Curtis Bowman

What the Affordable Care Act Has Done for Me

When I moved back to Texas in 2003, I had to find new health insurance. It seemed that the company I had been using in Philadelphia didn't underwrite insurance in Texas. I contacted an agent, and he steered me towards Blue Cross Blue Shield of Texas. I applied and was accepted.

Because I'm a self-employed scholar, I wasn't eligible for a group plan. So I had to go with an individual plan with a deductible of $2500. Over the years the cost of this not-very-good policy has risen by roughly 150%. At my current premium of $312 a month, I'm now paying $3744 a year for my coverage.

Because I had health insurance, however mediocre, I never figured that the Affordable Care Act would make much of a difference to me. Turns out that I was wrong about that.

A few days ago I got a surprising letter from BCBSTX. Here are the important excerpts:

The Affordable Care Act requires Blue Cross and Blue Shield of Texas (BCBSTX) to issue a rebate to you if BCBSTX does not spend at least 80 percent of the premiums it receives on health care services, such as doctors and hospital bills, and activities to improve health care quality, such as efforts to improve patient safety. No more than 20 percent of premiums may be spent on administrative costs such as salaries, sales, and advertising. This requirement is referred to as the "Medical Loss Ratio" standard or the "80/20 rule". The 80/20 rule in the Affordable Care Act is intended to ensure that consumers get value for their health care dollars.

[. . .]

The Medical Loss Ratio rule is calculated on a State by State basis. In Texas, BCBSTX did not meet the Medical Loss Ratio standard. In 2011, BCBSTX spent only 71.0% of a total of $1,054,029,473 in premium dollars on health care and activities to improve health care quality. Since it missed the 80 percent target by 9.0% of premiums it received, BCBSTX must rebate 9.0% of your health insurance premiums.

[. . .]

We are issuing a credit to the bank account you used to pay your premium. Your credit is $357.56.

Color me surprised. I guess that some BCBSTX executive gets one less expensive dinner in a fancy Dallas restaurant.

I must have heard about this aspect of the Affordable Care Act at some point, but I can't remember anything about it. Since this would have been a major selling point for people like me who already had health insurance, I have to wonder how hard it was pressed when the bill was winding through Congress.

Did the Obama administration simply not talk this up very much? I really can't remember. But if you can, please let me know. Go to my "about me" page to get my email address.

And if you google "medical loss ratio" for yourself, you'll get lots of hits.

Jonathan Chait Gets the Last Laugh Over Health Care Reform

Jonathan Chait gets the last laugh over health care reform.

"We followed the most radical voices in the party and the movement, and they led us to abject and irreversible defeat."

Take a look at David Frum's honest and insightful assessment of the magnitude of his party's defeat in its efforts to derail President Obama's health care agenda.

Thomas Schaller on the Elderly and the Lack of a Real Health Care Debate

Thomas Schaller notes the irony of the fact that the elderly are complaining the most about government involvement in health care while simultaneously receiving the most government health care dollars.

Here's a significant excerpt from Mr. Schaller's column that addresses the widespread ignorance of how much the federal government spends on health care for the elderly:

So let's have a national debate about the government spending for health care, fine. But as we do, let's be clear about where - or rather, on whom - the government spends the bulk of its health care money: senior citizens.

Of course, elderly Americans have more expensive health care needs. And I can honestly say I've never met a single person who begrudges senior citizens the opportunity to live out their retirement years without enduring sickness or pain.

Nor, by the way, does President Barack Obama begrudge them. In fact, a significant chunk of his speech Wednesday night to a joint session of Congress was dedicated to allaying the concerns of seniors. No other group received attention.

"More than four decades ago, this nation stood up for the principle that after a lifetime of hard work, our seniors should not be left to struggle with a pile of medical bills in their later years," Mr. Obama said at a Saturday health care rally in Minnesota, as further assurance. "That is how Medicare was born. And it remains a sacred trust that must be passed down from one generation to the next. That is why not a dollar of the Medicare trust fund will be used to pay for this plan. Not one dollar."

And yet, on our televisions we see enraged senior citizens at health care town halls with signs warning about the rise of socialism in America. That is, the group most worried about government intervention into health care is the group that benefits from the greatest government investment in public health care the planet has ever witnessed. Are you kidding me?

Prior to the government's redistributive investments in Social Security and Medicare, poverty and illness made for a brutal end-of-life experience for millions of seniors. According the National Bureau of Economic Research, "a large increase in the incomes of the elderly stemming from pre-Social Security social programs and the phase-in of the Social Security system has coincided with suicide rates for that group dropping 56 percent since 1930."

Yet we have to listen to knuckleheads like Sarah Palin, the 2008 Republican vice presidential nominee, scaring seniors with bogus warnings about the government creating "death panels." But before Social Security and Medicare, the sad truth is that many seniors issued what we might call self-imposed death panel verdicts: They took their own lives.

I don't remember this many seniors complaining about socialism during the past four decades, a period during which the poverty rate among seniors was reduced to a third of what it was, Medicare and Medicaid expanded drastically, and Mr. Obama's Republican predecessor in the White House pushed through an expensive prescription drug benefit - in short, an era that witnessed a giant, "socialist" transfer of cash from younger Americans to their parents and grandparents, some of whom are now complaining about a too-big government.

As I've said before, in my darker moments I sometimes think that the elderly are the enemy.

Claire Suddath on Why Southerners Are So Fat

Claire Suddath explains why Southerners are so fat.

Not that I'm fat, but I can certainly sympathize with Suddath's discussion of how Southern heat and humidity keep people from going outside and exercising. As I write this, it's 101 degrees where I live in Texas.

Wasteful and Inefficient

According to this article by Ceci Connolly of The Washington Post, even the chief executives of major health care institutions acknowledge that their industry is filled with waste and inefficiency.

Chronic Diseases Among the Uninsured

Reed Abelson of The New York Times reports on a new study of the indequate treatment that the uninsured are receiving for chronic conditions.

Say You're Sorry

Doctors and hospitals are learning that apologizing for preventable medical errors is helping to reduce the number of malpractice cases.

Pharmaceuticals in the Water Supply

Take a look at this AP article on the variety of pharmaceuticals that are being found in the country's drinking water supplies.

A "Tsunami of Spending" Awaits Us

This recent column by Jacob Sullum of Reason is worth reading in conjunction with Robert J. Samuelson's latest effort to prod us into a serious discussion of entitlement spending. (I blogged Mr. Samuelson's column in my previous post.)

Mr. Sullum's column brought to my attention a recent speech by David M. Walker, the Comptroller General of the United States. In that capacity Mr. Walker is the head of the U.S. Government Accountability Office, and thus he can be expected to know a thing or two about entitlement spending. You can use this link to download the text of Mr. Walker's speech (PDF, 124 KB).

Here's a mind-boggling excerpt to keep you awake at night:

Believe it or not, the federal government's total liabilities and unfunded commitments for future benefits payments promised under the current Social Security and Medicare programs are now estimated at $53 trillion, in current dollar terms, up from about $20 trillion in 2000. This translates into a defacto mortgage of about $455,000 for every American household and there's no house to back this mortgage! In other words, our government has made a whole lot of promises that, in the long run, it cannot possibly keep without huge tax increases.

The Medicare program alone represents about $34 trillion of our current $53 trillion fiscal gap. If there is one thing in particular that could bankrupt America, it's runaway health care costs. And don't forget, the first "baby boomers" will begin to draw their early retirement benefits under Social Security in a couple of weeks! And, just three years later, they will be eligible for Medicare. When "baby boomers" begin to retire in big numbers, it will bring a tsunami of spending that, unlike most tsunamis, will never recede.

The prescription drug benefit alone represents about $8 trillion of Medicare's $34 trillion gap. Incredibly, this number was not disclosed or discussed until after the Congress had voted on the bill and the President had signed it into law. Generations of Americans will be paying the price — with compound interest — for this new entitlement benefit. In many ways, the 2003 Medicare prescription drug episode arguably represents government "truth" and "transparency" at its worst. Unfortunately, based on adding the prescription drug benefit and other spending and tax actions, the federal government seems to be ignoring the first rule of holes in connection with its fiscal affairs. Namely, when you're in a hole, stop digging!

If trillions of dollars aren't big enough to get your attention, believe it or not, in fiscal 2007 over 62 percent of the federal budget was on "auto-pilot" and this percentage is on the rise! Shockingly, the major functions expressly envisioned by our Founding Fathers as a proper role for the federal government — things like national defense, homeland security, foreign policy, the treasury function, the federal judiciary, the Congress and the Executive Office of the President — are in the remaining 38 percent of the federal budget! And this portion of the budget is set to get squeezed.

Mr. Walker's speech was supposed to roll out a new report intended to instruct the American people about the fiscal challenges in our future. An abstract is available here, and that page contains a link to a PDF of the full report.