Let’s do this in Steps.
● Step 1: To understand Obamacare, you need to grasp what it needs to work. Like vampires need blood, Obamacare needs the public to part with their money. But even more specifically, Obamacare needs the young to part with their money. Old people are expensive to insure, they get sick and need medical care and insurers are likely to pay more to insure them than they collect in premiums, especially when they are forced to take in all old people no matter what their condition and they can only charge them the same rate as everyone else.
That’s why the young matter. The young are needed to prop up Obamacare with their dollars or the insurers will go break. If they go broke, the program fails and the whole scheme collapses.
● Step 2: It is estimated that seven million people will sign up for Obamacare in the first year... that will be considered “success.” Of those, they need around 2.7 million of those people to be “the young invincibles”, i.e. the people between 18 and 35 who are healthy and don’t need insurance.
● Step 3: Obamacare opened and they trumpeted the millions of hits they got. But it turns out that very few people were actually opening accounts. Figures are scarce, but it looks like around 4,000 opened accounts in the big states, 1,000 in the middle states, and a couple hundred in the small states. As a rough guess, we are looking at under 20,000 people opened accounts on the first day.
● Step 4: Of those people, it now turns out that only around 10% of those who opened accounts went on to apply for insurance. So we’re looking at 2,000 applied for insurance. Of those, anywhere from 50% to 99% didn’t provide enough information to process their insurance. That means maybe 1,000 people got insurance the first day and another 1,000 only think they got insurance.
● Step 5: Now we ask, is this a good number? Well, consider this. The opening day probably will have the highest turnout. That’s how life works. And in this case, that makes even more sense as everyone who has been waiting to get insurance they couldn’t otherwise get will show up to get it. BUT for the sake of argument, let’s assume that they get the same number every day from now on... a highly unrealistic assumption.
If we apply that assumption, then by January, 1.8 million people will have opened accounts and 180,000 will have signed up for insurance. At that rate, 7.3 million people will have opened accounts by the end of the year, and 730,000 will have insurance.
Hmm. If only 730,000 people sign up, that would be an epic disaster... Titanic class. Obamacare would become “Obama’s folly”... a hundred billion dollar program to help almost no one. But it’s unlikely that the 10% sign-up ratio will continue; it will rise as fewer gawkers visit and as the requirement for coverage kicks in... of course, that means the number of visitors will crash too, but let’s hold that thought. For the moment, let’s assume that 100% of visitors will start signing up immediately. Is that enough?
Well, no.
If 100% of these people sign up (an impossible figure, which is already based on obviously false assumptions that the same number of people will keep visiting each day), then 7.3 million people will have signed up by years end. That would seem to put Obamacare on track... barely.
But there are problems with this number. The number of visitors will fall dramatically. And it won’t stay consistent day after day. It will spike at the start and then crash throughout the year. So the total number will be far less than 7.3 million. If the numbers fall in half (marketing suggests an 80% fall), then we’re looking at 3.6 million people... almost four million short of their goal.
Further, there’s something else strange here.
It is estimated that there are between 9 million and 25 million uninsurables. You are smoking crack if you think those people won’t sign up as soon as possible. So think about this. Why didn’t Obamacare get more visitor... at least nine million? Why didn’t more people open accounts? And why didn’t the people who opened accounts get insurance? You would think that signing up nine million people should be easy, so why are they on a pace for 730,000?
More importantly, are the people who are opening accounts “normal” people or are they uninsurable? It’s entirely possible that the only people signing up are the people who can’t buy normal insurance. If that’s the case, this system will go broke before June.
It’s hard to tell what any of this means yet because so much can still change. But right now, this looks like a disaster in the making. It looks like they aren’t getting nearly enough interest in signing up and that suggests that the people who are signing up are the ones who will be so expensive they will break the system.
It will be interesting to see how this plays out. Team Obama is trying to put the best face on this. Said Treasury Secretary Jack Lew in response to a question about the number of people signing up being “embarrassingly small”:
“It’s the wrong question, We know that people take time to make important decisions like this. They go on, they compare their options. The fact that so many millions of people rushed to get information is a good sign.”Uh... no. That doesn’t wash. There is nowhere they can go to “compare” other products; the choice is buy or not buy, and so far, the “so many millions” aren’t buying.
Interesting times.
UPDATE: They are now touting the "nearly 9 million visitors by Friday night." That's five days. They initially claimed around 5 million visitors. So instead of 5 million a day, it's down to more like 1.8 million a day... except, if you factor out the first day, you are actually looking at 4 million over four days, or one million per day instead of five million. Not only will that number continue to drop, but if the percent signing up remains the same, then they are in much, much worse trouble than expected. Of course, that could also be the same million trying to sign up each day, after which point the pipeline of suckers is empty.
60 comments:
Andrew, obviously all those people are comparing the system to their own doctors. You know, the ones they can keep if they like them. (not)
Aside from all you've detailed, another giant problem with Obamacare is this: the Democrats bank on their supporters only paying halfway attention. Yet, to get Obamacare up and running requires people to pay significant attention to the event. I guarantee you that there are large swathes of people waiting for their Obamacare package to arrive in the mail or, even more likely, just expect to get their Obamacare the next time they walk into the hospital.
T-Rav, I can't for the life of my think what they could possibly be comparing. Sounds like garbage to me.
As an aside, I have seen no way to figure out if your doctor is under a plan at these websites.
tryanmax, That's a great point too. They are relying on their people not paying attention so they don't know how much they are getting screwed, but now they suddenly need them all to be informed and sign up. You can't turn a herd of morons on a dime like that.
In any event, the more I think about it, the more shocked I am that the numbers are this low. I suspect the numbers will prove to be an embarrassment before too long.
as you say, we will have to see. It is possible that some of the "uninsurable pre-existing types" will keep trying. The baby boomers hitting medicare should play havoc with this whole scenario since we probably out number the young indestructible types. I suspect the administration will push hard threatening people as the actual deadline approaches. As you mentioned a while back, Obama should have taken up the offer to postpone a year until after the mid-terms. Still as long as we have problems with a bad economy and high unemployment or under employment, people will continue to hope for a handout until we finally run out of credit.
Jed, I think almost none of the "young invincibles" (their term, not mine) will sign up. The fine just isn't high enough and few of them even know about it. So what you're going to get will be all the uninsurable, plus a smattering of other people, the majority of whom will be baby boomers who have a lot of medical issues coming up. And if there is rate shock now, just wait until next year!
In terms of the delay, that would be very smart, especially as tech experts are now saying the software itself is faulty... rather than this just being about server capacity. And the longer the problems continue, the more of a joke the program will be and the more it will be discredited.
In any event, it will be interesting. I think there are 9 million HUGELY expensive people dying to get into the system (unless they've been swept up under Medicaid, which is possible) and few others.
Great article. I knew it was a debacle but hadn't been following the numbers. Health insurance isn't cheap and requiring it doesn't make it cheaper.
Andrew.....The liberal mindset on this was best encapsulated by the couple from San Fran Bay area when the dude saw his and his family's premium go up $10,000 immediately:
"Citizens in the Bay Area have noticed, too. In a piece called “Obamacare’s winners and loser in Bay Area,” the San Jose Mercury News took a look at who was suffering under the new rules. Among the losers are Cindy Vinson and Tom Waschura, both of whom back the president:
Vinson, of San Jose, will pay $1,800 more a year for an individual policy, while Waschura, of Portola Valley, will cough up almost $10,000 more for insurance for his family of four.
The pair’s reactions are instructive. “Of course, I want people to have health care,” Vinson told the newspaper. “I just didn’t realize I would be the one who was going to pay for it personally.” Waschura was similarly surprised. “I was laughing at Boehner,” he said, “until the mail came today.”
Jed, just in case it comes up at a cocktail party, you should know that Millennials actually outnumber Baby Boomers. (95 million v. 79 million) Still, that doesn't mean those "young indestructibles" are going to sign up or that such a huge influx of Boomers won't strain (break) the system at the outset.
T-Rav T-Rav T-Rav
You know darn well the government has trained psychologists that know who you like and really don't like without you even knowing you liked/disliked that person.
If you can't keep your doctor you never liked him to begin with and if you argue with that there is a psychiatric reeducation camp the government can send you too to make sure you understand what it is you are to like!
Big Brother's Ministry of Love wins!
Andrew
Does the government care if you sign up for insurance.
Let us day you are a 30 year old male in perfect health with a degree from MIT making 80K a year. You don't need insurance and your employer can't afford it and drops you.
I am hearing rates of $250 a month or 3K a year. Sure the penalty is 900 this year but two years in it is like 2100 right.
So we can sign you up for 3K a year and you can use your insurance for normal doctor visits what have you costing us some money or you can give us the finger pay 2100 and save 900 overall and just not go to the doctor thus saving us the expense of keeping you on the waintinglist
Did not finish my thought above.... if I pay 2000 and don't cost anything is the government really out any money than if I pay 3000 and visit a doctor twice a month, and occasionally sprain my arm....
@Patriot. I like how Vinson said she didn't realize that she "was going to pay for it personally." Where else was the money going to come from? I hope this is all a big wake up call for those that voted for 0bama, especially if they did it twice. When signup's started for my company the 1st sentence you read is something along the lines of, "The new ACA will cost employers and employee's more than previously."
Andrew, I really hope this fails miserably, but what will they do about it if so few people sign up? They won't change the law, er, I mean tax, maybe they will have ACORN workers just sign people up.
Update from NY exchange website hell. I am not sure what the web designers were thinking when they designed it. It is almost as if they purposefully made it impossible to find out information. Now I consider myself pretty internet search savvy and it took me about 2 hours to find basic information. that was after the Great Crash of Oct. 1 where nothing worked on the first day. I finally found the link that had a premium/subsidy generator but no info on anything else (like insurance providers, plans, deductibles etc.) . Then after much more scrounging around, I found a spreadsheet that listed ALL of the insurance companies with plans with hyperlinks to their websites. I went to a few and they had what the plans offered in each catagory (mostly without having to give any specific information) BUT no premiums.
Who thought of this? Didn't they understand that SO many people would be shopping around? Personally I think they wanted to show how "low" the premiums would be before the REAL shock of what the deductibles/out-of-pocket expenses would have any time to sink in...
P.S. - one has to be REALLY computer savvy to find out any information without having to open up an account. There is almost none available in one basic source. I am also a little shocked that no journalists have matched plans with premiums, deductibles, outofpockets, and coverage in one place. Doesn't that strike you as odd?
P.P.S. - Jocelyn - ACORN by all of its new iterations is already being used to sell plans by way of "Navigators". And from what I have read, these "Navigators" are so purely trained they are able to help much except to give out propaganda that is readily available on ALL of these websites. There's lots and lots of 1-page brightly colored flyers one can print out in a myriad of languages to scatter around.
SNL had at least one thing right - On the "news", they questioned how could the possible have miscalculated so badly and be so ill-prepared for the roll out. " It was like "1-800-FLOWERS" being caught off guard by Valentines Day."
Thanks Anthony. The numbers are rather odd to me. There should be more people rushing to sign up, even if only the uninsurables sign up, so I'm not sure what's wrong. One thing is for sure though, this is an absolute mess.
And now the software people are saying the system has major design flaws.
Patriot, That's typical of liberals. Whatever liberals want must be easy to deliver and everything they want will work perfectly... only evil people and fools would want to stop them, man! Then it blows up in their faces and they start whining.
tryanmax, I had no idea there were so many of you! That won't make the Boomers happy.
Bev, I hadn't realized that ACORN had already been re-branded! I have to assume these "Navigators" have to sit with people and help them sign up because from what I've read, from this blog and others, the website is hard as heck to navigator. Whodathunk, Navigators doing the navigating! Yea that was awful, I'm sorry. -_-
I just heard a caller explain that there is not really a $95.oo fine. That is a minimum but the actual fine is "the greater of $95.oo or .1% of your income" in the first year. the next year it is 1.5%
Does anyone 'know' this?
Indi, There are two things going on.
1. The government needs money to pay the subsidies and to cover the people added to Medicaid. For that, they want you to pay the fine (1% of income this year, 2% next). Stupidly, however, the fine is not enforceable. So most people will figure out a way around it... just adjust your withholding.
2. BUT the system depends on the insurers participating. They won't participate if only the sick sign up and everyone else pays the fines. The government has set aside $10 billion in direct subsidies to pay for the really sick, but their actual cost is around $1.6 trillion. If they all signup and the young healthy people don't sign up to allow them to spread the cost, the insurance scheme will collapse and Obamacare fails.
So yes, the government wants some people to pay the fine, but it needs more young healthy people to support the insurers.
Jocelyn, Clearly the rich were going to pay for it. //rolls eyes
If few people sign up, then it depends on who they are. If they are the uninsurable, as expected, then the system will collapse as the cost of the policies soars. If it's just a mix of people, then it limps along as an embarrassment to Obama. In either event, it would be easy to kill because it won't work and will clearly not have any support.
Bev, On the lack of information, I think it's intentional.
1. They don't want outsiders to be able to gather information they could use to rip the program apart in an analysis. They've been very cagey about hiding all the parts.
2. They want people to need to get into the system before they learn anything on the theory that once you're 90% in, the path of least resistance is to just go ahead and finish signing up rather than backing out. It's like getting you to take a test drive. Once you're in the car, you are more likely to just buy it than you are if you call down to the dealer and ask the price.
Bev, LOL! That's funny. "We had no idea there was this Valentines Day thing?!"
Jocelyn, They're hiring all the usual suspects to go through poor neighborhoods and colleges to sit with people to sign them up. Others have been trained to sit at the call centers and pimp the plans when people call.
Apparently though, they have been so poorly trained that they are failing to gather the information they need and the insurers aren't able to process most of the policy requests they've gotten.
darski, Yes, the actual fine is 1% for the first year and then it rises. I believe it eventually becomes 2.5%. And for most single people, that puts the beak even point where it makes sense to buy the insurance at an income level somewhere around $240,000 a year.
So if the SC says that the States can opt out of the mandate, why can't the people IN those states opt out too?
Different legal mechanisms triggering different parts of the constitution.
The mandate against us was called a tax and you can't opt out of a tax.
By comparison, the "mandate" against the feds isn't actually a mandate, or it would be struck down, it's a bribe.
Didn't the SC state that "Texas" does not have to comply? What if I change my name to "Texas"? ;-)
Btw, isn't it totally cool that the guy who won the Nobel Prize for discovering the Higgs Boson is ALSO named Higgs?!? What an amazing coincidink!
Obama is reading from the TOTUS right now. He just had the audacity to accuse the Republicans of placing their demands as a precondition to negotiation. Basically, his entire speech is a list of exceptions to "everything" he is willing to negotiate. It's a pretty disgusting tactic when you think about it. Anything he doesn't want to discuss he simply declares to be beneath discussion.
As an aside, I think I have some insight into Obama's appeal, if you can call it that. I had to turn off my radio just to write this brief comment because something in the quality of Obama's voice makes it literally impossible for me to think while he's speaking. I can only imagine that the experience is as painful for me as it is euphoric for those who are unaccustomed to thinking.
Tryanmax - Maybe that is why he feels the need to make so many speeches. And many people who are compelled to listen to him look on him as sucha god-like speaker. My reaction is the very real feeling that my head will explode.
Bev, then I shall consider myself lucky. I merely get the sensation that my higher reasoning is shutting down. I suspect that if we lived in a true Big Brother society where I had to hear his voice all day, every day without the option to turn it off, I would quickly reach a completely feral state.
Stupidly, however, the fine is not enforceable.....
So does that mean they can't add the fine to your tax liability. They can only take it from your withholding if you overpay.
That has got to be the one of the most FUBAR 'ed things they have ever done.
Inid - Yes, it is true, they can only deduct it from your overpayment. They cannot seize it from your bank accounts or other income sources or withhold treatment until it is paid (boy, wouldn't THAT have been ironic!). So, it behooves everyone NOT to overpay their taxes and if you are lucky, maybe you can underpay just a few dollars.
And I add to your acronym, that this is also a classic example of a S.N.A.F.U.
Bev and Indi, That's very true. It will behoove everyone to make sure they don't overpay. And that's going to kill the government's cash flow because it relies on overpayment throughout the year as an interest free loan to finance the government. Obamacare will likely reduce that substantially.
Bev, That is amazing about the Nobel Prize. Question: Have you been to Denver lately? ;-P
Bev and tryanmax, I can't stand to listen to him. It's like the braying of an idiot... oh wait, it is the braying of an idiot! Huh. That explains that.
FYI: Obama is apparently starting to crack. He's now open to accepting short term budgets. I'm telling you, they are worried that people will start thinking they don't need the government.
FYI II: John Stewart accused Kathleen Sebelius of "lying". He criticized the tech problems, called the system incompetent, and railed against them allowing Big Business off the hook, but not the public. Ha ha.
Yeah, so apparently (I didn't bother watching the presser itself) the "press corps" didn't bother asking Obama a single question regarding any of the ObamaCare glitches, or about the NPS arbitrarily shutting down these parks, or anything. What a joke. That's all I can say about it.
Andrew
I am thinking that if Obamacare stays they are going to fix that. The Accounting would be a nightmare.
We have to figure out your liability, then subtract the amount that is due for healthcare fines, then keep a separate ledger for healthcare fines. Now we have to calculate penalties on unpaid amounts (do we charge penalty on unpaid AHA fines No fine Yes - do we treat that as unenforceable.
If we audit someone and they owe money for not paying taxes and AHA fines next year if there is a refund to which bucket is the money they confiscate going to assigned. If you own and you make ES payments do AHA fines come out of that and then are you possibly subject for not withholding enough.
This one stupid thing will become an accounting fiasco given how the IRS collects money.
...WOW.....
When you've lost Jon Stewart, well, you're bound to have him circling the Demo-wagons and/or tongue-bathing Obama in a couple days anyway.
Never mind, as you were.
Well, T-Rav, in all fairness the teleprompter wasn't programmed to provide answers to those questions, and you don't want to make a Democratic president look bad.
In all seriousness, our MSM is a disgrace.
I don't watch SNL anymore so I only know from watching the clip on Hannity but supposedly they did a sketch about Boehner and Michelle Bachman regarding the shutdown.
Boehner is a guy in a wife beater T shirt, wearing two ear rings and I think makeup who is acting tough in a walking down Sunset Boulvard on a Gay Pride day parade.
Bachman is dressed as a stripper with Miley Cirus hairdo on the bed doing suggestive dancing.
They are singing "It's my Party and I'll do what I want too".
It was unreal... funny Hannity is asking if they went to far and I am thinking they left the planet. The capacity of the liberal mind to develop its own fantasy world is amazing....
Indi, It will be a mess. Here's another angle -- the code doesn't say if they can charge interests on those amounts, so that still needs to be decided and then that would need to be separated.
Eric, True. But it's interesting that Stewart is as frustrated as he is with them. That's a really bad sign.
Indi, I don't think they went too far, I think they went down the wrong path. None of that makes sense. It has no relationship at all to those people or what they do.
And frankly, Smiley Virus should not be poking fun at one. Seriously, when you are a doped up retarded whore, you should probably go easy on trying to make fun of other people.
I did (unfortunately) happen to see the Smiley Virus video. The best descriptor is "surreal." To be honest, I was surprised to learn that the SNL cast still considers Michelle Bachmann to be relevant. Or maybe they were just stumped as to who Viraley could dress up as. In any case, I'm at a loss to explain just what the SNL writers intended by the sketch. Maybe they just wanted us all to be glad that John Boehner doesn't dress like a gay go-go dancer. I'm not really sure who is afraid of that happening but it is SNL we are talking about.
Yeah, my first thought was "Since when is Bachmann relevant?" My second thought was, "Isn't this anti-gay?" My third thought was, "Did anyone actually write this or did they just wing it?" And then it hit me this was just stupid, dated, childishness and nothing more.
Seriously, it was pathetic. It would be like us doing a skit in which Ed Muskie appears in blackface and calls Reagan a booger.
When you say "it was pathetic," are you referring to Miley or SNL in general?
I didn't see the skit, but I too thought, "Michelle Bachmann? What?" She's about as relevant to the shutdown as Spiro Agnew. Maybe I should preemptively remind SNL that Sarah Palin is no longer an elected official, just in case they have another urge.
As previously commented, I've also seen a number of anecdotes that some premium quotes were ridiculous. From what I understand, this is because the exchanges now adjust for local demographic health characteristics in addition to any individual health trends (like, you know, your personal medical history).
In other words, if you are a happy, healthy 26 year old nonsmoking male, your premiums will be more expensive if you live in a state with a lot of old folk than if you lived elsewhere. It's obvious why they did this, but you can see the perverse consequences that are soon to play out.
T-Rav, I meant SNL. "Pathetic" doesn't really seem to cover Smiley Virus somehow... not sure there is a word really.
whasatchmo, Obamacare is all about perverse consequences.
Sorry, Andrew. The correct answer to my question was Yes. :-)
I that event, I would like to revise and extend my remarks to... yes.
Ok, this is interesting. Here are more numbers released by the states. These are enrollees:
NY – 5,000 per day
Cal – 2,000 per day
Wash – 1,000 per day
KY – 850 per day
Conn – 150 per day
This would extrapolate to about 30,000 a day at the moment. Assuming they can keep up the rate all year, which is impossible, that works out to around 9 million in the first year... the uninsurables.
But that is HIGHLY unlikely. More likely, the number will crash after the first week of January. If it does what is more likely (a 90% drop starting in January), then it will be more like 3.7 million people (half of what Obama needs).
Also, that assumes these numbers are real. The NYC number has the right of a fake number since it's almost triple California's number.
I read an estimate of NY that there are about 1.1million uninsured and they don't expect anymore than 300K to sign up. I will try and find the source. Population of 19million, btw
Interesting post, Andrew, and it clears up as much as can be cleared up.
Apparently, all the info given when signing up can be used by
Law enforcement, so that too will prevent some folks from even checking it out.
Irit that Jon Stewart video, he seems mostly upset because Obamacare isn't single payer, but yeah, the big businesses getting a pass also made him upset.
Sebellius lied every time she spoke.
Ben, What has Stewart angry is that he feels like a fool defending the system. He thinks it should have been handled much better and Team Obama is messing it up to the point that it's making people like him look bad.
You know, I haven't looked into the law enforcement angle, but no doubt that will keep some people away too.
Andrew Says
"Seriously, when you are a doped up retarded whore, you should probably go easy on trying to make fun of other people. "
Honestly Andrew if you are a doped up retarded whore what else have you got?
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