Commentary Magazine


Topic: insurance industry

There’s No Fixing ObamaCare

Those who thought President Obama had “fixed” the inequities in his signature health-care legislation with an announcement last week should have been paying attention on Monday to the results of a meeting held in the White House with insurance industry CEOs. If the companies thought the administration was planning on helping them deal with the fallout from the president’s edict that those who had lost their coverage as a result of ObamaCare could get their old policies back, they were in for a rude awakening. Shifting gears to allow the president to claim that he is making good on his oft-repeated promise after following the law and cancelling those policies is going to create chaos for the industry as well as cost them a fortune. But though the whole mess is his fault, the president made it clear they will get no subsidies or help. Since the president’s solution will rely on companies to take a bath on this as well as the permission of state insurance commissioners, its highly doubtful that those negatively affected by the legislation will get much relief.

This is significant not just because it shows that the president’s hour-long press conference last week during which he apologized for his false promises–even as he made it obvious that he knew all along that his blanket proclamations that no one would lose their coverage or their doctor was false. Nor is it only important because it is one more of a series of problems about ObamaCare that began but certainly did not end with a dysfunctional website. The real issue here is that the problem that has been dumped on the insurance companies and the states with little hope that they can sort it out to the satisfaction of consumers is a foreshadowing of problems to come that we haven’t even imagined.

When ObamaCare was passed in 2010, it was not a secret that the bill was an ill-conceived mess, long on big promises and chock-full of confusing details that no one—especially then House Speaker Nancy Pelosi—had a clue about. If, as she memorably said, the bill had to be passed first before Congress could figure out was in it, she wasn’t kidding. What is now unfolding is not just an administration embarrassment about a website or a president credibility gap. What the president and his party must deal with is a monstrous piece of legislation that is filled with moving parts that don’t fit and that are bound to cause an endless series of controversies that will swell the growing ranks of ObamaCare losers. That is why the president’s poll numbers are sinking to record lows and Democrats must come to terms with the fact that rather than growing in popularity as they hoped and Republicans feared, ObamaCare may be headed for eventual failure.

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Those who thought President Obama had “fixed” the inequities in his signature health-care legislation with an announcement last week should have been paying attention on Monday to the results of a meeting held in the White House with insurance industry CEOs. If the companies thought the administration was planning on helping them deal with the fallout from the president’s edict that those who had lost their coverage as a result of ObamaCare could get their old policies back, they were in for a rude awakening. Shifting gears to allow the president to claim that he is making good on his oft-repeated promise after following the law and cancelling those policies is going to create chaos for the industry as well as cost them a fortune. But though the whole mess is his fault, the president made it clear they will get no subsidies or help. Since the president’s solution will rely on companies to take a bath on this as well as the permission of state insurance commissioners, its highly doubtful that those negatively affected by the legislation will get much relief.

This is significant not just because it shows that the president’s hour-long press conference last week during which he apologized for his false promises–even as he made it obvious that he knew all along that his blanket proclamations that no one would lose their coverage or their doctor was false. Nor is it only important because it is one more of a series of problems about ObamaCare that began but certainly did not end with a dysfunctional website. The real issue here is that the problem that has been dumped on the insurance companies and the states with little hope that they can sort it out to the satisfaction of consumers is a foreshadowing of problems to come that we haven’t even imagined.

When ObamaCare was passed in 2010, it was not a secret that the bill was an ill-conceived mess, long on big promises and chock-full of confusing details that no one—especially then House Speaker Nancy Pelosi—had a clue about. If, as she memorably said, the bill had to be passed first before Congress could figure out was in it, she wasn’t kidding. What is now unfolding is not just an administration embarrassment about a website or a president credibility gap. What the president and his party must deal with is a monstrous piece of legislation that is filled with moving parts that don’t fit and that are bound to cause an endless series of controversies that will swell the growing ranks of ObamaCare losers. That is why the president’s poll numbers are sinking to record lows and Democrats must come to terms with the fact that rather than growing in popularity as they hoped and Republicans feared, ObamaCare may be headed for eventual failure.

It is no small irony that ObamaCare was passed in part because the insurance industry decided that the smart play was to not oppose it. Though it was always at its core a wealth redistribution scheme that would adversely affect much of the middle class in order to benefit some of the poor, the insurance companies figured they could make money off of it as easily as in the existing system. That they are now being left in the lurch on the question of private insurance by the president they embraced as a partner will generate no sympathy for them from conservatives who are bitter about the role they played in passing this monstrosity. Nor will the left, which would prefer to see them run out of business by a national single-payer system, shed a tear for them. But the problems the companies will encounter in trying to pick up the pieces from the president’s broken promise will only add to the growing chaos that is being caused by the bill’s disastrous rollout.

With no firm assurances that the website will be fixed and little likelihood that enough healthy people can be herded in to the exchanges to pay more for insurance than they are used to in order to finance those who will pay nothing, the prospect of an ObamaCare collapse is no longer a far-fetched scenario. Ultimately, everyone’s coverage and rates will be affected by this fiasco. That’s why the belief that sooner or later the general public would regard ObamaCare as untouchable once it went into effect was misplaced. Unlike other expansions of government benefits such as Social Security and Medicare that were paid for by future taxpayers, the ObamaCare losers are made up of the middle class of the present.

Like the insurance companies, this vast class of consumers won’t be getting any bailout or congressional-style exemptions. Rather than making another historic addition to the roster of entitlement programs envisioned by progressives, all the president may have done is to create a vast group of Americans who are finding out they are being bilked by the administration. And there’s no fix for that in the president’s tool kit or in the IT experts called in to repair the website.

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It Sure Is a Choice Between Hope and Fear

As he is wont to do, William Galston delivers the bad news to his fellow Democrats. Eyeing last week’s Gallup poll showing that majorities disapprove of Obama’s “accomplishments” (e.g., the bailouts, ObamaCare, the stimulus plan), he writes:

The art of democratic leadership is to mobilize public majorities around measures that promote the general welfare. Judged against that standard, the past two years have been a failure—even if one believes that everything on the Gallup list was necessary and wise.

We will never know whether a different approach would have produced a better result. But a few things are clear:

* The failure of the stimulus to produce a more hopeful job market has cast a pall over everything else.

* The public regards the year spent debating health reform as a diversion from what it thinks should have been a sustained focus on the economy.

* And whatever its economic merits, the failure of the financial rescue to mete out justice to the financial leaders that got us into this mess has outraged the public’s moral sense. …

The bottom line: the majority can neither run on its record nor run away from it.

So that leaves the Democrats with ad hominem attacks, scare-mongering, and slurs on the Tea Party. (You’ll notice that the bogeyman George W. Bush has largely disappeared from the Dems’ rhetoric, since it appears Bush is more popular than Obama in some key swing states.)

Obama declares that the choice is between “hope and fear.” Actually, he’s right, but not in the way he intends. For many voters the hope is that electing conservatives to Congress will slow and reverse the spend-a-thon and focus the peripatetic White House on the issue they care most about — jobs. As for the fear, one suspects the public has grown weary of the host of villains the White House conjures up to deflect attention from its own dismal record.

It’s been two years since Obama articulated his own hopeful vision. Now it’s all about recriminations and finger-pointing. You wonder what his reaction will be when the Bible- and gun-huggers, the stooges of the insurance industry, and the Islamophobes stream to the polls, throw out many Democratic incumbents, and declare Obamanomics kaput. At this point, he’s certainly not acting like a president prepared to take the voters’ message to heart and revise his agenda accordingly.

As he is wont to do, William Galston delivers the bad news to his fellow Democrats. Eyeing last week’s Gallup poll showing that majorities disapprove of Obama’s “accomplishments” (e.g., the bailouts, ObamaCare, the stimulus plan), he writes:

The art of democratic leadership is to mobilize public majorities around measures that promote the general welfare. Judged against that standard, the past two years have been a failure—even if one believes that everything on the Gallup list was necessary and wise.

We will never know whether a different approach would have produced a better result. But a few things are clear:

* The failure of the stimulus to produce a more hopeful job market has cast a pall over everything else.

* The public regards the year spent debating health reform as a diversion from what it thinks should have been a sustained focus on the economy.

* And whatever its economic merits, the failure of the financial rescue to mete out justice to the financial leaders that got us into this mess has outraged the public’s moral sense. …

The bottom line: the majority can neither run on its record nor run away from it.

So that leaves the Democrats with ad hominem attacks, scare-mongering, and slurs on the Tea Party. (You’ll notice that the bogeyman George W. Bush has largely disappeared from the Dems’ rhetoric, since it appears Bush is more popular than Obama in some key swing states.)

Obama declares that the choice is between “hope and fear.” Actually, he’s right, but not in the way he intends. For many voters the hope is that electing conservatives to Congress will slow and reverse the spend-a-thon and focus the peripatetic White House on the issue they care most about — jobs. As for the fear, one suspects the public has grown weary of the host of villains the White House conjures up to deflect attention from its own dismal record.

It’s been two years since Obama articulated his own hopeful vision. Now it’s all about recriminations and finger-pointing. You wonder what his reaction will be when the Bible- and gun-huggers, the stooges of the insurance industry, and the Islamophobes stream to the polls, throw out many Democratic incumbents, and declare Obamanomics kaput. At this point, he’s certainly not acting like a president prepared to take the voters’ message to heart and revise his agenda accordingly.

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Liberals on the Ropes

The New York Times poll (invariably more positive for the Democrats than other surveys) contains little good news for the Democrats. The Times has Obama’s approval at 45 percent, near his all-time low of 44 percent. His disapproval rating of 47 percent is a record in this poll. A mere 33 percent think the country is going in the right direction. Only 41 percent approve of Obama’s handling of the economy. The generic congressional poll shows the Republicans ahead by two, with only 34 percent saying their own representative deserves re-election. By a margin of 48 to 41 percent, respondents favor a smaller government with fewer services over a bigger government with more services.

The Gray Lady is preparing its readers for the day of reckoning, edging its polling closer to more credible competing polls just in time for Election Day. (Looks bad when you miss the final results by a mile.) The Obami, their spin squad, and members of Congress should be making preparations as well. I advise against adopting the tactic of the left blogosphere — screeching that Americans are irrational bigots. It tends to annoy voters when you call them un-American or stooges of the insurance industry or uninformed or … oh wait. Yes, that probably has made them madder than they already were.

The president and the Senate and House Democratic survivors will have a choice to make: continue down the path that led to the defeat of so many colleagues and an anemic recovery or shift gears. It is a measure of the White House’s hubris and cluelessness that I’m really not certain which way they’ll go.

The New York Times poll (invariably more positive for the Democrats than other surveys) contains little good news for the Democrats. The Times has Obama’s approval at 45 percent, near his all-time low of 44 percent. His disapproval rating of 47 percent is a record in this poll. A mere 33 percent think the country is going in the right direction. Only 41 percent approve of Obama’s handling of the economy. The generic congressional poll shows the Republicans ahead by two, with only 34 percent saying their own representative deserves re-election. By a margin of 48 to 41 percent, respondents favor a smaller government with fewer services over a bigger government with more services.

The Gray Lady is preparing its readers for the day of reckoning, edging its polling closer to more credible competing polls just in time for Election Day. (Looks bad when you miss the final results by a mile.) The Obami, their spin squad, and members of Congress should be making preparations as well. I advise against adopting the tactic of the left blogosphere — screeching that Americans are irrational bigots. It tends to annoy voters when you call them un-American or stooges of the insurance industry or uninformed or … oh wait. Yes, that probably has made them madder than they already were.

The president and the Senate and House Democratic survivors will have a choice to make: continue down the path that led to the defeat of so many colleagues and an anemic recovery or shift gears. It is a measure of the White House’s hubris and cluelessness that I’m really not certain which way they’ll go.

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RE: Pelosi Angry, on the Ropes

Pete, even for Nancy Pelosi this is really beyond the pale. I have just a few thoughts to add.

First, no one is pulling the strings behind a concerted opposition to the mosque, but it’s odd that she should think so (as was her accusation that ObamaCare protestors were pawns of the insurance industry). There’s not a JournoList for the 68 percent of Americans who think the mosque should go elsewhere. And I don’t think that several New York Democratic congressmen, David Aaron Miller, the ADL, and Harry Reid are being “funded” by a common mysterious source to oppose the building of a giant mosque on the ashes of their fellow Americans. But if she’s curious, Pelosi can always ask Reid or her members from New York.

Second, this is a textbook case of projection. One of the central issues concerning the mosque, of course, is whether foreign jihadist groups are funding it. Imam Rauf won’t say, and Mayor Bloomberg, in his infinite inanity, didn’t bother to find out before getting behind the project. Maybe someone said “funding” in her presence, and she thought it was a good idea to question the funding sources of the Americans who don’t agree with her.

And finally, I assume she doesn’t think the alleged ringleader of this dastardly plot is foreign. So what she is asking for — this from the gal who labeled ObamaCare opponents “un-American” — is that we investigate Americans and American organizations. Whom shall we call to the stand first — Harry Reid or Abe Foxman? This is the sort of buffoonery and Constitutional illiteracy that is alleged of conservatives.

She’s become an embarrassment to the Congress and to her party. Regardless of the election outcome, shouldn’t Democrats pick someone better to lead them?

Pete, even for Nancy Pelosi this is really beyond the pale. I have just a few thoughts to add.

First, no one is pulling the strings behind a concerted opposition to the mosque, but it’s odd that she should think so (as was her accusation that ObamaCare protestors were pawns of the insurance industry). There’s not a JournoList for the 68 percent of Americans who think the mosque should go elsewhere. And I don’t think that several New York Democratic congressmen, David Aaron Miller, the ADL, and Harry Reid are being “funded” by a common mysterious source to oppose the building of a giant mosque on the ashes of their fellow Americans. But if she’s curious, Pelosi can always ask Reid or her members from New York.

Second, this is a textbook case of projection. One of the central issues concerning the mosque, of course, is whether foreign jihadist groups are funding it. Imam Rauf won’t say, and Mayor Bloomberg, in his infinite inanity, didn’t bother to find out before getting behind the project. Maybe someone said “funding” in her presence, and she thought it was a good idea to question the funding sources of the Americans who don’t agree with her.

And finally, I assume she doesn’t think the alleged ringleader of this dastardly plot is foreign. So what she is asking for — this from the gal who labeled ObamaCare opponents “un-American” — is that we investigate Americans and American organizations. Whom shall we call to the stand first — Harry Reid or Abe Foxman? This is the sort of buffoonery and Constitutional illiteracy that is alleged of conservatives.

She’s become an embarrassment to the Congress and to her party. Regardless of the election outcome, shouldn’t Democrats pick someone better to lead them?

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An Electorate Receptive to “Repeal and Replace”

Yuval Levin explains that ObamaCare is the worst of all health-care reforms — really no health-care reform at all:

In order to gain 60 votes in the Senate last winter, the Democrats were forced to give up on that public insurer, while leaving the other components of their scheme in place. The result is not even a liberal approach to escalating costs but a ticking time bomb: a scheme that will build up pressure in our private insurance system while offering no escape. Rather than reform a system that everyone agrees is unsustainable, it will subsidize that system and compel participation in it — requiring all Americans to pay ever-growing premiums to insurance companies while doing essentially nothing about the underlying causes of those rising costs.

This is why the ideologically honest Left was just as appalled as conservatives by the result. We are herding unwilling customers into the arms of insurers, passing the bill to the taxpayers, and exacerbating the problem at the nub of the health-care-cost problem — consumers do not foot their own bills and have little incentive to spend wisely and monitor costs. Conservatives have further reason to object to the scheme: “It aims to spend a trillion dollars on subsidies to large insurance companies and the expansion of Medicaid, to micromanage the insurance industry in ways likely only to raise premiums further, to cut Medicare benefits without using the money to shore up the program or reduce the deficit, and to raise taxes on employment, investment, and medical research.” In short, there is enough for everyone to hate.

As Levin points out, there is time to act, given the bill’s implementation schedule. (“No significant entitlement benefits will be made available for four years, but some significant taxes and Medicare cuts — as well as regulatory reforms that may begin to push premium prices up, especially in the individual market — will begin before then.”) Although there are some small benefits scheduled this year to entice voters to embrace ObamaCare (e.g., ban on dropping those already insured for pre-existing conditions, requirements to keep twenty-somethings on their parents’ insurance), these are limited and in some cases duplicate existing state regulations. (Moreover, those who already have insurance — some 80 percent of the population — surely are among the most likely voters.)  Meanwhile, employers are taking a hit and informing their shareholders and employees of the perils of ObamaCare, and the cost problem that was the rationale for the bill worsens:

Rather than reducing costs, Obamacare will increase national health expenditures by more than $200 billion, according to the Obama administration’s own HHS actuary. Premiums in the individual market will increase by more than 10 percent very quickly, and middle-class families in the new exchanges (where large numbers of Americans who now receive coverage through their employers will find themselves dumped) will be forced to choose from a very limited menu of government-approved plans, the cheapest of which, CBO estimates, will cost more than $12,000.

Throw in a plethora of new taxes and perverse incentives for employers to drop their employees from coverage, and you can see why it is an “unmitigated disaster — for our health care system, for our fiscal future, and for any notion of limited government.” But there is time to rip it up and start again. There is no shortage of market-based alternative plans from conservatives. But first, the existing one must be abandoned before it can do permanent damage to the health-care system and to our economy. That is the rallying cry for conservatives this year and in 2012 — to prevent the wrecking ball before it hits its target and to offer a better alternative. Rarely is there such a stark choice for voters, but there is no fuzzying up the differences between the two sides on this one. Are you for or against a giant new entitlement program? Do you think individuals should be forced to buy insurance plans they don’t want? Is it smart to levy huge new taxes when the economic recovery is stalled? If framed clearly, the “Repeal and Replace” brigade has a compelling position.

The unfolding debate also comes within a certain context, one the Obama administration chooses to ignore. The public has not, contrary to the Left’s expectations, become enamored of big government in the wake of the financial meltdown. To the contrary, the bailouts and stimulus plan have engendered suspicion and contempt. The “Trust us, it’s working!” rhetoric has contributed to the public’s growing unease with governing elites. And the mound of debt has reinforced the public’s suspicion that the White House and Congress are unserious and ill-equipped to address our fiscal train wreck. In other words, the “Repeal and Replace” contingent will be making its case to an electorate already predisposed to accept much of its argument.

Yuval Levin explains that ObamaCare is the worst of all health-care reforms — really no health-care reform at all:

In order to gain 60 votes in the Senate last winter, the Democrats were forced to give up on that public insurer, while leaving the other components of their scheme in place. The result is not even a liberal approach to escalating costs but a ticking time bomb: a scheme that will build up pressure in our private insurance system while offering no escape. Rather than reform a system that everyone agrees is unsustainable, it will subsidize that system and compel participation in it — requiring all Americans to pay ever-growing premiums to insurance companies while doing essentially nothing about the underlying causes of those rising costs.

This is why the ideologically honest Left was just as appalled as conservatives by the result. We are herding unwilling customers into the arms of insurers, passing the bill to the taxpayers, and exacerbating the problem at the nub of the health-care-cost problem — consumers do not foot their own bills and have little incentive to spend wisely and monitor costs. Conservatives have further reason to object to the scheme: “It aims to spend a trillion dollars on subsidies to large insurance companies and the expansion of Medicaid, to micromanage the insurance industry in ways likely only to raise premiums further, to cut Medicare benefits without using the money to shore up the program or reduce the deficit, and to raise taxes on employment, investment, and medical research.” In short, there is enough for everyone to hate.

As Levin points out, there is time to act, given the bill’s implementation schedule. (“No significant entitlement benefits will be made available for four years, but some significant taxes and Medicare cuts — as well as regulatory reforms that may begin to push premium prices up, especially in the individual market — will begin before then.”) Although there are some small benefits scheduled this year to entice voters to embrace ObamaCare (e.g., ban on dropping those already insured for pre-existing conditions, requirements to keep twenty-somethings on their parents’ insurance), these are limited and in some cases duplicate existing state regulations. (Moreover, those who already have insurance — some 80 percent of the population — surely are among the most likely voters.)  Meanwhile, employers are taking a hit and informing their shareholders and employees of the perils of ObamaCare, and the cost problem that was the rationale for the bill worsens:

Rather than reducing costs, Obamacare will increase national health expenditures by more than $200 billion, according to the Obama administration’s own HHS actuary. Premiums in the individual market will increase by more than 10 percent very quickly, and middle-class families in the new exchanges (where large numbers of Americans who now receive coverage through their employers will find themselves dumped) will be forced to choose from a very limited menu of government-approved plans, the cheapest of which, CBO estimates, will cost more than $12,000.

Throw in a plethora of new taxes and perverse incentives for employers to drop their employees from coverage, and you can see why it is an “unmitigated disaster — for our health care system, for our fiscal future, and for any notion of limited government.” But there is time to rip it up and start again. There is no shortage of market-based alternative plans from conservatives. But first, the existing one must be abandoned before it can do permanent damage to the health-care system and to our economy. That is the rallying cry for conservatives this year and in 2012 — to prevent the wrecking ball before it hits its target and to offer a better alternative. Rarely is there such a stark choice for voters, but there is no fuzzying up the differences between the two sides on this one. Are you for or against a giant new entitlement program? Do you think individuals should be forced to buy insurance plans they don’t want? Is it smart to levy huge new taxes when the economic recovery is stalled? If framed clearly, the “Repeal and Replace” brigade has a compelling position.

The unfolding debate also comes within a certain context, one the Obama administration chooses to ignore. The public has not, contrary to the Left’s expectations, become enamored of big government in the wake of the financial meltdown. To the contrary, the bailouts and stimulus plan have engendered suspicion and contempt. The “Trust us, it’s working!” rhetoric has contributed to the public’s growing unease with governing elites. And the mound of debt has reinforced the public’s suspicion that the White House and Congress are unserious and ill-equipped to address our fiscal train wreck. In other words, the “Repeal and Replace” contingent will be making its case to an electorate already predisposed to accept much of its argument.

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Band-Aids for Band-Aids for Band-Aids

Out on the health-care stump in Pennsylvania today, President Obama talked up the importance of competitive markets:

He continued, “An insurance broker told Wall Street investors that insurance companies know they will lose customers if they keep raising premiums. But since there’s so little competition in the insurance industry, they’re okay with people being priced out of health insurance because they’ll still make more by raising premiums on the customers they have. And they will keep doing this for as long as they can get away with it.”

Or until someone with common sense allows people to cross state lines to purchase insurance.  But that would break the self-replicating chain of big government, so it’s not going to happen.

Here’s what always does happen: Democrats use disasters brought on by regulation to justify further regulation. Restraining insurance companies won’t be the last step in that chain, of course. When government-imposed price caps suck the incentive out for insurance providers, lawmakers will go on TV wielding a report about how underserved the insured have become. This will justify new guidelines for what providers will then have to offer. It never ends.

We saw this with the housing boom and bust. Government-imposed equality of ownership distorted the market. The follow-up disaster demanded — what else? — government-imposed regulation. Wealth redistribution is the gift that keeps on taking.

Out on the health-care stump in Pennsylvania today, President Obama talked up the importance of competitive markets:

He continued, “An insurance broker told Wall Street investors that insurance companies know they will lose customers if they keep raising premiums. But since there’s so little competition in the insurance industry, they’re okay with people being priced out of health insurance because they’ll still make more by raising premiums on the customers they have. And they will keep doing this for as long as they can get away with it.”

Or until someone with common sense allows people to cross state lines to purchase insurance.  But that would break the self-replicating chain of big government, so it’s not going to happen.

Here’s what always does happen: Democrats use disasters brought on by regulation to justify further regulation. Restraining insurance companies won’t be the last step in that chain, of course. When government-imposed price caps suck the incentive out for insurance providers, lawmakers will go on TV wielding a report about how underserved the insured have become. This will justify new guidelines for what providers will then have to offer. It never ends.

We saw this with the housing boom and bust. Government-imposed equality of ownership distorted the market. The follow-up disaster demanded — what else? — government-imposed regulation. Wealth redistribution is the gift that keeps on taking.

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RE: ObamaCare and Political Theater

Pete, it’s hard to see exactly what Obama is doing here. Certainly, even in the hubris-filled halls of the West Wing, the Obami must know that the votes aren’t there in the House, and as a result, it will be mighty hard even to get 50 Senate Democrats to walk the plank for a bill that is so grossly unpopular. There are a few theories circulating.

First, Obama is simply tending to his base, trying to demonstrate how he did everything possible (other than find a reasonable bill the country could support). He is, he will tell his netroot base, simply a victim of the Republican attack machine and all that misinformation. He’s putting on a show summit, giving his faithful a reminder of better days when dog-and-pony shows and big speeches seemed to be the road to legislative victory.

Another theory is that this is simply a prelude to a bare-bones bill that will save him from humiliation. Regulation of the insurance industry — i.e., price controls and federal micro-management — might be popular and passable. That was Obama’s “added element” in the ObamaCare II rollout. And if he can throw in some tort reform studies, a Medicare reform commission, some tinkering on interstate insurance sales and the like, he can declare “victory” and climb out of the hole he dug for himself as he pursued an unpopular signature agenda item at the expense of achieving anything else of note.

And finally, Obama might have no game plan at all. It wouldn’t be the first time. He’ll have a summit. Maybe the poll numbers will improve. Maybe he’ll force the Democrats to take a vote. Maybe not. Just figure it out as he goes along. After all, if he had planned on garnering bipartisan support and actually passing something, Obama wouldn’t have rolled out an ObamaCare II so similar to  ObamaCare I, nor would he have threatened the Republicans with reconciliation in advance of the summit.

In the end, there are two simple realities. The public doesn’t like the bill at all. And it’s an election year, following a losing run for Democrats that has spooked incumbents. That’s why it’s hard to see how ObamaCare II will ever become law.

Pete, it’s hard to see exactly what Obama is doing here. Certainly, even in the hubris-filled halls of the West Wing, the Obami must know that the votes aren’t there in the House, and as a result, it will be mighty hard even to get 50 Senate Democrats to walk the plank for a bill that is so grossly unpopular. There are a few theories circulating.

First, Obama is simply tending to his base, trying to demonstrate how he did everything possible (other than find a reasonable bill the country could support). He is, he will tell his netroot base, simply a victim of the Republican attack machine and all that misinformation. He’s putting on a show summit, giving his faithful a reminder of better days when dog-and-pony shows and big speeches seemed to be the road to legislative victory.

Another theory is that this is simply a prelude to a bare-bones bill that will save him from humiliation. Regulation of the insurance industry — i.e., price controls and federal micro-management — might be popular and passable. That was Obama’s “added element” in the ObamaCare II rollout. And if he can throw in some tort reform studies, a Medicare reform commission, some tinkering on interstate insurance sales and the like, he can declare “victory” and climb out of the hole he dug for himself as he pursued an unpopular signature agenda item at the expense of achieving anything else of note.

And finally, Obama might have no game plan at all. It wouldn’t be the first time. He’ll have a summit. Maybe the poll numbers will improve. Maybe he’ll force the Democrats to take a vote. Maybe not. Just figure it out as he goes along. After all, if he had planned on garnering bipartisan support and actually passing something, Obama wouldn’t have rolled out an ObamaCare II so similar to  ObamaCare I, nor would he have threatened the Republicans with reconciliation in advance of the summit.

In the end, there are two simple realities. The public doesn’t like the bill at all. And it’s an election year, following a losing run for Democrats that has spooked incumbents. That’s why it’s hard to see how ObamaCare II will ever become law.

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What Bad News?

This is not an administration that takes bad news well. Or to put it more precisely, this is not an administration that takes in bad news. The president pretended not to hear the Tea Party protesters outside his window in April. The administration brushed off ordinary citizens who turned out to object to ObamaCare at town-hall meetings in August as stooges of the insurance industry or ignoramuses. It went to war with Fox for refusing to toe the sycophantic line. And in December it’s reduced to screeching at Gallup for bearing bad polling news. (Watch out RealClearPolitics!)

Charles Franklin of Pollster.com responds to Robert Gibbs’s outburst:

Gibbs’ “EKG” analogy for President Obama’s approval level is typical rhetoric of any administration in trouble with the public. First imply the polls are “all over the place” and then assert that the president doesn’t govern based on polls. Dems and Reps alike reach a point in their approval ratings when they trot out these chestnuts. Sadly, both assertions are false and administrations that truly ignore public opinion are in more trouble than they know.

And another pollster explains:

I would have to heartily disagree with Gibbs’ comments — the reality is I have that situation all the time when I bring clients bad news. When I bring my clients good news they always tell me how smart I am and when I bring them bad news they tell me that I’m stupid and no better than a 6-year-old with a box of crayons.

The disinclination to hear and process bad news is part of human nature. No one, most especially a “sort of god” who had been virtually immune from criticism, likes to hear complaints and wails of disappointment. But a White House that treats critics as enemies and bad news as disinformation does so at its peril. Without a realistic picture of public opinion and how its own policies are being received, the administration is incapable of making the needed course corrections, personnel changes, and message refinements that every White House must undertake to keep from going off the rails.

This administration, however, seems to have a singular strategy: double down on its nasty rhetoric, keep turning Left on policy, rage at the media for missing the “real story,” and admit no errors. It’s a recipe for failure, both policy and political. The Obami may see more of both.

This is not an administration that takes bad news well. Or to put it more precisely, this is not an administration that takes in bad news. The president pretended not to hear the Tea Party protesters outside his window in April. The administration brushed off ordinary citizens who turned out to object to ObamaCare at town-hall meetings in August as stooges of the insurance industry or ignoramuses. It went to war with Fox for refusing to toe the sycophantic line. And in December it’s reduced to screeching at Gallup for bearing bad polling news. (Watch out RealClearPolitics!)

Charles Franklin of Pollster.com responds to Robert Gibbs’s outburst:

Gibbs’ “EKG” analogy for President Obama’s approval level is typical rhetoric of any administration in trouble with the public. First imply the polls are “all over the place” and then assert that the president doesn’t govern based on polls. Dems and Reps alike reach a point in their approval ratings when they trot out these chestnuts. Sadly, both assertions are false and administrations that truly ignore public opinion are in more trouble than they know.

And another pollster explains:

I would have to heartily disagree with Gibbs’ comments — the reality is I have that situation all the time when I bring clients bad news. When I bring my clients good news they always tell me how smart I am and when I bring them bad news they tell me that I’m stupid and no better than a 6-year-old with a box of crayons.

The disinclination to hear and process bad news is part of human nature. No one, most especially a “sort of god” who had been virtually immune from criticism, likes to hear complaints and wails of disappointment. But a White House that treats critics as enemies and bad news as disinformation does so at its peril. Without a realistic picture of public opinion and how its own policies are being received, the administration is incapable of making the needed course corrections, personnel changes, and message refinements that every White House must undertake to keep from going off the rails.

This administration, however, seems to have a singular strategy: double down on its nasty rhetoric, keep turning Left on policy, rage at the media for missing the “real story,” and admit no errors. It’s a recipe for failure, both policy and political. The Obami may see more of both.

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Worth It?

Rudy has been getting flak from fiscal conservatives (check out today’s Wall Street Journal) for his support of a catastrophe insurance fund for Florida. However, this may have been the price to pay for Governor Charlie Crist’s endorsement. Crist has been hammering away at the insurance industry and quizzing the GOP contenders for months on whether they will help “spread the risk” (i.e. offer up federal taxpayers as the liability backstop) for Floridians who live in hurricane territory.

On the subject of an endorsement, Crist sounds on the fence here, perhaps waiting to see if any other contender will pony up support for the fund. Crist has a 70 percent approval rating, so his nod would certainly help in a close race. But the prospect of a popular governor’s endorsement has to be weighed against the appearance of pandering. It would be nice to say that pandering doesn’t pay, but it seems not to have hurt Romney a bit in Michigan, where the topic was help for the auto industry. Although the Journal praises McCain’s disdain for the Florida venture and scoffs at Romney’s refusal to take a firm position, it is not certain whether McCain’s stubborn refusal to give the people what they want will pay off with the voters. In the end, Rudy’s position may get him some votes but not Crist’s endorsement. Unless Rudy’s poll numbers reverse course, Crist may well decide to remain mum.

Rudy has been getting flak from fiscal conservatives (check out today’s Wall Street Journal) for his support of a catastrophe insurance fund for Florida. However, this may have been the price to pay for Governor Charlie Crist’s endorsement. Crist has been hammering away at the insurance industry and quizzing the GOP contenders for months on whether they will help “spread the risk” (i.e. offer up federal taxpayers as the liability backstop) for Floridians who live in hurricane territory.

On the subject of an endorsement, Crist sounds on the fence here, perhaps waiting to see if any other contender will pony up support for the fund. Crist has a 70 percent approval rating, so his nod would certainly help in a close race. But the prospect of a popular governor’s endorsement has to be weighed against the appearance of pandering. It would be nice to say that pandering doesn’t pay, but it seems not to have hurt Romney a bit in Michigan, where the topic was help for the auto industry. Although the Journal praises McCain’s disdain for the Florida venture and scoffs at Romney’s refusal to take a firm position, it is not certain whether McCain’s stubborn refusal to give the people what they want will pay off with the voters. In the end, Rudy’s position may get him some votes but not Crist’s endorsement. Unless Rudy’s poll numbers reverse course, Crist may well decide to remain mum.

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The Future of Health Insurance

Monday’s New York Times highlighted one of the many ways that existing models of medical insurance are beginning to come undone. In this case the subject was long-term-care insurance, which is supposed to help cover the exceedingly high cost of intense chronic care required by some elderly Americans—especially those with Alzheimer’s disease and dementia. As policy-makers have looked at the economic forecasts for old-age health care in the past few decades, they have increasingly used tax incentives and other spurs to encourage middle-aged and older Americans to buy such insurance.

Insurance companies at first jumped right into the newly burgeoning field, but as the years have passed and more patients have made claims, insurers have come to realize that the economic model of long-term care does not work like the rest of their business: demographic changes mean much more demand than originally anticipated, costs are enormous and stretch on for years, and the normal insurance premium structure is often not adequate to make such insurance a profitable enterprise. Several of the biggest early players have suffered mightily. Conseco, which at one point was the leading insurer, actually went bankrupt.

Read More

Monday’s New York Times highlighted one of the many ways that existing models of medical insurance are beginning to come undone. In this case the subject was long-term-care insurance, which is supposed to help cover the exceedingly high cost of intense chronic care required by some elderly Americans—especially those with Alzheimer’s disease and dementia. As policy-makers have looked at the economic forecasts for old-age health care in the past few decades, they have increasingly used tax incentives and other spurs to encourage middle-aged and older Americans to buy such insurance.

Insurance companies at first jumped right into the newly burgeoning field, but as the years have passed and more patients have made claims, insurers have come to realize that the economic model of long-term care does not work like the rest of their business: demographic changes mean much more demand than originally anticipated, costs are enormous and stretch on for years, and the normal insurance premium structure is often not adequate to make such insurance a profitable enterprise. Several of the biggest early players have suffered mightily. Conseco, which at one point was the leading insurer, actually went bankrupt.

The result is what the Times described this week: some patients who counted on their insurance have been let down as the industry has begun to come to terms with the economic realities of an aging society. The Times story goes too far in its criticism at some points—one California lawyer is quoted saying, “these companies have essentially turned their bureaucracies into profit centers.” Well, yes, that’s what companies are. But the article does get at a growing set of problems for the insurance industry.

The aging society is one source of the trouble, but advances in biological science are another. As genetic knowledge improves, some of the premises of the insurance system could come undone. Insurance is based on an assessment of risk that in turn relies on the inherent unknowability of the future, including our medical future. If that changes, if we become better able to predict with genuine precision our likelihood of falling prey to certain medical conditions, it will begin to make less and less sense for insurers to cover us for those illnesses. If they know with near certainty that we are likely to need a particular treatment, then insuring us for it would cease to be a risk, and would become just bad business judgment.

In both cases—long-term-care insurance and improving genetic knowledge—we find that the problem is not so much a lack of coverage or care, but a business model that’s failing to keep up with reality. The age of biotechnology, which has only begun, will certainly bring many more such challenges.

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