The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Dealing with Changing Change

Posted by Alan on December 28, 2010

The folks over at American Health Line are doing a series of guest posts discussing health policy developments over the the past year and what’s likely to happen in 2011. I was honored to be asked to participate and my contribution was posted today. Entitled “The Plot Will Thicken” it expresses my viewpoint that health care reform will continue to evolve over the next few years and especially in 2011. This doesn’t mean that every change will be for the better (which is an easy prediction to make since, depending on your perspective, what is “for the better” may be “for the worse.”) But it does mean what we think the Patient Protection and Affordable Care Act will do may not be what it actually does.

One reason is that the impact of the PPACA will vary to a significant extent by where you live and work. This aspect of the health care reform package hasn’t received a great deal of attention. While the PPACA is a federal law (two laws if you’re being technical — HR 3590 and HR 4872) state regulators and lawmakers will be responsible for its implementation. For example, Congress requires each state to have a health insurance exchange up-and-running by 2014 or have the Department of Health and Human Services run one for them. In the health care reform package they described in broad terms what those exchanges are supposed to do and how they’ll operate. The operative word here, however, is “broad.” States will determine whether all health plans will be eligible to participate in their exchanges, the role of navigators and brokers, the ability for consumers to enroll directly with a carrier directly through the exchange, and a lot more.

What the states decide on these questions will vary considerably. In California we’re seeing a push for a heavy government-hand in the marketplace.  In other states the exchanges are likely to have a lighter touch, adopting the role of an information resource rather than negotiating with carriers. Regardless of the approach, the states will comply with federal requirements, but their impact on the market and stakeholders will vary considerably.

Another reason the Patient Protection and Affordable Care Act will continue to evolve is the political reality that the Congress convening in 2011 is far different from the Congress that passed HR 3590 and HR 4872 in 2010. The impact of Republican gains — at both the state and federal levels — cannot be ignored. Nor can the shadow that is already being cast by the 2012 presidential election.  

The new Republican majority in the House of Representatives will try to repeal the PPACA and they will fail, but that doesn’t mean they will be unable to influence how the reforms are implemented and interpreted. And it doesn’t mean Congress won’t attempt to modify aspects of the law. Doing so will not be easy, but that doesn’t mean it’s an impossible task.  We’re already seeing strong bi-partisan support for changing some elements of the law, for example, the 1099 reporting requirements. As more of the burdensome elements of the law become apparent the greater will be the pressure to make adjustments.

Then there’s the changes to the PPACA the courts may require. The judge in Florida hearing a suit brought by 20+ state attorneys general is likely to throw out the individual mandate contained — and he may find the entire law is unconstitutional. From a legal perspective this will be a non-event (except for providing a lot of lawyers the opportunity to appear on cable news channels). Other judges will uphold the law (and some already have). The Supreme Court will ultimately decide both of these issues. What will matter is the wind this decision will put in the sails of those seeking to amend the PPACA.

To assume that the law as we understand it today will remain as is over the next few years is to ignore the dynamic nature that is legislative and political change. Laws as complex and far-reaching as the PPACA are not set in stone. To be fair, they’re not set in sand either. They’re set in something more closely approximating Silly Putty. (Sorry, I couldn’t resist that one).

Even in California, one of the states that seemed immune to the conservative wave that swept across the rest of the country in the recent election, health care reform will evolve. There has been widespread concern among California brokers concerning their implicit exclusion from the exchanges. One reading of the law is that unlicensed navigators will perform the role of counseling consumers on the best health plan for their unique needs. Yet the board charged with running the exchange may realize the short-sightedness of this approach. I’m not saying they will. And until we see who is appointed to the board I wouldn’t bet on things getting better. Regardless, there will be a lot of folks (including CAHU and myself) working hard educate the exchange board, lawmakers and regulators concerning the value of brokers and how we can help achieve the shared goal of making health care coverage more affordable and accessible to Californians. Whether this effort will succeed remains to be seen — and its success if far from certain.

That health care reform will evolve doesn’t mean that brokers, providers and carriers (to name just a few of the groups impacted by the PPACA) should simply sit back and wait to see what happens. Brokers, for example, need to examine their business strategies, recognize that their world has changed and begin the process of adapting to it. Some readers of this blog (and we’ll no doubt hear from them in the comments section, below) are convinced that brokers specializing in the sale and service of individual policies are doomed to extinction and no amount of changes in the PPACA will change them. Given that reasonable people can disagree, others have expressed their intent to diversify into other product lines or market segments, but to continue to be fully engaged in the individual market.

How individual brokers (or physicians or carriers) respond to the changes resulting from implementation of the Patient Protection and Affordable Care Act will depend on their tolerance for risk, their ability and willingness to adapt, the nature of their current business, the state or states they operate in, and the like. What’s important for all of us to recognize, however, is that we need to keep an eye on those changes resulting from implementation of the Patient Protection and Affordable Care Act. Because the changes will be changing, too.


42 Responses to “Dealing with Changing Change”

  1. Ann: The part time thing is true. The rule here is an employee must work 30+ hours per week to be eligible for group health insurance. I believe each company can choose whether that requirement is raised (above 30 hours per week or not) to be eligible.

    The first year the opened for business, it was a total bust. I believe 136 business enrolled and only 13 of those companies ended up accepting the plan offered to them. The main reason for that was because the prices were quite a bit higher than the prices those same companies could have been offered for the same type of plans outside of the exchange. We have yet to see how things turn out in the 2011 year. It’s a little early to tell, but it’ll be interesting to see. You can read a little more about the original failure here:

    I don’t believe that a lot of agents left the business once the exchange opened, and I don’t think a lot have left the business this year, yet, because the Utah health exchange plans can be sold by Utah agents, and they can earn commission by referring people and representing them to the exchange. As long as we have a place in the exchange, I think the market will stay pretty active. However, two of the four companies have lowered their commission structures as of January 1st, 2011, so that will probably weed out some of the new brokers that aren’t established and aggressive.

    No carriers exited the market yet, that I know of. At least not the main ones.

    I haven’t lost any clients to the exchange yet, but if I do, it would be a little more likely to happen this year, if they can get the costs right. I am signed up to sell through the exchange, but haven’t done so yet. I’ve offered it to a couple of my groups, but they don’t want to deal with the administration of it all.

    We can sell direct or inside the exchange. The benefit to the client (employers) in the exchange is that their employees can each choose their own separate plans with whatever companies they want.

    Right now group health insurance policies are sold through the exchange, but individual/family plans are solely sold through the private market (directly through the companies and agents).

    It’s been an interesting ride so far. Interested to see what happens next.

  2. I’m a Utah health insurance agent and we’ve had a health insurance exchange setup for over a year now. At the moment, brokers/agents are involved in the selling process, but we’ve had to fight to keep our position. I am pretty much expecting to no longer be a health insurance agent as of Jan 1, 2014. I think it’s important to have an alternate career plan or balance your book. There’s just to much that’s up in the air. Too many unknowns.

  3. Jim Thornton said


    “If you have an important point to make, don’t try to be subtle or clever.
    Use a pile driver. Hit the point once. Then come back and hit it again.
    Then hit it a third time–a tremendous whack.”
    (Winston Churchill)

  4. Quentin said

    It is true that ‘change’ is inevitable. However, after now having had some time to ruminate over a number of ‘provisions’ the new legislation mandates, I cannot help but come to the conclusions that the spirit in which this monstrosity was implemented was quite deviant in its premise and malevolent in its nature.

    A more appropriate acronymn for PPACA would be the…

    ‘Personal Property Appropriations and Commandeering Act’

    Upon perusing its provisions, one cannot help being perplexed as to…

    Why Congress would pass legislation mandating that EVERYONE buy health insurance and,
    in the same breath, put in so many mandates and orders so as to drive the cost of coverage so high that few will be able to afford to buy it.

    The real answer is that it is the ultimate purpose of this legislation to eventually be used as an excuse to seize the personal property of any citizen who cannot comply.
    (Illegal alien residents will most likely not be held accountable in any way for non-compliance.)

    • Quentin,

      I, too, wonder why congress would pass legislation requiring everyone to buy health insurance. Above and beyond the mandates which make the requirement so outrageous.

      Why not require everyone to buy one of the cars the government now manufactures as well?

      • Subrogation, and Quentin:

        Carrying Health Insurance is not applicable to buying a car. In fact, they are as different as night and day. Don’t buy an american made car. Walk, if you choose. Drive a foreign model, if you choose. Neither will cost the taxpayer a dime.

        Should you go without insurance and you need care, you will cost the taxpayers, and maybe a lot of money. You can NOT be turned away, you will receive care, and we, the taxpayers, will have to pay for you. Why should we have to do that? You don’t care about your health, why should we? Because the law requires that we do.

        Americans have become “Entitlement Expectant”. Money grows on trees, and if not there, it comes from someone else’s pocket, but not yours. Well guess what…I’m tired of paying your way, and so are most Americans.

        The best thing to come out of the PPACA IS the Individual Mandate. It means, at least regarding Health Insurance, no more free rides. The worst thing about this mandate is that the penalty is far too low. It should cost you at least a half a year’s salary, or earnings, if you choose to rely on others to carry your baggage.

        It fascinates me that this one mandate is what most of those suing the Feds on this rotten law is the very thing that at least begins to end the “Societal-Welfare-ism” philosophy that so many Americans think is okay. It is not okay. Some of us were brought up in a generation that required each individual to act responsibly and to not rely on the “Welfare” of others to get by. That you argue this specific mandate says a lot about your seeming lack of being “Individually Responsible”.

        A shame, that.

      • Ann H. said

        Actually, I feel no shame at all in wholeheartedly supporting both of these two distinct issues. One is the freedom from forced purchase of a product (and the precedent it sets for future legislation and court battles), the other is the moral responsibility to bear ones own costs.

        Congress could have separated these distinct issues from the PPACA. An individual mandate isn’t necessary to avoid adverse selection. Open enrollments and strict qualifying event windows of opportunity to enroll could do the same thing.

        The PPACA’s weakest point is the individual mandate, which is why it’s in the cross hairs. It’s a weak point in the courts, but also in the public eye. This weak point may give us an opportunity to slow or stop PPACA, reorganize health care reform, and make changes that are more effectual.

        But, in any case, I still feel no shame at supporting free enterprise, free choice, and freedom from forced purchase of a product, especially when the government is taking over so many industries and controlling the purchase of those products through government agencies (like exchanges). I also feel no shame in supporting methods to ensure that each person bears responsibility for their own costs and cannot continue to cost shift their burden onto the shoulders of others. I feel no shame at allowing irresponsible people to feel painful consequences of their actions if they are given the opportunity to enroll but choose not to.

        Here’s the bottom line, though. Those two distinct issues do not need to be inextricably intertwined in the health care arena. Congress can avoid adverse selection by other methods than the individual mandate.

  5. Curt Cella said

    Hey folks – please check out this article and have a giggle:

    Let me see if I have this right: The government can’t do a decent job protecting the security of our Nation’s airports so will lose out to private firms but this same government is going to get ear deep in managing our country’s health insurance industry and that will have a happy ending?

    Sometimes I feel like Jim Carrey in The Truman Show.

  6. Jim Thornton said

    I am not sure I am posting this in the correct place, but I would like to respond to Faith and Curt.

    Faith, your situation breaks my heart. The silence here seems to reinforce what I have felt for a long time myself: those of us outside the large group health insurance world are beneath second class citizens here in “the best healthcare system in the world.” We are fish in a barrel, easy pickings for whatever moneyed interests want to extract from us.

    Curt, you say that “While your premiums MAY go down in 2014, all the government has done is transfer the pain and suffering you’re feeling to others in your community including your own kids.”

    There is clearly some truth here, at least the first part, you make it seem like the pain of people like myself and Faith will be transferred entirely onto the backs of others.

    If this is the case, it is not what I want. What I do want is to take the enormous burden that currently rests on the shoulders of those of us in the individual market, who have any kind of “health history” whatsoever, and shift it from a few breaking backs onto a much larger pool of backs. If this means lots and lots of people will have to pay a slight amount more so that a significant minority of us can get coverage at all, I am enthusiastically for this.

    Isn’t that what insurance is supposed to be? Spreading risk out over large numbers so that no individual has to pay exorbitantly?

    Until you have lived in the shoes of people like Faith and myself, I don’t think you should bandy about your political outrage with quite such cocksurety, to coin a neologism.

    Right now, America strikes us Lilliputians as a bunch of Mothras vs. Godzillas where these humongous corporate interests, using the full powers of their size, negotiate the best deals for themselves and leaving all the little companies and, even worse, unaffiliated individuals, to pick up the cost shifting and become profit centers for the medical industrial complex.

    I asked this over a year ago, and I still don’t know the answer. If the small group and the individual market are such a pain for insurers, if they have to charge such exorbitant rates to cherry pick members and keep their recision departments on high alert 24/7, if they truly believe that charging a guy who makes $60,000 a year over $22,000 a year in health insurance premiums is doing me a favor, then why don’t they abandon the small group and individual markets altogether and the let the government form a super group with negotiating clout on a par with General Electric, Microsoft, or some other huge corporation that can get decent rates?

    Why are insurers clinging to bastards like me if we don’t, in some way, represent sucker profit centers to make up for the better deals they have to cut for other huge corporations, who are not only wise to their tricks but big enough to do something about it?

    You can ridicule my politics all you want, but as long as I am consigned to the edge of the human flock, school, or herd by this employment-based monstrosity of a health insurance system, where I remain easy pickings for predators, I will continue to pray for single payer, Canada style!

    • Curt Cella said

      Hey Jim – I’m self employed: Who do you think is paying for MY health insurance? The Tooth fairy?? Jim you amaze me: You can read Faith’s comments and simply fail to connect the amazingly LARGE dots: Faith’s situation perfectly demonstrates what we in the insurance business know and what you should know being a fan of this blog: Health Insurance is HOW we pay for health care services in this country. The price of health insurance reflects the stark reality that the underlying cost of health care services are going….UP!!!!!!!!!!!

      While Faith’s anger at her own situation is understandable, it is simply not understandable to this reader why she has chosen to toss out the baby with the bathwater as it relates to her commentary about Blue Shield. Faith: As a plan member you receive a negotiated rate that is lower than what you would pay for that service if you just walked in off the street with NO insurance. The trend is UP for group plan members as well as individual plan members. Faith are you not getting an EOB? Explanation of Benefits?

      Jim: Employment based? Seriously? Employers are also paying through the nose for the health benefits they provide employees. And will continue to do so because…..lo and behold….THE COST OF HEALTH CARE SERVICES continues to trend….ready for it?……UP!!!!!!!!!!

      Jim the regrettable part of all this is that you hang out here at an insurance agent blog and you simply refuse to take advantage of the knowledge that is being offered to you on a silver platter: While you delight in writing as though you were Thomas Jefferson with a quill you simply refuse to note that no one here is against you: Insurance agents want to sell insurance to EVERYONE. What we are all discussing here is not the pluses or minuses of your or Faith’s situation because we all readily acknowledge that IT IS bad. What we constantly discuss here is that Health Reform will not be the curative you or Faith or scores of others will ultimately need to fix this situation. Our government has sold you the Brooklyn Bridge Jim: They have convinced you that Health Reform will restore ‘law and order’ to a horrendous situation. It will not. Faith called it: While you might see an initial drop in your premium and Faith in her’s the trend will continue to be UP. There is not one single thing in the Health Reform legislation that caps insurance costs. Not one. The President said as much the other day when he called for ADDITIONAL legislation that would cap increases to a max of 10% annually. Jim: PLEASE think about it – why would we need that if PPACA had FIXED what was broke?

      You said it best Jim: What YOU want is Canada. I want to continue earning a living as an insurance professional. Looks like neither of us will get what we want for Xmas.

      • Jim Thornton said

        Curt, I absolutely agree with you that one of the main problems is the ever escalating cost of health care services in this country.

        The problem, as I see it, is that healthcare is a profoundly different animal than most business activities for which the free market does seem to restrain costs.

        Food is a necessity for life, but if you are down on your luck, you can eat ramen noodles. You don’t have to buy oysters and filet mignon. There are alternatives.

        Healthcare is different. If you, or even worse, a loved one, has a heart attack, or gets hit by a bus, you are not going to go shopping for the cheapest clinic you can find.

        There is no “ramen noodle” equivalent to lifesaving medical care, at least for sudden acute problems. You head for the nearest ER and cross your fingers.

        Granted, there are ramen noodle-esque equivalents for some things. You don’t have to take Effexor XR if generic Prozac works for you. You don’t have to ask your doctor for antibiotics when you get a cold. You don’t have to go to a doctor for 97 percent of the stuff people go to the doctor for.

        The unrestrained cost of medical services today can be largely explained, in this Thomas Jefferson’s opinion (excuse me while I dip my goose quill in some more India ink…okay, I can scriven onwards) by a perversion of market forces that pervades the whole system.

        If you get insurance through work, there is very little, if any, incentive not to use it. I pay thru the nose and rarely if ever go to the doctor, but that may just be an indiosyncracy on my part. The person who is paying — for most lucky folks, his or her employer — gets to see the sticker shock, but the person who is using the system usually doesn’t have to fork out much more than a copay. Why NOT get a sore ankle checked out with an MRI if it’s not going to cost you more than $20?

        There are all sorts of ways that corporate interests benefit mightily from this disconnect between user and payer of health care services.

        Doctors buy medical facilities and testing equipment and funnel patients who, if they had to pay reasonable amounts out of pocket for some of these services, would never in a million years agree to it.

        Drug companies come up with tiny, insignificant improvements on drugs–isolating one optical isomer, for instance, of a drug about to expire–then get 17 more years of patent protection on it, then send out squadrons of babes to doctors offices to promote the bejesus out of a “new and improved” miracle drug, which, in reality, often works worse than old line stuff available generically.

        Hospitals, hoping to get as much money out of ancient people in the last few weeks of life, run Pap smears on octagenerians and all sorts of other unnecessary procedures, so that every specialist around can get one last bite out of the dying apple.

        Because of “death panel” fear mongering, which clearly serves the interests of those who make money peddling such procedures and tests, etc., and laws in Medicare that make it illegal not to pay for just about anything the hospital administrators deem necessary, living wills be damned, we get no shortage of skyrocketing costs squandered on old people, the majority of whom don’t want this “care” but are too decrepit and scared witless to argue against it.

        Now add in that there is nothing even remotely “free” about a market that won’t let you reimport drugs from other countries, or create your own group of healthy individuals to qualify for health insurance group protection, and to me (one second! need to dip the goose quill again! ah! there!) what you have is this giant system designed to extract as much money as possible from the public as possible, and ready to use its full lobbying clout to ensure that nothing is done to derail the gravy train.

        You say Obama has done nothing to restrain costs?

        What about the announcement just this past week that “end of life” counseling will be paid for by Medicare once more? This, to me, is a huge deal, but I am sure that hospitals, specialists, drug makers, etc. are even now whispering in Sarah Palin’s ear to rally the troops again that Obama wants to kill grandma.

        Whereas all he really seems to want to do is spare Grandma unnecessary PAP smears in her final hours of life.

        • Curt Cella said

          Wow Jim – you just used a whole bucket of ink and no where in there did I see where MY industry should be held accountable??

          Let me try and address your points and admittedly because of your writing style I sometimes get lost in the woods so I will respond to what I THINK you are saying (Alan please don’t fret – I’m NOT bashing Jim, it’s ME not him.):

          First Jim you are laying claim to the notion that health insurance is the right of all men everywhere. You know what? I agree with you….in a manner of speaking. The sad fact of the matter though Jim – in this conversation – is that while I agree with you that it may be right for everyone to have equal access to a health plan, there are MANY people out there (And shockingly enough because I see them virtually VERY day parents with small kids!) who CAN get a health plan but choose not to. While you and I may not ever dare to go ‘naked’ there are many folks out there who will do just that and not give it a second thought – and Jim: We’re talking about folks who are turning up their nose at health plans that are going for less than your cell phone plan!
          Think I’m lying? Well then Jim – tell me why Health Reform legislation specifically allows folks to go without health ins while paying a minimal “fine”? Why have that in the bill if you don’t fully expect certain segments of the population to simply ignore a legislative mandate? There is also the whole other issue about the absurdity of tax credits as being useful in this process: Jim many folks may choose to EAT their ramen noodles instead of getting health insurance…Why? Well Jim it’s really this simple: They KNOW they gotta eat – they don’t KNOW they are going to have a heart attack.

          Jim you also seem to be stuck in this mode of thinking that says that every guy within shouting distance who has group health insurance is living off the fat of the land: Guess what? Group rates are going UP UP UP! More and more employers have simply thrown up their hands and have started passing along these higher costs to their employees without a second thought. No more angst or hand-wringing – they are just simply doing one of two things: Downgrading plan benefits AND/OR insisting on higher employee contributions. Where it might have once been 100% it’s now 50%!

          Jim everyone is caught in this spiral – individual and group clients alike – and here’s where your commentary really baffles me: You go through this whole long rant that seemingly points the finger of blame directly at the health care industry and its out of control costs and you like the President simply ignore that part of the equation and then launch into a diatribe about why health insurance premium rate increases should be capped by legislative action. I mean what the heck is that all about?? You and Obama simply will not acknowledge what is right before your very eyes and instead go back to the same old refrain “Let’s blame it on the health insurance industry!”

          I’m simply lost about your rants here and elsewhere in the thread about ‘death panels’ Jim – I guess I just see that as you, Keith Olbermann and Bill Maher doing “your thing”. In that way you guys are like our guys (i.e. Sarah Palin) doing your lunatic fringe bit. If you are convinced that Obama’s actions on end of life counseling and Medicare will put any kind of dent in the huge gaping yaw that is our Nation’s screwed up health care cost model then God bless you and I assume you’re one of three people left in PA that will vote for Obama in 2012….and speaking of PA – Yes Jim I actually knew that PA was the CHEAPEST state (or one of the cheapest states) in the Union for the PCIP plan and frankly should have prefaced my comments to you with a disclaimer that the PCIP argument for you as a PA resident is pretty useless on my part – BUT: Jim if you will check out the PCIP rates here in CA and many other states you will see that they are pretty damn useless to oh so many folks.
          Now isn’t that interesting Jim: You have PA where folks in need can lay hands on a PCIP plan and CA where you pretty much can’t…So it seems you have a Federal plan that is administered and delivered by each state as they choose to do so…What does that tell us Jim? It tells me that there’s another thing broke with PPACA: You have federal legislation that lands differently on the backs of citizens based solely on geography. You rant about equality and spreading risk Jim yet you blatantly ignore the fact that PCIP is a great example of just how inequitable our government is when trying to fix what they perceive to be broken.

          P.S. – Love the quill bit Jim – Shall I play the part of court jester Joe Biden and lean in as you ‘dip’ and whisper “It’s a big %#^#&^#& deal Mr President!”?

        • Jim,

          You’ve referred to me in the past as “Dr. Moriarty”. As in Sherlock Holmes’ nemesis. Considering the rotten deal you’ve been handed I understand your passions.

          That said, I really respect and appreciate my colleagues’ passions in how badly they’ve been screwed by the PPACA and only ask that you understand that you aren’t alone in having your world really “Rocked” by the economic issues affecting this country over the past several years.

          Are there buggers in our profession, who would just as soon see the general Public turned sideways as lose their incomes? Of course. I don’t know what your profession was, before the economics of the USA went “south” on you. But can you tell me, us, that you didn’t have SOBs and self-absorbed jerks in your profession as well? Be it physicians, insurance professionals, lawyers, CPAs, educators, mechanics, engineers, laborers, carpenters, general contractors, clergy (of any theology); can you tell me that they all don’t have their share of jerks, who would abuse the public, within their midst? I doubt it.

          So, given that sociopathic people exist in all realms of today’s society, let’s try to work together to solve these problems, and not pick out any specific profession about which to generalize to attempt to prove a point.

          Your arguments will gain in intellectual believability, and perhaps, maybe, we can solve some problems, together.

        • Rick said


          All you points have been discussed with me, Spence and others many times in the past. Instead of posting redundant verbose messages, refer your intended recipients to the archives.

  7. Faith said

    I buy health insurance from Blue Shield of CA for myself and two sons, and the cost per month is approx $1,000, with $5,000 deductible and 30% copay for labs and all hospital costs. When one of my sons was hospitalized in Santa Barbara’s only hospital, I freaked when I saw the hospital’s itemized bill mistakenly forwarded to me from the collections agency, and began trying to understand the costs. I discovered the mark-ups on common antibiotics were 3,000%, and also that the hospital makes a $50 million + profit/surplus per year (so it’s impossible to argue the mark-ups are to cover the costs of uninsured patients). I wrote all state reps, insurance commissioner, etc. — only to learn there is NO LIMIT to what a hospital can charge in California. Market forces do not operate competitively in many hospital situations — and this one was absolutely a monopoly situation. So, if there is no limit or regulation on what hospitals can charge, how will “rising costs” ever be controlled? I just got a 14% rate hike on my Blue Shield of Ca premium — when I cannot even USE the policy because of all the exorbitant co-pays, percents, deductions, things not covered, etc. When my son was hospitalized, Blue Shield refused to tell me what, exactly, they were charging me, claiming they have a secret negotiated rate. Even if it’s a 50% knock-off, the hospital is still ahead by marking up meds 3,000% (also room cost markups). The insurer doesn’t want to lose its profits, so it jacks up rates, especially for private buyers. The hospital decides to make a little more (and you can read in the “non-profit” minutes exactly how casually rates are increased and millions more in profit are targeted), so then the insurance company has to charge more, etc., etc., There’s no end in sight to the rate hikes because there’s no end in sight to the amounts hospitals can and will charge. The financial report on that hospital crooned over the hospital’s cash flow, market dominance, guaranteed growth. It’s so outrageous — and I seriously doubt that was a one-of-a-kind hospital situation. How come there’s no attention paid to the source of the problem — unregulated hospital prices?

    • Bob said

      Please speak up to people about all of this outside of the insurance industry. I think the people here on this blog were well aware of what you are pointing out.

      Almost everyone rails against the “evil insurance companies”, but is giving the hospitals a free pass.

      I don’t know the CA individual market at all but in TX we always get an itemized explanation of benefits outlining every item. Usually what I find is being billed for drugs or procedures that were never done.

    • nnp said

      you’re preaching to the choir

  8. Alan, I read your blog whenever you post. I always seem to learn something new, until today. The fact is that after 2 years of hearing people prognisticate the affects of the PPACA and Obamacare, I have come to the conclusion that my crytal ball is not the only one with low batteries. Frankly, I am tired of statistics and predictions. They are all a waste of time, as far as I am concerned.

    As I understand much of the savings the PPACA was to generate was because of the money that would be saved by Medicare. The same congress that forced the PPACA on America in March eliminated the savings we would see for 2010 and 2011 with the “Doc Fix” legislation they passed in December.

    I just read an opinion piece on the way Obama got his “end of life counseling” through Medicare rule making when congress told him “no” earlier this year.

    If our President is going to side step legislative rules whenever it meets his desire, there is no way to predict what the future holds.

    As long as we have a president and Secretary of HHS that do not feel they have to abide by the rules, anything can happen.

    • Curt Cella said

      Amen brother.

      The faulty savings stats that were used to build the case for this legislation is the statistical equivalent of building a structure on quicksand.

    • Jim Thornton said

      Congress told him no because of ridiculous “death panel” fear mongering whipped up by Sarah Palin, et al, no doubt bolstered by the hospital lobby that does not want to see their gravy train slowed down in any way.

      60 Minutes had an excellent segment on end of life care in America’s hospitals, even for people who have signed a living will and do not want extreme measures taken.

      You can probably find this online somewhere for viewing, and I don’t remember all the details. But they profiled the daughter of one woman in her late 80s, a former nurse who absolutely did not want absurd interventions to run up her bill. Despite this, that is exactly what she got.

      Dying of end stage pancreatic cancer, one of her doctor’s ordered a PAP smear!

      All told, something like 23 different specialists got one final bite of the apple before the poor old lady finally gave up the ghost–and expensive (for Medicare) bites these were!

      Her bill for the last couple weeks of life was enormous. It would be one thing if she had wanted any of these test, probings, procedures, etc. But she had expressly said she did not want them.

      The juggernaut, once rolling, cannot be stopped.

      She got her Pap smear and dozens of other tests, too.

      If a “death panel” can spare me such indignities, and keep the country a wee bit more solvent, even if it means some hospital CEO and rash of geriatric specialists get a bit less moolah, put me down for it!

      Mr. Insurance Barn, if it was Mitch McConnell in favor of “end of life counseling,” be honest: you would not be able to stop singing its praises, would you?

      • Jim,

        You’re wrong. I AM in favor of “End of Life” counseling. Before I retired my specialty was Long Term Care insurance and Medicare Supplements. I consider End of Life counseling to be very important, in learning of all of the options available.

        That said, “The Insurance Barn” and “Curt Cella” are 150% correct in their unease with a President and Secretary of HHS who ignore the law and put into place whatever they choose, despite what the “People” (who are they? Let’s ignore them.) and what Congress has said. This is NOT representative government, Jim, it is a plain and simple form of dictatorship. “A rose, by any other name, smells the same”.

        These threads only turn nasty, Jim, when one of us posting plainly and clearly insults another. I had just agreed with Alan, earlier, to have a post of mine to you, deleted, as I was attempting to hold you accountable for your statements. In fairness, you owe “The Insurance Barn” a very clear apology. Assuming that if Mitch McConnell said or approved of anything, that those who are very unhappy with Obama and the Democrat Controlled Congress policies as demonstrated in the 11/2010 elections, doesn’t for a second mean that the vast majority of voters who voted out an incredible number of Democrats, would blindly follow a Mitch McConnell; “Mr. Insurance Barn, if it was Mitch McConnell in favor of “end of life counseling,” be honest: you would not be able to stop singing its praises, would you?”.

        Shame on you, Jim. That certainly added nothing to the conversation, except your clearly, and ongoing, bitter opinion.

        • Jim Thornton said

          “That said, “The Insurance Barn” and “Curt Cella” are 150% correct in their unease with a President and Secretary of HHS who ignore the law and put into place whatever they choose, despite what the “People” (who are they? Let’s ignore them.) and what Congress has said. This is NOT representative government, Jim, it is a plain and simple form of dictatorship. “A rose, by any other name, smells the same”.”

          Spencer, I apologize to Insurance Barn by personalizing my comment. My point, however, is hardly controversial: people on all sides of a debate are very quick to change their opinions, on a dime even, when their “team” leaders decide to go in a different direction.

          If you have access to the scholarly literature, I refer you to a fascinating review:

          Are Political Orientations Genetically Transmitted?

          John R Alford; Carolyn L Funk; John R Hibbing
          The American Political Science Review; May 2005; 99, 2; ABI/INFORM Global

          Among other conclusions, the authors make a point we all know is true: If Obama were to implement the exact
          same policy as Bush, or vice versa, the popularity of said strategy would follow party lines–with those who like Obama liking the policy when he backs it and hating it when Bush backs it, and vice versa.

          Clinton and Lewinsky? The horror! or An understandable lapse.

          Innumerable anti-gay Republicans tap-dancing in airport bathroom stalls? An understandable lapse? or The horror!

          I mean, honestly, Spenser! This whole Obamacare stuff that is so demonized here was the brain child of Bob Dole and other Republicans back in the Clinton era. What has changed? Not the policy or the issue–but the party that finally managed to ramrod it through.

          As far as ramrodding things through goes, this is how politics worked for Bush. How many Americans were enthusiastically in favor of waterboarding or wiretapping American phone lines? Where were the “People’s” feelings taken into account there?

          On the other hand, I do not understand how you can possibly conclude that adding end of life counseling to Medicare is a form of dictatorship, plain and simple.

          There was never a vote on this where Americans said, en masse, they don’t want it.

          There was never even a poll where a majority of Americans were against it. Quite the contrary–most Americans are in favor of it, just as they are in favor of reasonable gun control, campaign finance reform, lack of government intrusion into people’s sex lives, etc. So when has violations of all of the above been trotted out as evidence of dictatorship, plain and simple?

          Congress didn’t pass anything saying it was illegal to do add end of life counseling to the bill–it was just such a political potato that they dropped it because of the few easily stirred up hornets that were convinced it would give Obama, personally, vast euthanasia rights.

          There was never anything remotely like this, of course, but that did not stop Sarah Palin and John Boehner from stirring up fears. To this day, 30 percent of Americans over 65 still believe in death panels–though there have never been any suggestion of this whatsoever.

          I know you think the New York Times is nothing but a pack of lies, but read the article. It’s not as black and white as you make it.

          Bottom line: our health care system is broken for a number of reasons, but demonizing any rational attempts to give people the information they need to make choices for themselves, calling this sort of thing “death panels” without any scintilla of evidence to prove it, is shameful.

          Everyone here keeps making the point that the cost of medicine is going UP, UP, UP. But when the government takes baby steps into letting people decide to say NO, NO, NO by preparing advance directives that hospitals, doctors, etc. can’t ignore, you say it’s dictatorship.

          You can’t have it both ways.


          Pariah Jimbo

        • Curt Cella said

          Well I guess this is as good a place as any to also throw in with Spencer – I TOO believe in end of life counseling seeing as how I have elderly relatives battling cancer.

          I’m still baffled at how Jim has become so fixated on this subject. Having end of life COUNSELING is NEVER going to stop a doctor from doing what a doctor does best: Order tests and procedures.

          Having a living will is just about the only thing I can think of that would deter a doctor from doing whatever a doctor – under the auspices of a HOSPITAL – feels like doing. Perhaps we should offer tax credits to folks to get them this important component of sound financial planning?

          So how any of this relates to what is wrong with the HEALTH INSURANCE INDUSTRY is beyond me. Oh yeah – I know: Jim has found a health insurance blog populated by health insurance agents and feels compelled to stick his arm in the cage.

          Hey here’s a thought: Maybe there wouldn’t be so much unnecessary tests ordered if doctors weren’t doing a CYA thanks to a total lack of tort reform in this country which might have made a great component of a more coherent, more comprehensive, better thought out Health Reform bill.

          And on that note Jim: I bid you adieu – It was only in reading Spencer’s comments to you that I became aware of your long running ‘act’ here so consider this my last direct response to ANY of your posts.

        • Jim:

          “Clinton and Lewinsky? The horror! or An understandable lapse.” Not going there, Jim. I couldn’t stand Clinton, and it had nothing to do with Lewinsky. It had to do with his constant lying. “I never had sex with that woman”, thump, thump, thump! “I never smoked dope!” “Okay, I did, but I didn’t inhale!” (It was at that point that he lost most of my generation…he didn’t inhale??? Please). “I didn’t use every means available to dodge the Draft!” Yes, Bill, you did. Do you understand this concept, Jim? Clinton was a liar, period.

          Then you recommend I read this: “Are Political Orientations Genetically Transmitted?” “Among other conclusions, the authors make a point we all know is true (We all know, or you surmise? I don’t agree with that statement one scintilla): If Obama were to implement the exact same policy as Bush, or vice versa, the popularity of said strategy would follow party lines–with those who like Obama liking the policy when he backs it and hating it when Bush backs it, and vice versa.” Oh, please. Jim, do NOT paint me with the same brush you would paint all progressive liberals or all Republicans. That is a terribly arrogant comment to make. I grew up Jewish, in a Jewish family that is still highly liberal to progressive. Our culture teaches the importance of giving, and I’m a pro at that. It also seems to me that a lot of my tribe feel shame that we survived the Holocaust, and shouldn’t be allowed to keep our money. I strongly disagree with my extended family about that, EXCEPT, there are others in my family, my tribe, that are of the same political philosophy as I. I’m a Social Liberal, and a Fiscal Conservative. I’m an independent, not an R or a D, in my opinion both parties are extremely corrupt. Oh, and I was adopted at age six months, my birth mother being a Russian Jew first generation American, her parents being Russian Jews from Ukraine. According to my birth records they were liberals. My adopted father was ultra liberal, and a successful physician. Genetics and politics? No sale.

          Death panels? That’s just Republican hyperbole. It’s nonsense.

          You said: “On the other hand, I do not understand how you can possibly conclude that adding end of life counseling to Medicare is a form of dictatorship, plain and simple.” Re-read my post, Jim, I never said that adding End of Life counseling was a form of dictatorship! Not once! I said that Obama adding it AFTER the Congress left it out, and knowing the wishes of the electorate, after the fact, was an act of dictatorship, and it was! Since you choose to quote me, Jim, then quote me correctly, and do not add or subtract words that are “in your way”. ANOTHER EXAMPLE OF YOUR MISQUOTING: “Bottom line: our health care system is broken for a number of reasons, but demonizing any rational attempts to give people the information they need to make choices for themselves, calling this sort of thing “death panels” without any scintilla of evidence to prove it, is shameful.” Point out to me, precisely, where I made that statement, Jim. I’ve reread my post, and by gum, it just isn’t there! YOU put it there.

          It appears that you consider yourself a “Pariah”. Should you perceive yourself that way, then the only person who is responsible for that is YOU, Jim. Try to quote without making up what the other person said; your apology to The Insurance Barn falls far short of an apology. When you offer an apology, do it, and leave it “whole”. When you continue, as you did, to say, “My point is hardly controversial”, you just weakened your apology. It’s like, “I’m sorry, but…”.

          I’ve been listening to you crying in your beer, Jim, balling like a baby and feeling sorry for yourself. Stop it! Lots of others have been seriously harmed by the political policies that have been and haven’t been taken since the beginning of the Obama Administration, and not one of their really gruesome stories matches yours for drama, “Woe is me”, “Poor me”, “The World owes me a living and I want it now!”, yada, yada. Adapt, Jim! That’s what you and others who come from your perspective seem to want to consistently tell those colleagues of mine who are now in deep water without any support. It seems that you will not be happy until everyone whom you think is responsible for your lot in life have paid the ultimate price and are as mentally and financially broken down as are you. Stop blaming everyone else, Jim. Look in the mirror, then go look for a job, just like everyone else.

          Finally, do not quote me again, Jim, unless you can quote me with honesty and integrity and ethics. Thus far, you have failed miserably.

  9. Mark said

    This originally appeared in USA Today on 12/27 but I saw it this morning in the SF Chronicle.

    It pretty much sums up all the discussions.

    Happy New Year to everyone!

  10. Jim Thornton said

    One of Alan’s ongoing points for as long as I have been reading his superb blog is that the coming changes will be significant, hard to predict, and likely to spur other changes that are even more difficult to predict. Anyone who “knows” what is going to happen over the next several years is thus likely to have his or her cocksure attitude served up on a platter with a side dish of fava beans!

    In some ways, the revolution in the American healthcare system reminds me a little of the end of the Soviet Empire. Remember those heady days when the Berlin Wall was torn down? Neither the hopes (Russia and its various satellites become like America with rooskie accents) nor the fears (countless rogue states firing purloined nuclear weapons hither and yon) have come to pass.

    But once a highly unstable system reaches the point of break down, the changes that do come can’t be reversed.

    Anyhow, I think the much derided Obamacare is like this–neither the hopes of people like me, nor the fears of folks like Curt, are likely to come to pass. They probably say more about our respective personalities than the actual future course healthcare in our country will take.

    Alan, for his part, has steadfastly and even handedly maintained a middle course throughout all this: change is coming, it’s hard to predict exactly what kind of change it will be, but it’s unlikely to be as good or as bad as we overly emotional flighty creatures imagine!

    Along this spirit of predictable unpredictability, two Yale professors wrote an interesting editorial in today’s Philadelphia Inquirer.

    I don’t think their prediction is all that likely either, but I must say that I, with my seemingly insatiable capacity for hope, do indeed hope they are correct, and that something akin to a single payer system–at least for individuals–will eventually have to emerge from this morass!

    Check it out.

    • Stevie Lee said


      I’m curious as to your definition of single payer and why you wish for it.

      • Curt Cella said

        Jim’s idea of the single payer system is the idea of a guy who is struggling under a huge $$$ burden for his current health insurance coverage. In other words: “I don’t know what single payer entails but it’s gotta be better than what I got now!”

        Jim the article you point to is not all that enlightening to those of us who read the LA Times on a daily basis: It is just the same old liberal bias beating the drum for Health Reform (Something the White House has given up almost entirely…. when was the last time you heard them touting this mess?). In point of fact, the esteemed FOX News Commentator Charles Krauthammer has already beaten you and the libs to the punch: He has already gone on record as saying Health Reform as we know it today is just an interim step to socialized/single payer (take your pick) system and I believe him.

        Jim I find it interesting that you consistently either directly or indirectly tout single payer or some other (drastic) Reform measure yet you seem to steadfastly ignore calls to directly address the comments offered here about the folly of mandating that folks lay out money for something (A health plan) they simply will not be able to afford come 2014. While your premiums MAY go down in 2014, all the government has done is transfer the pain and suffering you’re feeling to others in your community including your own kids. Tax credits are a ridiculous mechanism for offsetting costs to a huge swath of consumers. If they don’t have “X” dollars today to pay their premium what good is a tax credit going to do them a year hence??
        I personally suspect that the White House and Democrats already factored that into their Health Reform calculations: They set the fines so low that many folks will simply toss up their hands and accept the fine and STILL not have the insurance the White House claims they deserve – so if that’s the case then what in the world did Health Reform accomplish??
        Jim you never did respond to my comment about the PCIP mess so I’ll ask it here again: PCIP plans are OUTRAGEOUSLY expensive. The vast, vast majority of the intended audience is still without the health coverage our government said these people deserve. Where is the outrage from the Left? Where are all the folks who demanded Health Reform, Jim? Here again, I never see an article in the LA Times decrying THAT sorry situation but lo and behold every single fine that is leveled on a carrier is front page.
        I guess it’s appropriate that you used the Berlin Wall analogy Jim: Now that we don’t have the communist boogeyman, we’ve replaced it with the health insurer boogeyman.

        • Curt Cella said

          Just a quick footnote to this apropos of nothing: I know one guy I won’t be voting for in the next election: Mitt Romney! IF that was the guy behind the mess that is now the Massachusetts health system I say thanks but no thanks! As a CA resident I have already lived through years of a DEMOCRAT masquerading as a REPUBLICAN (outgoing Guv Arnold Schwarzenegger!).

          Continuing the theme of “change” in this blog post, it’s time for “change I can believe in”.

        • Jim Thornton said

          Curt, I went online to find out what PCIP costs in PA, and believe me, I would transfer to this in a heartbeat if I could.

          However, the PA plan is not run by HHS, and it requires you to go naked for six months before you can even apply, and then most likely go on a waiting list.

          Here is the plan, and my comments below in ALL CAPS>

          Eligible residents of Pennsylvania can apply on-line for coverage through the state’s Pre-Existing Condition Insurance Plan program known as PA Fair Care. SOUNDS GOOD TO ME!

          To qualify for coverage:

          You must be a citizen or national of the United States or residing in the United States legally. CHECK!


          You must have a pre-existing condition or have been denied coverage because of your health condition.


          PA Fair Care covers a broad range of health benefits, including primary and specialty care, hospital care, and prescription drugs. All covered benefits are available for you, even if it’s to treat a pre-existing condition. SOUNDS GREAT!

          Premium: $283.20 per month HUGE SAVINGS!
          Deductible: $1,000 in-network ONLY $500 MORE THAN I PAY NOW!
          Out of Pocket Limit: $5,000 in-network NOT MUCH MORE THAN NOW EITHER


        • Ann H. said

          And there, Jim, you have the fallacy of government insurance. You are insured through a private plan (albeit at more expensive premiums). You cannot get insured through the government plan.

          The government plans to offer guaranteed issue insurance to all in 2014. The roles will be reversed. You’ll be able to get the coverage, but you (and the rest of us) will choke at being able to afford it and the tax burden to support the new system.

          Jim, the PA plan is the only one in the nation priced affordably. As of November, the government reported that 8000 people were insured under the new high risk pool plans (sometimes called PCIP for Pe-existing Condition Insurance Plan). Of that 8000 people, 20% were in Pennsylvania due to the affordable prices.

          Let’s do some math. PA has nearly 20% of 8,000 people, which means 1600 enrollees. Actually, it’s 1657 enrollees at the last count, and I’m getting those numbers from a Kaiser report.

          Now, our govt estimated that 4 million people qualify for the High Risk Pool by being uninsurable, having a pre-existing condition, and having no insurance for the past 6 months. Of those 4 million people, our govt predicted that 200,000 would enroll in the high risk pools. First of all, that’s shocking. If 4 million are eligible, and even the govt admitted they only expected 200,000 to enroll, how do they think they’ll get all of America to enroll in 2014? After all, these 4 million are UNINSURABLE, UNINSURED FOR AT LEAST 6 MONTHS, AND HAVE PRE-EXISTING CONDITIONS!!

          Okay, back to my math. Let’s take 4 million people divided by 50 states, which equals 80,000 eligible in each state. Pennsylvania is the 6th largest state by population, so surely there’s more than 80,000, but let’s stick to 80,000. Out of 80,000 ELIGIBLE, UNINSURED, UNINSURABLE SICK PEOPLE, only 1657 enrolled???? What?

          What’s the problem? Rates? Yes, in other states, but not in PA. In PA, the rates are $283 no matter what your age, from what I am told. Coverage? Yes, the coverage is limited, including prescription limitations, but hey, it’s coverage. Marketing??? They should have used agents (hint, hint). They should pay agents more than a $50 one-time fee. Free loaders??? Surely this must be a base issue if even the government predicted that only 200,000 of 4 million would enroll. Now that they are finding that only 8,000 of 4 million are actually enrolled, we must face a deep problem here.

          Let’s look at the rest of the nation. North Carolina enrolled 513 people, and the rates range from $183 to $729. NC is tied with CA for the FOURTH HIGHEST ENROLLMENT in the nation! What? That means states # 5-50 enrolled less than 513 people each?

          Serious problems here. If you can’t enroll 200,000 out of 4 million sick uninsured people, how can you enroll everybody in 2014?

          The government’s solution is rarely a good one, Jim. Even in your case, you admitted it doesn’t work for you. I’m sorry to hear that you think Canadian style insurance will work for you, or the 2014 solution will work. I was visiting Toronto once, and I saw a long line of people waiting to enter a building I thought might be a Theatre. Interested in the show, I stopped and asked what was playing. They said it was the medical clinic, and they were waiting to get medical care. I later visited the Canadian side of the Great Lakes and saw ferries that people dubbed the “wheelchair ferry”. Canadians were going over Lake Ontario to hospitals in Buffalo NY or Rochester NY to get their surgeries, then returning home when they were well. Look online, Jim. You’ll see that Canadians buy supplemental insurance to supplement their govt insurance, which has holes in it and doesn’t pay for some of the medical care a person would need. They also buy American insurance to help them when they need to ferry over here for their health care.

        • Curt Cella said

          Ann – every day I fall more in love with you. Bless you for doing the leg work on that research as I was too darned lazy to do it knowing the end result would be Jim ignoring the data and once again falling back on “Plan B” – blame the insurance carriers.

          Right on about your comments about agents – I read an article the other week that said here in CA they were going to “fix” what was broken with PCIP by launching a campaign to make AGENTS more aware of the product. Seriously? SERIOUSLY?! Uhh yeah thanks for that: I know it exists and even for a laughable $50 which I could care less about I help make my clients aware of it by featuring it in my quote engine (STRICTLY VOLUNTARY but hey contrary to Jim’s take we DO CARE about HELPING PEOPLE!) and I also am more than happy to run it by clients who would CERTAINLY qualify – were it not for the OUTRAGEOUS PREMIUMS that come with each plan!
          Sorry for the caps but I swear: As your data clearly pointed out this is a train wreck that the President and his people should be ashamed of.

          By the way: Check out – there is an almost daily effort to pat themselves on the back touting how great Health Reform is and what it’s doing the little guy. I’m stunned to say that I simply wasn’t aware that my tax dollars could be used to pay for an in-house PR campaign for the Administration. What a shame the folks behind that website can’t be more evenhanded and report on PCIP’s horrendous shortcomings.

        • Ann H. said

          Aw, Curt, I’m blushing! Nothing feels as good as love. Thanks for the compliments and Happy New Year! Ann H.

  11. R A Jensen said


    The final paragraph in your post actually, to me, suggests a far more complex future. As I happen to work most aggressively in the senior markets, and have observed the reactions to changes in Medicare, what happens with providers in the reformed world for under-65 will have dramatic impacts on health coverages.

    Medicare, Medicaid, and the various VA coverages all operate in a world of rationing — albeit described using other terms:: payments to providers, procedures limited or excluded from reimbursements, etc. All of this makes the standard “limitations and exclusions” in commercial policies pale in comparison.

    The result is that providers have begun, in large numbers, to dramatically limit or exclude government assistance patients from their business. This will inevitably occur within the under 65 world, and sooner than you might think. In fact, the current political powers have openly supported rationing as the only way of controlling costs — they are wrong of course, but that is what they have said.

    When providers no longer have a segment of health care financing that they can “cost shift” into, what then? This is the meat and potatoes of reform and worth discussing now.

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