Wednesday, November 27, 2013

Right on the Money


This guy is right on the money!  Like yesterday's "President of Peace", today's "The Conservative Movement's Death Wish" at The People's View just nails it. Listen:

At this point, it's as if conservatives can't help themselves. The fact that Obama has run rings around them in spite of their vigorous efforts has led to a psychotic break. Republicans fight Democrats with vile assertions. Republicans knife each other in purity contests. A strong, intelligent, black Democratic president who knows exactly what they're up to, and times his attacks for maximum effect, has put them flat on their backs. They're used to Democrats and liberals who are defensive. They're used to the triangulations of a Bill Clinton. Barack Obama's strength has sent them into a fugue state from which, as yet, they haven't been able to awaken.

The public doesn't see it this way, at least not yet. (False) equivalence rules the day with the MSM. Will the picture come clear by next November? Maybe yes; maybe no. I'm really not sure. But by 2016, it will be crystal clear, and the Republican wipeout will be epic. I hate to think that we may need to wait until 2017 to pass Immigration Reform; but that is entirely possible.

Spandan at The People's View gets who Obama is. Not many on the Liberal side fully do. They think he's a pure triangulator, like Clinton. He's not. When he includes, even absorbs the GOP position, as he has on deficit reduction, this is not a cave. It's a patient, long game strategy, where (like aikido) you absorb all your opponents energy, until they have nothing left, and the field is yours. Look how completely Obama has won the field on budget battles. He can't get his way (needs a Dem House); but now the GOP is defanged, without their normal battle cry.

The GOP remains completely unable to see this man. And because they can't, they will lose. Possibly in 2014. Certainly in 2016.

Tuesday, November 26, 2013

What if Obamacare Works?

Even if you don't think this will happen, stay with me imaginatively: What will the GOP do if the screw turns, and the MSM begins reporting on an Obamacare that's working? This morning, Ezra Klein's Washington Post Wonkblog was titled "Is Obamacare Turning the Corner?". Ezra's answer: It might be. Greg Sargent also entertained this possibility this am at The Plum Line at WaPo in a post titled "What if the GOP Stance on Obamacare Proves a Liability, Too?" I'm not declaring the moment is here. I'm asking us to imagine what the GOP will do if, and when, that day arrives.

What's your guess? Here's mine:
  • They won't see it or recognize it.
  • They will continue to highlight problem stories.
  • The focus will shift from the website or dropped coverage, to doctor cut-outs and their expected collapse of the employer-based insurance program.
But I predict that many fewer people will be listening, and that the MSM will provide better and more balanced coverage. One of the main reasons I think so is that over the next four months, we will see a progressive boatload of information about the numbers of people signing up in total, and state by state. Here's a great example I just found of the kind of regularly updated info that folks will have access to, that will document progress in signups - The bottom line, as reported, is that after completing 8 of the 26 week enrollment cycle, we have 956,788 total enrollments - 228,578 in private insurance, and 728,210 in Medicare. Here's the graph they update weekly:


If we went through the remaining 18 weeks at last week's signup pace, we would end up with 1.35 million in private insurance (versus a 7.0 million goal) and 4.1 million in Medicare (about 5 million targeted). But the pace is picking up. Where will it end up? Very hard to tell. My guess: 4-6 million in private; 5-7 million in Medicaid.

Will the GOP spin this as a disaster? Perhaps not, but they will just shift their target of attack to people losing their doctors in newly tightened networks (this will happen periodically), or the coming "collapse" in employer-based coverage (this will not happen in big numbers). One of the biggest problems for the GOP will be the release of premium increases for 2015, which will turn out to be modest, versus horrendous, because the risk pools will end up containing enough young and healthy folks to be well balanced.

In short, I do not think the GOP will be able to adjust if news gets progressively better on Obamacare, as I believe it will.

It is still possible for Dems to turf the GOP out of the House control next November. Not likely. Possible.

Blessed are the Peacemakers


What does it take to make Peace? The People's View comes as close to nailing it as I have seen in the MSM or the blogosphere, in a post titled "The President of Peace". To quote:

The media will never acknowledge it, but President Obama's spine of steel and his actions of resolve are what have led us to this point. The world met an American president for the first time in some time that wasn't interested in conflict for conflict's sake, but someone who also couldn't be pushed around. He ended the war in Iraq, and now in Afghanistan, but he has not hesitated to take targeted action to deliver devastating blows to terrorist groups. Barack Obama was prepared to use a military strike in Syria, but he never gave up the option to resolve the situation peacefully, if he had willing partners.

This is what peace requires. It requires a commitment to fair play, and an iron strong guarantee of consequences for fouls, born out by facts. It requires an American president thirsty for peace, but undaunted to deliver consequences to anyone who takes him for a fool. It requires a president committed to security with targeted actions rather than all-out conflict. It requires neither a warmonger nor a peacenik. It requires the president of peace.

Is this what Jesus meant? Is a peacemaker someone who is willing to fight, but doesn't need to? Someone seeking peace, but not so attached to it that obvious fouls are overlooked? Someone willing to wage war, if needed, but not attached to that either - someone with no interior need to prove his or her macho? Seeking peace but somehow not attached to either peace or war? Someone who hopes for the best and is unsurprised when the worst happens? Someone who sees and hears and gets the adversary completely, so that even the adversary notices that he/she has been seen and understood?

Jesus also said, "Be gentle as a dove and shrewd as a serpent." Stand in the very center of the paradox. Be the paradox. Embody both the willing warrior and the compassionate seeker of peace. This is what I believe Jesus meant. This is who Obama is - a peacemaker, or, per The People's View, "The President of Peace".

Monday, November 25, 2013

His Demise is Greatly Exaggerated

The Economist argues that Obama's protective teflon coating has been penetrated, that he has lost the trust of the electorate, that he stands exposed with no more magic illusions to protect him, and, given all this, he will most likely sink. Time's argument is similar: Obama made a promise to people about keeping their healthcare, a promise he now admits he cannot keep. And, of course, there's the website, evidence (yet again) that our President may be smart, but he is incompetent as a manager.

The Economist cover is pre-Iran deal; so my guess is Obama might be depicted treading water, instead of heading right down into the deep. Suspect Time would stick with their cover, even if they put it out today.

So how bad a patch is it for the President? What should those of us on the Blue Team be concerned about?

Obamacare. Quite simply, Obamacare is the Obama Presidency, in symbolic ways, writ large and small. If gets fixed; if enrollment grows strongly through March 31, and 5-7 million sign up for private insurance on the Exchanges and another 4-5 million are added to Medicaid's roles;  if the under 35s' sign up in good numbers; if 2015 premium hikes are modest; if employers mostly stay with their insurance plans when the employer mandate kicks in next June 1 - then Obamacare will have made it to firm, sustainable ground, and this should be a winner for Dems in November.

I believe all of this will happen. There are signs already: in the first two weeks of November, CoveredCalifornia completed applications (through the eligibility determination stage) at the rate of 70,000 per week, or 10,000 per day. And under 35s' were 22.5% of the applications, slightly better than their 21% share of California's population. 39% of the signups are Medicaid/MediCal eligible; the rest qualify for private insurance. CoveredCa should beat their enrollment targets and clear well over 1 million enrollees by March 31. If California can do this with a well diversified 12% of the US population, we should be fine nationally, if not by March 31, 2014, certainly by the same date in 2015.

I believe it. AND I'm still praying. Hard.

Sunday, November 24, 2013

Power of the New Media

Consider this from Uri Friedman at The Atlantic:

In 2003, Javad Zarif outlined a plan for rapprochement with the United States by helping draft a document that was then handed over to the Swiss ambassador to Tehran, who then handed it over to the Swiss foreign ministry, which then faxed the document to the U.S. State Department, where the roadmap was then circulated among Bush administration officials and eventually filed away, without ever being made public.

Ten years later, Zarif simply uploaded this video to YouTube.

Amazing! 10 years ago, Zarif couldn't get this message out into any form of broad distribution. Now he can. That's a big change, due to the new social media.

Whether you believe his story is the second question - one you can't get to if you never get the message.

I actually believe Zarif: Iran wants its dignity respected, and feels it would be undignified, as well as completely unfair, for them to have to give up their nuclear aspirations. Will they keep it peaceful? I think so, but like Secretary Kerry, we need a bulletproof mechanism to know that they are doing so.

In five years time, I predict that Iran will be emerging as a reasonably reliable player, working most of the time with the US in the Middle East region. They will have pulled back from supporting Hamas and Hezbollah. Israel and the Palestinians will have made peace. The Sunni-Shia divide will have settled back from stark divide and sectarian conflict to a more comfortable and predictable balancing of power interests. Iran's trade with the West will be booming, and US tourism into Iran will have grown leaps and bounds.

 Iranians are an energetic, cultured people with an extraordinarily rich civilization and history. We must keep our eyes wide open, but I predict they will grow to be friends with the US.

A Team Effort in the Long Game


What an exciting moment this is: a first stage, six month deal with Iran has been inked by the P5+1. The Supreme Leader in Iran has sent President Rouhani and Foreign Minister Zarif a letter of congratulations. Iranian social media is happily abuzz on both sides of the political divide - reformers and pro-regime supporters. Israel and Saudi Arabia are negative, as are many US conservatives - which to my mind is predictable and makes our getting the deal done even more admirable. The Twitterverse is full of mostly positive speculation about how a new world of possibilities may have opened up for diplomacy - after all, consider that the three most powerful countries on earth (US, Russia and China) actively worked together to make this happen. Could this diplomatic model render large nation state war less likely in the future? Is it even remotely possible the peacemakers will prevail?

A spiritual teacher once told me: "The only conjunction God likes is AND." So all the above is true AND we will need to continue to be cautious. "Trust, but verify," Reagan said. "Be gentle as a dove and shrewd as a serpent," Jesus said. "Trust in God and tie your camel to a stake," says Mohammed.

All true. AND this is a moment for celebration!

Obama told us he would pursue the engagement path, that he would talk with Iranian leadership without conditions, and he was roundly criticized. In Oslo, accepting the Nobel Peace Prize, he warned that to achieve peace, he would probably end up having to fight as well, which he did in Afghanistan and which he was ready to do here, if there was no other choice.

But diplomacy and peace was the preferred path. I think he knew that his biggest problem was to convince the Iranians over time that he (and America) could be trusted. Was the US seeking regime change (like Iraq) or would they pull back the pressure if convinced the nuclear program was peaceful? Was Obama really so different from Bush? Do you think we would have this agreement now if Obama had followed GOP and the media's urging to actively support the Green movement in 2009? And do you think today would have happened if Obama had bombed Syria for crossing his chemical weapons red line?

Strategic patience is what Stratfor's George Friedman has called it. That, and both the willingness and the capacity to play the long game - to have a crystal clear picture of what you would like to see happen, and to wait, and to take the hits, and to wait some more until the moment of possibility arrives.

That, and a willingness to trust your team - Samantha Power, Susan Rice, Hillary Clinton, and now John Kerry.

Clear vision. A strong team. A deep and quiet space within you that allows you to take the hits without flinching or flailing about. And patience. And if the other side really does have shared interests, a deal that is good for both sides can happen.

And it just did! Bravo, Mr. President and Mr. Secretary! Bravo!

Friday, November 22, 2013

Healthcare Costs: Big Slowdown

(All charts are from Trends in Healthcare Cost Growth and the Role of the ACA)

I've been waiting for the White House Council of Economic Advisors to put out a solid report highlighting the slowdown in healthcare cost growth due to the ACA, and here it is! Terrific stuff, which, over the long term, will define the success ot failure of the ACA much more than website disasters or even the middle class policy cancellations: Are healthcare costs slowing and is the ACA playing a role in the slowdown? According to the CEA's report (enclosed charts) the answer to both questions is a strong Yes!

Up until this Spring (May, 2013), most analysts were saying the slowdown was due to the Recession, with not much influence from the ACA. Beginning in May, a number of studies, including one by the CBO in August, made the other argument that the ACA is largely responsible for the slowdown, partly because the most dramatic slowdown was and is occurring in the public programs (Medicare, Medicaid) where health spending, funded by the Government, is not affected by recession-induced income drops. The chart above shows that real per capita Medicare spending has been flat and has actually declined for Medicaid. (Remember: this measure takes nominal cost growth, adjusts for population changes, then strips out inflation.)

Here are the detailed numbers:

Wednesday, November 20, 2013

Now I See the Problem

(From National Journal/United Technologies poll)

I have long felt that the opposition to Obamacare was essentially a partisan affair, with some Democrats and many Independents affected by the GOP anti-ACA disinformation campaign. The above chart, taken from a newly released National Journal/United Technologies poll, points out another fundamental issue that I had not taken seriously enough: the perception of the program as "helping the poor and the uninsured, but not everyone, and (certainly) not me". In other words, Obamacare represents a redistributive program, moving resources from the wealthy and the middle class to the poor. The extent to which this view is held by Democrats, Independents, and key parts of Obama's coalition (millenials, college-educated women, though not minorities) had escaped me, and I am enormously glad to have found this research, giving me more information, and (I believe) a clearer perspective. In short, I think I now see the problem.

America doesn't seem to favor redistribution, as much as it did in the 60s'. This is not only an anti-big Government response. It springs from a feeling of national scarcity, even decline, that we no longer have the abundance, and therefore the policy options that we used to have. What is given to one group of people is not available to others. Competition for resources becomes zero sum: win-lose. If you win, I lose; and vice versa.

Monday, November 18, 2013

The Feeding Frenzy

I watched highlights from the Sunday shows yesterday afternoon. I was struck by the near unanimity of the opinions: Obamacare was in free fall. So was the President. He has clearly lost the trust of the people. And he has demonstrated extraordinary incompetence. In short, a feeding frenzy. Even MSNBC's Chris Matthews piled on.

Then I spent some time on Conservative websites - Red State, NRO, Weekly Standard and Commentary. The tone was dismissive, contemptuous, arrogant, triumphal, and (here and there) a word of pity for this poor benighted President who is so completely over his head.

No one charted a path for the ACA's demise. Obama was known to be finished. With his collapse would come the end of Obamacare. All of this was stated clearly, calmly, confidently. Nothing to question here. Move on.

Staggering. It really was.

Here are five questions I would like to have asked:
  1. Will Obamacare be repealed or substantially altered in the next six months?
  2. How many Exchange sign ups will there be by March 31 (private insurance, Medicaid)?
  3. How many of the estimated 10-12 million people in the old non group market will buy ACA compliant policies for 2014 (on or off Exchanges)?
  4. What will the average Exchange-based premium increase for 2015 be (announced next summer)?
  5. Will the number of people who are covered by employer-based insurance go up, go down, or stay the same, comparing 2014 to 2013?
Try to give an answer to these questions before you go below the fold. My answers are just below.

Saturday, November 16, 2013

Why the Sky Isn't Falling

According to a good many pundits, it's all over. Here's from Real Clear Politics this am: Is it Game Over for Obama by Dana Milbank at the Washington Post; The Sinking Ship of Obamacare by Kathleen Parker, also at WaPo; A New and Unprecedented Level of Panic and Chaos by Yuval Levin at the National Review; and When the Obama Magic Died by Fouad Ajami at the Hoover Institute.

The Magic Man has been revealed as an inexperienced naif, way over his head. The bedazzled American crowd has lost both interest and faith in its putative hero. Trust once lost cannot be regained. And most of all, underlying all of this, his signature project, Obamacare, is headed for the rocks.

Is this true, or even probable? Is the sky really falling? My short answer is: No! For this to be true, Obamacare would have to be fundamentally broken. Although conservatives think it is, I am satisfied that it is not. Let's review the arguments:

Conservatives claim there is a flaw in the program's design. To balance the new insurance pools, the young "invincibles" have to sign up. If they don't, the pool will skew towards the unhealthy; premiums will go up; more healthy people will decide to opt out; premiums will go up even further; and we begin the well-discussed "death spiral" that will shipwreck a badly designed insurance program. And, argue Conservatives,  the under 35s' will not sign up, because the penalties are so modest, relative to the insurance premium costs. Conservative conclusion: fundamental, unfixable program design flaw. Obamacare is doomed.

On the other side, program defenders argue that most of the young uninsureds would like to have insurance, but they have not, until now, been able to afford it. With the subsidies in the ACA, they will be able to; 60% of the uninsured will be able to buy solid insurance for less than $100 a month. What has kept this argument open has been the website problems, plus the natural tendency of those who need something the most (the not so healthy) to sign up first.

So what about the millions of people who are getting cancellation notices? How does this affect the ACA's economic model? Or is this essentially a political problem (breach of Presidential promise), not an economic one?

Thursday, November 14, 2013

Our Integral President

(from, go to 00:45)

Watch the announcement/press conference and you will see how an integral leader responds to a serious, possibly existential crisis. I have never witnessed anything like this in public political life. I've seen officials apologize publicly before; I have never seen a major leader enter what I'll call the "zone of apology" (that mental and conversational space where apology is present, looked at, reviewed, analyzed and engaged) and remain there so gracefully and with such powerful presence.

Before saying more, let me offer a David Whyte poem that, for me, wonderfully expresses the power an integral leader must have to hold difficult questions easily and to face directly into the "fierce heat of living":


It doesn’t interest me if there is one God
or many gods.
I want to know if you belong or feel
If you know despair or can see it in others.
I want to know
if you are prepared to live in the world
with is harsh need
to change you. If you can look back
with firm eyes
saying this is where I stand. I want to know
if you know
how to melt into that fierce heat of living
falling toward
the center of your longing. I want to know
if you are willing
to live, day by day, with the consequence of love
and the bitter
unwanted passion of your sure defeat.

I have been told, in that fierce embrace, even
the gods speak of God.

By David Whyte

From Fire in the Earth

Tuesday, November 12, 2013

What's Trying to Emerge?

I think a successful ACA is trying to emerge, through the fog of political war. Do not think the GOP can reverse the process; the policy fundamentals are in place. For me the question is not whether a working ACA will emerge, but when this will be recognized. I've said by early summer. I'll stick with that.

What are the policy fundamentals that have been put in place, causing what I see as an irreversible process:
  • Insurance Reforms - Essential benefits must be offered in all policies, except Catastrophic coverage for those under 30. Children can stay on their parents' policies until age 26. No insurance denial due to preexisting conditions. No lifetime or annual caps. Annual limit on out of pocket expenses. Community rating - no gender differences; only 3 age breaks; and a smoking/no smoking break - the end of "slicing and dicing". 80% Medical Loss Ratio for Group policies, 85% for Non Group. This represents a HUGE tilting of the scales in favor of the little guy - the middle class - and away from insurance companies. There is NO WAY people will give these new benefits up.
  • Insurance Exchanges - All 50 states, plus the District of Colombia, have Exchanges (16 are state-run, 7 are jointly run by the state and the federal government, and 27 are federally run). When is fixed, people in all states will be able to buy their insurance online, if they do not have insurance on the job, and are not on Medicare or Medicaid. Between 12 and 15 million people have been buying their individual policies directly from insurers. Many of these policies do not meet ACA Essential Benefits standards and have lost their grandfathered status by making significant benefit changes post-ACA. Estimates vary - 6-10 million policy holders who will have their old policies cancelled and will have to upgrade, often paying more. Many, perhaps most of these conversions will be handled directly with the insurer. Others will choose to move or be forced to move to the Exchanges. The CBO has estimated that 2 million people would migrate from the Individual/Non-Group market to the Exchanges. This is the "crisis" we are in right now. By March 31, this tsunami will have flowed through the system.  Thereafter, there will be a gradual elimination of the remaining grandfathered plans, but this will not create the blowback of our current round. For the most part, when open enrollment begins again in October of 2014, all the Exchanges will be working well (I am confident), and people will experience the pleasure of buying insurance in a clear, transparent way - allowing comparison shopping, and absolute certainty about what you are buying, what will be covered, and how much you will be on the hook for. When these Exchanges are truly working, people will love them; and they will never go back to the old, seemingly rigged game.
  • Medicaid Expansion - The ACA expands Medicaid, offering it to everyone with incomes between 100% and 138% FPL, but based on the Supreme Court ruling, states can refuse to accept the expansion. At this point, 25 states, plus the District of Colombia, have accepted the expansion; 25 states have declined. The CBO originally estimated that 9 million would sign up in 2014, and that this number would grow to 12 million in 2015, and 13 million in 2020. With the red state opt-outs, the 9 million estimate for 2014 has been cut to 4-5 million who will sign up in participating states, and 4-5 million eligible, but left high and dry in opt-out states. This will be a BIG political problem in opt-out states, where the GOP will be hammered for putting ideology ahead of the people of their states. The pressure for this will not go away, until each refusing state has changed their position. 
  • Income-based Subsidies - The ACA provides subsidies for people with incomes between 138% and 400% FPL ($45,000 for an individual; $94,000 for a family of four). Subsidies are structured so that people pay from 2.0% to 9.5% of their income for insurance, depending on their income levels. Subsidies can cover the entire premium for lower income people, and become more modest as you move up the income scale to 400% FPL. What many people don't yet know is that if premiums rise, your subsidy rises to completely offset the increase. If you qualify for subsidies, and income stays constant, your personal out of pocket for premiums will only change if your income changes. Subsidy-qualified people are sheltered from premium rate shock in Year 2 and beyond. In short, the subsidy program will help millions of people buy insurance they couldn't afford, and this affordability will remain in place. 60% of the uninsured will be able to buy insurance for $100 a month or less. After March 31, 2014, whether 1 million, 7 million, or more have enrolled on the Exchanges, with 60-70% receiving subsidies, NO ONE will be able to take this benefit away.
  • Individual Mandate - Beginning in 2014, everyone must have "minimal essential coverage". If not, you will be subject to a penalty (the higher of $95 or 1% of income in 2014; 2% or $325 in 2015; and 2.5% or $695 in 2016). Many analysts have focused on how modest these penalties are, relative to annual premium costs; but my perspective is that 1%/2%/2.5% of a $75,000 income will be considered relevant by people at that income level. Am confident that the individual mandate will, over time (as it did in Massachusetts) encourage most people without insurance to sign up.

Friday, November 8, 2013

Obamacare Approval

(Poll of Polls, from Andrew Sullivan at The Dish)

As Andrew Sullivan at The Dish observes, it is interesting, in fact, surprising, that the Poll of Polls shows favorables on Obamacare moving up since the October 1 web site disaster. Could it be that people generally understand about problems, even big ones, occurring during a product or program's launch period; and that, at long last, folks are coming in contact with an actual program, with specific features in the real world that they can observe and experience for themselves; and they have survived the encounter (despite GOP insistence) and are beginning to like what they see?

I think it's not only possible, but likely. What I'm really interested in is what this chart will look like next May, or June, as we move into the stretch for the midterms. And here's my prediction: the lines will have crossed, or be just about to cross, moving favorables over unfavorables for the first time. Why do I think so:
  • The web site will have been fixed (before Christmas) and it is very easy now to put your info in; to compare policy options; to see what (if any) subsidy support you are eligible for, and to sign up and buy insurance (although open enrollment is closed until October 1).
  • Enrollment was pretty much on target, greatly helped by the almost 2 million folks whose policies were cancelled and decided to buy new coverage on the Exchanges. Total enrollment is 6.8 million, with 2.5 million under 35.
  • The cancellation crisis is behind us. Of the 6 million people who lost coverage, 3 million renewed with their insurance companies directly; 2 million went to the Exchanges, and 1 million chose to pay the fine and skip insurance.
  • Large employers have continued to offer insurance to their employees, with almost no one pushing their workers out into the Exchanges. The Total number of people getting insurance at work has actually grown slightly, as more small employers, using ACA credits, are offering plans.
  • Overall healthcare costs are adding a 6th year to their record of cost moderation and premium increases (on exchange and off, both group and individual) have remained moderate.
  • There have been some pressure on doctors, especially in moderate income and poorer neighborhoods, as the medical system reacts to the surge of new patients from Medicaid and the Exchanges. But the system is adjusting. In some states, PAs' and Nurse Practitioners are being granted new practice authority.
  • States that refused the Medicaid expansion are under enormous media  and political pressure to accept the Federal money, expand Medicaid, and stop the travesty of having people with incomes from 100%-138% of Federal Poverty Levels not  able to get subsidy support, where anyone with incomes from 139%-400% of FPL can qualify for subsidies.
  • There are quite numerous complaints from people whose individual policies were cancelled, and bought on the Exchanges, that they can't use the same doctors or hospitals they could before. But the great majority of people on the Exchanges, most of whom did not have insurance before, understand how tight provider networks help reduce costs, and are satisfied with the medical services they have access to.
In short, people are encountering the real program, and finding it works fine, and that no other part of their relevant world has blown up, or even seems remotely at risk of doing so. The big adjustment in the individual market, from bare bones to a full range of essential benefits, has been made. Many are paying more, but they mostly understand that they now have much better insurance. Complaints are still heard, but now the much louder media sound is of people telling their positive, happy and hopeful stories.

Democrats running against incumbent Republicans are hammering their opponents, and through them, the GOP for misleading and frightening folks. They are telling potential constituents: don't send the Republicans back, unless you want to lose this very good thing called Obamacare.

The possibility of a huge upset in November is beginning to be discussed seriously.

That's what I think is coming. Very, very exciting.

President Obama's Interview

This is worth watching. Not just to hear the apology, but to directly experience the presence of this man responding to questions from a hostile questioner. Choose your adjectives. Mine are: present, fully awake, forthright, powerful, clear, resolute, fully listening to, absorbing and answering all of Todd's questions.

Jesus said: "Be gentle as a dove and shrewd as a serpent."

That's our President.


Wednesday, November 6, 2013

Some Demographics

(compiled by author from Google)

Obama won in 2008 and 2012 with Minorities, Millenials, Unmarried Women and Professionals (what Ruy Texeira and John Judis call the "Rising American Electorate"). In 2010, these folks stayed home, and Democrats were clobbered. What can we learn from Virginia, comparing yesterday to the race for Governor in 2009 about who might show up next November? Here's what the comparative demographics suggest to me:
  • Minorities, and to a lesser extent Millenials, can show up for an off year election (i.e., non presidential elections). They turned up yesterday in Virginia, but not in 2009. They actually did not show up in New Jersey (per Ed Kilgore at The Washington Monthly), where Minority/Millenial turnout was similar to 2010, not 2012.
  • Why did Minorities turn out so strongly in Virginia but not in New Jersey yesterday? My guess: Christie is not Tea Party; worked with Obama on Hurricane Sandy relief; and is not fighting Obamacare. Cucinelli in Virginia was full-throated Tea Party and called his campaign a referendum on Obamacare, which the Black community legitimately takes as an effort to destroy their leader's legacy. If 2014 becomes, like Virginia, a referendum on Obamacare, and thus Obama, Minorities (and Millenials, to a lesser extent) will show up, and that will make the difference.
  • Seniors showed up in the same way they did in 2009, but it wasn't enough. Dems can win, even with the high midterm turnout from Seniors.
My conclusion: Make 2014 about Obamacare and Immigration (even if, by some miracle, serious Immigration reform is done before election day). If we do, Minorities will show up and Dems will win - not everywhere, but in enough places to retake the House.

It's Not Easy


"It's Not Easy" by Superman

I can't stand to fly
I'm not that naive
I'm just out to find
The better part of me

I'm more than a bird, I'm more than a plane
I'm more than some pretty face beside a train
And it's not easy to be me

I wish that I could cry
Fall upon my knees
Find a way to lie
Bout a home I'll never see

It may sound absurd but don't be naive
Even heroes have the right to bleed
I may be disturbed but won't you concede
Even heroes have the right to dream?
And it's not easy to be me

Up up and away away from me
Well it's all right
You can all sleep sound tonight
I'm not crazy or anything

I can't stand to fly
I'm not that naive
Men weren't meant to ride
With clouds between their knees

I'm only a man in a silly red sheet
Digging for kryptonite on this one way street
Only a man in a funny red sheet
Looking for special things inside of me

Inside of me, inside of me, yeah
Inside of me, inside of me

I'm only a man in a funny red sheet
I'm only a man looking for a dream
I'm only a man in a funny red sheet
And it's not easy, it's not easy to be me

Tuesday, November 5, 2013

How Many Under 35s' Do We Need?

Conservatives have been relentless in their confident prediction that the young and healthy will not sign up for Obamacare. George Will, and many others, state categorically that to do so would be "against their interests". The penalty is small, relative to the cost of insurance. They don't think they need it. So they won't buy in.

I have argued against this, saying that they haven't bought insurance up until now because they couldn't afford it, for the most part - not because they didn't want it. But something I agreed with Conservatives on - if they don't sign up, the risk pool will be unbalanced, and the program could break down.

Here's the key question: How many under 35s' do we need? The target is 2.7 million, out of a total forecasted Exchange enrollment of 7.0 million, or 38.6%. In an earlier blog, Ezra Klein was also wondering where the 2.7 million target came from, and he realized, looking at demographics, that about 39% of the uninsured are under 35 - hence the 39%, or 2.7 million target.

But do we need that many? Ezra said he didn't know, and that the answer needs to come from an insurance analysis of the overall risk pool. To date, I have not seen such an analysis.

So today I began poking around, and what I found out is extremely encouraging:
  • The Risk Pool - I assumed the relevant risk pool was the 7.0 million target for the Exchanges. If I'm reading research correctly, that's wrong. The risk pool is the entire individual (non group) market, both on and off the Exchanges - so 14.0 (current Individual market) plus 7.0 (expected in 2014 as newly insured on the Exchanges), or 21.0 million. So new signups from the uninsured is not the only source for young, healthy folks to balance the pool. The existing individual market must already have a lot of healthy folks.
  • Is Current Individual Market Pool Already Balanced? - If it is, then the full increment must itself come in as a balanced pool. But the fact is that policies in the individual market are individually underwritten in all but a few states; and policy pricing is based on individual by individual risk assessment. So from the outside, we can't know if the existing pools have been balanced in the past. We do know that insurance companies, in preparing their Exchange pricing bids, have made a risk assessment of the new pools, combining existing policy holders with new Exchange market entrants.And remember: most everyone was surprised that the bids came in as low as they did.
  • What about the 3-5 million people whose policies were cancelled? - These policies were ones that did not conform to the ACA's Essential Benefits provisions. In other words, these were bare bones, catastrophic policies. And who's likely to buy policies like these? Healthy folks - and for the most part, people who don't think they need much insurance. Leave out any partisan positioning - what will these folks do? Will they moan and groan, and finally bite the bullet and buy the new, more complete insurance policies? Or will they drop coverage and pay the penalty? I predict that 80-90% will buy. And when they do, we'll have a very healthy pool.
I think we have lots of room, that the individual market (after the folks cancelled sign back up) is an unusually healthy risk pool, and it would take a veritable tornado of newly added sick people to unbalance it and cause a "death spiral". What's the needed target? Don't know - but it's way under 2.7 million.

Monday, November 4, 2013

Taking on Water

We're taking on water. Those of us on the blue, Obama team have to be honest. We're in a rough patch.The website mess is an unforced error, a self-inflicted wound. The "You can keep your health plan." promise was a mistake, as Robert Gibbs admitted today. We will recover, for sure, but November could be tough. If the website fix is successful, and the policy cancellations run their course by the end of the month, we should start moving positive by mid-December.

Before then, we have to absorb all the upset and pain experienced by people in the individual market whose policies get canceled. There are 12-15 million people in the individual market; half to three-quarters of these will have their old plans cancelled. Since the cancelled plans are "non-conforming (with ACA)", i.e., bare bones plans, almost all of these people will have to pay more. Probably half of them, or more, will be eligible for subsidies, but they need a working web site to figure that out. I assume this will happen in December (a working web site), thus diminishing the cries of pain.

But many will pay more, even with subsidies. As Jonathan Cohn shows in a wonderful article this morning, some of the victims of this "October surprise" will end up liking the change, after it is fully explained, because they will end up with real insurance as opposed to "fake" insurance. But a sizeable number will not like being told they have to pay more, and that they must carry more insurance than they think they need (Pregnancy coverage for single males; mental health coverage of people convinced they will never need such a thing, etc.). And thus the "middle-class eroding, liberty destroying" Obamacare meme will live on, in all its gory glory.

But this, too, shall pass. The cancellations should end by very early December. The cries of anguish will be heard, absorbed, and then they will diminish, falling to near zero by year end. And that's when the Blue Team will make its run for the Gold - from mid-December thru March 31, as the web site becomes fully functional, and people get serious about their insurance purchase decisions.

Will we hit the 7 million target Exchange enrollment number by March 31? I'm not sure. It's possible, but a long way from certain. We will actually be helped by the folks receiving cancellation notices (6-7.5 million), who are not rolled over into a new policy by their insurance company, and have to use the Exchanges. How many? My guess: 3-5 million. If half of these people (who have gotten used to having coverage) decide to buy on the Exchanges, this is 1.5-2.5 million people that may not have been actively considered as part of the original 7 million target, which I believe was taken completely from the uninsured. And a good number of these people are under 35, which will help us make the key goal of about 40% of signups being under 35 (2.7 out of 7 million is 38.6%).

We don't have to hit 7 million by March 31. But we need to hit near the 40% under 35 target to ensure our insurance pool is balanced. We'll know all of this by the end of March, with pretty fair predictions much sooner, say by early February.

Plenty of time for Team Blue to take it to the GOP in the November mid-terms!

Sunday, November 3, 2013

Obamacare More Than Enrollment

(Tom Scully, former GOP official, now Obamacare investor,  NYT Magazine)

Tom Scully (pictured above) worked on healthcare (among other things) for Bush I and was Director of the Center for Medicare and Medicaid Services (CMS) for Bush II. He is now Founder and CEO of naviHealth, whose website says:

naviHealth is a post-acute care (PAC) benefit manager partnering with risk-bearing healthcare organizations to lower PAC costs by empowering the patient, improving care coordination, and using a proven data and technology driven approach to enable PAC navigation.

Fascinating article. The first one I have seen like it. There will be more. A great many more. Opposition to Obamacare has been so absolute on the Conservative side that normally astute investment analysts have almost totally missed a very important fact set: The ACA is not just about enrolling the uninsured. It's a multi pronged effort to control healthcare cost inflation by shifting provider incentives from the fee-for-service model, to a coordinated-care, values-based model.

For the most part, business has - up until now - been listening to the GOP: the program is rotten through and through; it's a Government takeover of healthcare; it will restrict choices, lower healthcare quality, and raise premiums and overall costs; and it is founded on a losing economic proposition that the under 35s' will sign up, against their economic interests, since the penalty is way too low to make them become insurance buyers.

All of this is mostly wrong. There will be some restricting of choices - viz. the folks having their bare bones policies cancelled. Also possible are some supply bottlenecks - shortage of doctors in some areas - as the delivery system reacts and adjusts to the increased demand. But most of the other critiques are just wrong. The most important error is the GOP certainty that the young will not sign up, thus dooming the program to a "death spiral" of rising premiums.

Once businessmen, like Tom Scully, figure out that Obamacare isn't going anywhere, that it will be with us for a  long time, they will start to look for opportunities to invest. And the name of the game will be cost containment: how to help 1/6th of our economy, the healthcare sector, shift from a quantity of service model (individual units of service billed individually) to a quality and value model (pay more for better quality; give rewards for reducing system utilization or complexity - what Tom Scully and naviHealth are attempting).

A huge part of the US economy is moving into a time of conscious, intentional market disruption, and as any economic historian will tell you, when markets are disrupted and basic business models are changed, there is good money to be made by those able to see what's trying to emerge. The initial disruption caused by ACA is showing up in the insurance market, not the medical delivery system itself. But the ACA is chock full of "test and then scale" ideas for cost containment in the delivery system itself.

There are three ways to cut costs: change the price of medical care; reduce utilization of the medical system; and lower the complexity level of how patients are treated when they use the system. Most efforts in the past have focused on controlling price - reducing payments to hospitals, doctors, etc. This has distinct and well known limits. And because there was not much of this in the ACA, pundits concluded that there was no effective cost control that would come out of the bill.

What they missed completely was the very large variety of tests the bill authorized, looking to test ways of reducing system utilization and complexity: keep people healthier, so they don't need the system as much; like Tom Scully, work with acute care patients and support them post-op, so they don't need readmission to the hospital; organize the independent medical silos into Accountable Care Organizations that are rewarded in "bundled payments", and who make more money by keeping their patients healthy; use Electronic Medical Records to give all providers the same information about patients, and thus reduce unneeded tests, etc.

This is why healthcare costs are coming down. There's a revolution going on. The healthcare system is finally learning how to reward providers for not using the medical system,  in other words, for keeping people healthier.

This is a big deal. This is where Tom Scully is placing his chips. Many others are doing so as well. Healthcare costs will continue to moderate, eliminating our long term deficit/debt problem. Conservative anger over Obamacare has kept the country and some of its business leadership from seeing the seeds of transformation the ACA's many test and scale provisions have already launched.

And by the way, this is what the Independent Payment Advisory Board (IPAB) is about. Not a Death Panel. An efficient mechanism for bringing to scale methods that have proven out in tests.

Hang on. This promises to be quite a ride.

Tom Scully

Saturday, November 2, 2013

This is a BIG DEAL!

Most of these folks ended up in Medicare (about 85%), but my guess is the 41% figure will also be pretty close for the under 35s' share of health plan purchases. Here's the Healthier Kentucky site, so you can follow the progress over time.

38.6% signup from the under 35s' is the enrollment percentage for this critical group: 2.7 million target for under 35s' out of total Exchange target of 7.0 million. If we hit this "mix percent", we should have a balanced risk pool, thus avoiding premium spikes next year or any "death spiral". 

This is early evidence only. And it's not enough. But it's a good sign.

The only real argument Conservatives have ever had against the program is that the under 35s' won't sign up, leaving the risk pool unbalanced towards the less healthy, leading to a premium death spiral, and the possible collapse of the program. 

I have long predicted that they would sign up, because the vast majority of the uninsured have incomes less than 200% FPL (about $23,000); they cannot afford insurance (though they would like it); and at that income level, the subsidies are hefty, making buying insurance affordable. The uninsured under 35s' are not, for the most part, the young urban professional earning $30-35,000, and feeling immortal. These are the folks that Megan McCardle, George Will, Yuval Levin, and many others must have talked to, or been thinking of, in making their declarations of absolute certainty that the under 35s' will not sign up "against their interest." They will sign up. Because it is most definitely in their interests.

There's an interesting sleeper element emerging: what will the folks, with the bare bones plans that are being cancelled, decide to do - once they get over being mad? I think they'll buy insurance on the Exchanges, even at a higher price. Some will deal with insurance companies directly. Many will go to the Exchanges. Many are under 35 and healthy. Signups from this very large group should ensure pool stability.

The ACA is going to launch on solid footing, which will become evident by Christmas, or sooner. Enrollments may take time, like they did in Massachusetts. They may even have to delay the penalty schedule for a year, or issue a Policy Notice after March 31, saying that anyone certifying that he/she could not access the Marketplace will not be subject to the penalty. There is much Sound and Fury still to come, but...

Obamacare is here to stay, and its emerging success will be the reason the Dems retake the House in November.

Friday, November 1, 2013

So True

From Peter Wehner's "A Debacle for Liberalism" (bolding is mine):

Critics of the president may be wrong. Obamacare may turn out to be one of the most successful and popular programs in the history of man. But whether they are right or wrong, there is at least no confusion as to who has ownership of the Affordable Care Act. We all know who stood where, when; who supported it and who opposed it; and we are now in the process of being able to judge the claims of Obamacare against the reality of Obamacare. An abstract debate can now be measured by its true effects on the nation as a whole.

It looks to us that liberalism, in getting what it wanted, will end up doing significant and sustained damage to itself, to public confidence in government (which is already near historic lows), and to its conception of the welfare state.

It would be quite an historical irony if Obama, who raised such extravagant hopes among progressives when he ran for office, turns out to have a shattering effect on contemporary liberalism. But that may be just where we are heading. Barack Obama may turn out to be the best thing to happen to conservatism since Ronald Reagan.

So true.

The lines have been drawn on Obamacare more clearly than on any other policy issue in my lifetime. The Right is so completely clear and confident that they are right that it's almost scary. Have they lost their minds? It's always dangerous to assert, without the quiver of a question, that you are right and could not possibly be wrong.

If the website begins to work, if enrollment is solid, and if the under 35s' sign up, then they're wrong. They will find a new attack line in order not to admit it, but they will be wrong. Dead wrong.

The very large, current flap on folks losing their individual, bare bones policies is a one time phenomenon. During the open enrollment period next year, this issue will not arise. The adjustment will have been made. So if we have solid enrollment, and the under 35s' have signed up, the system will work.

Does no one in Conservative-land see this possibility?

This Just Makes Me Happy!

Crossing a Red Line

I think Republicans are crossing a red line: they are waging a war, not just on the social safety net policies that help the poor, but on the poor themselves. Paul Krugman made this case very well this morning in his New York Times column titled "A War on the Poor". Here's Krugman:

John Kasich, the Republican governor of Ohio, has done some surprising things lately. First, he did an end run around his state’s Legislature — controlled by his own party — to proceed with the federally funded expansion of Medicaid that is an important piece of Obamacare. Then, defending his action, he let loose on his political allies, declaring, “I’m concerned about the fact there seems to be a war on the poor. That, if you’re poor, somehow you’re shiftless and lazy.”

Obviously Mr. Kasich isn’t the first to make this observation. But the fact that it’s coming from a Republican in good standing (although maybe not anymore), indeed someone who used to be known as a conservative firebrand, is telling. Republican hostility toward the poor and unfortunate has now reached such a fever pitch that the party doesn’t really stand for anything else — and only willfully blind observers can fail to see that reality.

"...the party doesn't really stand for anything else..." Think about that statement for just a minute. If you're reading this blog, you are probably a progressive. Try to notice those progressive lenses and suspend them for a moment. Is the statement an accurate reflection of the GOP today? Could we gather evidence that would convince an international body of impartial observers? (By the way, I know we cannot be sure of finding such a panel, but the exercise as metaphor is useful, nonetheless.)

I think we can gather such evidence. I think Krugman is right. And if so, the GOP is definitely crossing an important - I could even say, sacred -red line: No political party can long survive in America if it truly despises a significant portion of the electorate.

I think the GOP, driven as it is now by the Tea Party, aggressively, passionately dislikes the poor. Why? Krugman again:

In a much-cited recent memo, Democracy Corps, a Democratic-leaning public opinion research organization, reported on the results of focus groups held with members of various Republican factions. They found the Republican base “very conscious of being white in a country that is increasingly minority” — and seeing the social safety net both as something that helps Those People, not people like themselves, and binds the rising nonwhite population to the Democratic Party. And, yes, the Medicaid expansion many states are rejecting would disproportionately have helped poor blacks.

So there is indeed a war on the poor, coinciding with and deepening the pain from a troubled economy. And that war is now the central, defining issue of American politics.