Patterico's Pontifications


CBO confirms ObamaCare is a takeover of the health insurance industry

Filed under: General — Karl @ 7:05 pm

[Posted by Karl]

While everyone has focused on the Senate Dems caving to Sen. Lieberman’s demand to drop the “public option” from ObamaCare, this tidbit has slipped by largely without notice:

The CBO on Sunday issued a strongly worded memo on the proposal establishing all health insurance companies’ “medical-loss” ratio at a maximum of 10 percent — meaning 90 percent of premiums would have to go to medical claims. Companies would have to issue rebates to their customers if they fail to meet this standard. Alternatives would set the level at 80 percent to 85 percent, as included in the House-passed healthcare bill.

Considering the medical-loss ratio in tandem with the other strict new insurance regulations contained in the bill, the CBO predicted that such a policy would “reduce the types, range of prices, and number of private-sector sellers of health insurance,” the memo says.

“In CBO’s view, this further expansion of the federal government’s role in the health insurance market would make such insurance an essentially governmental program, so that all payments related to health insurance policies should be recorded as cash flows in the federal budget,” the memo states. (Emphasis added.)

The official copy is available through the CBO. OpenLeft’s Chris Bowers moans:

The Senate will not pass a public option. It will not pass a Medicare buy-in. It will not mandate a 90% medical loss ratio. Ugh. This deal keeps getting worse all the time.

If only Darth Lieberman would appear to say, “Pray I don’t alter it any further.”


60 Responses to “CBO confirms ObamaCare is a takeover of the health insurance industry”

  1. If Lieberman is a Sith, I’m signing up for the dark side…

    I would vote for a ticket that had Joe as the VP…

    Scott Jacobs (d027b8)

  2. There’s a strange one in the jungle

    And he says that death need not hurt

    There’s a strange one in the jungle

    He’s got something to quench your thirst

    Freshen up, freshen up, freshen up

    happyfeet (71f55e)

  3. I admit this will sound crazy, but: As an independent, Joe needs support from Connecticut independents and even Republicans to stay viable, let alone to win another term. Are we sure this isn’t an agreed plot to make Joe the scapegoat — something that might actually help him with independent and conservative voters in his home state — while letting some Senate Dems off the hook for caving on the public option?

    DRJ (84a0c3)

  4. As for the real topic of this post, when conservatives claimed that Obama’s health care would put American on the path to government health care, Democrats and Obama promised we could keep our current health insurance if we wanted. They also dismissed as ridiculous conservatives’ claims that ObamaCare could result in death panels. But it looks more and more like the conservatives were right.

    DRJ (84a0c3)

  5. 90%? Absurd. I’d be surprised if any insurance company would avoid losing money at that, let alone for the industry to be profitable enough to bother with.

    That 10% scrap would have to cover salaries, training, taxes, advertising, reinvestment for growth, and dividends for investors, all with enough left over to keep the company solvent in lean years.


    roy (d6fc79)

  6. Sarah-Joementum 2012

    aunursa (862c19)

  7. Megan McArdle says Kos tweeted he wants to kill the health care bill because it let the insurance companies win.

    DRJ (84a0c3)

  8. I heard Joe speak in my community when he was running on the ticket with Gore. I realize he had to sign on to Gore’s platform but I still think he’s very liberal. It’s only his moderate stance on national security and this health care plan that makes him even remotely acceptable to conservatives.

    DRJ (84a0c3)

  9. i’d vote for Palin/Lieberman….. as long as someone else was the VP.

    Palin doesn’t need him, he needs Palin. that’s the old guard trying desperately to protect their rice bowl……


    redc1c4 (fb8750)

  10. LIeberman has also had good policies in other areas such as farm subsidies (he’s against them) and school choice. I was disappointed to see him renounce some of his policies to sign on to Gore’s platform in 2000.

    Mike K (2cf494)

  11. DRJ,

    I would not be at all surprised to discover that some of this is theater. The Dems have been looking for a way to drop the P.O. without taking heat from the base. Joe is ideally suited for the job.

    As for Kos, here’s a few tweets from this evening:

    “Bye bye, Reid. You weren’t a bad MINORITY leader.”

    “They’re still trying to stick us with the mandate, right? Another government bailout of a broken industry.”

    “Insurance companies win. Time to kill this monstrosity coming out of the Senate.”

    Thing is, I don’t see Kos — or the other Lefty sites — gearing up an online campaign to kill the bill, like they did to support the P.O. So far, there are no posts urging phone calls, etc.

    Karl (404c05)

  12. Curtain #1 guarantees you President Sarah Palin and Vice President Joe Liebs on January 20, 2013.

    Curtain #2 allows you to take your chances on which way the political winds blow during the next three years.

    Which curtain would you choose?

    aunursa (862c19)

  13. democracy doesn’t have curtains

    happyfeet (71f55e)

  14. No, but hypothetical questions do.

    aunursa (862c19)

  15. Please, Karl. Give it up. Recognize a decent-sized victory when it’s staring you in the face. This deal is cake and candy for the insurance companies. You guys can weep for them; they’re not weeping, believe me. They’re getting a bunch of new customers, and some government money to boot, without any incentive to change their ways.

    The banks are having fun with the president, too, this week, just for grins and giggles. “Loans, schmoans” is their view, I’m sure.

    Great week for Big Business. It’s their world. The rest of us are just visiting.

    But look, a bill is passing. You must know that. A neutered bill is as good as it gets for the red team, though it’s not so good for Americans.

    Myron (998393)

  16. “This deal is cake and candy for the insurance companies. You guys can weep for them; they’re not weeping, believe me.”

    Myron – Classic comment. This really proves you don’t understand shit about insurance.

    daleyrocks (718861)

  17. I guess. I’m mostly just saving my enthusiasm for Sarah Palin for in case she gets the nomination.

    happyfeet (71f55e)

  18. “The Senate will not pass a public option. It will not pass a Medicare buy-in. It will not mandate a 90% medical loss ratio. Ugh. This deal keeps getting worse all the time.”

    I don’t understand the pessimism of Bowers. Here’s an administration that is unafraid of regulating compensation in multiple industries and just today strong arming the banking industry to pit itself back in the soup by extending a bunch of bad loans. What makes Bowers think they wouldn’t pass a 90% loss ratio requirement and force private insurers out of the health care business? It’s just another step to more complete government control. They wouldn’t even think about the job losses involved.

    daleyrocks (718861)

  19. Give it up, Karl. Just shut up. Seriously 😉

    JD (f8c9db)

  20. Moron just called the CBO a liar. Did you catch that?

    John Hitchcock (3fd153)

  21. John – Myron thinks he knows things. Don’t you know who he thinks he is?

    daleyrocks (718861)

  22. the proposal establishing all health insurance companies’ “medical-loss” ratio at a maximum of 10 percent — meaning 90 percent of premiums would have to go to medical claims. Companies would have to issue rebates to their customers if they fail to meet this standard.

    I can’t imagine how even the liberals on the Supreme Court will say that this is constitutional.

    Subotai (a207ab)

  23. Moron thinks he’s Dogcrpp?

    John Hitchcock (3fd153)

  24. Myron,

    I have been blogging for quite some time now — months, really — that Obama’s game has been to buy off and bailout the stakeholders, including the big insurers. I don’t drop it into every healthcare post because I don’t want to bore people who have better reading skills than you.

    Karl (404c05)

  25. Wow, the CBO sounds like it’s getting nervous as a tea partier.

    My favorite federal mandate: they mandated mental health coverage as a rider on the TARP bill. Yeah, I see the connection.

    You have to ask yourself, are they trying to destroy private insurance?

    Patricia (b05e7f)

  26. are they trying to destroy private insurance?

    Patricia – Yes

    daleyrocks (718861)

  27. strong arming the banking industry

    Daley: What the? “Strong-arming?” To paraphrase Barney Frank, tell me what alternate universe do you spend most of your time? Banks are doing the exact same things they’ve been doing all along with no new regs, except they’re now doing it with our money. I know that’s alright with you, but it ain’t alright with me.

    Myron (998393)

  28. This really proves you don’t understand sh**

    Daley: Cursing doesn’t make you smart. Strikes me that a lot of guys need to learn this very simple observation. All you’re doing is befouling the blog and making it NSFW.

    Myron (998393)

  29. I have to admit, Moron made me chuckle with that one.

    John Hitchcock (3fd153)

  30. I have been blogging for quite some time now — months, really — that Obama’s game has been to buy off and bailout the stakeholders, including the big insurers

    Karl: Indeed? What’s your evidence?

    Myron (998393)

  31. Hitchcock: Name-calling has never been an apt substitute for cogent thought. It does, however, speak volumes about the name-caller.

    In that way, it’s sort of like swearing.


    Myron (998393)

  32. “All you’re doing is befouling the blog and making it NSFW.”

    Myron – I didn’t know you commented at W.

    Upon what did you base your conclusion about the insurance industry being happy about new customers at government mandated terms and conditions, some nimrod lefty’s blog post or was it your own asspull?

    daleyrocks (718861)

  33. That is a good idea, better than the 25%+ “overhead” we have now.

    Jakealoper (37754c)

  34. Ya know, instead of asking an accusatory question, such as “What’s your evidence,” you could fut the shuck up and read those posts that Karl is referring to. He’s the most specific and detail-oriented blogger on this site.

    Icy Texan (5a64d2)

  35. “Hitchcock: Name-calling has never been an apt substitute for cogent thought.”

    Myron – When you have a cogent thought, maybe we’ll stop swearing and consider it, until then stop the behavior modification advice. You don’t deserve any special treatment. You are a garden variety troll, and not a very intelligent one at that.

    daleyrocks (718861)

  36. Myron – I didn’t know you commented at W.

    Daley: Mainly on Tuesdays, when I pull a long evening shift (I’m on the east coast). Otherwise, I comment at home. But it’s others I’m thinking about. I’m considerate that way. 🙂

    Anyway, as for insurance companies being happy about this boondoggle, I’m using a little something I call common sense, which suggests that just about any business would like 30+ million new customers, some of whom will now have government money to buy the product (which they legally MUST buy).

    I think they’ll put up with a few regs just fine.

    Myron (998393)

  37. My own experiences have been to purchase ins for the big unexpected things that will get handed to you now and again. I took care of all the small stuff, dental, eye-care, normal kid visits and such. Did that on an as needed basis.

    Then the reason I purchased ins arises, call the co. Every thing is fine go get fixed. Bills sent in ins co answers with; CLAIM DENIED!!!

    WHAT THE FUCK!!!!!

    Happened three times! Oh they did pay, after a time, seems they just send out denials for effect! Received of course like a shot across the bow or maybe getting pulled over and having the officer lay out several shots. You get the feeling.

    Now for some glazed history. Back in the early 80’s, the ins co. came up with some imagined threat for losses, our rates for all insurances increased massively! One policy went from 2600 to 23,000 in a single year. No negative claims history involved. It took a few years, rates did go down, probably due to the numbers of folks that said to hell with you, and took insurance upon themselves! Figured hey with our record, will take our chances.

    During the 80’s we had the ins guy gov, Levitt big time insurance broker agents, and watched all sorts of mandated ins purchasing being forced upon all of us, rates again rose.

    The miss river flooded in the 90’s, big time payouts for the ins co’s, rates took a jump to cover.

    After the events of 9/11 ins co’s were hollering about their losses. Again large increases across the board despite the govt payouts the industry saw only 7.5 billion in profits that year. Up over a billion.

    Katrina hit! Rates went up again! Imagine that?

    Four years later they all go broke, and we bail them out using up front tax dollars! Rates go up again and they will still go broke! The proof is in cast in concrete, they do not have the ability to operate as a business that can be honest and provide the services they purport!

    It might be time to let the ins co. cover our things and let all of us keep each other healthy and take care of our unplanned needs. Just like we do today, without the need of pleading for donations to glass jars on c-store counters to fill the all too many gaps.

    I can’t say that I fault the ins co’s. for trying to halt this, they will lose an entire segment of revenue. But they need to, they have not demonstrated their ability to actually handle it well.

    I do know this one thing, when the Doc says we have to perform this emergency surgery today, the last thing I need to be hearing is, a discussion about money.

    I will add a somewhat recent experience. I was working at a job I thought all was ok with, one evening while pushing a mop my back slipped out and I went down, amazingly right in front of my boss! Normally never on site, but she was. Saw me, my pain, my inability to continue running the mop.

    I hit my Chrio the next day, file a workers comp claim. I asked my boss about their filing their information, which in my biz I did online, well they used a PRIVATE workers comp company. I got the stare down from her as if I had just killed somebody. At the time I was but miffed.

    The bill was all of $200, why, I do not know as usual it would have been $70 for my two visits, needed more but had no idea who would be held to pay for them.

    It took the PRIVATE carrier almost two months to determine that I had a back problem before I went to work for mickey mouse penny pinching co! Well no shit! The only reason I can even walk today is because of the great Chrio I have had for 25 plus years!


    Now if I had been working for myself, which I did for 30 years, it would have been Dr. file, employer submit report, bill paid. I used state backed workers comp. (State backed as it used to be a division of the State that went govt private). Whatever that really means. My workers got their medical paid when needed if they got injured on the job. Period PS the end!

    Insurance companies today seem to have enough money to purchase TV commercials every 5 minutes on 300 channels, but not enough to pay those that file a claim for an injury? As far as I am concerned, the entire industry is nothing but a hollow fucked up enterprise!

    (TC steps off and kicks his soap box into kindling)

    TC (0b9ca4)

  38. Actually, Moron, I’m being generous in calling you Moron. You see, it’s like grade-inflation.

    John Hitchcock (3fd153)

  39. “Banks are doing the exact same things they’ve been doing all along with no new regs, except they’re now doing it with our money.”

    Myron – Try keeping up with current events. The loan spigot has dried up for all but the most credit worthy businesses and Obama is scapegoating the banks. Surely you must have read about that? He wants them to take more risks and lend to riskier customers, which is what got them into trouble in the first place. That makes a heckuva a lot of sense. Instead he should have designed a stimulus package that was designed to work and also go into effect in 2009 instead of 2010 and 2011. Instead we got the piece of crap the Democrats rammed through. You remember that, right?

    daleyrocks (718861)

  40. “I’m using a little something I call common sense”

    Myron – No, you’re doing something called an asspull because you don’t understand how the business works. Trust me.

    daleyrocks (718861)

  41. Hitchcock: Uh-huh. Still no discernible argument, I see. You might as well turn in for the night if you’re not going to add anything. We’ll talk when you have something to say.

    Daley: Let me ask you if you read about the massive bank bailout? And what new regs can you tell me have been passed? Links please.

    What I remember is that the stimulus was too small, another potentially decent piece of legislation ruined by the “need” to bring in conservative politicians, in that case the Maine women and Arlen.

    Myron (998393)

  42. Moron, until you come up with more than the same old leftist talking points that have already been fragged by the facts, you might actually get something worthwhile in return.

    Thumb clip, pull pin… Moron’s talking points gone.

    John Hitchcock (3fd153)

  43. grrr, forgot the strike button doesn’t work.

    until when

    John Hitchcock (3fd153)

  44. “FRAG OUT!!!”

    redc1c4 (fb8750)

  45. its worse than that. look right now these insurance reforms can only be afforded if there is a mandate, right?

    Well, the mandate is unconstitutional. Go read the constitution. originally the only direct taxes had to be apportioned among the states, and they had to be strictly by population. the apportioned part means that the Feds could only tax the states not the people. the only exceptions were excises, duties and tarriffs, which this wouldn’t be.

    now, the 16th A made an exception to that, but only for income taxes. this is not an income tax, therefore the tax, if it can be levied at all, has to be applied to the states. end of story.

    So the mandate is unconstitutional and will fall at the first challenge. it doesn’t exist. and the insurance companies will go bankrupt without them.

    A.W. (e7d72e)

  46. Daley: Mainly on Tuesdays, when I pull a long evening shift

    …as Head Fluffer on the new film called “The North Pole.” And we don’t need to speculate any further as to his meaning of “pull.”

    Name-calling has never been an apt substitute for cogent thought. It does, however, speak volumes about the name-caller

    It’s fascinating to watch an individual continually project their own worst behaviors onto others they don’t agree with – Moron habitually calls other liars when challenged, yet seems to believe that those actions have no relevance to his own personal accountability.

    We need a better class of Trolls – at this point, even Harpy looks better, at least he was entertaining.

    Dmac (a964d5)

  47. If you feed them, they will come.

    ropelight (5883b5)

  48. A.W., that constitutional interpretation is not going to fly very far. Randy Barnett over at Volokh Conspiracy built a better case on the limits of the commerce clause, but even his theory is going to be hard pressed to find five votes on the supreme court.

    SPQR (26be8b)

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  50. spqr

    really? so if we are taxed directly by the US government, this is not a diract tax?

    No, actually this is a 100% death blow to the mandate. it is unconstitutional, period.

    A.W. (b1db52)

  51. spqr

    i mean but for the 16th amendment, congress wouldn’t be allowed to tax our incomes. you know that, right?

    A.W. (b1db52)

  52. AW, SPQR is smart and gets the intended limitations of our constitution, but is defining constitutional as ‘whatever can get 5 votes on the SCOTUS).

    And in effect, that’s exactly what constitutional is. We don’t have the government we were supposed to have because power has been usurped and no one has stopped it. From Marbury to Wickard to Mccain Feingold, what our government can do has been expanded. It’s not like they can’t just redefine the word ‘duties’ or ‘income tax’.

    How my government could possibly justify forcing me to buy this kind of service is beyond me. And that’s one of the many good reasons why I won’t be on the high court.

    In my opinion, the constitution wasn’t written well enough. Perhaps it’s the best result they could get in those times, but many things are written as absolutes that aren’t, and so the constitution almost forces this ‘living constitution’ crap. The 2nd Amendment doesn’t really forbid infringing on my bearing of any arms. The 1st Amendment doesn’t really forbid infringing on my right to say anything anywhere anytime without legal consequences.

    The constitution is beautiful instead of written like a statute. you could write a 2nd amendment that allows all people to own guns and ammo and not tanks or cannons, but it wouldn’t be a beautiful comment on how our ability to remain a free people rests on our own shoulders. so as things stand, the courts get to reinterpret the parts that require it, and now are reinterpreting the parts that don’t require it… to the point where they are getting the law backwards.

    Dustin (44f8cb)

  53. A.W., your belief that the Federal government can’t tax individuals except on their incomes is not correct – and had been pretty much undermined even before the 16th Amendment.

    Dustin, the Constitution was written well enough. Its been undermined by dishonest judges.

    SPQR (26be8b)

  54. SPQR, I suppose I ask the authors of a constitution to try to picture a dishonest judge’s attempt to reinterpret the law, and work harder against it.

    i swore to defend our constitution when i enlisted a million years ago, and I wasn’t the only person who took the time to read it and consider what I was promising. I believe in the basic meaning, but there are simply too many problems with our constitution for me to accept that it’s an example of a well written law.

    Of course, it wasn’t meant to do what it’s used to to. It’s applied to states, but was meant as a promise to preserve the state’s autonomy. Whether it was written well or not, it wasn’t meant to apply to all these transactions, governments, and problems. It was meant to keep the federal government out of all that.

    This is the basic problem AW identifies. Did the constitution intend to authorize takeover of insurance? to force me to buy this stuff? no… dishonest judges intended that part.

    Dustin (44f8cb)

  55. Take my second amendment example.

    It could be written much, much better than that. Most of us could probably take a stab at it and come up with something better than what he now have. Is SPQR right that this wouldn’t be necessary if our justice system employed more honesty? Of course he is.

    the ideas behind our bill of rights or separation of powers or federalist system? Unassailable.

    Dustin (44f8cb)

  56. spqr

    Okay, name one case where the supreme court allowed a direct taxation outside of income.

    in fact, in the pollock case they made it clear they were not going to bend on this. its always easier to make the SC bend when the language is not so clear.

    A.W. (e7d72e)

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