax avoidance techniques such as underreporting of income.

Meanwhile, John and Mary Public face/approach a reverse tax cliff regarding Obamacare. The Public’s could merely take the months of November and December off and earn zero income during those months and avoid the reverse tax cliff. The Public’s could continue earning income and deploy legal tax avoidance techniques. Finally the Public’s could continue earning income and deploy illegal tax avoidance techniques such as underreporting of income.

Returning to the 2.6 million unresolved “inconsistencies” in Obamacare applications and the 04/15/2015 tax day disaster of many subsidy payments needing returned by Obamacare subsidy recipients: Did Obamacare applicants put the cart before the horse regarding tax avoidance techniques? How so?

On the ACA/Obamacare web site it asks a very vague question regarding income: “What is your household's expected income for 2014?” If one answers the preceding question assuming tax avoidance techniques deployed one would give a different answer than if one answers the preceding question assuming no tax avoidance techniques deployed.

Consider for a moment that a clever person experiments regarding changing the answer to “income” upon the ACA/Obamacare web site (regardless of the anticipation of tax avoidance techniques deployed and consequential reportable income). By changing the income the person will see the subsidy rise or fall and hence the consequential price required to be paid for a particular insurance plan rise or fall. Is it possible the clever person tells other clever people of their experiment?

In the final analysis, are the “inconsistencies” really inconsistencies or merely a product of the ACA application design? Stated alternatively, if one turns loose Johnny Insurance Applicant on a malfunctioning web site with no verification of data input, would one expect “inconsistencies”?


Tuesday, July 1, 2014

ACA/Obamacare: “Sticker Shock”, Pauly, Harrington and Leive

The paper It All Depends: “Sticker Shock” in Health Insurance Reform, Pauly, Harrington and Leive, Wharton School, 01/04/2014 the conclusion is as follows:


"This analysis of the change in total expected payment for those to be covered in post-ACA exchanges tells rather different stories about "sticker shock." On the one hand, among those who previously bought individual coverage, premiums generally increase only modestly if they choose the plans with the lowest bronze or silver premiums. While bronze premiums are lower than what was paid before, however, estimated out of pocket payments are higher, so the net effect is a moderate increase in TEP. If people choose to pay the median silver premium, the increase will be larger, but (at 25-30%) is still much lower than some of the estimates from the informal literature.

The sticker shock story is much different for the previously uninsured. The low income previously uninsured will have subsidies to cover much of the higher premiums and cost sharing to which they will be subject. But the previously uninsured who will receive minimal subsidies, who constitute a sizeable fraction of the uninsured population, are estimated to experience a very large increase in financial responsibility. Not only will they have to pay significant premiums but, because of increases in total utilization because of moral hazard or greater willingness of providers to supply care, their responsibility for out of pocket payment will also increase. They will pay a slightly smaller fraction of their total cost of care than when they were uninsured, but the total cost will increase to such an extent that the financial burden will rise.

We have not provided welfare calculations for this population. Such calculations would reduce the change in TEP by an estimate of the value to them of additional care (but by something less than the cost of that care), and by a small reduction in the risk of very high levels of OOP. One reason for this large increase in TEP is the small average OOP for the non-low-income uninsured in the CPS data, and this data may have underestimated the relatively rare event of a high out of pocket payment. Even so, it seems that this is the population that will be subject to the most severe financial shock from health reform."

Note: click the link below then once upon the page which the link leads you to, click the very first link in the column of links and it will take you to the un-gated pdf version of this paper.



A worthy point within the paper is that the previously uninsured taking the largest total expected payment (TEP) increase:

"Given our assumptions, an insurance plan can be evaluated in terms of its "Total Expected Price" (TEP), defined by:

(1) TEP* = P* + OOP*

where P* is the average premium paid by persons in a given subgroup, OOP* is the average expected amount paid out of pocket, and TEP* is the sum of the "average person’s" premium and the average person’s expected value of out of pocket payments."

"The policy exemplar of an uninsured person is one who faces the risk of paying out of pocket for all of their medical care, which means either high financial risk (if care is used) or reduced access (if it is not). But the combination of charity and bad debt care, combined with the effects of incentives to seek out free care at emergency departments of hospitals, mean that the uninsured as a group do not either face or pay the full market price paid by insured patients. Somewhat surprisingly, this use of free or subsidized care even applies to the large minority of uninsured people who have incomes high enough that they could "afford" insurance (Bundorf and Pauly, 2006). So the relevant analysis of the financial consequences (though not the welfare consequences) from health reform that results in insurance purchase for this population compares their actual out of pocket payment when uninsured with the combination of premiums and out of pocket payments they will face under bronze and silver plans after reform."

Upon further review, will the uninsured remain uninsured because they already know how the system works i.e. "combination of charity and bad debt care, combined with the effects of incentives to seek out free care at emergency departments of hospitals". It would be a rational response to a price spike to avoid the price increase and remain at zero price. Further, not only do the uninsured understand how the system works, they may feel comfortable, in that, they have learned what to obtain health-care so why bother learning a new system (if it isn't broke, don't fix it).