American Elephants

Are You Ready for ObamaCare Sticker Shock? by The Elephant's Child


The nice folks who created ObamaCare in some back room in Congress ignored virtually every actuarial principle that governs rational insurance pricing. Consumers will experience another series of price shocks later this year when some see their premiums skyrocket thanks to ObamaCare. Premiums are already reflecting some of their neglect.

One of the central provisions of ObamaCare is the 1). requirement that health insurers accept everyone who applies (guaranteed issue). And 2). cannot charge more based on serious medical conditions and 3). coverage mandates that force insurers to pay for many uncovered medical conditions.

Guaranteed issue gives folks the incentive to forgo buying a policy until they get sick and need coverage, and drop the coverage when they get well. ObamaCare imposes a penalty (a tax?) but it isn’t enough to keep people from gaming the system.

Some actuaries are predicting 50% increases in premiums. Large employer groups will be less affected because the law grandfathers in employers that self-insure.

President Obama repeatedly claimed that health-insurance premiums would be $2,500 lower by the end of his first term, they are actually about $3,000 higher. He also claimed during the fiscal-cliff negotiations, a claim that he kept repeating, that “We don’t have a spending problem.  We have a health-care problem.”

Back in 2009, he was claiming that health-care reform “is no longer just a moral imperative, it’s a fiscal imperative,” and ” one of the best ways—in fact maybe the only way— to reduce those long-term costs.” In March, 2009, in a White House speech kicking off the Affordable Care Act in May of that year, he took notice of “one clear, indisputable fact”, which was that “the explosion in health-care costs has put our federal budget on a disastrous path.” He added that controlling those costs “is essential to reducing budget deficits.

A year later just before the Democrats voted to pass what he called “one of the biggest deficit reduction measures in history.” Obama said “Everybody who’s looked at it says that every single good idea to bend the cost curve and start actually reducing health-care costs are in this bill.” He promised that the conversion to electronic health records would produce $81 billion in savings, and make for greater efficiency. Nope. Didn’t happen. There is increasing concern that the switch has actually added to costs.

One dirty little secret was that the health care industry was already controlling costs before the Democrat push for ObamaCare took off. The new diagnostic machinery was hugely expensive, but improved outcomes. New drugs, made affordable for the elderly, prevented more serious disease. Health savings accounts combined high-deductible insurance policies with a tax-free health spending account that rolls over at the end of the year. Democrats killed the incentives in the drug plan, making it cost more, and  ObamaCare declared war on that cost control effort by capping deductibles at $2,000 and making it harder to offer the savings accounts. ObamaCare’s ever-increasing list of benefit mandates will drive up costs.

Doctors take an oath to “first do no harm.” Obama adviser Ezekiel Emanuel has declared that doctors pay way too much attention to their oath.

Throwing Good Money After Proven Bad Policy by The Elephant's Child

It does not matter how often you show that a program does not work, and in the case of Head Start, studies have been showing it to be ineffective for years, but — it’s “for the children.” When a study has just emerged and funding would seem to be questionable, you just tack it on to another urgent bill, in this case, Sandy Relief, and $100 million.

A billion here, a billion there, who can keep track?

On January 4, Congress approved $9.7 billion in initial relief for victims of the storm. A second vote on the rest of the $60.4 billion aid package is planned for Tuesday, and among the numerous items unrelated to clean-up efforts is $100 million in additional funding for Head Start, the LBJ-era program that already spends $8 billion a year trying to prepare low-income toddlers for kindergarten.

Since its creation as part of the War on Poverty in 1965, nearly 30 million children have participated in Head Start at a taxpayer cost of more than $180 billion. The problem is that by the government’s own reckoning the program has never achieved what it promises.

The first major evaluation was in 1969 by the Westinghouse Learning Corporation and Ohio University. It found that pre-schoolers who did make cognitive gains did not maintain them in early grades and that Head Start participants performed no better than children from similar backgrounds who had never been in the program. Federal evaluations in 1985 and 2005 also found that any positive cognitive impact was transitory.

President Obama has said that education policy should  e driven not by ideology but by “what works.” The administration in 2009 sat on a very positive performance review of the Washington D.C. school voucher program which it opposed. The Congressionally mandated study of the Head Start program was finally released more than a year late. Using the political cover of disaster relief to toss more money into a bad program at a time when the country is running trillion-dollar deficits is evidence of Congressional bad faith.

The Urge to Regulate and Control Goes Too Far. by The Elephant's Child
January 13, 2013, 4:18 pm
Filed under: Capitalism, Economy, Freedom, Statism | Tags: , ,

danger_chainsawI just had to put two of those wafer-like batteries in one of those technological instruments that we are acquiring so many of. After it took me nearly 15 minutes just to get into the packaging, at the cost of two broken fingernails,  I looked at the back of the package for directions if any. Habit. The type was too small to read, even with my magnifying glass, in two languages, of course. On the back of each wafer battery was a white sticker with an unintelligible black blob, and more teeny type.

With my handy magnifying glass, I was able to determine that the blob was perhaps meant to indicate a small child with the customary slash through it, and the type said don’t feed the battery to the kid, in the customary legal language.

The nannies, many of whom are obviously lawyers, have gone too far with the CYA legalisms. All ordinary garden chemicals now come with labels that peel back to reveal 2 or more pages of instructions, also in teeny type. Six Point type is readable, four point is too small and if it gets less than that, forget it. Does anybody read labels anymore? Is a magnifying glass something that everyone has on hand? Of course not.

Congress or the EPA or the DOA or some bunch of bureaucrats have just determined that in order to save you from obesity, all restaurants must now provide calorie counts so that you will know that a Big Mac, a chocolate shake and french fries are fattening.

For Pizza restaurants the new requirements are a huge problem. They have hundreds of ingredients, and most fast-food places operate from a large lighted menu on the wall where you place your order. Do they all have regular menus at the table? They probably will now. The expense of redesigning a restaurant chain to comply with such requirements is, for a large chain, in the millions.

People don’t care. They know that a pizza with all the trimmings is not calorie free. Does anyone eat pizza every day? Those who do not know that fast food and fried food are higher in calories, are probably among those who don’t know what a calorie is or how many one should or should not consume. What about State Fair food? Do you suppose those who consume deep-fried Twinkies don’t know what they’re eating?

What the Nannies have done is to create contempt for directions. They are not helpful. Directions, for the most part, come in English and Spanish. Everybody else is out of luck. Most directions fall into the “Remove the baby before folding up the stroller” type. Buckets come with warnings that a baby might fall in. Those are the lawyer-nannies. Remove all possibilities of misuse so that nobody can sue. Although collections of warning labels can be pretty funny.


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