I got Iowa wrong.
I thought the single twelve million dollar patient would empty out the Iowa on-Exchange to only a single carrier that could then have the ability to jack up rates to the point where it could cover the twelve million dollar claim and conduct normal operations as well.
Right now, the market is converging to a rational single carrier solution. The single carrier can raise their rates high enough to cover this catastrophic claim while the post-subsidy price is low enough to actually attract normal risk as well. The off-exchange market can be competitive especially if the single on-Exchange carrier splits their filing IDs so they can use different actuarial assumptions for a more normal market….
The other solution is that this is the textbook case of where a high cost risk pool or invisible reinsurance or a prospective re-assignment system would make sense. This is fundamentally an uninsurable scenario but the care needs to be paid for, so removing this single individual from the risk pool and paying for this person’s care out from general taxation lowers premiums in the individual market by $10 per member per month and allows them to function as if they mostly normal markets.
Medica covers the entire state of Iowa. It is effectively the last insurer standing. It is thinking about getting out. There would only be a single insurer in five counties in northeast Iowa.
Iowa, next year, if Medica stays. (It’s talking about leaving.) pic.twitter.com/GzolSLTeoZ
— Margot Sanger-Katz (@sangerkatz) May 3, 2017
Some of it hints that the massive single member cost is still an issue:
Here's what Medica says could help keep the company in Iowa's Obamacare market pic.twitter.com/iKwtGvL6gZ
— Zachary Tracer (@ZTracer) May 3, 2017
I got this wrong. I thought that the combination of monopoly pricing and high enough rates that are mostly paid for via premium tax credits would not give the last surviving carrier a reason to leave or threaten to leave.
Nunca El Jefe
This is the kind of stuff that really shines a light on the pitfalls of for-profit health insurance. I don’t live in Iowa but this was part of the big shit sandwich that we had yesterday. As always, thanks for writing about these things.
Mary G
That third bullet point is the key. Practically every R who spoke in the “debate” over the bill yesterday brought up Iowa only having one carrier who’s pulling out as proof of the “failure and collapse” of Obamacare and the reason they have to pull the plug. Medica has good reason to believe that Price and HHS will sabotage them for political cover. They would stay if they could be sure that the rug won’t be pulled out from under them.
Hunter Gathers
There are either a shit ton of people in Iowa with very expensive medical costs or this is just a ploy to make sure that Medica’s Executive Vice President of Dynamic Marketing Outside The Box While Changing The Paradigm gets his 6 figure bonus. Peruvian Blue Flake and porn star escorts aren’t free, you know.
Ohio Mom
It is too early in the morning for me to follow this (I’ll try again after breakfast). My initial takeaways are:
This is why I am always proud of our side, we strive always to be intellectually honest and to self-correct. We honor the facts.
We live in a deeply corrupt country. We are fish that don’t know we are in water.
Mathguy
“I got this wrong.” There’s four words you never hear from conservative politicians, pundits and economists.
ArchTeryx
@Ohio Mom: We live in a third-world kleptocracy and don’t really acknowledge that because the favelas and shantytowns are all out of sight, scattered all over rural and small-town America, rather then piled in layers all around the cities. Unlike what *we* think of as the third world, we’re rich enough to drive the poor out of sight – and out of mind.
And their ruling party just voted to cut off their healthcare in order to steal even MORE of the pie. For tip money for these billionaires, they are deliberately and callously killing off their own base. If that isn’t third-world kleptocracy, I don’t know what is.
Another Scott
I’m missing something here.
Earlier you identified the issues. The company cites the same issues for reasons why it may get out.
Is the disconnect for me the following? You thought they would use the issues as a way to have monopoly pricing and make boatloads of money for hookers and blow. The company is saying they may leave because they can’t know their income if Price and Trump gut Obamacare, or if they don’t take that high-cost Hawkeye off their hands.
Aren’t they just saying that they need more information before pricing out everything to know if they can actually make boatloads of money for hookers and blow?
IOW, aren’t you throwing in the towel too early?
Of course, they may also be saying that Price and Trump are determined to break Obamacare so they might as well get out before they put in all the effort to work around the early breakage…. Or their management may actually have a bit of a conscious and think that they can’t jack up rates 50% for the rest of their policy-holders.
Thanks.
Cheers,
Scott.
ArchTeryx
@Another Scott: Their management wouldn’t need to have a conscience to realize that a 50% price hike wouldn’t be viable. That would instantly drive EVERYONE unsubsidized out of the market, leaving the poorest (and on average, the sickest) patients. Instant adverse selection, which would greatly cut into their profits no matter how much they hiked their prices – and past a certain point, you’d be left only with 100% subsidized patients, i.e. Medicaid. Which just got almost completely gutted.
I don’t blame them for wanting to get out before this went down.
Ohio Mom
@ArchTeryx: Yes to everything you said, it is everything I meant in my shorthand.
I would only add that it is all less noticeable here because we are skating on the remains of the infrastructure we built back when we were a relatively more equitable place.
ArchTeryx
@Ohio Mom: Well, we NEVER were a more equitable place – our “golden age” came on the back of Jim Crow and segregation being the law of the land. It was when Lyndon Johnson finally did something about that – in earnest – that the reactionary right decided that apartheid South Africa was the model they wanted to emulate, and this is the all-too-logical end product of it: Genocide of the poor. Because to them “poor” means “black”, and that poor *white* people will also be sacrificed concerns them not at all.
It’s not unique to us, either. A lot of European countries are embracing reactionary apartheid, because until recently “poor” meant “people like us” so there was lots of political room to help. The moment “poor” was perceived as “poor African (black) Muslim immigrants”, the slashing and burning began.
MomSense
@Mary G:
Yes, this is the Republican MO. Rubio killed the risk corridors causing insurance companies to increase premiums. Then the Republicans campaigned on increased premiums.
They sabotage healthcare and use that as the justification to take it away.
I’m so fucking pissed right now I want to lobby for tax cuts that end the mortgage interest deduction and the deductions individuals and businesses get for health insurance. Why should I pay taxes to for their health insurance?
I’m really at my breaking point with these evil people. I’m starting to think they gleefully passed this shit sandwich bill because they plan to disenfranchise so many voters before 2018 it won’t matter.
Ubu Imperator
@David: I’m assuming you’re aware that Iowa’s Republican governor, Terry Branstad, privatized Medicaid services last year? This is not my area of expertise, but from what I understand, because of this, companies are not getting reimbursed in a timely manner, and it’s making them leave the market because it’s no longer financially viable. (This is what gives the Republicans cover in saying Obamacare is failing—only it’s not; privatization of public services is what’s failing.) This is not getting anywhere near the amount of coverage that it should.
ArchTeryx
@MomSense: Just remember: Their bullshit wouldn’t fly if they didn’t have a completely compliant media passing on their lies unchallenged, assuredly refusing to connect dots, and when the evil is so blatant it can’t be ignored, putting out clouds of “both sides do it” chaff.
Villago Delenda Est has the right idea. The first against the wall shouldn’t be the politicians. It should be their Beltway media enablers.
MomSense
@ArchTeryx:
The media enabled this evil bigly. They failed us and have given no indication they learned anything from it at all.
ArchTeryx
@MomSense: Even Kimmel’s heartfelt plea was full of “both sides do it” chaff, and as a result, anger was diluted instead of laser-focused against the Republicans. Mission accomplished.
This is all off-topic but it does, in the end, play into decisions such as Medica’s. They can read the writing on the wall. I expect many more to bail before 2018 thanks to what the House did, even if it goes not one inch further (and that, I fear, is just a pipe dream).
rikyrah
thanks Mayhew for the update.
Feathers
Never underestimate the degree to which ideology drives these decisions. If doing the right and profitable thing might lead to some folks getting ideas above their station, leave the money on the table, and screw over the bastards while you have the chance.
schrodingers_cat
@ArchTeryx: I would curb the sneering about the “third world”. Many of the so called “third world countries” were exploited for their resources by the so called master race in the not so distant past, including the regime that represents BJ all time favorite, the kindly QEII and her not so kindly ancestors. Look at the Middle East today, and tell me how much of today’s dysfunction can be traced to the WWI and what Britain and France and their allies did. The third world is the third world in large part because of the countries of Western Europe.
/end rant.
Aleta
Preexisting parasitic worms are the wrong lifeform to be voting on decisions about our health care.
And a curse on market-forced health care, market-driven news media and marketed politicians.
Chris
@ArchTeryx:
Yep. Totally this.
Yarrow
@MomSense:
Media is in the hands of large corporations and thus does their bidding. Truth takes a backseat to not upsetting their corporate masters. They’ve been told to get clicks and eyeballs on stories and that is the end goal of itself. Truth is incidental.
schrodingers_cat
@Yarrow: We need our own newspapers/tv media, not blogs and other derivative media, but news gathering infrastructure.
Chris
@MomSense:
Oh, yeah. They wouldn’t have made Sessions attorney general if they weren’t planning to push as hard as they can to disenfranchise as many non-Republican voters as possible.
Another Scott
@schrodingers_cat: OT: “Third world” has kinda morphed in meaning over time. It used to be, IIRC, a purely political construction.
1st world – USA, Western Democracy, important allies.
2nd world – USSR, important clients and allies, and China and its allies and clients.
3rd world – “Non-aligned” countries that don’t fit in the first two bins.
(4th world – Indigenous peoples)
It eventually turned into a nearly purely economic construction.
Of course there is overlap in the political/economic grouping, and corner cases (Switzerland is certainly 1st world economically, but not always politically (neutrality).)
I’m kind of annoyed and fascinated by the way meanings change over time. Don’t get me started on “hostage/captive”. ;-)
FWIW.
Cheers,
Scott.
schrodingers_cat
@Chris: So what? We assume that they have already won and go jump in a well? They may be evil, but assuming that they are omnipotent and throwing up your hands just plays into what they want.
Chris
@schrodingers_cat:
Please point to any sentence in which I said they were omnipotent, or even that they were guaranteed to succeed. Thanks.
Chris
@Another Scott:
Even in the original construct, I’ve never been sure where China was supposed to fit. It’s allegedly “second world” because it’s communist, but it also participated in the Bandung Conference and was at least an observer member in the Non-Aligned Movement that it helped lead to. And after the Sino-Soviet split, it turned into its own third player in the Cold War for a while, and sometimes played up the “third world revolutionaries, unite against both the Western oppressors and the Eastern revisionist traitors!” vibe.
schrodingers_cat
@Chris: You didn’t actually say it in so many words but many of your statements since yesterday do seem to imply that all is lost. If that’s not what you meant, then my bad.
schrodingers_cat
@Another Scott: @Chris: Most of the so called non-aligned countries were favorably disposed towards the Soviet Union compared to the United States. India, for example viewed the United States with suspicion because of its own colonial experience and saw it as the torch bearer of the British legacy.
OzarkHillbilly
@schrodingers_cat:
They’re still doing it over there (eg the Bangladeshi factory collapse, a factory that was churning out clothes for The GAP etc). That business model has been so successful they are trying to import it here now.
schrodingers_cat
@OzarkHillbilly: Poor Bengal, richest province of pre-British India, now known for its desperate poverty, especially Bangladesh. Kindly QE II’s ancestors did such an excellent job of hoovering all its wealth for almost 200 years.
ArchTeryx
@schrodingers_cat: Well, in the end, the colonialists concentrated money and power in a few hands and immiserated the rest of the population to maintain their own power. You are right; the Third World was made that way.
And now so are we.
Yarrow
@schrodingers_cat: Reporting and journalism doesn’t pay a lot of money. Needs deep-pocketed benefactors or a big enough corporation to keep it going. There are some left leaning journalistic endeavors but they don’t get a lot of attention. The people with the biggest megaphones and power tend to get the most attention.
I’m not really sure how to fix it. We can hope for liberal deep-pocketed benefactors to start their own media outlets, but that hasn’t worked well in the past. What worked better in the past was the Fairness Doctrine, so pushing for that or the equivalent might help. I’m also seeing people doing independent work and being able to get that information out there via Twitter and other social media. The MSM is months behind in many cases. I don’t know if that might change things.
OzarkHillbilly
@Chris:
It has the world’s 2nd largest economy. Pretty sure one has to put it in “First world” status for that reason alone. Some may disagree because of human rights, environment,etc, but for better or worse China now has a global footprint almost as large as ours. In some ways larger.
schrodingers_cat
@ArchTeryx: Victorian England is the model for Rs. Exploit the world and exploit your citizens to benefit the 1% (earls and dukes and other royals). We have hedgefunders and children of the already rich like T and Devos and others like them, instead of the earls and dukes.
Tenar Arha
@ Mr. Anderson ;) I have a question. (Yes, that was an intentional Matrix joke).
I know someone who is health insurance industry adjacent. Anyway she mentioned her assumption that the uncertainty of this whole fight would start to destabilize whole markets especially if the GOP did something drastic, like repeal. (This was all the way back sometime during the transition). Based on what’s going on now, she’s now assuming that the coasts/blue states may be okay, but the center is in danger. This kinda sounds like what she was expecting. (Honestly it feels to me a little like a bear market, with tons of animal spirits right now but that’s probably my POV).
Based on this long preamble I suppose I’m asking if the AHCA just imposed the beginnings of Trumpcare on the red states for 2018, without even understanding that’s what they’re doing? Especially on the non-expansion states?
OzarkHillbilly
@schrodingers_cat: The world’s corporations are modeled on the British East India Trading Company. The tar sand oil fields in Canada and the DAPL? Yep, BEITC. The new copper mine in Afghanistan? Same. The diamond mines in the Congo? Same again. And on and on and on….
Yarrow
@schrodingers_cat:
I didn’t see AchTeryx’s comment as “sneering” but more one of sadness and frustration. But your point about why countries that were exploited for resources by colonial powers are still struggling today is a good one.
I think we need a new term. “Third Word” seems inaccurate and outdated. “Developing countries” seems lacking to me because a lot of the countries have plenty of “development” and even when they do develop people still live in great poverty without a lot of opportunity. Maybe “inequality countries” or something like that? “Exploited countries?”
schrodingers_cat
@OzarkHillbilly: Nehru had a lot of flaws, but his idea that India had to develop on her own without multinational corporations was a good one, I think. India makes satellites that can go to Mars but my Pakistani friend tells me that Pakistan does not even manufacture a pin. Decades of US aid has only enriched the military junta there.
Enhanced Voting Techniques
I was right
http://talkingpointsmemo.com/dc/what-happens-to-obamacare-repeal-in-the-senate
All the more reason to hammer your Republican Rep’s phones.
Yarrow
@OzarkHillbilly:
China has been active in countries across the African continent for decades. They come in and build roads, stadiums, hospitals and so forth out of “friendship.” Once they are all good friends, then they look for ways to make that friendship beneficial for China.
This pattern and the strong relationships China has built up in many African countries over the decades is not covered in the US media at all. It’s going to be a big surprise to people here when manufacturing moves to the African continent (it’s just starting) and China has all the contacts and is well ahead of the game. People who work in the oil industry are aware of China’s relationships across the African continent to a certain extent because they have encountered it in their work in West African oil rich countries such as Angola and Nigeria. But it’s going to be a surprise for a lot of people just how widespread the Chinese involvement is in countries all across the continent.
Yarrow
@schrodingers_cat:
Definitely. And don’t forget suppression of women. Fits right in there.
Yarrow
@Enhanced Voting Techniques: Town halls need to be, as someone said yesterday, volcanic.
I berated my local Republican Congressman’s staffer yesterday about her boss’s vote. It was very satisfying. I plan to make calling all the Republican MoC’s offices that I have connections to a daily event so that I can let them know they are killing people and ask them how they can live with themselves. There is one near me that is on Swing Left’s list. I will work tirelessly to vote him out.
OzarkHillbilly
@schrodingers_cat: I think corporations are the greatest ill of all mankind. They have too much power and very little accountability.
As it was designed to.
OzarkHillbilly
@Yarrow: Yep, my point exactly.(I too have read that) They are spreading their influence everywhere. It’s in their own best interests. No guns, no bombs, just money. (to the right people)
Chris
@OzarkHillbilly:
Corporations are dictatorships. At best, they’re run by a corporate politburo, and at worst, by the idiot son or grandson of the founding king. It’s why conservatives love them and want to leave as much power as possible in their hands.
A German-type model in which a certain number of seats on the board of directors were reserved for the employees’ elected union representatives would probably do a lot to curb the worst of their abuses. Alas, good luck with that.
Ksmiami
@schrodingers_cat: we need to scare the fuckers where they live eat and work. If that leads to violence so be it
hovercraft
@OzarkHillbilly:
Just look at TransCanada and the other corporations building the pipelines, they’ve co-opted the local police and governments to serve them over the people they’re paid to protect. Turning dogs and hoses on people just trying to protect their land and heritage.
hovercraft
@Yarrow:
They’ve been in Zimbabwe for decades. Funny story they have been the one “friend” of the Mugabe regime, but as the country has gotten squeezed more and more by international sanctions there are fewer and fewer avenues for the kleptocrats to steal so they began to steal from the Chinese who have “invested” heavily in mining, ( Zimbabwe is rich in minerals), entire convoys of minerals would get “hijacked and diverted” when leaving the mines, so now the Chinese who were supposed to be minority partners, though somehow the minerals were always headed to China, are in charge of transporting the minerals to their destination and they then send what is the governments to them. So China now controls a huge portion of Zimbabwe’s natural resources and basically pays the government a small fee. Oh and those infrastructure projects they paid for are all falling apart, or incomplete, they were shitty to begin with and since they haven’t been maintained they have crumbled.
Elmo
@Enhanced Voting Techniques: Sigh. My Rep is Steny Hoyer. But when I left Tennessee I kept my old cell number, so I plan to bombard Sen. Corker’s office and claim my old address in zipcode 37763.
Neldob
China spreads their power and consolidates it as Trump puts on his show.
mai naem mobile
@Yarrow: I’ve been talking about this for several years. My dad had a small business in east Africa in their sixties and seventies. They starred getting Chinese made knick knacky cheap household goods in the mid 70s. Also, the news outlets in dofferent parts of Africa get a lot of their stories from their Chinese news agencies for free. The news outlets are in a financial crunch just like here so free stories are cheap and fill them paper/time. Think of having that kind of influence over a long period in their context of what the Russians did during their election.
ArchTeryx
@Neldob: And the media happily proclaim how dashong thr Emperor’s new wardrobe is.
Oatler.
@Chris: I used to go by that dictatorship thing but now I think The Corporation is a virus, working toward not needing us costly biological contaminants to function. Money units and bytes can flow freely without us and machinery doesn’t need breathable air. Our politicians are looking at the “greater good” for the virus.
Yarrow
@hovercraft: Yep. The infrastructure China has built hasn’t been the best. It was a lot better than anything they had at the time, though.
@mai naem mobile: Yes, the Chinese are playing the long game all across the African continent. People will be very surprised when the news finally breaks through. It’ll be too late to do much about it then, of course. It’s not like it hasn’t been know, though.
hovercraft
@Yarrow:
Actually it wasn’t, Rhodesia was an “independent” country up until 1980, we had one of the best infrastructures in all of Africa, we were a major exporter of agricultural produce, they were often referred to as the breadbasket of Africa, and then on top of that we had all the mineral wealth, gold, diamonds, uranium, copper I could go on. We also had a top tier education system, yes it was segregated but the white Smith government saw the wisdom in having a well educated pool of workers so they invested in one, people lacked rights but the infrastructure was solid, better than anywhere else in Africa outside of South Africa. What Mugabe inherited was a nation that with any sort of descent government was poised to take off and be one of the most prosperous in Africa, instead he brought in a bunch of kleptocrats who then proceeded to spend the next 37 years stripping every last penny they could out of it. Zimbabwe didn’t need to be the way it is, we were already up in the bottom of the ninth, and we blew it.
Yarrow
@hovercraft: Yeah, my statement was too broad. In the African countries that I’m familiar with, the infrastructure that I know China built was better than what was there before. It varies from country to country, of course. So many corrupt leaders across the continent while the people are screwed. Sigh.