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February 17, 2010

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Jack is Back!

The country needs catastrophic insurance against electing nitwits, fakirs, charlatans and community organizers.

Jim Ryan

If you are healthy and have full coverage instead of catastrophic, you are being taken to the cleaners. You are paying for the doctor visits of people who go to the doc's frequently. Get into a pool where only healthy people swim.

If you own a business and want to give your employees health insurance, give them catastrophic and, if you like, a few bucks in an HSA. Your costs will be lower than if you give full coverage.

anduril

This article is about catastrophe, in a way: Rich Dog, Poor Dog: China's new class struggle.

clarice

I'm claiming all oil changes and gas on my car insurance..I bet those greedy insurance companies won't pay though.

anduril

Here's a fascinating AE analysis of the Iran issue: On Iran, no easy answers for Mrs Clinton or the Gulf. I've read some of this guy's stuff before and it's usually pretty acute, as political analysis--very much from an Arab perspective:

Mrs Clinton came to the Gulf to brief, and with the hope to enrol, America’s Arab allies in what the US and its UN Security Council partners plan to do now that Iran has turned down even a reasonable proposal to build mutual confidence. Iran instead declared itself a nuclear state – a symbolic if dubious claim. Prospects for domestic change in Tehran have dimmed after the poor showing of the Green Movement last week.

Mrs Clinton sought two things. First, Gulf leverage to convince a reluctant China to come on board with sanctions at the UN. It is doubtful she made much headway here since the Gulf states see themselves as marginal players in the Chinese strategic thinking. Second, Mrs Clinton sought assurances that Gulf states will abide by a sanctions regime designed to complicate the operations of Iranian businesses linked to the Revolutionary Guard, which oversees Iran’s nuclear programme. Gulf leaders must have certainly reiterated that they would implement whatever demand comes out of the UN Security Council, though they will remain silent on that matter until a resolution has been passed.

...

The problem, of course, is that calling Iran an authoritarian state will not sway either Russia or China, both of which are just that. It will also not sway countries that will not let moral and political considerations determine their foreign policy interests. And without the legitimacy that comes with the UN stamp on sanctions, the US will not be able to secure unconditional adherence from the Gulf states.

Indeed, scepticism about the effectiveness of sanctions runs deep. Among the comments that stood out during Mrs Clinton’s stay in Saudi Arabia were those of the Saudi foreign minister, Prince Saud al Faisal. “Sanctions are a long-term solution,” he said. “But we see the issue in the shorter term, maybe because we are closer to the threat. So we need an immediate resolution rather than a gradual resolution.”

Such remarks are meant to convey the Arab sense of urgency and fear that talk of containment means that prevention is no longer in the cards. They also clearly show how little policy thinking the Gulf states can contribute: if war is unthinkable, engagement doomed to fail, a grand bargain is fundamentally a betrayal, and sanctions utterly inadequate, then what?

...

And as containment erodes, so will the credibility of its architect, the US. No one wants to see a repeat of Iraq, where that combination inexorably led to conflict. There is another danger that Prince Saud alluded too: a regional nuclear arms race, a risk that Mrs Clinton once again tried to dispel by stressing the efficacy of the US security umbrella. Mrs Clinton helped put these matters in clear focus. But so far, there is no evidence that she could do much else.

And in that context there's this re US - China relations, which loom large in the Middle East: Perilous U.S.-China games:

More surprising was the outburst by U.S. Secretary of State Hillary Clinton last month when, according to American press reports, she warned China that it risks "diplomatic isolation" as well as disruption to its energy supplies unless it joins other U.N. powers in stepping up sanctions against Iran to deter Tehran from developing nuclear weapons.

Even making allowances for U.S. frustration over Iran, and indeed over Beijing's continuing obstruction of united action to prevent Iran from blowing a hole in efforts to contain nuclear proliferation, this was not only undiplomatic but rather silly. Diplomatic isolation? Is that a threat to China? And how would Washington go about it, and what would it achieve? Would Washington pay off its debts to China first?

All this will no doubt be arrant nonsense to the usual cast of knuckleheads here at JOM, who see the world through black and white glasses.

Charlie (Colorado)

So, to Obama, the only part of health insurance that is actually insurance — shared risk of relatively improbable events — isn't really insurance.

Somehow that almost makes sense.

DebinNC

Amy Bishop and her victims still clinging to life have access to health insurance. When AL sends Amy off to meet her maker, I hope she's buried in her Obama t-shirt and gets an Obama shout-out.

Neo

You can tell you are losing the press when this stuff appears ...

The federal government is again counting the nation's homeless and, by many accounts, the suburban numbers continue to rise, especially for families, women, children, Latinos and men seeking help for the first time. Some have to be turned away.

"Yes, there has definitely been an increased number of turnaways this year," said Jennifer Hill, executive director of the Alliance to End Homelessness in suburban Cook County, Illinois. "We're seeing increases in shelter use along the lines of 30 percent or more."

Donald

Somebody remind my how this Obama moron and the rest of his mind fucking stupid ilk is so damned smart, and me the high school graduate running business, paying my taxes, officiating high school sports (And I am the best there is at baseball, I'll say it), payng my taxes (Did I mention that I pay my taxes?) is such a mouth breathing moron, who pays $112.00 per month for my catastrophic insurance, get's check ups regularly and can even drop $210.00 per month for the saintly ambien CR. Then pays my debts.

Apparently this stupid bitch (Yeah, I'll say it) couldn't, well really...wouldn't, because she was a demcratic party dead beat who was just following the lead, from the best and brightest, bother to pay down her credit card debt, and pay for the most basic items. She was just as Brilliant as Obama, Biden, Pelosi, Reid, Geightner, Summers, and deserved what she got. I wouldn't pay one of those cretins to sweep up after my high school drop out welders. They aren't smart enough.

Jack is Back!

Anduril,

I see the world through the prism of death versus life, good versus evil, freedom versus oppression and liberty versus tyranny. If you are committed to killing me or taking my property or liberty then it is my duty to find you first and make sure you are either disabled from doing that or dead so I don't have to worry about it and can now cross you off my list of life liabilities.

If that is too black and white for you then I suggest you stop using bold print to make points you obviously feel we are all to stupid to make ourselves when we read your missals.

Donald

Well, I do have poor syntax and spelling. Of course I was an english major at a major public university. So there.

anduril

"Missives," perhaps?

It's not so much that I think the usual cast of knuckleheads are too natively stupid to understand these points--although there are obviously some seriously challenged people here--but that the usual cast has willfully blinded itself.

As for the bold print, as I've explained before, I use it as a courtesy and an aid to the reader--it makes it much easier for the reader to seize upon the main points and move quickly through the material. It's then up to each reader whether to read the rest of the detail. Courtesy and helpfulness. Try to wrap your tiny mind around those concepts.

And, yes, I do see the world as vastly more complicated than you do.

Porchlight

But in Obama's telling she had no insurance at all.

Technically true, but misses the point. When Obama says she didn't have insurance, what he means (in lefty-speak) is that she had to pay for part of her health care bill.

Obama doesn't like catastrophic healty insurance because he doesn't like health insurance, period. He doesn't think Americans should have to shoulder any part of the health care burden (at least not directly). He's for single-payer, as he told us awhile back.

Catastrophic insurance, with its resemblance to actual insurance instead of just pre-paid health care paid for by someone else, isn't equitable in the lefty mind. It makes the lefty goal of single-payer harder to realize, and so Obama conveniently ignores/marginalizes it.

anduril

Yes, Neo, the continuing Carterization of The One. Increasingly the difference between the two parties is, to paraphrase Obama, they've got him.

Porchlight

healty = health, sorry

Captain Hate

And, yes, I do see the world as vastly more complicated than you do.

LOL; that's sounds like something straight outta Biden.

Charlie (Colorado)

If you are healthy and have full coverage instead of catastrophic, you are being taken to the cleaners.

Even if you are in a healthy group, you're being taken to the cleaners: you're paying the insurance company a percentage to "administer" your "insurance", ie, to limit what the doctor can do for you and to write the checks for you.

Jane

Your cleaners don't hold a candle to the cleaners in Massachusetts.

anduril

Wow! Really penetrating comment, Captain Oaf!

rse

Anduril-

What a condescending twit you are.

Rob Crawford

And, yes, I do see the world as vastly more complicated than you do.

To repeat something I posted elsewhere yesterday:

Oh, good Lord. "Embracing complexity" in a simple situation isn't a sign of intelligence, it's a sign of fecklessness. Only the pseudo-intellectual thinks "complexity" is a sign of sophistication -- the reality is, it's quite often the exact opposite.

Porchlight

Only the pseudo-intellectual thinks "complexity" is a sign of sophistication -- the reality is, it's quite often the exact opposite.

Hear, hear, RC.

MikeS

Catastrophic coverage, with a reasonable deductible, provides an incentive for people to take responsibility for their own health and wellness. If, by eating responsibly, washing hands, getting inoculated, etc., they can save money they will.

It is that personal responsibility, versus dependency on big government, that Progressives object to. Hell, they dont' care if you live, die, get dialysis, or chemotherapy, they only care about power.

Ignatz

Here is David Leonhardt of the NYTs, with his pom pons, hot pants, megaphone and of course cowbell, cheerleading for Team Barry on the magnificence of porkulus.
He's no economist but his logic is pretty frickin dismal.

anduril

Now, here's something interesting--noted kabbalist and Neocon Spengler's (i.e., David Goldman's) latest ruminations: The case for an Israeli strike against Iran. Here's the nub of his brainwave, and I'll use bold print for the usual impaired types:

Rather than focus on the second-order effect - the consequences of Iran's possible acquisition of nuclear weapons - Israeli analysts should consider the primary issue, namely the strategic zimzum [2] of the United States. The correct questions are: 1) can Israel act as a regional superpower independently of the United States, and 2) what would Israel do to establish its regional superpower status?

The answer to the first question obviously depends on the second. To act as a regional superpower, Israel would have to take actions that shift the configuration of forces in its favor. No outside analyst has sufficient information to judge the issue - with the best of information a great deal of uncertainty is inevitable - but there are several reasons to believe that an Israeli attack on Iran would establish the Jewish state as an independent superpower and compel the United States to adjust its policy to Israel's strategic requirements.

An added benefit? Israel would be able to begin strategic cooperation with Russia!

Russia well might prefer to deal with Israel as an independent regional power than as an ally of the United States. A stronger Israeli presence in the region also might contribute to Russia's market share in missiles and eventually fighter aircraft. Russian-Israeli cooperation in a number of military fields has improved markedly during the past year, including the first-ever sale of Israeli weapons to Russia (drones) and Israeli help for the Russian-Indian "fifth generation" fighter project.

Here's the catch, though. This isn't really about establishing Israel as a true superpower--it's about blackmailing the US into doing what Israel wants:

the United States would have to respond to a new strategic situation in the Middle East were Israel to inflict even moderate damage on Iran's nuclear program.

...

Whatever Washington thought it was doing would come unstuck in the wake of an Israeli strike against Iran. Rather than attempt to lead events - in no particular direction - Washington would have no choice except to follow until it arrived at its own foreign policy at some unspecified future date. Although Washington would scream like a scalded pig, Israel's influence is more likely to rise than to fall in the aftermath.

There are some complicating factors, which Spengler acknowledges at the outset:

Ha'aretz concludes, "The likelihood that the American move will succeed is unclear, but Israel is required to give Obama a chance, for one simple reason: Israel will need full American support for any actions it may decide to take against the Iranian threat. If Israel goes to war, it will need intelligence help, prior warning, military equipment and diplomatic support from the United States."

That is not quite right. No matter how much "intelligence help" and "diplomatic support" Israel might get from the United States, Israel's capacity to deliver conventional munitions at a distance of 1,250 miles (2,012 kilometers) could not eradicate the Iranian nuclear program, which is located in hardened underground facilities. At best, Israeli efforts could set the program back a year or so. Low-yield nuclear weapons delivered by ballistic missile would be required to strike a devastating blow to Iran's nuclear program. But the political and strategic costs of the first use of nuclear weapons are grave, and Israel may not be ready to assume them. It probably doesn't need to.

I hope none of that is too complex. Or that concern over any aspect of that is feckless.

JM Hanes

anduril:

"The problem, of course, is that calling Iran an authoritarian state will not sway either Russia or China, both of which are just that. It will also not sway countries that will not let moral and political considerations determine their foreign policy interests."

An obvious fact which, to date, has escaped our shared-values-international-standards President's recognition -- not to mention the fatuous fans of the U.N. everywhere. By the time Obama is through, he'll hold the worst foreign policy mistakes EVAH championship title.

"If war is unthinkable, engagement doomed to fail, a grand bargain is fundamentally a betrayal, and sanctions utterly inadequate, then what?"

A question which seems to confound the bevy of critics you quote ad infinitum too. The apparent alternative of choice is parlor games in which questionable "experts" divine Iran's unthreatening intentions, while complaining about everyone else's putative lack of acuity.

As for black and white glasses, physician, heal thyself.

Does Seixon curl?

God love you, Donald. I'll bet your high school dropout welders are up to date on ClimateGate.
=======================

Ignatz

--If that is too black and white for you then I suggest you stop using bold print to make points you obviously feel we are all to stupid to make ourselves when we read your missals.--

"Missiles," perhaps?

JM Hanes

"Courtesy and helpfulness."

Pettifogging pendantry and petulance.

clarice

Very good, JMH.

I do think "perverse" is a short and accurate description of the administration's foreign policy--a policy which among other things seems designed to hurt our allies (like Israel and India and the UK) while currying favor with our enemies.
Bizarre, might fit, too.

Ignatz

--As for the bold print, as I've explained before, I use it as a courtesy and an aid to the reader--it makes it much easier for the reader to seize upon the main points and move quickly through the material......

Courtesy and helpfulness. Try to wrap your tiny mind around those concepts.--

Hope that bolding helps everyone seize upon the main point; courtesy.

Jane

So "courtesy" now means "obnoxious"? Now I get it.

cathyf
Even if you are in a healthy group, you're being taken to the cleaners: you're paying the insurance company a percentage to "administer" your "insurance", ie, to limit what the doctor can do for you and to write the checks for you.
That's not being taken to the cleaners, that is the perfectly rational action of hiring the "insurance" company to act as your negotiating agent. People hire agents to negotiate for them all of the time. The "benefits administrator" has all sorts of technical expertise that (even I, who am expert at virtually everything ;-) cannot match.

Latest in my saga: my doc told my benefits manager that he wants to charge $157 for my last thyroid blood test. Bene manny said no way, $36.15 is what she pays. So now that's what I'm paying...

People rely upon negotiating agents and third-party markets for price discovery all of the time. Drive your truck of corn up to the grain elevator and you will receive a price based upon what's been set by a bunch of guys yelling on the CBOT floor in Chicago.

Old Lurker

Are we forgetting how "to shun", people?

centralcal

Not at all, OL, not at all (even tho' avatar colors have confused things a bit)!!!

Old Lurker

Proving Cathy's point, we shifted to a pretty high deductable BCBS policy, thinking we would negotiate "cash" prices with the routine docs we see. Discovered that most docs were not able/willing to provide a lower price even though our paying cash would save them a bundle.

No problem. Went back to BCBS and doubled the deductable yet again, knowing they will only pay out on our behalf if the claim is huge. Now we give the BCBS cards to the docs, they bill us "Cathy's $157" and send that bill to BCBS. 60-90 days later BCBS informs the doc he will get $36.15 and then a month or two after that, they tell me I have to pay the $36.15 since I have not reached my deductable...so then I happily send the Doc his $36.15.

I consider part of my (now very very low)BCBS premium to be "real insurance" for a catastrophy, and the balance to be an Agent Fee. The time value of money on the $36 bucks I delayed paying for months I keep as "profit".

anduril

Our "ally" Israel, selling drones to Russia. What other country selling drones to Russia would clarice call an "ally" of the US?

Old Lurker

Hi C'Cal. I dissed you on the other thread (and DoT and DrJ) so had to apologize as soon as I recalled some very good JOMers still live in CA. :-)

Sue

OL,

I was about to make that some point. My BCBS insurance has a fairly large deductible, by choice, we can pay more for a lower one, but we can afford to pay what BCBS has negotiated with our doctors to accept as payment for their services so we do and pocket the difference in the premiums, which to date we have still come out ahead. (and if that isn't the longest, stupidest sentence ever in JOM history, I'll try again later) We never reach the deductible, but save money anyway, since we pay a very, very low premium to BCBS and pay that "$36.15" to the doctors.

Old Lurker

Exactly so, Sue.

JM Hanes

anduril:

"Our "ally" Israel, selling drones to Russia. What other country selling drones to Russia would clarice call an "ally" of the US?"

She'd probably start with France.

Captain Hate

Are we forgetting how "to shun", people?

Sorry OL; I'll turn in my Amish merit badge.

MayBee

Catastrophic insurance, with its resemblance to actual insurance instead of just pre-paid health care paid for by someone else, isn't equitable in the lefty mind.

Exactly, Porch.
Any time people get to keep their own money, they may end up spending it on something other than what the government thinks they need.
Thus, catastrophic policies and HSAs are bad, because people might spend the money they save, rather than use it to pay toward their deductible or checkups each year.

Ignatz

The only problem with a catastrophic plan, as we've learned through the school of hard knocks, is occasionally there are some diseases which are both very expensive to treat and kind of chronic.
Gets pretty costly after awhile.

Mary

Ignatz,

You are correct. But if the accounts are opened when the insured is relatively young, it is amazing how much money can be set aside. We helped the boys when they moved off the family insurance get started with the HSA contributions. Since they are young and healthy they should be okay. We are funding our own plans now to use for part "B" in a few years as well as covering some dental charges that insurance does not cover.

cathyf

Yeah, Ignatz, I think that there is a logical market there for some sort of rider with a kind of lifetime, or long-term deductible. For example, you have a $10,000 deductible per year, after you pay $100,000 in deductibles, the annual deductible goes down to $500/year for the rest of your life, or until you are eligible for medicare, or something.

The number of people who would get to $100K in expenses is very small, so the premium would be pretty reasonable. In a way I expect that's built in implicitly anyway -- many people who acquire some chronic expensive disease end up declaring bankruptcy and we end up paying for their bills anyway...

Old Lurker

Point is if the market is allowed to become pure insurance and to operate freely, Iggy's "tail risk" can easily be covered much as umbrella insurance works on other policies today.

jimmyk

I thought a lot of policies already have a lifetime cap on out-of-pocket expenses. I know some policies have the opposite--a lifetime cap on reimbursements, which is kind of strange. But the point is, as others have said, proper insurance that isn't all mucked up with mandates and tax distortions can take care of this. Perhaps there would have to be some kind of protections to prevent an insurer from dropping people in these circumstances, but other than that, it shouldn't be a problem.

glasater

I have this fantasy of putting Cathyf in charge of health insurance for the whole country.......

SunnyDay

Some unrelated observations with no particular point:

With health insurance, theory never lines up with real life. There will always be horror stories and bad situations. We can't make everything perfect.

The "buy health insurance across state lines" theory - part of the rate calculation is actual cost in each area - usually by zip code - so while it sounds great, it's actually going to force people in low cost areas to pay higher rates - or the insurance companies will refuse to do it.

In my area, many medical practices and all of our hospitals have become non- profits.

cathyf

Or another way to look at it -- health insurance presents us with some of the most interesting, counterintuitive and intractable problems in economics.

SunnyDay

Yes, I could go on all night. :D

JorgXMcKie

I think the problem that I have with anduril's posts is that they're really not long enough to thoroughly cover his subjects and they're way too hard for someone like me [who has only a PhD] to understand.

I think it would help if he would bold the entire thing, put periods after every word [so I would slow down and read more carefully], add [in parentheses] definitions for any word of more than one syllable, include {in brackets to make them easier to see} detailed explanations of any term he's not fully confident is understood properly by anyone with an IQ of at least 80, and put footnoted links to all possible additionally useful [in his opinion] citations.

Oh, and he should always include his own opinions in italicized, colored print, with the insults in a different color to make sure I know what he thinks about me and my intellectual capabilities.

Thanks in advance.

bgates

it's actually going to force people in low cost areas to pay higher rates

How is that supposed to work?

Captain Hate

Since this is the health care thread that isn't dead, I have a question about the WSJ editorial on WellPoint in LUN. One of the reasons they give for WellPoint increasing premiums is California extending Cobra and capping what insurers can charge post-Cobra. My question is: Are the caps the problem and not Cobra itself, or the extensions of it? As I understand it, perhaps not all that well, Cobra enables a person to continue health coverage by paying his/her regular share plus the former company's share of the group plan they were previously in. The benefit for the person laid-off is that he/she continues to get the advantage of being in a group plan based on how well the former employer negotiates with the health insurer.

Am I missing something?

anduril

I think the problem that I have with anduril's posts is that they're really not long enough to thoroughly cover his subjects and they're way too hard for someone like me [who has only a PhD] to understand.

I think that means he thinks he's smart. Thanks for sharing that about yourself.

cathyf

Here's the problem, CH...

In a typical company-sponsored health plan that is really insurance, all employees in a particular class are required to pay premiums into the plan. There may be some choices as to which plan, but everyone is required to participate as a condition of employment. This means that the group follows the statistical properties that you would expect given their ages, etc.

Ok, the problem is that whenever you allow people to choose whether or not to participate in the plan, the choosers do not act randomly. People who know that they have health problems, or have a well-based fear of future health problems, will all take the insurance. Some of the people who believe that they are healthy will see it as rational to take the risk of going without insurance.

So the more people have choices, the sicker the pool of covered people gets. This is called adverse selection. (One of those interesting, counterintuitive and intractable problems in economics.) Insurance cannot survive in an environment where people are allowed the freedom to opt in and out of the covered group. In a group of employees, healthy people take the insurance or give up their jobs.

With COBRA, the problem is that the unemployed person gets to decide whether or not they are going to do the COBRA or just go without insurance. So there there you go, a giant adverse selection problem. Especially in a company that is struggling and has had to lay off some huge chunk of their employees, COBRA can so change the risk pool characteristics of the company that it could cause the company to go under. Especially since those companies that just laid off a bunch of employees are almost always in pretty deep financial stress to begin with. In fact, the brand new law where the federal government subsidizes the COBRA premiums is a huge help in ameliorating the adverse selection problem. (It of course causes other problems, but it looks like it might be a net positive effect.)

SunnyDay

bgates - I'm not sure I can explain it. It's not as simple as it seems. I think cathy knows what I'm talking about, maybe she can explain it.

I believe it will also move insurance out from state regulation to federal.

I'm pretty sure there would be some unintended consequences.

A much simpler situation, but an example - years ago, it was decided in MT that life insurance rates were unfair if men had to pay higher rates than women. So they actually passed a law that said the insurance rates had to be the same. So, the insurance companies went to unisex rates - they charged women the same rate as men. Women's premiums went up - men's premiums did not go down.

Life insurance rates have far fewer factors involved, so it's an over-simplified example, but the point is, the people who want this do not realize what's actually going to happen if it gets passed.

Maybe I'm wrong - I keep wondering why someone doesn't say something. It might be because I'm way out in left field and don't know it. :D

SunnyDay

Yayyyyy, cathy. I vote for you to be in charge. It would take me two pages to explain adverse selection. I can't trim it down to where it fits into words. hahaha.

One of the questions on some insurance applications (taken by agents in person), is "who approached whom?" they're looking for that adverse selection factor.

Captain Hate

Thanks for the explanation cathy

MayBee

A much simpler situation, but an example - years ago, it was decided in MT that life insurance rates were unfair if men had to pay higher rates than women. So they actually passed a law that said the insurance rates had to be the same. So, the insurance companies went to unisex rates - they charged women the same rate as men. Women's premiums went up - men's premiums did not go down.

Yes, SunnyD (hi!).
I think we'll also see this with some of the other changes people say they want out of health care reform-
-no denials for preexisting conditions, and limits on premium differences for those with preexisting conditions (aka "discrimination")
-lower out of pocket costs
-no lifetime benefit caps
-no dropping people who are sick
-elimination of charges for things like mammograms, flu shots

All of those things, as unpleasant (and horribly managed) as they can be, keep premiums down for large groups of people.
They can't be implemented without someone paying *more* than they are now.

SunnyDay

waving @ MayBe

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