Tuesday, September 30, 2014

ACA/Obamacare: Employer Work-Around and Other Avoidance Techniques

“Take Advantage of Imperfections in the Minimum Value Calculator. In addition to being affordable, health insurance must meet a “minimum actuarial value” test. For self-insured companies, this means that the benefits can differ from the essential health benefits included in a standard plan, but the employer plan has to cover at least 60 percent of expected costs under a standard plan.

One official way to do that is to get a passing score on the Department of Health and Human Services’ “minimum-value” calculator, an online tool. And here is a surprise: an employer can actually meet this test without including hospitalization! (See the discussion at Kaiser Health News.) At the site, the visitor is invited to check boxes indicating whether certain benefits are included in the employer plan. In addition to hospitalization, mental health care, imaging (MRI and CT scans) ER visits and specialist services are other items that do not have to be included to meet the government’s test.

Pay the Fine. Employers can drop health insurance coverage altogether (or never provide it in the first place) and pay a fine equal to $2,000 per employee. That’s a stiff price to pay, but it’s less than the cost of health insurance. If the employer chooses this option, the employees will be eligible for subsidized insurance in the exchange.

By the way, this is a win-win choice. Economic theory tells us that the $2,000 fine will ultimately be paid by the employees – in the form of lower wages or reduced non-health care benefits. But most low-wage employees will get a subsidy that is worth much more than that and they will have generous health insurance to boot." - What Can Employers Do To Reduce The Cost Of Obamacare?, Forbes, 09/16/2014

Link to the entire article appears below:




Sunday, September 28, 2014

ACA/Obamacare: More About The Health-Care Cost Curve

"But the growing centrality of education and health care is not only a function of public preferences and demand. Another important factor, especially to the two sectors' growth within the labor market, is the fact that it is more difficult to squeeze labor costs out of those industries than it is in, say, manufacturing or agriculture. After all, most factory work does not require deep knowledge or complex judgment. As a result, engineers are constantly developing machines that can substitute for humans in manufacturing. Furthermore, as countries like China and India become more integrated into the global economy, an ever-larger pool of low-skill labor becomes available. The need for manufacturing labor in the United States is therefore reduced; the relative cost of manufacturing output is thus held down.

Compared to manufacturing, the delivery of services in education and health care today is relatively labor intensive. Teachers and doctors require much more training than do manufacturing workers. Everyday work in education and health care generally involves more judgment and complex decision-making than are required on a production line. These higher-level tasks are not as easily handed over to machines or outsourced to low-skilled workers abroad.

Education and health care are also more resistant to the productivity increases that have dramatically altered the manufacturing sector. Factory automation, for instance, can swiftly raise the number of widgets produced per worker; office automation has vastly streamlined supply-chain management, inventory control, and accounting. But increasing the number of operations per surgeon, or the number of essays graded per teacher, is much more difficult. Hence, productivity growth in health care and education lags behind that in other industries.

As a rule, this means that health care and education tend to be less efficient. As increased productivity has led to wage growth in other, more efficient industries, the inefficient sectors must maintain competitive wages. But without the commensurate productivity gains, they experience cost growth, an effect named "Baumol's Cost Disease" (after the economist William Baumol, who identified it in the 1960s).

Baumol's famous illustration of this phenomenon compared classical musicians with auto workers. It takes just as many musicians to play one of Mozart's symphonies today as it did a half-century ago, but it takes far fewer auto workers to produce a car now than it did then. As a result, manufacturing has become much more efficient — employing fewer people, but paying each of them somewhat more. Orchestras can't employ fewer people, but they do have to pay each of their employees more than they used to — if only to keep up with the rest of the economy, lest their musicians run off to become auto workers.

The result is that, over time, costs in less efficient industries — like the fine arts, but also health care and education — will increase in relation to costs in more efficient industries. And these increasing costs, as well as rising demand for the services these sectors offer, have combined to place both education and health care at the commanding heights of today's economy.


If it were true only that health care and education are increasingly important sectors of our economy, there would be little cause for concern. Indeed, societies ought to desire economies that are strong and flexible enough to hum along as new technologies and other developments cause industries within them to rise and fall. The problem, rather, is that both health care and education are increasingly government-dominated industries. And this domination produces two ill effects that exacerbate the changes these sectors are already undergoing: Government's influence artificially increases the demand for health care and education (by significantly subsidizing both), and it makes both sectors even less efficient than they would be otherwise (by heavily regulating them and shielding them from market forces)." - The New Commanding Heights, Kling and Schulz, National Affairs, Summer 2011


The entire article appears in the link below:




Friday, September 26, 2014

ACA/Obamacare: A Chief Architect of ACA, Dr. Ezekiel Emanuel, And His Very Dark Philosophy.

‘Normally, no one would care that in a recent Atlantic essay — “Why I Hope to Die at 75” — 57-year-old Dr. Ezekiel Emanuel argued that living to be 75 years old was long enough for anyone. After 75, Emanuel suggests, “We are no longer remembered as vibrant and engaged but as feeble, ineffectual, even pathetic.”

But Emanuel is no garden-variety crackpot. Nor is he a wannabe science-fiction writer dreaming of a centrally planned planet of robust youthful humanoids. Unfortunately, he was one of the chief architects of the troubled Affordable Care Act and a key medical advisor to the Obama administration.’

‘Emanuel’s main point is that those who live beyond 75 inordinately gobble up collective health resources — like flu shots. Emanuel asserts that at age 75 and beyond, he will decline nearly all medical tests and treatments. (“What about simple stuff? Flu shots are out.”) He claims he won’t take antibiotics either.’

“I think this manic desperation to endlessly extend life is misguided and potentially destructive,” Emanuel writes. “For many reasons, 75 is a pretty good age to aim to stop.”

Emanuel takes the banal position that aging is more costly than youth, and then he takes it to a pathetic extreme, revealing his ignorance of both history and ethics. And while he is mostly talking about his own plans, his past influence and his present desire to disseminate his views make it clear that he would like Americans to follow his advice that it would be wise for them to be dead at 75.’

‘Age is no absolute barometer. We all know those who at 75 are far more vigorous than others who are couch potatoes at 40. If Emanuel’s point is that living beyond 75 is unwise given the odds that society will reap less achievement per resources invested, then that frightening anti-humanist argument can be extended to almost any category.

Should we do away with health care for those with chronic debilitating diseases on the theory that society inordinately gives them too much time and capital and gets very little in return? Events of the twentieth century should warn us about where such government decision-making on health has led.

Why incarcerate prisoners for life sentences? They will likely produce little behind bars. Take values, morality, and collective debt for past services out of the equation, and we could just as easily choose not to treat severely wounded veterans, given that they are unlikely to return to the battlefield.

How exactly does Emanuel judge achievement? By elite measures of where you went to school, who you know, and the influence you peddle?’

‘Many might suggest that a naive and clueless Emanuel in his early fifties did the nation a lot of damage by dreaming up a lousy, big-government health-care scheme. Under Obamacare, millions lost their doctors and existing health care. They have paid more for deductibles and premiums, as the nation increased its debt to only marginally cover more of the uninsured.’ - Should We Hope to Die at 75? NRO, 09/24/2014.

Link to the entire article appears below:





Wednesday, September 17, 2014

ACA/Obamacare: GAO Reports that CMS Hasn’t Paid Proper Attention to Healthcare.gov Security Risks

‘HealthCare.gov has continuing security frailties that put users' sensitive personal information at risk, a government watchdog is set to tell Congress this week.

Despite the federal government's efforts to protect the website from breaches, "weaknesses remained in the security and privacy protections applied to HealthCare.gov and its supporting systems," said the Government Accountability Office.

The agency released a report Tuesday on the security of the site, through which millions of Americans bought coverage under the health law last year and which millions more will be urged to use.

"Until these weaknesses are fully addressed, increased and unnecessary risks remain of unauthorized access, disclosure, or modification of the information collected and maintained by Healthcare.gov and related systems, and the disruption of service provided by the systems," according to the GAO report, published ahead of testimony to be given at a Thursday hearing of the Republican-led House Oversight and Government Reform Committee.

The warnings come two weeks after the Department of Health and Human Services disclosed that a hacker had broken into part of the site and uploaded malicious software during the summer.’

‘GAO said the CMS failed to ensure system-security plans were complete and was relying on a draft data-use agreement with a contractor tasked with verifying users' identities.

Moreover, the agency skipped some assessments of privacy risks and didn't perform comprehensive security testing of the HealthCare.gov system that used all of the security controls specified by the government ahead of the site's launch. Testing remained incomplete as of June 2014, GAO said.

The agency also hadn't set up an alternate processing site for HealthCare.gov systems that would allow them to be recovered in the event of a disruption, the watchdog found.

Other weaknesses included lax enforcement of password-strength requirements and inconsistent application of security patches to the system.

Certain systems supporting the site's infrastructure weren't restricted from accessing the Internet, which increased the risk that unauthorized users could get to data.

Moreover, one of the federal agency's contractors hadn't properly secured its administrative network, which could allow unauthorized access to the HealthCare.gov system.

Many of the problems stemmed from the agency's disagreements about security roles and responsibilities with the various contractors, states and federal agencies that exchange information as part of the HealthCare.gov system, the watchdog said.’ - Federal Health Care Website Faces Security Risks, Watchdog Finds, WSJ, 09/16/2014


Link to the entire article appears below:


Update 09/18/2014: Government Insider Warned of HealthCare.gov Security Risks: ‘I Am Tired of the Cover Ups’, dailysignal.com


Sunday, September 7, 2014

ACA/Obamacare: Weeks Go By Before HealthCare.gov Detects Hacker Breaching Security and Uploading Malware

‘A hacker broke into part of the HealthCare.gov insurance enrollment website in July and uploaded malicious software, according to federal officials.

Investigators found no evidence that consumers' personal data were taken or viewed during the breach, federal officials said. The hacker appears only to have gained access to a server used to test code for HealthCare.gov, the officials said.

The server was connected to more sensitive parts of the website that had better security protections, the officials said. That means it would have been possible, if difficult, for the intruder to move through the network and try to view more protected information, an official at the Department of Health and Human Services said. There is no indication that happened, and investigators suspect the hacker didn't intend to target a HealthCare.gov server.

The prospect nevertheless raised concerns among federal officials because of how easily the intruder gained access and how much damage could have occurred.’

‘Washington officials said they are concerned an intruder gained access to the HealthCare.gov network through a basic security flaw. The server had low security settings because it was never meant to be connected to the Internet, the HHS official said. When the hacker broke in, it was only guarded by a default password, which often is easy to crack.

"There was a door left open," the official said.

The department discovered the break-in weeks later on Aug. 25 during a daily security scan. Buried amid lines of computer log files were data showing the test server had been contacted by the outside Internet, which wasn't supposed to happen.

Lawmakers first raised security concerns about HealthCare.gov when it launched nearly a year ago. At the time, then-HHS Secretary Kathleen Sebelius said the department had a plan in the event of a security breach. Other hacking attempts reportedly have been made, but none appear to have been successful before this.

"It is full of data that criminals covet," said Rep. Joe Barton (R., Texas), who opposes the health-care law. "Handing private information over to the government is bad enough. People should at least know it won't fall into the hands of hackers."‘ - Hacker Breached HealthCare.gov Insurance Site, WSJ, 09/04/2014

The entire article appears in the link below:




Wednesday, September 3, 2014

ACA/Obamacare: When the Taxing Authority Taxes Itself

"When Congress passed the Affordable Care Act, it required health insurers, hospitals, device makers and pharmaceutical companies to share in the cost because they would get a windfall of new, paying customers.

But with an $8 billion tax on insurers due Sept. 30 — the first time the new tax is being collected — the industry is getting help from an unlikely source: taxpayers.

States and the federal government will spend at least $700 million this year to pay the tax for their Medicaid health plans. The three dozen states that use Medicaid managed-care plans will give those insurers more money to cover the new expense. Many of those states — such as Florida, Louisiana and Tennessee — did not expand Medicaid as the law allows, and in the process turned down billions in new federal dollars.

Other insurers are getting some help paying the tax as well. Private insurers are passing the tax onto policyholders in the form of higher premiums. Medicare health plans are getting the tax covered by the federal government via higher reimbursement.

State Medicaid agencies say they have little choice but to pay the tax for health plans they hire to insure their poorest residents. That's because the tax is part of the health plans' costs of doing business. Federal law requires states to pay the companies adequate rates.

"This situation results in the federal government taxing itself and taxing state governments to fund the higher Medicaid managed care payments required to fund the ACA health insurer fee," said a report by Medicaid Health Plans of America, a trade group." - Who's paying the new Obamacare tax? You, USA Today, 08/30/2014

The entire article appears in the link below:



Related: ACA/Obamacare: When the Taxing Authority Pays Its Own Imposed Tax. Huh? No Way! Way!