Is there something genetic about Democrats and their uncomfortable relationship with reality? Bill Clinton had trouble with the word ‘is’. Obama doesn’t understand what ‘Period!’ means. They also can’t seem to tell us what ‘enroll’ means.
First we got the enrollment numbers, except for the one we’d like to know, which is how many people have actually gone through the process of enrolling in a plan. There has been a sort of Talmudic debate over the meaning of the word “enroll” — should we count folks who had chosen a plan and asked to be invoiced, or should we count only those who paid? Some of the people who enroll will not actually end up paying their premium. However, because premiums for January plans aren’t due until December, counting only those who have already mailed in their check or money order will substantially undercount those who will end up enrolling. Myself, I leaned toward counting those who have enrolled in a plan and requested an invoice for payment. But there were decent arguments on both sides.
The Barack Obama administration resolved this debate by choosing a third metric: They counted everyone who had put a policy in their online shopping cart, even if they hadn’t actually gone ahead and signed up. By this logic, I am the proud owner of 28 items in my Amazon.com cart, including a hot pink laptop case and a fridge mount for an iPad model I don’t even own. And everyone with a Match.com profile is married.
Reality is slippery for these guys.
The writer is an economist, and if you to the link, you see something called “the abandonment rate’ for products sitting in shopping carts in different industries. For example, fashion is 74.72%, travel is over 80%. Yes, we want that vacation, but in the ObamaEconomy, who can afford it?
But there is this:
But HealthCare.gov isn’t a normal website. People are now legally required to buy insurance, and if you want to get a subsidy, the exchange is the only game in town. I would expect abandonment rates to be much lower than the numbers above. How much lower, exactly? That I couldn’t say. I will say this: I think my household probably accounts for at least two of those 106,185 because I went shopping on the D.C. exchange the day it opened to see how things were working. We are unlikely, however, to actually purchase a policy in the next month.
As if this was not enough of a feast for policy journalists, this morning we got news that the president would be making a big announcement on Obamacare. Around noon, he took the podium in the White House press room, looking drawn and exhausted. He was, he said, “offering an idea” to keep people from losing their plans: The administration would delay enforcement against noncompliant plans for a year. Insurers could continue to offer them, though they would not be forced to.
This may be a near-perfect specimen of that Washington perennial: the nonsolution solution. Insurers are already warning that they can’t simply allow people to stay on their old plans, firstly because all plans have to be approved by state insurers who haven’t signed onto this, and secondly because getting their computer systems to reissue the canceled policies is a hefty programming task that may not be possible to complete by the end of the year. But that’s not the administration’s problem, is it? They can say, “Hey, we changed the rule — if your insurer went ahead and canceled your policy anyway, that’s not our fault!”
Why a dumb administration this is. Just pathetic. What follows is a quick explanation of how insurance companies and the law work together, worth the read. Bottom line: No matter what the Left tells you about how fabulously profitable they are, their profit is controlled by government policy. This latest idiotic scheme will put healthy people onto their old plans (if the insurance companies are able to get them back), while putting very sick people onto the exchanges. The rates worked out previously will not cover this newer, sicker pool. Get it?
In reality, the rates are pretty closely calibrated to their anticipated average expenditure, aka the “actuarial value” of the policy. That’s how insurers set their prices for this year, on and off the exchanges. In other words, the exchange policies were priced with the expectation that the people who had been buying coverage in the individual market — who are somewhat healthier than average — would be paying more for their coverage. That’s part of what was expected to subsidize the cost of sicker people paying less.
Now Obama is saying that those healthier folks who already had insurance can keep buying their old policies, presumably at cheaper rates. But if insurers go along, that means that the average person on the exchange will be somewhat sicker than previously expected. Because the insurers already priced those policies for 2014 and cannot change their rates, they could very well lose money.
At least for one year. Come next year, what do they do?
Hey, ever think about the law? I don’t, I think the law, and it’s parents, The Constitution, are unicorns, but if you still believe, this is an interesting point:
Presumably they will also not enforce the mandate against people who have grandfathered plans. But that raises an interesting legal issue. Remember that in 2012, the Supreme Court ruled that the mandate was a tax. And as a lawyer of my acquaintance points out, taxes have to be enforced uniformly; the Internal Revenue Service can pick and choose who it audits, but it cannot pick and choose who has to obey the law. If it declines to enforce the mandate against grandfathered consumers, it’s conceivably opening itself up to a bunch of legal challenges.
Oh what a tangled web we weave, when first we practice to deceive.