Catastrophic insurance for the catastrophe that is Obamacare
Obama had a bright suggestion for his insurance companies (they do kind of belong to him, don’t they?):
The Obama administration said Thursday it would allow millions of Americans whose insurance policies had been canceled to purchase bare-bones plans next year, in another 11th-hour tweak to the law likely to cause consternation among health insurers.
Health and Human Services Secretary Kathleen Sebelius told a group of six senators in a letter that people whose policies had been canceled because of new requirements under the Affordable Care Act would be allowed to purchase “catastrophic” plans. Those plans previously had been restricted under the new law to people under the age of 30 or those who qualified for a set of specific hardship exemptions.
Basically, this means they’ve expanded the definition of “hardship” to include “screwed by the Obamacare regulations.” Come to think of it, that makes sense.
In fact, though, it’s even later than the eleventh hour. Many insurers are saying this move would amplify the chaos in an already chaotic situation.
I have a question for Obama, Sebelius, and the rest: if the individual policies cancelled were such terrible “junk,” why are you allowing those who originally had them to purchase one of the very types of policy you defined as “junk” in the first place? Might it be because catastrophic insurance can be a valid choice for some people depending on their circumstances, and not “junk” at all?
Another question for Obama and company: why not just let anyone purchase a catastrophic plan who wants to do so? Wouldn’t that be a novel idea?
I think I know what their answer would be.
This is what the country has come to.
The government is going to allow us to do what we were doing before the government made it against the law to do.
For a price, of course.
The administration is in panic mode. Two weeks from now there will be hundreds of thousands (millions?) of people whose policies were canceled and who will be uninsured. There will be sad stories of people in car wrecks or heart attacks who are wiped out by medical bills. As the clock ticks forward on this train wreck, Obama will be spending two weeks in Hawaii. The optics are terrible.
Back in the fall the Republicans were asking for a one year delay in the individual mandate. Obama really screwed up when he said no. Maybe he really is in over his head.
“Another question for Obama and company: why not just let anyone purchase a catastrophic plan who wants to do so? Wouldn’t that be a novel idea?”
As I read it, that’s where they are right now.
“The Obama administration said Thursday it would allow…_
Frightening. That phrase reflects the fact that we are no longer a free people.
Our Constitution has been shattered more than in its various elements. It has been undermined in its spiritual core…the Declaration of Independence.
We do no longer hold certain truths to be self-evident…
We do no longer hold this.
We are not “ruled”.
Der Obamafuhrer uber alles.
When do we fight?
Should read we are “now” ruled.
Carthafe delenda est. Only not Carthage.
House Republicans made a big mistake by not placing in the Ryan budget deal a requirement that Obamacare must be fully implemented, no exemptions or exceptions, come 1/1/14. They failed to recognize that one should stand back and let the enemy defeat himself. If the Senate Democrats refused to go along, then they would have been stuck explaining why the ACA was such a wonderful idea in the face of everyone realizing it for the disaster that it is.
Parker,
What you suggest makes sense, but I fear the media would say that the Republicans didn’t care if people and businesses got hurt by enforcing the law while Obama cared about people and wanted to help them.
Mr. Frank:
No, that is not where they are right now. Only people who had individual plans that were cancelled (or those under 30, or those with certain other previously-listed “hardship” exemptions) can buy it. The operative new phrase is, “people whose policies had been canceled because of new requirements under the Affordable Care Act would be allowed to purchase ‘catastrophic’ plans.”
People over 30, for example, who need insurance because they never had it before cannot buy catastrophic insurance without paying the Obamacare penalty for doing so. Nor can someone with individual insurance of some other kind who did not have it cancelled. Nor can anyone else except those particular categories of people I already mentioned who are the exceptions.
And by the way, I’m not sure about this, but I don’t think subsidies are available for catastrophic plans.
“..but I fear the media..”
We on the right (side) have to stop fearing the MSM, period. The uninformed voters, in particular the elite altruist cult, must feel the pain if there is to be a great awakening. Otherwise we will have to make sure the cartridge box is full.
“but I don’t think subsidies are available for catastrophic plans.”
Under the rule of the messiah there shall be no catastrophic plans unless said plans include contraceptives, maternity care, transgender surgery benefits, etc.
Slaves are not allowed to do whatever the heck they want to do. What country do people think they are living in here?
Mr. Frank,
I think what people are more scared of is getting hit like Duck clan and Sarah Palin did.
Force of power, will bend the will of most average weaklings. The Left uses not only physical violence in its toolbox, but also verbal violence. It has worked quite well so far against their opponents in DC, the Republicans.
But when people listen to the MSM tell them when the sun will rise in the sky and what it signifies for one’s fate and cause, this is not fear. This is giving the Left the moral authority and equality of status that comes with being another human being. That is an entirely different issue from fear.
Back before the feds got involved, catastrophic insurance had a high deductible, very high. It also had the low premium. Theoretically, you paid for the usual expenses out of cash flow which included the savings on the premium. But if the stuff hit the fan, you were protected up to a couple of mill.
OTOH, you really should save the premium difference, which is to say put it someplace. Some did not.
Thing is, the lower the out of pocket expense, the closer you come to a prepaid plan and the further from insurance.
If, for example, you have a zero deductible, the company knows they have to pay for the utterly predictable, say, $2000 in family expenses every year, and so they have to bill that $2k plus admin.
There’s no savings unless it’s your employer paying it and then the savings is only that it’s invisible if you’re a moron.
Some tax benefits, I should say, as opposed to getting paid that part of the premium.
Neo,
You are, of course, correct. What I was suggesting is that the Obama administration is in full temporary retreat. They are fearful that the total number of people insured will be lower than prior to the passage of Obamacare. They are also fearful of the stories that will come out from people who have lost insurance to cancellation. It appears that everything is on the table with them, and the law is no barrier to their actions.
I think the insurance companies are getting set up for the blame. Obama will say they could have extended the old policies and did not. He will say they could have offered catastrophic policies and did not. Meanwhile, the insurance companies are pissed at getting jacked around with so little time and at losing the premiums for the full coverage plans. Plus, all those original plans that were cancelled had premiums that are lost to them for now. It is likely that the insurance companies will take a big hit in January. Because they need the government to cover their losses, they can’t complain publicly. Obama plays hardball.
Gawd, I hope we can elect a Republican majority in the Senate, keep the Republican majority in the House, and elect a Republican president so we can repeal this piece of crap.
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According to Keith Koffler at http://www.whitehousedossier.com/:
“The decision that those who have lost their insurance may now forgo the basic Obamacare requirement to have insurance or purchase a cheap catastrophic plans was actually made in response to complaints from about a dozen Democratic senators — most of whom are up for reelection next year — who expressed alarm that their constituents were hopping mad.”
So. Not to help people who have been shafted. To help six Dems up for re-election.
Shameless. Lawless. Unaccountable. Ugh.
Whatever the fine print, most young people are going to construe this latest regulatory retreat to mean “I don’t have to buy insurance.” Whether they intend to or not, Obama and Sebelius are inching closer and closer to making the “mandate” seem about as mandatory as the 55 mph speed limit.
What’s galling is that, despite all the problems, setbacks, and dubious amendments, Obama still won’t simply step up and admit that this is a failure and should be repealed. Frankly, I’m not at all convinced the Dems can’t still save the day for themselves by doing this and rolling out some other set of reforms to take the place of Obamacare. The GOP would probably have a hard time responding to such a strategic maneuver, and meanwhile the media would hail Obama for his courage, pragmatism, and leadership.
It is beyond my comprehension why the Republicans haven’t unified around some alternative plan and started talking it up. For instance: 1) allow people with preexisting conditions to buy into Medicaid (not great coverage, I know, but better than nothing and also better than upending the entire health industry to accommodate a relatively small group); 2) make catastrophic coverage available (not mandatory!) across state lines so that people who can’t afford more comprehensive plans can, at least, avoid bankrutpcy if serious illness strikes, and also so people ARE covered if a condition that would be “preexisting” comes along 3) set up tax incentives for health savings accounts to cover everyday medical expenses, and 4) tort reform. Why wouldn’t something like that look better than this? And why wouldn’t that silence the “party-of-no” rhetoric that insists Republicans have no alternatives to offer?
The problem, Mrs. Whatsit, is that your plan offers no free stuff paid for by rich people. The left has gone well down the road of creating expectations that anything that looks like a “need” should be provided free to everyone. Inevitably, this leads to equally shared destitute conditions, but it seems like every generation needs to relearn this painful lesson first hand.
Mrs Whatsit:
No, something like that wouldn’t silence them.
Republicans offered plans in 2009—(here’s one). They are working on plans now. Do you hear much about them, except for the fact that they don’t exist, according to Obama and the Democrats?
But you are right—they need to unify around one and PUSH it. Republicans are not unified, however, and that’s a big part of their problem.
IMO there are three issues to be considered in this latest Obamacare imbroglio.
First:
It doesn’t really matter whether Obama suddenly permits catastrophic coverage or not. As long as one can’t be turned down for a pre-existing condition (and also stay on one’s parents coverage until age 26) there’s simply no incentive to purchase any coverage, castrophic or not. The low level of any penalty still makes it advantageous to pay the “tax” penalty rather than fork over thousands for insurance. So, another Obamacare false fix.
Second:
No one is really talking about the upcoming Obamacare aftermath. Next year, with many more people with cancelled policies and many not knowing if they are Obamacare covered, are we going to see people postponing non-life threatening medical intervention? Who’s going to submit to lens replacement or knee replacement surgery not knowing if their insurance is going to cover it? What physician is going to recommend or perform such surgery not knowing if s/he is going to get paid? What hospital is going to allow it not knowing if they’re going to get paid? One does not allow a person making $50,000 per year to run up a $40,000 major medical bill without some insure-ance that payment will be forthcoming.
Are we going to see a major drop in medical procedures, which in turn, will affect doctors’ incomes and hospitals’ bottom lines? There could be a huge fiscal disaster in the making here.
Third:
With each extra-legal “fix” that this administration demands, they ignore and dilute the rule of law more and more. They’re looking more and more like the mafia boss (“So I changed the rules of our deal. What’re ya gonna do about it?).
So if the rule of law doesn’t apply to the very governmental branch responsible for executing the rules of law, more and more people are going to see that it doesn’t need to apply to them either. Will we reach a tipping point where so many people are flouting the law that enforcement becomes impossible? Are we getting closer to teetering on the brink of anarchy?
I am reminded of several discussions at this blog in the run-up to the 2012 election and those commentators who wished to accelerate such a systemic collapse to finally “get it over with.” They may get their wish.
T:
Actually, there is an incentive to get insurance, beyond avoiding the penalty, and despite the weakness of the mandate.
If a person is uncovered, he/she is liable for expenses incurred until that person gets insurance. If the person has assets, he/she won’t get financial help. And one can’t enroll in Obamacare any old time; there are open enrollment periods only in the fall, as with Medicare. There are special exemptions from this (special enrollment periods), but illness doesn’t seem to be one of them.
So a person without coverage could rack up quite a hefty bill if a serious illness hits while waiting for the enrollment period.
Of course, most people don’t know this, so it might not act as an incentive. I believe that hospitals will still have to treat you, as before Obamacare.
Neo,
Thanks for that clarification. Several questions still remain.
The reason hospitals treat the uninsured is because the law required it but does Obamacare require it (I ask that rehetorically since you’ve already indicated unsureness above)? Furthermore, if hospitals are still required to treat, but the patient finds out that they are NOT insured (e.g., application submitted and payment made but not processed) who, then foots the bill? Does the hospital go after the patient?
If I were a physician, a hospital executive or an insurance exec, I’d be really worried right now about how all of this will shake out (although, the insurance execs more than hospitals or physicians are complicit in this legislation). Perhaps the bigest concern would be wondering if Obama’s “exceptions” to the law are eventually found to be illegal (in a court of law) and that the hospital/insurance co/physician would be in the position of defending a decision based on an illegal exceptions (this goes back to my rule of law concern).
I can see an incredible amount of legal finagaling going on. For example, run up a huge medical bill, get divorced and put the assets in the spouse’s name (or the kids’ names) and avoid payment. There used to be “Medicaid trusts” where people put funds in a trust which would prohibit medical payments as a means of qualifying a person for Medicaid for long-term care. Those have been severly restricted with the 5 yr lookback period but I find it hard to believe that the drafters of Obamacare were wise enough to consider such possibilities. After all, the current failure of the program’s debut evinces the fact that they’ve considered very few possibilities at all.
n.B., my use of “finagle” put me to mind of the musical Chicago. Is it just me or is the govt looking more like the musical with each passing day?
kyndyll, of course you’re right — but from what I can see, Obamacare also does not offer free stuff paid for by rich people. I think people thought it would. I have some dim hope that maybe by now they are beginning to notice that 1) medical care still isn’t free and 2) not just the rich, but everyone but the poorest people are the ones who are paying for it. Maybe??
And yes, neo, of course you’re right, too, the Republicans have offered many plans before — but not in any kind of unified way, and not at a moment like this when there is at least some chance that the media might tell people about them. As long as all they do is what they’re doing now — standing around on the sidelines gloating — they confirm the worst stereotypes about themselves. Which is probably because those stereotypes are true . . .
Maybe I’m naé¯ve and uninformed but I never had health insurance until I was 45 since I didn’t marry ’til then and my deductible has never been over $100.00 annually because it was with my employer.
Question: Who is going to collect these large deductibles from the patient, the doctor, hospital or the gov’t?
skullbuster,
My experience is you pay in advance of non emergency medical care if you have not met your deductible and you pay any copay in advance. Hospitals can be very aggressive at chasing you down for medical bills.
Somewhat related to the issue of paying is the problem of getting people to keep up with their insurance bill every month. If you are under an employer plan, the payment is deducted from your pay, and you never see it. Adding large numbers of people with low incomes to insurance plans means individuals have to pay the bill every month. It’s not hard to believe that lots of people will have late or missing payments. What’s the Obamacare plan for that?
What’s really needed is Obama insurance, which will insure the policy holder from the consequences of any of Obama’s presidential policies.
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