Insurers’ Sweet Screaming Nightmare Scenario: A Health-Law Death Spiral

Anna Wilde Mathews reports: As the Supreme Court hears arguments on Wednesday in the latest challenge to the Affordable Care Act, health insurers are struggling to prepare for a decision that could unravel the marketplaces created by the law.

“Without the tax credits, insurance-industry officials say, the individual insurance markets in those states are likely to start collapsing, as many people drop coverage they can no longer afford, leaving only those less-healthy consumers who value insurance because they’re likely to need care…”

The ruling could come in June—but insurers must make regulatory filings before then about their 2016 plans. Utah’s Arches Health Plan, for one, says it may propose an array of insurance product designs this spring. Then, depending on what the court decides, the insurer would be poised to drop some of them before they’re finalized with regulators and offered to consumers. The insurer may also come up with two different sets of rates for next year, one for each potential court outcome.

“…That would drive up premiums, because insurers would raise rates to cover the costs of this smaller, sicker pool. Then even more people would likely refuse the ever-more-expensive coverage.”

“We’re hedging our bets right now,” says Ferris W. Taylor, chief strategy officer.

The Supreme Court case focuses on federal subsidies that help lower-income consumers purchase plans. The plaintiffs argue that these tax credits aren’t authorized by the law in states where the federal government provides the online insurance exchange—which total as many as 37. Avalere Health, a consulting firm, estimated that around 7.45 million people could lose the federal financial help if the court rules against the subsidies.


“What happens is, you go into a classic death spiral…It doesn’t hang together.”

— Janie Miller, chief executive of nonprofit insurer Kentucky Health Cooperative Inc

Without the tax credits, insurance-industry officials say, the individual insurance markets in those states are likely to start collapsing, as many people drop coverage they can no longer afford, leaving only those less-healthy consumers who value insurance because they’re likely to need care. That would drive up premiums, because insurers would raise rates to cover the costs of this smaller, sicker pool. Then even more people would likely refuse the ever-more-expensive coverage.


An analysis by researchers at the Urban Institute, a liberal-leaning policy research group, projected that in states where the subsidies disappeared, individual insurance premiums would go up 35% on average in 2016. That increase would affect all consumers purchasing their own plans in those states, including people who didn’t buy through the government marketplace, the researchers suggested. The financial blow would be particularly tough for smaller insurers that can’t dilute the impact with other, unaffected business, like employer and Medicare plans.

 “The impact would be substantial enough that I would expect many carriers to consider pulling from the market. There’s a question, if the subsidies are struck down, if it’s an insurable market.”

— Tom Snook, an actuary with consultants Milliman Inc. who is working with a number of insurers offering exchange plans

“What happens is, you go into a classic death spiral,” says Janie Miller, chief executive of nonprofit insurer Kentucky Health Cooperative Inc. “It doesn’t hang together.” Her nonprofit’s home state wouldn’t feel the direct impact of a ruling, because Kentucky has its own exchange. But the insurer has said that next year it will go into West Virginia, where the subsidies could potentially be affected. Ms. Miller said the co-op would have to re-evaluate its expansion plans if the court struck down tax credits there. Read the rest of this entry »

BREAKING: Federal Appeals Court Panel Says Most Obamacare Subsidies Illegal


Crash and burn for Obamacare?

 reports: In a potentially crippling blow to Obamacare, a top federal appeals court Tuesday said that billions of dollars worth of government subsidies that helped 4.7 million people buy insurance on are not legal under the Affordable Care Act.

“Now, Obama and Company will look for John Roberts to pull their fat out of the fire again. I am afraid he will.”

— Wesley J. Smith

[Obamacare Fed Exchange Subsidies Fall]

In its decision, a three-judge panel said that such subsidies can be granted only to people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia — not on the federally run exchange Plaintiffs in the case known as Halbig v. Burwell argued that the ACA, as written, only allows that often-significant financial aid to be issued to people who bought insurance on a marketplace set up a state.

[Also see: Good News: Americans No Longer Required to Obey Laws, Regulations, or Court Decisions]

[White House on Obamacare Ruling: Letter of the Law Doesn’t Matter]

[See the court document here]

The decision is certain to be challenged by the Obama Administration, and does not immediately have the effect of law. But if it is ultimately upheld, it would cause insurance rates for those people who lost the subsidies to dramatically rise. Read the rest of this entry »

Obama Exceeds Peter Wehner’s Expectations


Source: Commentary Magazine

BREAKING NEWS: Bowing to Pressure from punditfromanotherplanet, White House Responds: Health Secretary Resigns


No longer able to withstand the increasing pressure from punditfromanotherplanet, Secretary of Health and Human Services Kathleen Sebelius resigns in disgrace, as Democrats struggle to hold Senate in upcoming mid-term elections reports: WASHINGTON — Kathleen Sebelius, the health and human services secretary, is resigning, ending a stormy five-year tenure marred by the disastrous rollout of President Obama’s signature legislative achievement, the Affordable Care Act.

The system is down at the moment. We are experiencing technical difficulties and hope to have them resolved soon.”

— Kathleen Sebelius, struggling to defend the website and the health care law

Mr. Obama accepted Ms. Sebelius’s resignation this week, and on Friday morning he will nominate Sylvia Mathews Burwell, the director of the Office of Management and Budget, to replace her, officials said.

“If I could take something along with me, it would be “all the animosity. If that could just leave with me, and we could get to a new chapter, that would be terrific.”

— Kathleen Sebelius

The departure comes as the Obama administration tries to move beyond its early stumbles in carrying out the law, persuade a still-skeptical public of its lasting benefits, and help Democratic incumbents, who face blistering attack ads after supporting the legislation, survive the midterm elections this fall.

[See: Kathy, We Knew Ye Too Well: Sebelius Resigns Five Years Too Late]

“President Obama has headed off panic over Sebelius’ departure by reassuring the nation that he has another unqualified failure to take her place.”

Tim Cavanaugh

Officials said Ms. Sebelius, 65, made the decision to resign and was not forced out. But the frustration at the White House over her performance had become increasingly clear, as administration aides worried that the crippling problems at, the website set up to enroll Americans in insurance exchanges, would result in lasting damage to the president’s legacy. Read the rest of this entry »

Kimmel Mocks Obamacare

Having trouble signing up on Don’t expect Obamacare-Care to be any better


Jimmy Kimmel took some shots at the health-care law’s ongoing problems by releasing an ad for the spoof program…

[Gold Box Deal of the Day: Order Best of Warner Bros 50 Film Collection (+UltraViolet Digital Copy) [Blu-ray] from Amazon]

Read the rest of this entry »

No Respect: World’s greatest Gacker calls Security ‘Shameful’

The cover of "Ghost in the Wires," the autobiography of notorious computer hacker and security expert Kevin Mitnick. (LITTLE, BROWN & COMPANY)

The cover of “Ghost in the Wires,” the autobiography of notorious computer hacker and security expert Kevin Mitnick. (Little, Brown & Company)

Security expert — and once the world’s most-wanted cyber criminal — Kevin Mitnick submitted a scathing criticism to a House panel Thursday of ObamaCare’s website, calling the protections built into the site “shameful” and “minimal.”

In a letter submitted as testimony to the House Science, Space and Technology Committee, Mitnick wrote: “It’s shameful the team that built the site implemented minimal, if any, security best practices to mitigate the significant risk of a system compromise.”

[The book at Amazon: Ghost in the Wires: My Adventures as the World’s Most Wanted Hacker]

Mitnick’s letter, submitted to panel Chairman Lamar Smith, R-Texas, and ranking member Eddie Bernice Johnson, D-Texas, held comments from several leading security experts.

Read the rest of this entry »

Obamacare Initiates Self-Destruction Sequence

Photographer: Jim Stratford/Bloomberg News What happens to bad ideas.

What happens to bad ideas. Photographer: Jim Stratford/Bloomberg News

Megan McArdle writes:  On Wednesday, Politico’s Carrie Budoff Brown reported that the administration was saying fewer than 500,000 people had actually lost insurance due to Obamacare-induced cancellations. This struck me as a strange leak: Half a million is a lot less than many people (including me) have been estimating, but it is still not a small number, and the administration has tended to sit on negative information until the last possible moment.

Yesterday, we had a more official announcement from the administration: Anyone who has had their policies cancelled will be exempt from the individual mandate next year. The administration is also allowing those people to buy catastrophic plans, even if they’re over 30.

What to make of these two statements? On the one hand, the administration is trying to minimize the number of people who have been affected by cancellations, and on the other hand, it is unveiling a fix to the problem of cancellations. And these are not minor changes.

As Seth Chandler points out, doesn’t even let you see catastrophic plans if you’re more than 30 years old. Is now the time to be making technical changes to the website?

As Avik Roy points out, catastrophic plans aren’t that much cheaper than the so-called bronze plans. They’re also not eligible for subsidies. This is unlikely to be much help to folks who lost insurance; all it does is introduce some much-unneeded complexity to

Read the rest of this entry »

ObamaCare: Echoes of Stalinism Past


Peter Morici writes:  D-Day arrived for ObamaCare Saturday and began with an 11 hour shutdown of–the problem plagued website intended to provide easy access to affordable insurance for millions of Americans.

The contraption is functioning better but is still terribly inadequate. It can only handle 50,000 users at a time, well short of the volume needed to assist the millions of Americans who must purchase health insurance by year end or face fines.

Those eligible for subsidies must use the system, but often the system cannot verify eligibility for aid. Many are in limbo–applications already initiated are stalled, lost, or otherwise cannot be completed. software to funnel subsidies to insurance companies is not functioning effectively, and the small business site that was to offer group coverage has been postponed one year.

Eventually Mr. Zients will have this monster fulfilling all its functions, but it is likely to be a balky, frustrating website, much like other federal websites or those run by private firms enjoying monopoly power.

Health insurance will be as much of a headache as tax filing. Bureaucrats will have easy access to sensitive personal data, which Obama administration political moles can use to target, harass, and sometimes destroy critics, and simply occupy millions of hours of citizens’ time that could be used more productively.

Welcome to statism–the ants of capitalism herded into a bureaucratic hell to serve the masters of a grander design. Read the rest of this entry »

Has Obamacare Been Rescued by the Administration’s ‘Tech Surge’? Don’t Bet On It

note: This is an official White House photo

note: This is an official White House photo

 writes:  Is Obamacare back in action? For the last two months,, the federally run insurance portal at the heart of the law, has experienced numerous technical troubles. The administration vowed to fix those problems by the end of November, and today, the Department of Health and Human Services (HHS) announced that it had met the goal of making sure that the site “worked smoothly” for the “vast majority of users.”

In a conference call this morning, a spokesperson for HHS said, “we believe we have met that goal.” A six-page progress report released by the administration this morning touts technical progress as well as managerial improvements, declaring that the team making the improvements is now “operating with private sector velocity and efficiency.”

Anyone else catch the irony there? Set up a vast, government-managed tech operation, watch it fail—and then, as it attempts to reboot itself, boast of private-sector quality work?  (Also, let’s not forget that the original failed work was in fact done by private contractors working under the managerial bumbling of the federal health bureaucracy.) Read the rest of this entry »

[VIDEO] Error Message Greets CNN Reporter on Relaunch Date

On the same morning the Obama administration announced its fixes to the website, a CNN reporter ran into an error message as he attempted to use the website.

Medical producer Matt Sloane said the website had improved since its October 1 rollout, but when he refreshed the page after it showed it had been “in progress” for several minutes while processing his information, he received an error message.

National Review Online

Dem. Strategist: ‘I Still Can’t Get Insurance through, or Over the Phone’

Andrew Johnson reports:  Democrat Jimmy Williams, a strong supporter of Obamacare, is reaching his wit’s end over the health-care law’s botched rollout. After nearly two months of trying on both the website and over the phone, he still hasn’t been able to sign up for a plan, including an attempt the day before.

“That is not a good track record — not just for me, but I’m sure for lots of people,” Williams said on MSNBC on Wednesday. “I want the website to work — I demand that the website works — and if he doesn’t have it working in three days then he’s going to have to answer to his critics, including me, a Democrat.”

He said he tried to log on to on Tuesday, but was unable to get through. After calling the call center (his third time since his first try October 4), Williams said he still didn’t have a plan.

The White House’s self-imposed deadline for a functioning website is November 30.

National Review Online

Tuesday News Dump


Ben K – Ace of Spades HQ

Analysis: Bad Managers Ruined Obamacare


Politicians can’t talk their way out of a technological mess

Glenn Harlan Reynolds  writes: The Obamacare rollout remains a debacle, but now enough time has passed that smart people are beginning to dissect what went wrong. So far, the best take I’ve seen comes from Internet pioneer Clay Shirky, who notes that the politicians weren’t listening to the people doing the actual work.

I was talking about this to my Administrative Law class not long ago. I had told them that there are few real secrets in D.C. because everyone sleeps with everyone else. A student then asked why both the administration and the GOP seemed to have been blindsided by the Obamacare website problems. “I guess nobody was sleeping with the techies,” was my response.

Shirky leaves out sex as an explanation — always a mistake where Washington is concerned — but he does focus on communication, and on the problems with having big tech programs run by people who don’t actually understand the technology.

Read the rest of this entry »

[VIDEO] Kathleen Sebelius As Obamacare Website Crashes

The perpetually annoyed Health and Human Services overlord Secretary Kathleen Sebelius had an embarrassing moment in Florida yesterday as she was touring Miami.

She was meeting with Obamacare Navigators when the HealthCare.Gov website crashed right in front of her. This must happen a lot because she took it in stride, saying cheerfully, “Uh oh!” while her host said, “Oh, that happens every day!”

Read the rest of this entry »

TIME’S UP: Obama’s Race for Survival

I didn’t access the full article, and I took liberties with the headline, but from the introduction, it soft-pedals as you might expect, though the cover art makes up for it. This is about as much fun as watching reruns of Watergate Hearings. Which for some of us, actually is kinda fun…

TIME: A good President needs a big comfort zone. He should be able to treat enemies as opportunities, appear authentic in joy and grief, stay cool under the hot lights. But humility doesn’t come naturally to those who decide they are qualified to run the free world. So the sign that the Obama presidency had reached a turning point came not when his poll numbers sank or his allies shuddered or the commentariat went hunting for the right degree of debacle to compare to the rollout of Obamacare.

It happened when he started apologizing. In triplicate. For not knowing what was going on in his own Administration. For failing to prevent his signature achievement from detonating in prime time. For not telling the whole truth when he promised people that Obamacare would not touch them without permission: “If you like your health care plan, you can keep your health care plan.”

Read the rest of this entry »

Obama Loses His Cool


Only the pant crease remains

Rich Lowry writes:  Barack Obama is the coolest president we’ve had since John F. Kennedy, at least according to conventional standards for such things. Obama has always been a brand as much as a politician, one that has been perceived as sleek, smart, and up to date.

Then along came Its failure to launch is a signal event in the long political battle over Obamacare and perhaps an inflection point in the president’s image. It’s hard to maintain a sense of truly being on the cutting edge of change when you can’t build a website.

Obama’s cool was, in part, an artifact of world-class marketing. Graphic designer Michael Bierut writes in the book Designing Obama (yes, there’s such a book) of how impressed he was watching Obama rallies in 2008: “The awe-inspiring part was the way all the signs were faithfully, and beautifully, set in Hoefler & Frere-Jones’s typeface Gotham.” If only the folks at Health and Human Services were consumed with such attention to detail.

Read the rest of this entry »

From ‘Yes We Can’ to ‘Nobody’s Perfect’

The Daily Show’s Jon Stewart, who once upon a time used his comedy perch to protect President Barack Obama, now has little choice but to mock him. Mercilessly.

Stewart wouldn’t like it if we took his jokes seriously, but he still skewered the president’s abysmal press conference Thursday in ways that left the leader’s image in tatters.

Read the rest of this entry »

USA TODAY Editors Abandon O: ‘Credibility Going Up in Smoke’

New data show just how broken it is

website is down

The health insurance signup numbers the White House released Wednesday afternoon were deeply disappointing, though not particularly surprising.

Everyone knows that the website has been performing abysmally, and the actual numbers confirmed what everyone could only guess at until now because the White House had withheld the data.

Overall, only about one-fifth of the people the White House expected to sign up for insurance in the first month actually did so: 106,185 against a forecast of 500,000. That’s just slightly less than a capacity crowd at Penn State’s Beaver Stadium. And of those who signed up, only 26,794 did so on the federally run exchanges in 36 states. The rest enrolled on state-run exchanges.

Read the rest of this entry »

Government is Magic

“These are the people who love Freakonomics, who enjoy all sorts of mental puzzles, who like to see an idea turned on its head, but who couldn’t fix a toaster.”

120119_obama_castle_ap_328Our technocracy is detached from competence. It’s not the technocracy of engineers, but of “thinkers” who read Malcolm Gladwell and Thomas Friedman and watch TED talks and savor the flavor of competence, without ever imbibing its substance.

These are the people who love Freakonomics, who enjoy all sorts of mental puzzles, who like to see an idea turned on its head, but who couldn’t fix a toaster.

The ObamaCare website is the natural spawn of that technocracy who love the idea of using modernity to make things faster and easier, but have no idea what anything costs or how it works.

It’s hard to have a functioning technocracy without engineers. A technocracy made in Silicon Valley with its complete disregard for anything outside its own ego zone would be bad enough. But this is a Bloombergian technocracy of billionaires and activists, of people who think that “progress” makes things work, rather than things working leading to progress.  Read the rest of this entry »

TechCrunch: How Doomed Itself By Screwing Startups

A screenshot of the website, which has experienced numerous glitches since it was launched Oct. 1.

A screenshot of the website, which has experienced numerous glitches since it was launched Oct. 1.

 writes:, a government-run e-commerce website for the Affordable Care Act, does not actually need to exist. The still-dysfunctional federal site could have offloaded all of the work to startups, which were already building more sophisticated price-comparison alternatives to the official site, just like Orbitz does for airline companies. was supposed to be an information hub for the needs of millions of uninsured citizens who are now legally required to have a healthcare plan. The federal website ended up offering insurance directly, after 24 states (mostly Republican) refused to design their own e-commerce websites for their residents. Unfortunately, at launch, the federal and state sites crashed.

Three weeks later, Obama’s signature law, the Affordable Care Act (“Obamacare”), is in danger of losing public confidence and the enrollment numbers it needs to meet its promise of cheap, quality insurance. But, it’s unclear why the state and federal exchanges websites were built in the first place. Read the rest of this entry »

BREAKING: Obama to Appoint Sebelius to Higher Level Cabinet Position


Just kidding. The title of the following Rich Lowry NRO article is “Heckuva Job, Kathleen Sebelius”. But it wouldn’t surprise anyone, would it? Career success formula in the Obama era:  Incompetence + Catastrophe + Taking Heat + Lying on National Television = Reward, Success, Promotion. Is Kathleen Sebelius following in the footsteps of Susan Rice?

Rich Lowry writes: Little did they know it, but Republicans fighting to defund or delay Obamacare had an ally in spirit in Health and Human Services secretary Kathleen Sebelius.

Her explanation for the Obamacare website is that she couldn’t possibly have been expected to make it work in the mere three and a half years since the law passed. She told the Wall Street Journal that the website ideally needed five years of construction and one year of testing, and instead had only two years of construction and almost no testing.

That means with the proper development time, would have had a flawless launch . . . on October 1, 2017. Had Senator Ted Cruz suggested a four-year delay in Obamacare as his fallback in the defunding fight, he would have been scorned as an unbending fanatic, although he might have been giving Sebelius the breathing room she needed.

Read the rest of this entry »

NUKE AND PAVE: HealthCare.Gov Needs to Blow Up, Start Over, Tech Experts Agree

BatmanWithBombErika Johnsen writes:  There’s a growing consensus on the mid- to late-November time frame by which the Obama administration really, really needs to have ObamaCare’s online portal running smoothly to avoid inducing more death-spiral risks and subsequent industry panic, and all of their plans for public outreach and directing people to call centers and whatnot is only going to get them so far.

“Tech surge” or no tech surge, CNN reports that still more experts and computer engineers are piling on to the suggestion that fixing HealthCare.Gov’s major problems before the end of 2013 just isn’t a feasible task, and that rebuilding the system from scratch would be the administration’s easiest and safest bet:

After assessing the website, Dave Kennedy, the CEO of information-security company Trusted Sec, estimates that about 20% of needs to be rewritten. With a whopping 500 million lines of code, according to a recent New York Times report, Kennedy believes fixing the site would probably take six months to a year. Read the rest of this entry »

Sebelius: ‘I Don’t Work for You’

Courtesy of NRO Staff:  Health and Human Services secretary Kathleen Sebelius responded moments ago to questions about whether she will resign in the wake of the Affordable Care Act’s problematic rollout. Her response is raising some eyebrows.

Sebelius: ‘I Work For The United States of America  The Department of Health and Human Services My Fellow Citizens  The American People  the Democratic Party

“My goal is to actually get the website up and running,” she told reporters. “The majority of people calling for me to resign I would say are people who I don’t work for and who do not want this program to work in the first place. I have had frequent conversations with the president and I have committed to him that my role is to get the program up and running and we will do just that.”

A group of 33 House Republicans on Wednesday sent a letter to President Obama calling for her resignation. ”The scope of the problem is so great that, were this a private company or military command, the CEO or general would have been fired,” they wrote. “We are, therefore, calling on you to hold Secretary Sebelius accountable for the fiasco that is and ask for her resignation.”

National Review Online

Will a ‘Tech Surge’ Save ?

There might yet be hope from the private sector — just not in the way you might think.


Christina Farr reports:  Over the weekend, the U.S. Department of Health and Human Services promised it would recruit the ”best and brightest” to fix, the federal government’s online insurance marketplace that’s part of the Affordable Care Act (aka Obamacare), which has been plagued by technical defects. On Monday, President Barack Obama promised a “tech surge” to fix the problems.

It’s not going to happen. is not going to get help from “the best and brightest” nor a “surge,” neither of which it can easily afford. In reality, the government’s options are limited, sources tell VentureBeat.

But there might yet be hope from the private sector — just not in the way you might think.

Read the rest of this entry »

Who’s to Blame for Broken Obamacare Website? Republican Opposition, that’s Who!

Remember last week when MSNBC viewers saw a banner reading, “GOP flubs Obamacare launch“? It took him days, but today Fox News contributor Juan Williams attempted a similar leap, blaming the “excruciatingly embarrassing” rollout of the website on those darned Republicans and their “massive opposition… more


Goldberg on Obama’s Defense of

National Review Online

You Can Check Out Any Time You Like but You Can Never Leave

You Can Check Out Any Time You Like but You Can Never Leave

Not Retreat, Retweet!

via Pundit Planet (PunditFaP) on Twitter

Most Popular Question at How to Get Exemption From Lack-of-Coverage Penalty Fee?

Jeryl Bier writes: One day away from the launch of the Obamacare marketplaces, the question most on the minds people visiting the website is not about coverage, but rather about avoiding the penalty, or tax, for not having health insurance. As of Monday morning, here is how the website listed its “Most Popular” items:

Picture 17_0

As the website explains, the fee (tax) in 2014 is 1 percent of annual income or $95 per person, whichever is higher. The fee increases each year. By 2016 it increases to 2.5 percent of income or $695 per person, whichever is higher.