Trump Disembowels Obamacare… Slowly and Painfully

InsFormSmallOn the day of his inauguration, President Trump took time out to issue an executive order directing his administration to drag its feet enforcing provisions of the Patient Protection and Affordable Care Act (ACA). Regulators were instructed to “waive, defer, grant exemptions from, or delay…” whenever possible to the “maximum extent of the law.” Many believe this move was intended to destabilize the ACA and hasten its demise without Republicans getting blamed.

Republicans hold majorities in Congress and now occupy the White House. Thus, Republicans have it within their power to use a process known as budget reconciliation to repeal with a simple majority vote those Obamacare provisions that involve the budget. For example, Republicans can repeal the taxes, fees and appropriations that fund the ACA. The individual and employer mandates, with associated penalties, can also be repealed.

What Republicans cannot do is repeal the costly insurance regulations that drive up premiums for most people. That would require the help of perhaps a dozen skeptical Democrats. The law is difficult to repeal outright because it was designed to alleviate a problem too costly for the government alone to fix. The health care law was passed to make medical care more accessible for low-income Americans and those with pre-existing conditions. This was to be done largely by socializing the costs and spreading the burden among a much broader segment of the healthy population.

Dismantling the ACA using budget reconciliation alone would get messy. Repealing both the sliding-scale exchange subsidies and the cost-sharing reductions for low-income enrollees would likely cause more than three-quarters of Obamacare enrollees to drop their plans. If Republicans scaled back the enhanced Medicaid matching rates to the level of non-expansion beneficiaries, many states would withdraw from Medicaid expansion. In the years following repeal (without replace) the individual market would implode under the weight of adverse selection. This is because the only people who would enroll in individual coverage would be those who are sick, since they are the only ones who could benefit despite paying sky high premiums.

The ACA was signed into law on March 23, 2010 after a year of heated debate. No Republicans voted for either of the two bills that became the ACA. The best known provisions include an individual mandate, an employer mandate, subsidies to help moderate-income people afford coverage and Medicaid eligibility expanded to include working-poor single adults. Young adults could also stay on their parents’ employer plans until age 26.

Several other prominent provisions include changes in insurance regulations for coverage purchased in the individual market. For instance, medical underwriting was replaced with the regulations known as guaranteed issue and community rating. This meant individuals could not be charged more or turned away due to pre-existing conditions; premiums could only vary by geographic location and age. In addition, maternity coverage was mandated in the individual market and women’s premiums could not differ from men’s. The ACA also did away with limited benefit plans and plans that do not include an essential benefit package. In the process the ACA banned annual and lifetime caps on benefits.

At first glance, many of these provisions do not seem unreasonable. However, they have a sinister purpose. They were designed to socialize medical care using backhanded regulations. Stated another way Obamacare intentionally makes most people much worse off in order that it may benefit a few selected individuals. At its core the Affordable Care Act is an income redistribution scheme based on health status — and wealth. The goal was to force (non-poor) healthy people to shoulder most of the cost of caring for the least healthy (20 percent) of the population — and those with modest incomes. Granted, actuaries will tell you all forms of insurance are designed to pool risk by redistributing premiums from those with no claims to those experiencing losses. The redistributive intent of the ACA seems more deliberate, however. The ACA banned premiums based on health risk and instead requires community rated premiums grouped within a series of only three age bands. The ACA also banned annual and lifetime caps on benefits, and premiums that vary by sex. These provisions collectively have the effect of maximizing the transfer of wealth from younger, healthier enrollees to mostly older, sicker individuals.

Of course, nobody actually wins the health insurance lottery by having a heart attack. It’s good that most people do not require costly medical care that exceeds their annual premiums. Unfortunately, premiums are high because ACA proponents wanted society to be especially generous when doling out other peoples’ money. In a nutshell, the process of repealing & replacing Obamacare requires deciding how much of your money should go towards your own medical needs; and how much should go to subsidize others. This includes not only those whose health is more precarious than yours — it also includes those with unhealthy lifestyles as well as those whose health problems are unfortunate.

Comments (94)

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  1. Barry Carol says:

    Whether we used high risk pools or pure underwriting, the folks with known medical risks and high associated healthcare costs could be subsidized by general federal tax revenues. The cost to the federal government may well be higher than it is under the ACA but healthy people could see their premiums reduced significantly. Would that be satisfactory or does everyone want something for nothing?

    • Devon Herrick says:

      Most healthy policy analysts recognize that most people seem to want something for nothing!

      • Dennis Byron says:

        Was the word “healthy” intended or a Freudian typo?

        • Devon Herrick says:

          @Dennis I suppose it was both a typo and a Freudian slip. People in good health naturally like risk-rating; while those in poor health think it only fair insurers charge an average or community-rated premium. I personally like the idea of an individual mandate requiring people to withhold, say, 10% from payroll that goes into a personal HSA account they control for health care. This is the Singapore system.

      • Allan says:

        Then there are those that want control over others and others that want to feel good about themselves by being charitable and giving other people’s money away. Put your comment and this one together and what do you get?

        • Devon Herrick says:

          Yes, it’s amazing how benevolent people can be when they are donating other peoples’ money!
          There is nothing inherently wrong with trying to find solutions for public free rider problems; and certainly nothing wrong with benevolence. But, as Mark V. Pauly explained in TheHealthCareBlog interview, community rating does not work. This is especially a problem because health care is not a trivial expense. In the case of young people, the cost of health coverage can exceed the payment on a good used car they need for work. More problematic: if young people cannot afford $3,000 per year for health coverage, society as a whole cannot afford it collectively either.

          • Allan says:

            You are absolutely right, but then why do some people that claim the title of fiscal conservative demand community rating or something that is its equal?

            On another note, I believe the free rider issue though annoying is near meaningless.

          • Bart I says:

            From the inverview, Pauly is also in favor of an individual mandate, and seems to think that if plans have enough subscribers they will voluntarily forgo risk rating. I don’t quite understand that last part.

            I understand that there are other ways of covering preexisting conditions, and that some may be preferable, at least in theory. I only default to community rating because it seems to be the most common approach seen in everything from group insurance to Medicare to ACA to risk pools. It seems to “not work” better than most other proposals I’ve seen.

            And it seems more straightforward to use a similar approach when trying to fill in the gaps that aren’t covered by those other systems.

            I’m happy to consider alternatives, and ideally several could coexist if the subsidies are constructed carefully. The better system should eventually predominate.

            I expect they all have their own problems, though, so I would like to see them fleshed out a little before abandoning community rating entirely.

            • Devon Herrick says:

              There is probably a point at which the cost of additional efforts to underwrite exceeds the benefit.

  2. Allan says:

    Barry, the perpetrators and supporters of the ACA of which you were or still are onen created a system that took already high prices and made them even higher. I don’t think a lot of people want something for nothing. They just don’t want to pay a price that is far higher than it should be and they don’t want all the government regulation and politics that comes with the ACA.

  3. Dennis Byron says:

    Weren’t the Democrats who supported PPACA in 2009-2010 (about 20 did not) pretty upfront about the fact that it was just another step (as was Medicare in 1965) toward Medicaid for All?

    • Allan says:

      Obama is in a video saying just that about socialized medicine.

      I note you correctly slipped in the word Medicaid (for all).

  4. Lee Benham says:

    So “health Insurance” is an insurance that is not designed nor acts like any other kind of insurance.
    It should not even be classified as insurance by definition.

    Its sold in a “market” that is a highly subsidized market that would not exist if it weren’t for the subsidies.

    As long as employer based benefits and the individual market are separated the individual market will flounder. Any attempt to bolster the individual market will weaken the employer based market.

    its going to be an ever repeating cycle until one single market is created. There will also never be a way of controlling escalating health care costs until the subsides are ended to purchase the Health Insurance that pays for the health care.

    (health insurance is expensive because medical care is expensive. medical care is expensive because it is paid for by subsidized health insurance)

    • Allan says:

      “its going to be an ever repeating cycle until one single market is created.”

      That would be MEDICAID for all which might have some savings, but most of the savings will revert back to those in power that were ultimately in control of Medicaid for All. We keep forgetting that for some government is a means for organized and legal theft.

      “health insurance is expensive because medical care is expensive.”

      Medical care is expensive, but made more expensive because someone else is paying the bill.

  5. Lee Benham says:

    I think Insurance should be individual and not subsidized. Medicaid should stay as a welfare program. I would be ok with a Medicare for all as long as it was privatized and not subsidized.

    health Insurance markets and healthcare markets will never stabilize themselves as long as they are subsidized. there is no such thing as a free market when it comes to Health Insurance and healthcare.

  6. Allan says:

    “Medicare for all as long as it was privatized and not subsidized.”

    How could Medicare for all be private?

    Things that are private have a willing buyer and a willing seller. How can Medicare for all in the context generally being used ever be private?

    We need two entities. A free marketplace entity plus a public entity. The latter should not negatively affect the former. Take note I am not defining what constitutes a public entity.

    Yes, health insurance can be free market just like every other insurance offered today.

    • Lee Benham says:


      A Medicare for all would be privative insurance. Get rid of Medicare and let the private sector health insurance operate just like every other kind of insurance.

      Change everything we are talking about from health insurance to home and auto.

      Would People love employer based home and auto insurance if it were guaranteed issue and subsidized. Why aren’t home and auto policies subsidized? Home and Auto policies are discriminated against. P and C lives Mater!

      When we turn 65 we should qualify for the government picking up 80% of our home and auto claims so all we have to do is supplement what the gov contract doesn’t pay.

      I know health insurance will never be treated like other insurance. However that is the core problem don’t you think?

      • Allan says:

        “A Medicare for all would be privative insurance.”

        How? Is it mandated? Is it specific for different groups of patients? Does it involve risk adjustment? How are costs controlled? How is marginal care prevented? Think in terms of the willing buyer and the willing seller.

        Are you thinking of mandated prepaid Medicare for all where choice doesn’t exist?

        I don’t want to get into a detailed argument over what you are advocating in the middle of your reply, but some auto insurance in some states is subsidized and parts of homeowners insurance might be subsidized as well. Neither are mandated and both have premiums determined based upon risk. Driving a car on public roads is a privilege not a right.

        “I know health insurance will never be treated like other insurance. However that is the core problem don’t you think?”


        • Lee Benahm says:


          The only point I was making is that our current system is not a free market system and never will be. Does A wiling buyer and a willing seller exist in our current system today?

          Our healthcare system is funded almost entirely by a subsidized third party payer that is also broken up into subsections. Over 65, under 65 and employer based coverage.

          Why do we have subsections of a pool when all pools are currently being subsidized by tax payers?

          • Allan says:

            The current system has been degenerating away from the free marketplace for over 50 years. In other words when people say the freemarket doesn’t work they are wrong because in modern times there was never a truly free market.

            One way of handling our present dilema is to Repeal and not Replace except to permit a bridge between the ACA and the free marketplace so that insurers and the people have time to adjust.

            All charity provided by government should be provided outside of the free marketplace with recognition that what is being given as charity by government officials was forcefully obtained from productive citizens.

            I think that third party payer is one of the primary reasons, if not the primary reason, that we ran into so much trouble.

            • Ron Greiner says:

              I’m with Rand Paul and think we should give freedom a chance. I don’t think it’s going to happen because most want people to switch insurance companies after they become sick.

              Imagine, switching life insurance companies AFTER you got internal cancer. Barry would say, “As long as there is no gap in coverage,” as if that means something.

  7. Devon Herrick says:

    @Barry Carol
    Is there a method to create a guaranteed issue and community rated core benefit that could be incorporated into all risk-rated plans? By this I mean a core plan that has, say, a $10,000 deductible that maxes out at $100,000. This could be incorporated into all plans; but individuals would be free to upgrade benefits at their own risk-rated expense for $2,000 deductible or unlimited benefits. For those who were likely to max out the benefit every single year the state high-risk pool could cover a portion of their core premiums. The bells & whistles would always be at their own expense.

    • Ron Greiner says:

      Is that $100,000 max per year or per lifetime?

      Put the expensive regs on health insurance and smart people will flow into the freedom of life insurance with living benefits.

      …then you will want guaranteed issue life insurance.

      • Devon Herrick says:

        Ron, It could be either. I was trying to see if there is a way to have guaranteed issue/community rated limited benefit plans. There is strong support for health plans that cannot turn people away due to pre-existing conditions. But we know that is costly, subject to gaming and healthy people dropping out. Guaranteed issue/community rating is costly and there should be a limit to the generosity the public is required to provide. I’m just wondering if there is a way to limit the publically subsidized generosity while still providing some protections?

        • Ron Greiner says:

          There is a limit of the freedom we are going to outlaw and it’s called the Constitution. If I want to give you “healthy Discounts” for your health insurance because you are not an alcoholic with a dying liver the government should not be able to stop us.

          Rand Paul says about replacing Obamacare, …”we should try freedom!”

  8. “Revenge is a dish best served cold.”

    • Ron Greiner says:

      John you say, “The health care law was passed to make medical care more accessible for low-income Americans and those with pre-existing conditions.”

      It is true some low income and sick people were winners with Obamacare but the law was passed to help a certain group of insurance companies that bought the politicians.

      These poor Tampa school teachers who have to spend $1,168 a month to add 2 children to the school’s insurance were NEVER considered so they must buy over-priced insurance from the Marketplace with after taxed dollars.

      Obamacare would NEVER give tax credits and lure people off EMPLOYER-BASED insurance. I suppose John you think these good-hearted Democrats just got confused and created the “Family Glitch” by mistake.

      The propaganda is running thick.

    • Lee Benham says:

      Well Rep Lewis is completely delusional. “The ACA act is working”. Where did he come up with the 100 million figure people with preexisting condition?

      Why is he talking about Medicare advantage donut holes in a hearing about individual mandate?

      McDonough might be a brilliant scholar but he has no practical understanding of insurance. He needs to understand that if an insured has nothing to risk they don’t have any incentive to transfer that risk to an insurance company. His fix to the problem is to give more money to the problem making insurance more affordable.

      In the 1990’s several states had tried guarantee issue and had significant market turmoil. Guess McDonough is not a history scholar.

      WTH is Crowley talking about? New York had a horrible market before the ACA. (Probably because of guarantee issue). Now the market is up over 200%. Yes because people are getting refundable tax credits. What a pinhead.

      Great a John Gruber quote. There goes all credibility. A broken clock is correct twice a day. Nice

      How much has been spent? Trillions!!!

      Mr. Davis obviously wasn’t listing and should go back to sleep. Why is he talking about repeal when the hearing was about the effectiveness of the individual mandate?

      MR. Miller needs to use Crayons. How do these people get elected?

      Next time explain the needy this way.
      If we can accept the concept that productive individuals are, as a matter of policy, to be treated differently from those less productive, things should be easier. Greater progress can be made if we don’t have to concern ourselves with always looking back to see who is faltering and pausing to help them catch up. We would be able to focus on helping the strongest move forward, looking ahead to opportunity, and building a stronger America.

      You may recall the book Alive from the mid-1970s. It recounted the story of an Argentine soccer team whose plane crashed in the Andes. Once the survivors decided that they would feed – literally – the weakest to the strongest, fear and frustration fell away. The group understood that it would be the strong and productive that would move things forward. They would deliberately impose an unequal burden on the strong. But they would also do what they could to assure the strongest stayed strong. Each gained a personal peace knowing where they fit in the food chain so to speak.

      While we can get excited about the chance to better meet the needs with those who want to be and can be productive, reducing the burden on the less capable is also important. So clearly while some have been able to exploit the American Dream others still languish in despair and also, I would imagine, a bit of embarrassment. To help this needy group we will work to reduce Healthcare costs.

      You might get some backlash but I guarantee you would make headlines 

      • Lee Benham says:

        on a side note the politicians are using the words healthcare and health insurance as the same meaning. maybe that’s why the don’t understand. There is a differance

      • Ron Greiner says:

        John would never say that because he knows that neither an ox or a donkey can stop the progress of socialism.

        John, Obamacare will allow smokers to pay more but not alcoholics. Is that fair?

        Smokers’ taxes pay for children’s health insurance too.

        • Ron Greiner says:

          Obama said he would never raise taxes, not one dime. Then the 1st thing he did as President is raise taxes on smokers because of children, sick.

          I don’t smoke but why is it OK to stiff smokers and not alcoholics?

          These central planners are biased.

      • Allan says:

        Ron next time you question the intelligence of our elected officals review this short video. It will put things into perspective. I think he was reelected.Doorknob dumb.

  9. Don Levit says:

    You asked about guaranteed issue community rated limited benefit plans
    That fits the Health Matching Account
    Contributions vary in relation to coverage
    Benefits range from $5,000 to $60,000
    Level premiums to age 100

  10. Bob Hertz says:

    Lee, I was interested in your assertion that private health insurance should be left to the free market, essentially like home and auto insurance — which are close to universal and offer reasonable premiums in almost all cases.

    I don’t precisely know why, but if that happened I fear that health insurance would wind up like disability and LTC insurance — i.e. being owned by about 10 per cent of the population, with high premiums, and lots of declined applications for underwriting reasons. Ordinary workers almost never have personal disability or LTC insurance.

    If health insurance got that rare, the sun would still come up tomorrow but hospitals might be in huge economic trouble.

    I am frankly not sure why free markets in some insurance produces such better results than free markets in other insurance….the agents are not the villains and the insurers are not the heroes.

    • Ron Greiner says:

      Bob, you say, “….the agents are not the villains and the insurers are not the heroes.”

      Bob, all of those people that you put on employer-based insurance before Obamacare, without warning them they would lose their insurance if they got too sick to work, makes you a villain.

      Your license requires you to provide Full and Proper Disclosure.

      • Bob Hertz says:

        I never put anyone on employer insurance. Employers offered insurance to their employees when the employee was hired, or some months thereafter. I or another agent in the fully-insured market presented policies to the employer at renewal time.
        (I did not work with self-funded plans.)

        I suspect that 98% of American adult workers have a friend or family member who at some point lost their employer coverage when they lost a job. I do not think that an insurance agent they never met was pulling the wool over their eyes on this issue.

        The problem of health insurance for workers who are laid off or forced to quit due to illness is very real. COBRA is a rather pale attempt at a solution, pale because it is unfunded. The ACA actually made things a little better, because the sick ex-worker could get a guaranteed issue policy and his likely lower income could get him a subsidy.

        I read your opinion to be that this worker should have had a personal portable policy all the way along. The new HRA programs might get us a little closer to that, but there is a long way to go.

        • Ron Greiner says:

          Bob, you say you NEVER talked to an employee and were playing golf when your non-licensed employer SOLD your insurance. Too funny.

          I swear, I NEVER talked to one employee but Obamacare helped some of the people that were in trouble because of me and other villains.

          YOU say, “I do not think that an insurance agent they [[never met]] was pulling the wool over their eyes on this issue.”

    • Allan says:

      “being owned by about 10 per cent of the population”

      Bob, there are two basic reasons for people to buy healthcare insurance on the freemarket.

      1) To provide them with care they might not have otherwise been able to afford.
      2) To protect their assets.

      Do you think those two reasons only pertain to 10% of the nation?

      • Bob Hertz says:

        The number of persons who need to protect assets is of course much higher, as you suggest.

        But then why has a good product like Long term care insurance penetrated (actually) only about 7% of households?

        My own opinion is this:

        – LTC is innately expensive to insure.
        – Super-low interest rates cause insurance premiums to be higher
        – Hard to train and motivate agents to sell the product
        – This is considered a product to be bought with disposable income. Many persons with assets to protect do not actually have much disposable income.

        Probably other causes also.

        • Barry Carol says:

          When long term care insurance first came on the scene, there was very little useful experience in how to price it. The industry borrowed what it could from the life insurance industry but a perfect storm conspired against it. The reasons for the failure of long term care insurance despite underwriting include (1) more people went on claim than expected, (2) people stayed on claim longer than expected as life expectancy increased and (30 investment returns were significantly lower than expected, especially since the 2008 financial crisis.

          The LTC industry will no longer sell a long term care policy to anyone older than 74 even if they’re healthy. There are hybrid options, however, that combine ordinary life insurance with LTC benefits using the cash value of the insurance policy to, in effect, cover the LTC premium.

          Premiums are indeed quite high. My own premium for a policy my wife and I purchased in 2003 recently increased by 60% phased in over a three year period (20% per year increase for three years). We now pay just under $6K per year for the two of us. Not many older folks can afford that.

        • Allan says:

          “My own opinion is this:”

          LTC is expensive and what they are offering is a one shoe fits all in a population that has various needs. I don’t think the insurers have worked out the problems of the marketplace and the individuals they have insured haven’t planned well enough. I think you are right about the interest rates which permit insurers to dramatically reduce rates. That is just one of the unintended consequences when the fed acts against the marketplace to keep interest rates down. People can’t afford long term care so why would agents spend too much time selling it.

          The biggest reason behind lack of preparation for LTC is that people don’t like to think about these things and they asssume government and Medicaid will take care of everything. The market is limited and IMO is only appealing to the upper middle class that has enough disposable income to purchase insurance, but not enough for the actual care.

    • If health insurance were a free market, guaranteed renewable health status insurance would be the standard. Very little underwriting except for those who did not maintain continuous coverage. However, most people would pay a small premium for catastrophic coverage and pay medical bills directly nine years out of ten. Insurers would not cover normal costs of childbirth, for example, because it is fraught with moral hazard.

  11. Lee Benahm says:


    Fair questions unfortunatly we will never find out how health insurance would survive In a free market. I don’t think it will happen in my lifetime…

    Side note did any one else see Gruber on Fox News tonight? He could possibly be the dumbest person To ever speak about the ACA. Well not as dumb as asking if an island would capsize because of the additional people but a very close second!

  12. Lee Benham says:


    your state is putting a $300 million dollar band aid on Obamacare. Maybe other states will try the same insanity. How do we lower the cost of health Insurance? give insurance companies more money obviously. Excellent solution.

  13. Lee Benham says:

    Here is how you take advantage of the stupidity of the politicians.
    You need to talk with your groups of 50 and less. Have them cancel the group plan. This creates a special enrolment period so you can do it all year long. Have the employer contribute a set $ amount into a premium only HRA plan. The employees can then go to the exchange and if they get tax credits great. If employees don’t qualify for tax credits through then the state of MN Will pay 25% of the cost. Both Employers and Employees save money which will free up some dollars for you to sell life insurance will live benefits. You should average about $1500 of commission per employee.
    The only losers hear are the tax payers. Make America Great Again!

    Don’t say I haven’t ever done anything for you 

    • Ron Greiner says:

      In the Minneapolis zip code 55401 Medica’s premium for a 30-year-old HSA plan with Obamacare is $189 a month. There are cheaper plans but the HSA deductible must be smaller by Federal law.

      MN has outlawed Short Term Medical STM. Iowans say if you would move the southern counties of IA into MN you would double the IQ of both states.

  14. Bob Hertz says:

    Lee, I am not sure you have the whole picture on the $300 premium relief plan in MN.

    For 2017 there was a huge price increase, and the large carriers pulled back from unprofitable counties. The outstate counties mainly have just one provider, and a narrow network plan to boot.

    These rural counties have an older population, and many of them make too much for subsidies. So, you had 60 year old couples making $70,000 a year facing premiums of $2,000 a month or more. Lots of these couples voted for Trump in anger.

    The state of MN has a budget surplus this year, so both parties supported a plan that helps pay premiums for the persons described above. Essentially the state is expanding the ACA subsidies for a time.

    This does not really help the insurance companies, most of whom will leave the market next year in my opinion. They were very close to leaving the market this year.

    Is this a band aid to Obamaare? Maybe. But if you were governor or a Republican speaker of the MN House, what would you do?

    I think I have said this before but whatever,I will say it again. In a pinch, and faced with widespread suffering, Republicans will endorse some of the same insurance subsidies that they railed against when Obama used them.

  15. Lee Benham says:

    I’m very aware. What happened in MN happened in every state. All I was stating is throwing more money at the problem is just wasting more mony on an unfixable problem.

    • John Fembup says:

      Well, it’s certainly unfixable by screwing around with insurance schemes – as the past 50 years amply demonstrate.

  16. Adrienne says:

    It will be interesting to say the least to see what our new administration is going to offer up in place of the ACA. I cannot even imagine at this point what will happen to the millions of Americans who are going to be without health care coverage if his legislation passes.

    • John Fembup says:

      It’s probably not so big a problem as you imply.

      2/3 of the people who enrolled in ACA were eligible for Medicaid before ACA.

      ACA prompted them finally to enroll in Medicaid. They’ll just stay on Medicaid.

      The rest will be interested in the “replace” part of the Republican promise to “repeal and replace”.

    • Allan says:

      When there is any change in this type of law winners and losers appear. In this case we will hear from the media how bad the replacement plan is because they will tout the losers while magnifying their problems. However, I can’t see how we would have more losers than we already had with the ACA which was spiraling out of control and meant total failure with almost universal losers. The number of winners has to improve because the economic ramifications of the ACA were so bad for the country.

  17. Lee Benham says:

    What is interesting is that everyone is worried about the people who will lose coverage but don’t seem to care about how many peoples coverage has gone up over 500% since the ACA was implemented. How about all of the middle class affected by the family glitch that cannot afford the outrageous prices?
    We can’t take coverage away from people now but it didn’t seem to bother anyone when the ACA was first past when millions of people lost their coverage.

    • Ron Greiner says:

      Lee, you and I know the “family glitch” is required to keep employer-based health insurance alive and kicking. You are wrong when you say that the ACA raised premiums only 500%. Before the ACA parents could purchase HSA qualifying Individual Medical (IM) on a child for $50 a month. In Iowa in 2009 it was only $40 a month for a child (I did a press release on it). NOW, it is common for employer-based health insurance to charge $600 a month to add a family member onto the workers employer-based insurance. Trust me, many parents are being scammed into paying 1000% more for their child’d insurance.

      You will never see the socialist-controlled media tell the truth and educate these brainwashed American sheeple, it’s bazaar. The media wants all children to lose their health insurance at 26-years-old. Media brainwashing polling tells us so. All children who are diagnosed with MS at 24-years-old, like my beautiful daughter, do turn 26-years old. It’s a fact.

      In contrast, parents who purchased child only Individual Medical (IM) for $50 a month protected their child because it was ILLEGAL to terminate the insurance until they become 65-years-old or Medicare eligibility. But NO, NOW parents must pay 1000% more to have their child in danger, all to stack the deck for evil over-priced employer-based health insurance.

      Here is what the media should have reported. The RX on my beautiful daughter has increased from $30,000 a year (2009) to $100,000 a year today.

  18. Bob Hertz says:

    Lee you raise a good point.

    Jonathan Gruber almost made fun of the people who lost cheap, underwritten insurance in most states when the ACA went in torce. He called them genetic lottery winners or something like that.

    There are two good writers, Linda Blumberg and John Holohan, who have proposed several fixes for the family glitch, and for the unafforable crisis facing those persons who make a little too much for subsidies.

    All these fixes would have cost money, and the sad state of Congress from 2009 is that Democrats were too gutless to propose them, and Republicans were so eager for the ACA to fail that they might not have listened.

    Here is a sample of solution writing, the family glitch is covered later in the piece.

    I want to add my own two cents, which is that almost all the ACA fixes seem to add up to less than we spend on Medicare in two weeks. There is a serious double standard, where seniors get what they want and workers get the crumbs.

    • Ron Greiner says:

      Sorry Bob but Linda Blumberg and John Holohan won’t be able to save employer-based health insurance, the ACA and villains like you who peddle it.

      The ACA is down for the count and you need to throw in the towel, get off the golf course and sell real insurance that doesn’t kill people.

  19. John Fembup says:

    So Bob, this report proposes a fix for ACA. Let’s suppose it’s the best possible situation – this is an optimal fix. ACA will be perfected.

    ACA will still fail. It does not need opponents to fail. It will fail all by itself. Even if it’s perfect.

    Reason? It’s an insurance solution bolted onto a medical cost problem.

    It does not address the problem. It cannot solve the problem. Even the optimal insurance arrangement will fail.

    After more than 50 years one would think our so-called policy and thought leaders would have figured out by now that we don’t have an insurance cost problem, we have a medical delivery cost problem.

    One would think.

    • Barry Carol says:

      John – You and I have long agreed that health insurance is expensive because healthcare is expensive. However, most people would prefer to have health insurance than not have health insurance. For those who don’t have employer provided health insurance and don’t qualify for either Medicare, Medicaid or VA care, they need to acquire it in the individual insurance market. If they want reasonably comprehensive coverage for themselves and their family, many of these folks will need a subsidy to help them cover the cost of the insurance premium. So, we can indeed cover more people if we spend more taxpayer dollars to subsidize those who can’t afford the entire premium on their own. That would address the health insurance coverage issue.

      There are numerous strategies to attack the healthcare cost issue and all of them can be pursued on separate tracks independent of expanding insurance coverage. We could push for sensible medical tort reform which could reduce the perceived need among physicians to practice defensive medicine. We could invest somewhat more money in sophisticated data analytics to reduce fraud in the Medicare and Medicaid programs. We could encourage more people, especially among the elderly, to execute a living will or advance directive that outlines what care they want and don’t want in an end of life situation. We could require price transparency so both patients and referring doctors can more easily identify the most cost-effective high quality providers in real time and direct more of their business to them. We could experiment with bundled pricing and reference pricing for medical tests and procedures like imaging and surgery that lend themselves well to those concepts.

      The list goes on but the bottom line is that both increasing the number of people who have health insurance and reducing the cost or at least slowing the growth rate of medical care can be addressed simultaneously but separately. They are not mutually exclusive.

      • John Fembup says:

        Barr, yes of course the problem has many more dimensions than simply cost, and I think we’ve always agreed on that as well.

        Just because it’s a quiet Sunday morning and I’ve nothing better to do, I’m going to restate some things.

        My principal beef is that confusing insurance cost and medical cost inhibits analysis. It’s rare to find a public voice that seems to understand the difference. It’s also rare to find a public voice that explicitly acknowledges insurance costs are downstream from medical costs. Yet it’s common that people who regard themselves as experts speak of “healthcare” as though it were the same as medical care (that’s bad enough) and who then go on to confuse medical care and insurance in virtually alternating sentences. It’s common to find people who argue that medical costs can somehow be constrained with insurance. Generous insurance, they mean. Can it be a surprise that the result of this is analytical confusion or that we have experienced 50+ years of insurance “solutions” that haven’t even addressed the medical delivery cost problem?

        I think tha analytical confusion has us looking for our lost watch over here, under the street light, rather than over there in the dark, where we felt it slip off our wrist. I think we’re treating symptoms but spending little time trying to understand the disease – much less treating the disease.

        The public begun to sense that the giant insurance mechanism we call Obamacare has somehow made matters worse. Yet too many people still cling to the notion that Obamacare failed because it has flaws and that it would “work” when it’s “fixed”. Despite Obamacare, despite the evidence of 50 years, these people still believe that some elusive, optimal insurance mechanism can actually solve a medical cost problem. And they are encouraged in that mistaken belief by our so-called political and “expert” thought leaders who continue to treat insurance cost and medical cost as though they are the same.

        I’ve consistently stated that even if medical delivery costs were somehow constrained, people would still need insurance against the cost of treatment for serious injuries or diseases. I’ve also consistently pointed out that a great many people are in denial about how much medical spending is driven by behavior. I’ve suggested our public health efforts have not contributed enough to the public debate. And I’ve been very clear that I think physicians have not taken leadership of the public debate (I understand how busy they are; 50 years of experience also creates doubt that business and government types will devise any solution that physicians are likely to embrace). I’ve even suggested that, if the public were more informed about modern medical care they would prefer it – and its cost – to the medical care available to us at much less cost in, say, the 1950’s, or 1960s or 1970s, or 1980s, etc

        Summary: (1) the focus on insurance is an analytical mistake; (2) as a result business, government, and health policy wonks who are driving the public debate, are communicating the wrong underlying cost problem (3) therefore the public believes the cost of insurance is the problem (4) physicians have not taken meaningful leadership positions in the national debate; meanwhile (5) Americans continuie to pour oceans more insurance money into the delivery system which just induces its costs to grow, and probably faster, which means (6) the underlying medical delivery cost problem is not being addressed and grows worse as we tinker with insurance.

        • John Fembup says:

          PS – Barry, I guess you can call me “Joh”. At least once.

          There are typos and then there are typos . . Sorry about that one.

        • Barry Carol says:

          John – I hear what you’re saying about the cost of medical care delivery but I’ll offer a couple of thoughts in response. First, on the health insurance side, we can cover more people if we spend more money on subsidies. Whether we want to or can get such an idea through the political process or not is a separate issue. I’ve always said that I think we need to find a way to help the unhealthy and already sick who couldn’t pass underwriting get their medical bills paid. This group may be relatively small in number as a percentage of the population but they rack up a lot of healthcare expenses. We also need to help those who can’t afford health insurance even if they can pass underwriting but have an income too low to afford the premium but too high to qualify for Medicaid.

          With respect to the cost of medical care, I’m encouraged by something the economist, Herb Stein, told us which is that if a trend can’t continue, it will stop. Estimated Medicare spending over the next five years is significantly lower now than the estimate for the same five year period made in 2010 when the ACA passed. That’s good news. Whether that happened because of the ACA, independent of the ACA or in spite of the ACA is not important. It happened.

          Among the elderly, lots more people have living wills and advance directives now than 15 years ago. More people appear to be choosing hospice care sooner at the end of life. With growing numbers of people who have high deductible health insurance plans and Medicare Advantage plans, more patients seem to be making doctors aware that out-of-pocket cost is an issue for them and their doctors try to accommodate them when they learn that cost is a factor for any given patient. If medical costs continue to increase as a percentage of GDP, an interview with a venture capitalist in the healthcare space that I read recently, he opined that if healthcare costs reach 20% of GDP, it would probably be a tipping point that would result in substantive changes to reduce cost growth.

          Finally, when I was still working, I remember numerous healthcare and health insurance experts predicting back in 2005 that U.S. healthcare costs would hit 20% of GDP by 2015. The actual number came in at 17.8%. That’s pretty good news too, I think.

      • It could also be said health care is expensive because we have too much health insurance.

    • Ron Greiner says:

      John, you are correct when you write about the ACA, “It does not need opponents to fail.”

      The ACA was going to fail regardless who became President.

      You are wrong though when you say, “One would think.”

      Americans have been so brainwashed by the politicians, the corporate media and the so-called non-taxed think tanks that they cannot think anymore. Those days are long gone.

      You are asking for too much.

  20. Barry Carol says:

    It’s also worth noting that advances in technology from new drugs and medical devices to new surgical techniques tend to increase the cost of healthcare while such advances usually reduce costs in every other field. Less invasive surgical techniques may reduce costs per procedure but increase the number of patients who need the operation and can now tolerate the new technique but not the old one.

    New therapies that extend the lives of people who would have died without them raise healthcare costs. As we live longer, we are more likely to develop expensive to treat conditions like Alzheimer’s and dementia or we may just deteriorate to the point where we can no longer perform some or all of the normal activities of daily living (ADL’s) and need expensive long term custodial care. Since individual healthcare costs cease when we die, technological advances are a double-edge sword from a healthcare (and health insurance) cost standpoint.

  21. Ron Greiner says:

    Over 1/3 of all people in California are on over-priced Medicaid. It’s like the Valley Girls, with a HUGE credit card, are in control in Sacramento.

    Governor Brown is in trouble over Obamacare and is considering another Civil War but the President holds the Trump Card just like President Abraham Lincoln did.

    Breitbart reports: —With the stroke of a pen, President Trump could shut down the state by cutting off or delaying funds.

    Moreover, federal funds fuel almost every major institution in California, including:

    Military Bases
    K-12 Schools
    Public Colleges and Universities (Federal funds, student loans)
    Federal contracts with technology and defense companies

    Since the California Constitution forbids deficit funding, the state cannot live off credit cards alone.—

    Valley Girls and California – like Frank Zappa said, “There is no cure.”

  22. Lee Benham says:

    You keep saying that the individual market needs some kind of subsidy.
    Do you think Employer Based benefits would work if they did not have tax payer subsidized status?
    What are your thoughts on how tax payer subsidized health plans have been able to control the costs of medical care?
    I will concede that giving the same tax advantages to the individual insurance market that the employer insurance market operates with would create a more level playing field. However I do just not understand how leveling the subsidy playing field for insurance will do anything to slow the inflation of health care costs. I believe more subsidies will accelerate the costs of healthcare.

    • Ron Greiner says:

      Lee, before Obamacare parents could purchase permanent and portable HSA qualifying Individual health insurance on a child for $50 a month. Now that option is gone because of central planners like Barry and parents pay $500 a month to add them onto their dangerous employer-based health insurance, their only option, they think.

      Barry wants young single mothers paying $500 a month to insure their child and he and his wife will take her high Medicare tax, Barry and his wife cost over $20,000 a year, and laugh all the way to the bank.

      Barry and central planners are making it so hard on young people that many won’t have children anymore. Barry is rolling in the dough and buys expensive LTC insurance so he lives longer and continues to suck the life’s blood from younger Americans for his socialistic ways. It is sad.

      Admit it Barry, it’s TIME to repeal Obamacare.

      • Barry Carol says:

        Ron — If you want your low cost underwritten insurance so young people can buy cheap policies so badly, just pay for high risk pools that actually work for the people who need them. While that won’t be cheap, it would solve your problem. Or maybe you don’t want to pay for the high risk pools and just let those sick people die instead. Which is it?

        • Ron Greiner says:

          Barry, are you sold on the Obamacare replacement plan? High Risk Pools is the Republican agenda.

          High Risk Pools worked great in IA,NE and MI.

          Why do you say I don’t want High Risk Pools?

          Anyway, I’m glad you are finally sold on the Republican replacement. Welcome aboard.

          • Barry Carol says:

            Thirty-five states offered high risk pools before the ACA and 15 didn’t. Their overall history is terrible whether or not they worked in IA, NE and MI. We’ll have to do a lot better next time if they are to be a credible solution for the unhealthy and already sick. It won’t be cheap to do high risk pools right.

        • High-risk pools make a lot of sense for people who earn commissions from selling insurance to people who pass underwriting. As for taxpayers and the sick people in high-risk pools, that is a more complicated story.

          • Ron Greiner says:

            John, that’s not true. When I drive 5 hours and spend a bunch of time enrolling a client who is declined because they are sick I don’t make a dime when I educate them on the High Risk Pool.

            I do it all for NOTHING John.

            Non-taxed think tanks make a lot of sense for people who make $500,000 a year like the NCPA paid John Goodman before he was fired. As for taxpayers, that is a more complicated story.

          • Lee Benham says:

            Complete and utter nonsense

            • Ron Greiner says:

              Lee, John is saying that sick people don’t benefit from High Risk Pools! crazy

              John doesn’t like salesmen I guess. Cuba doesn’t have many salespeople, maybe John would be happier there.

      • Barry Carol says:

        Lee — While I expect health insurers to negotiate with providers for favorable reimbursement rates and I expect them to require reasonable documentation to minimize fraud, I don’t expect them to control healthcare costs. Health insurance is about transferring actuarial risk from individuals to insurance companies. It’s not about controlling healthcare costs.

        As I’ve said many times, there are numerous approaches to controlling healthcare costs that are independent of insurance and insurance companies, at least for the most part. In an earlier comment, I mentioned tort reform, more people with living wills, investment in data analytics to minimize fraud in Medicare and Medicaid, bundled and reference pricing for imaging and surgical procedures, price and quality transparency tools. The list goes on.

        If I have a minor car accident, the body shop will probably charge less to fix my car if it knows I’m paying out of pocket than if insurance is paying to fix it. If my house is damaged by a storm, flood or fire, contractors will probably charge less if I’m paying out of pocket than if insurance is paying. However, most people can’t afford to pay out of pocket beyond relatively small amounts. That’s why they need insurance.

        • Health insurers promote the idea that they can control costs. We have decades of experience indicating they cannot. We would never expect auto insurers to control the costs of owning and operating an automobile.

          • Lee Benham says:

            You Said
            Health insurers promote the idea that they can control costs. We have decades of experience indicating they cannot. We would never expect auto insurers to control the costs of owning and operating an automobile.
            I have been reading your post for a few years and you have continually advocated a free market to control health care costs. We all know there is no such thing as a free market when it comes to health care or health insurance. So how do we get to a free market?

        • Allan says:

          “Health insurance is about transferring actuarial risk from individuals to insurance companies. It’s not about controlling healthcare costs.”

          That is true because of one of the reasons for health insurance is to pay for things one could not afford without assistance. Therefore health insurance increases healthcare use and costs. The restraining part of healthcare is the patient, but only if he is responsible for purchasing and paying for his insurance.

          You wear two hats. One is the free market hat that we have been seeing more of lately. The other is the socialist hat. So before determining your idea of how much health insurance actually costs one has to know which hat you are wearing.

          You have mentioned many ways of controlling health care costs all of which are important, but none of them in the long term will control costs when the government is out of control and is micro managing the sector. Once the patient is in charge reality enters the picture and prices fall.

    • Bart I says:

      Do you think Employer Based benefits would work if they did not have tax payer subsidized status? What are your thoughts on how tax payer subsidized health plans have been able to control the costs of medical care?

      I don’t know if Barry ever answered this, but employer benefits certainly wouldn’t exist in their present form without preferential tax treatment. They would have dried up with the passage of ERISA or HIPAA.

      I will concede that giving the same tax advantages to the individual insurance market that the employer insurance market operates with would create a more level playing field

      Only while ACA restrictions on underwriting remain in place. Pre-ACA the field was pretty level for anyone healthy enough to buy individual coverage at the lowest rates. Not exact parity of course, but the discrepancy could just as easily have been in favor of the individual plan as with the tax-favored but high-priced employer plan.

  23. Lee Benham says:

    You said.
    Health insurance is about transferring actuarial risk from individuals to insurance companies.

    What actuarial risk is a typical 35 year old making $35,000 a year transferring?

    A 35 year old individual making $35,000 a year can buy an ACA Bronze plan for about $6,000 a year or around 17% of their income. That insurance plan would come with a $6400 out of pocket.

    If the insured is transferring risk to the insurance company for 17% of their income to have to still pay an additional 17% of their income.

    Please explain to me what risk is the individual transferring?

    This individual has a choice to make. Best case scenario they will pay 0% of their income in a year. Worst case they will spend 34%

    If the insureds transfer of risk doesn’t start until the insured has spent 34% of their income is it really worth transferring that risk?

    • Barry Carol says:

      Lee — At $35K of income, that person would be eligible for subsidies and his premium should be limited to 9.5% of income for the 2nd cheapest silver plan in the market. The insurer quotes at price at which it will accept the risk transfer. If the insured doesn’t like the price or can’t afford it, there is no transfer. The principle behind insurance is to transfer risk. Whether or not there is a meeting of the minds on the cost of the quoted premium with or without subsidies is a separate issue. You’re making a straightforward concept more complicated that it is or needs to be.

      • Lee Benham says:

        the subsidies do not change the cost of the insurance. All they do is transfer who is paying. But ill play along. ok how about a 35 year old making $44590 a year and the numbers jump to 13% and 13%.

        What you are saying is that collectively tax payers need to pay a large portion of the premiums so the insured only has to pay the 17% of income to cover out of pocket costs. What exactly as a collective are we paying to transfer. If the out of pocket costs will bankrupt the individual anyway why pay to transfer risk when there is nothing to risk?

        • Allan says:

          “What exactly as a collective are we paying to transfer. If the out of pocket costs will bankrupt the individual anyway why pay to transfer risk when there is nothing to risk?”

          That is one the fallacies of the ACA, something its previous supporters are first figuring out.

      • Ron Greiner says:

        Barry, here in Tampa the 2nd cheapest Silver Plan has an out of pocket of $7,150 and the client gets $33 a month in tax credits, wow.

        But remember, they are paying premiums with after tax dollars. They are not getting the HUGE tax dodge that you enjoyed for your whole life.

        • Barry Carol says:

          Ron – According to free market oriented expert, Avik Roy, insurers can, at least in theory, underwrite even known healthcare risks. So a person with, say cystic fibrosis or Gaucher’s Disease might be quoted a premium of $300K or $400K per year most of which would be needed for the ultra-expensive specialty drugs to treat those diseases. That would be fine, according to Roy, if taxpayers subsidized the cost of virtually the entire premium so the insured’s out-of-pocket exposure was limited to a sliding scale from 10% of income at most down to a nominal amount at an income level just above Medicaid eligibility. This is his alternative to high risk pools which he doesn’t particularly like.

          Even with tax credits and underwriting, there are still plenty of people who would need subsidies to pay for health insurance. How many and how much it would cost to cover them, I don’t know. You’re the insurance agent. So what would the premium for a 60 year old with, say, high blood pressure, asthma or diabetes that’s well controlled with medication cost? What percentage of the population would be uninsurable under normal underwriting standards even with rate ups and what would it cost to cover them? The high risk pools being talked about by Republicans so far are a joke because the amount of money they plan to allocate for them is only $25 billion over ten years which probably wouldn’t be nearly enough to cover the need for one year let alone ten. They will need to do a heck of a lot better than that in their replacement bill.

          For the record, I never had a problem with the concept of high risk pools. The problem was always that politicians never wanted to put up the money needed to pay for them in most states because it was deemed too much money to spend on too few people many of whom were too sick to even vote. That’s not where politicians’ bread is buttered.

  24. Bob Hertz says:

    Yesterday I quoted an ACA health insurance plan for a 62 year old in Omaha. The premium was $1,025 a month for a Bronze plan with a $6,550 deductible. This poor soul would pay $12,000 in premiums plus the deductible before the policy paid for much of anything. (he would get free mammograms)

    This person’s income was too high for subsidies, and that got me thinking.

    The $12,000 premium is not out of line with what corporations with older work forces pay for health insurance. It is certainly not out of line for what Medicare costs on a 65 year old. It is not out of line with what the VA and TriCare really cost. People with low incomes get Medicaid or (currently) a large subsidy from the ACA.

    In other words, 90% of insurance buyers are heavily subsidized. This guy in the off-exchange ‘ghetto’ is the only fellow NOT being subsidized.

    The price of health insurance is effectively set by all the subsidized people. (I have no training in economics, but I am sure there is a theorem for this.)

    So as I read the many thoughtful posts on this blog and some others, I see two schools of thought:

    a. my liberal school, which advocates extending subsidies to the off-exchange sector as described in my Urban Institute cite above;

    b. the libertarian school, which wants fewer subsidies, and more people exposed to un-payable premiums, which will eventually drive down prices to what unsubsidized people can afford.

    There is some logic in strategy b., but it also smacks of a kamikaze approach where your first wave of attackers is sacrificed to break down the opponents.

    • Barry Carol says:

      Bob — When it comes to both healthcare and health insurance, it’s the big, expensive stuff that breaks the bank. It isn’t primary care and it isn’t being healthy enough to never or rarely need to see a doctor.

      The libertarians say they want to take care of the sick, expensive people outside of the free market (read underwritten) health insurance system. They throw out ideas like high risk pools, which I would be OK with, and, in the case of Avik Roy, underwriting everyone and subsidizing those with very high premiums which could run into the six figures for those who are already very sick. The problem is that politicians at both the state and federal level have never shown any willingness whatsoever to do either one effectively. That includes current Republicans in Congress that are pushing an ACA replacement plan that provides a measly $25 billion over 10 years for high risk pools. It’s grossly inadequate. High risk pools that actually work for the people who need them would be very expensive for taxpayers.

      • Bart I says:

        $25 billion is a fair estimate for one year, if you exclude people on Medicare or ESI and there is no erosion in either of those.

        But I don’t think that figure is out of line with what most ACA replacement proposals want to spend in new tax credits or deductions(!?)

        It’s the same money either way. Either you spend it on tax credits to subsidize community rating premiums, or you spend it on a risk pool.

        For that matter, community rating IS a risk pool. The only difference is the percentage of population inside the pool.

      • Allan says:

        I don’t know whether or not the amount proposed for high risk pools is adequate or not, or even too generous. What I do know is that you will hold the entire population hostage over a relatively small number that under any circumstance will be getting a lot of care and are guaranteed admission to a hospital whether they can pay or not.

        To control costs in a significant way drastic changes must occur and we must have more of a marketplace in healthcare. You, like everyone else, wish to protect the known problems, but you don’t seem to care about the vast majority of people that constitute the unknowns many of which soon will be among the knowns. That lack of understanding does nothing but perpetuate the problem year after year.

        Take note of how according to your desires everything comes to a stop if your specific limited goals aren’t realized 100% before moving on. That is the nature of those that wish control over others and refuse to let people make decisions for themselves.

        • Ron Greiner says:

          Allan, Federal Savings With Republican Age-based Tax Credits – Hundreds of Billions A Year?

          1. Vastly reduce the employer insurance exclusion which is $380 billion a year and growing.

          2. Vastly reduce the cost of Medicaid which is $400 billion a year and growing.

          3. Vastly reduce the cost of the States’ Health Insurance for Children (S-CHIP).

          4. Vastly reduce the cost of Federal Employee Health Insurance.

          Republican Healthcare Reform is a Windfall for the All of the States.

          Heck, Iowa loses 6% income tax on employer-based health insurance. Iowa loses $1,368 on family insurance that is $1,900 a month. The states could help pay for the High Risk Pools.

          The States save a bundle (Billions) on their employees’ health insurance.

          If we don’t save California they want Civil War!

          Chicago would save a lot on employee insurance too.

    • Lee Benham says:

      Maybe you academic individuals can help explain this information.
      From the data it looks like there is plenty of money subsidizing health care.
      The average annual health care costs for a 64 year old are around $10,000 a year and for a 40 year old they are about $4350 where as a 20 year old is closer to $2000.
      It looks like we are just very inefficient in getting the subsidies to the individuals.