Wednesday, October 30, 2013

My Personal Health Insurance Comparison

The other day I posted about it making the most sense for young healthy people, under Obamacare, to choose the lowest premium plan possible, tied to a health savings account, looking strictly at the numbers involved, and not worrying about what plan had what coverage, and also asked how that might effect the stability of the insurance system in general.

I've since looked at the follow up information that BlueCross-BlueShield sent me regarding my plan options moving forward, so I figured I'd make the comparsion to my current plan.

My current plan is called Blue Edge HSA 100%.  Under this plan, I am given access to either BCBS's PPO network of doctors, or their BlueChoice network of doctors.  My individual deductible on this plan is $1,750, and my coinsurance is 100%, meaning I pay nothing after my deductible.  For this plan, my monthly premium has been $246.08.  This amount includes dental coverage that I tacked on, which if I remember correctly, is about $25/month of this amount.  So if we're comparing health insurance to health insurance, my premium just for health insurance is roughly $221/month.  This has been an individual insurance plan, and so I will compare this to the individual rates of the new plans being offered.  Rates in my article from the other day were quoted for both myself and my wife, and so differ from the rates in this post.

My current plan has been cancelled, and BCBS has sent me a letter indicating that the most similar plan to my current plan is the new Blue PPO Gold 001 plan.  This plan runs $376.40/month, and has a deductible of $3,250.  So for the most similar plan, the monthly premium has increased roughly 170%, and the deductible has also nearly doubled.  I am also limited to only the PPO network.  Even better news, this plan is also not eligible to be used with an HSA.   Here is what this plan offers:

I am also told that Blue PPO Bronze 005 is the most similar in price to what I have today.  This plan is $239.43/month, so they've managed to offer a plan at a similar price.  This plan has a $5,000 deductible, and a coinsurance of 80%, with an out of pocket max of $6,250.  This means that even after I've paid $5,000 in deductibles, I'm still paying 20% of the bills until I've hit $6,250.  This plan does qualify for use with an HSA, and here is what this plan offers, compared side-by-side with the plan above, so we can see how much worse it is on the surface.

There's really not a lot to like about that picture, since what it's really saying is that I might more or less count on coming out of pocket to the tune of $6,250 just about no matter what, because of the 80% coinsurance.  Basically with this policy I'd be cutting checks to BCBS to the tune of $2,873.16 a year for the right to have them tell me I'm paying for everything myself until I've spent $5,000, and then I'm also still paying 20% until I've shelled out another $1,250.  At least I get to have an HSA with this one.  Yay!

Bottom line is, for me, that I'm either paying almost double in premiums, with almost double the deductible, to get similar coverage to what I already have, but can't use an HSA, or I can buy much, much worse coverage for a similar price.

Given the fact that they have another plan called Blue Choice Bronze PPO 006, that turns that litany of 80% coverage into 100% coverages, with a $6,000 deductible and $6,000 out of pocket max, and for only $160.09/month, also HSA eligible, I'm not sure why anyone would bother with something like the Blue PPO 005 above.  At least not a young, healthy person in a big city like me anyway.  If my doctor isn't in the Blue Choice network, I can find one that is.

This obviously becomes much more problematic where people live more spread out.  If someone is stuck with the Blue PPO network of doctors, they're stuck with something like that awful Blue PPO 005, or else instead, for some terrible reason, double the premiums.

Monday, October 28, 2013

Another Market Force within Obamacare

It's been quite some time since I've had the time on my hands, or the ambition to write about any politics here.  I've recently started my own company, and so have a bit better outlook on life in general, and a bit more time on my hands now that I manage my own time as I please.  With that, I've been doing some thinking on this roll-out, or lack thereof, of Obamacare, and I've found something in all this that I'm interested to write about that I think happens to be an angle not many other people are seeing in it.

A great many commentators have been expounding on whether or not Obamacare will collapse under its own weight due to lack of people being able to sign up for it, or people just not signing up and taking the penalty instead.  This may very well end up being the case.  From what I can tell from researching rates over the past week or two, we're all either looking at incredibly high premiums compared to what we're used to, or else incredibly high deductibles compared to what we're used to.  I will note here that I make too much money to qualify for subsidies under the law, so I can't and won't bring those into my discussion of the rates, which works for me, as I wish to focus on this purely as a market analysis anyway, without the government distortion.  With such high premiums, accompanied by de facto poor service in the form of high deductibles, the number of "eff-you" types who will forego coverage for the penalty would seem to be high.

The long view of this idea that Obamacare will collapse under its own weight due to lack of participation, is that with the market unable to support the healthcare needs of the many sick and old, on the backs of the few healthy and young, the left wing will at some point execute the complete takeover of the healthcare system in the form of single payer.

I'm not immune to thinking this myself, and certainly feel that this would be the worst case scenario, resulting in rationing of healthcare, and DMV-like service in the hospitals themselves, not just on the website where you're supposed to be able to sign up for your coverage.

All of this said, I've been spending a good part of the last week or so researching the available plans, and I'm seeing something else happening, that may be more catastrophic both to insurance companies, and the government, than anyone has thought to this point.


Yes, the thought has been that most likely scenario in all of this is that a great many people will forego insurance for the penalty.  However, as Megan McArdle recently pointed out, this will not be so easy.  The penalty is a nominal $95, or 1% of your gross income.  This is next year's figure, and I am sure it will increase over time.

Now, if a person makes $100,000, then the $1,000 penalty tax that has to be paid is really a pittance compared to the amount this person would have to shell out in health insurance premiums, so let's go hypothetical and imagine that the penalty is made high enough to prod people into actually buying insurance, and every single person in the land has to buy insurance, and does.  This hypothetical leads us to examine what policies will be bought en masse across the country.


For the purposes of this post, I am going to use information from Blue Cross-Blue Shield of Illinois, both because this is my insurance company and I am most familiar with them, and because when I compare estimates on (sans subsidy), they are easily the most inexpensive across the board.

Here are the results for plans for my wife and me from Blue Cross-Blue Shield.

Looked at in this manner, we are seeing what the maximum outlay might be if shit really hit the fan and deductible payments were maxed out.  What I look at most closely, however, being a younger, healthy person, is how much money here remains in my own control.  This is where having an HSA kicks in.  Basically, if I am able to afford to stash away the maximum tax-deductible HSA contributions for two years, without having to dip in to the HSA account to pay deductible fees, I am basically no longer coming out of pocket on deductibles in the future.  Granted, of course, I will likely have some small amount of medical expense, so that not everything I pile away into the HSA will stay there over the course of two years, but let's even say in 2.5-3 years, my HSA has enough money in it that if I get hit by a car, I'm not diving into my checking account to cover deductible payments.

This being the case, the market force at play within Obamacare is one that should be driving all the young, healthy people onto low-premium, high deductible "Bronze" level plans, that they can tie to a Health Savings Account.

This is the arrangement I've had set up for myself for three years now, and only the deductible and premiums are really changing here for me.  I will be very interested to see what comes of this system over the course of the next year.  The mandate has the opportunity to force young, healthy people to actually think about their insurance coverage for the first time that I can recall.  From a personal standpoint, I've always had insurance, either through my parents, or through school, or through work.  Three years ago, I became an independent contractor, and had to buy my own insurance.  This was the first time I actually ever looked at any of these plans beyond what the deductible was and what the copay was.  Now millions of other people are going to be in that boat as well.  Unless somebody that is young is also sick with, perhaps, diabetes or some type of other length of life disease, where it will make sense to have more of a "maintenance plan" type of insurance, there really is no conceivable reason why a young person would choose anything but the low premium, high deductible, HSA combination.

And so my question is, what happens then to the structure of this program?

If everyone who is healthy enough to forego a "maintenance" insurance plan chooses to do so (and why wouldn't they?), my early assumption has to be that the insurance industry will be unable to support the older sicker people based on the lack of premium revenue.  The whole idea here was to force everyone to buy insurance, raise premiums, and use the higher premiums on healthy people to pay for sicker peoples' maintenance insurance.  But if younger people in general go the route of paying the bare minimum into the insurance pool as possible, instead contributing to their own HSA accounts, and the deductibles be damned, doesn't this eventually pull just as big of a Jenga piece out from the foundational levels of the scheme as people just not signing up anyway?

I do recognize that the more immediate problems with the system, such as not being able to sign up, and having no real financial reason to sign up due to the extremely low penalty, are likely to drive this train off the rails much sooner than my scenario.  However, I also think that my scenario is another one that dooms this system as well.  Ironically, however, taken to the next logical step in the long view, the market response would be to increase deductibles further, meaning that people would be much, much more inclined to begin actually shopping for their healthcare, rather than just showing up and expecting to be serviced for no charge, meaning that in the long run, prices to the consumer might actually come down as the healthcare industry would finally again be required to service the consumer rather than throw a fat bill at the insurance company's wall to see what sticks.  Over the long term, proponents might actually trumpet to the heavens that the program has worked!

But I wouldn't give our government the credit for such foresight or patience as to wait for all of that to come to fruition.  If they had the foresight or patience for that, they'd have simply written a program that majorly incentivized people to get onto HSA's, and opened up the insurance markets across state lines, giving people more freedom and choice.  But the government response to a market response of insurance prices going up will surely be one instead of further control, perhaps to put some kind of fiat cap on deductibles, and eliminate HSA eligible plans, putting us all on more expensive maintenance insurance, leading to the necessity to increase the subsidy to lower income citizens, or perhaps even broadening the criteria for acceptance onto Medicaid (which is already looming large as a major wrench in the works).

Ultimately, this would also mean the healthcare industry will continue to overcharge for services, since there will continue to be no price feedback from the actual consumer.

Saturday, May 5, 2012

Why They Need Us

It's been a long time since I felt like posting anything.  But now the Obama Campaign recently issued The Life of Julia, and it's just too stupid to pass up.

Enough has already been said picking it apart, so I won't really bother with that.  I will however, give you twenty-nine seconds that explains exactly the road the President is headed down with this nonsense.

It's really not any more difficult than this.  Either you believe people need to be reliant on the government to live their everyday lives or you don't.

Wednesday, January 11, 2012

Jake the dog is Bender from Futurama

And no, not just in the sense that John Dimaggio voices both of them.

I mean literally, they're the same 'person' but with millions of years difference.

Now please, stop throwing your chairs in outrage and listen... Or read... Unless you're blind.

Lets start with the first point:

Jake is a dog, not a robot. Right? Well if you remember your Blade Runner you'll remember that 1) Harrison Ford is a super badass, and 2) That at a certain level of sophistication, there is no clear distinction between a robot/android and a biological creature. Now the Bender we know was a 2nd generation robot and pretty unsophisticated. Prof. Farnsworth invented the first gen not long before and society had not fully accepted robot kind [remember prop infinity?] by the time of Futurama.

After enough generations of machines building and designing their successors, they would end up looking and functioning like biological beings. And if the 2nd gen version had extendy arms and legs, I'm sure the nth gen would have extendy everything.

Lets also look at the designation 'dog.' No other traditional animal exists in the post-apocalyptic world of Ooo. Aside from sentient worms, evil penguins, and a snail that contains the mind of the Litch, we've yet to meet anyone or anything (aside from Finn) who was a traditional earth-based life form. Yet we have Jake the 'magic' dog. It is my assertion that as human society progressed and intertwined with robots, we changed the designation of our partners to something that meant a best friend and constant companion. And what better friend has mankind ever had than the dog?

Then regarding the proclamation that Jake has 'magic' stretching powers, we must only remember Clarke's law that “ Any sufficiently advanced technology is indistinguishable from magic .”

So we've crossed the first plausibility gap. Now lets take a look at behavior.

In the episode 'Apple Thief' Jake repeatedly tells Finn about how he used to snatch purses and hock stolen goods before he learned it was bad. This behavior is [likely intentionally] reminiscent of Bender's general attitude and behavior. But when did he 'learn it was bad?' We know that all Bending units (except our Bender) are basically immortal. When they 'die' their minds are uploaded into a new body and they go on with their lives.

Well any new body would require a new set of operational programs – essentially like installing new drivers when you throw a new video card in your PC. It would be poor design if a robot mind were dropped into a new body and didn't know what internal commands to use in order to move and function. And with any new ability that their new chassis provided, there would need to be a set of moral/social guidelines on how and when to use those abilities. Therefore robot morality would evolve over time and develop along with their abilities and social freedoms/responsibilities.

At some point in a robot's near-immortal life they would 'learn' that stealing was wrong when their moral core was updated to include that definition.

Also, Jake's immaturity and fierce loyalty to his equally immature human companion mirror how Bender acted (perhaps with a more upgraded moral core – this \is\ a kids show after all). Plus Jake's eternal drive to party and inability to do anything else with much conviction are very Bender-ish as well. Such loyalty is perfectly normal for a race that was created to live with humans, and even explains why every woodland creature ignored baby Finn except Jake's parents.

And one last piece of the puzzle: the Rainicorn-Dog wars.

These wars are why Jake's romance with Lady Rainicorn is so scandalous. That these two can and do co-exist shows us that there is no inherent reason for the two species to clash, and no reason is ever given. Except one that may have missed you.

Rainicorns eat humans.

Here I assert that Rainicorns are the reason why humanity is all but extinct. As they are able to phase matter through their bodies, fly at speed, and who knows what else, they would be a nearly unstoppable enemy. Where they came from and why they speak Korean are not germane. If humanity were locked in a losing war with the Rainicorns, our faithful companions and social equals [the Dogs/Robots] would certainly fight on our side [and if it was part of his base programming that he may one day need to fight the Rainicorns, it would explain why Jake can understand Korean but never speaks it]. Jake is told by his father in a flashback that he would be hurting people his whole life. This is exactly the kind of thing a parent would cheerily say to their offspring if an eternal war was being fought.

In any conflict involving humans, robots, and an even more powerful foe, robots would certainly do the bulk of the fighting. They would likely even continue fighting on our behalf even after we had pulled our last-resort [scorched-earth] and blew a giant hole in the Earth. And for the untold ages after that, it would no longer be the Human-Rainicorn war, but the Rainicorn-Dog war. Only in the past few decades with the invention of soy-humans have the Rainicorns stopped their attacks.

(Note all the nukes in the first screen of the opening sequence)

Bender plays classical piano with perfect form.

Jake plays the viola with perfect form.

Bender can stretch his arms and legs.

Jake can stretch his arms and legs with much more precision, as well as the rest of his body (to the apparently cellular level)

Bender is fiercely loyal to his human friend.

Jake is fiercely loyal to his human friend.

Bender is a party animal, and often gets distracted from his primary task to do something more fun.

Jake is a party animal, and often gets distracted from his primary task to do something more fun.

Bender is childish and cowardly when facing his own perceived mortality (ie sick/dying).

Jake is childish and cowardly when facing his own perceived mortality (ie sick/dying).

At some point after Futurama, Humanity is living along side Robots as equals when a war with the Rainicorns begins. After the planet is heavily nuked (the so called 'mushroom wars' referenced in-series) the Robots (who now resemble and are called 'Dogs') continue to fight the Rainicorns until a stalemate is reached and the conflict is mostly forgotten. Some time after this, Adventure Time takes place.

Jake is a super-advanced bending robot, retaining only his general attitude towards life, voice and the basis of his physical abilities.

Monday, August 22, 2011

A Letter to Sam Harris on the Economy

Dear Mr. Harris-

You have requested that economists in particular contact you in regard to the 08-19-11 Addendum to your blog post "How Rich is Too Rich?"  I am not an economist, but I follow economics very closely.  I'm an engineer by degree and run a construction company, so it is perhaps in my nature, as well as required of my position, to know what's happening in the world, economically.  I hope you will take a few minutes to think about my take on your ideas, however, because admittedly this is long, I will not be surprised or disheartened if you do not.

First, I will assess your first idea:

Future breakthroughs in technology (e.g. robotics, nanotech) could eliminate millions of jobs very quickly, creating a serious problem of unemployment.

In a very broad sense, I think that the creation of a massive robotics industry causing large scale unemployment would perhaps be akin to the fear once upon a time that the rise of the automobile industry would have caused large-scale unemployment due to their replacing horse-drawn carriages.  To shamelessly steal from DeVito's speech in Other People's Money, there was once a company that made the world's best buggy whips, whose employees surely found themselves eventually unemployed due to the rise of the automobile.  But as those people lost their jobs due to the rise of an industry that made their profession nearly obsolete, so too did a new industry arise whose ability to employ massive numbers far surpassed the ability to employ of carriage-makers, horse farmers and buggy whip makers combined.  In the aggregate, employment rose.

Will robotics eliminate jobs?  Of course, it has already eliminated thousands upon thousands of jobs, from the automobile industry to the airplane manufacturing industry to the construction even of submarines.  Many welds on the newest submarines, for instance, require accuracy that only robotics can achieve.  This means that welders that worked on submarines are out of that particular work.  But they are still welders.  They just need to weld elsewhere.  Perhaps they might even go to work for the company that is manufacturing the robots.

If we look to the future of robotics, the scenario that kills millions and millions of jobs is the perhaps Asimov's Foundation series scenario, or more recently, the scenario in the movie, Surrogates, where robots become so commonplace, there is nearly one robot, or more, for every human being.

But who makes the robots?  Surely for the smaller components and the excessively detailed work, there are other robots.  But there are still going to be assembly line jobs.  There are going to be jobs for the people who need to supply the materials, all the way back to the original mines they came from.  Robots won't do everything.  All along the way there will need to be people to do the work.  Perhaps this is best explained easily in Leonard Read's pamphlet, "I, Pencil."  If the industry grows to such a magnitude as you suggest, then yes, surely it will create massive unemployment in other currently existing industries, but it will create massive employment in a new, growing industry.  Such is the nature of capitalism and economic progression.

But many of your readers responding to you have already covered this basic idea, and you are looking for something more.

I am suggesting, however, that there is nothing that rules out the possibility of vastly more powerful technologies creating a net loss of available jobs and concentrating wealth to an unprecedented degree.

To this I would suggest that there is and always has been this possibility, however the missing piece of the equation is necessarily the rate of population growth.  It did not used to be uncommon for families to have 4, 6, 8 or even 10 or 12 kids.  When our economy was largely driven by agrarian life, it was economically necessary for a family to have as many workers as possible to work the farm.  Given the rise of mechanical farming equipment, the farm family has gotten smaller over the years.  In the early-to-mid 20th century boom in manufacturing, we saw our population skyrocket as we had an economy that we were comfortable still having several children per family, as factory workers would have assumed that their kids could eventually go to work in the factory, if nothing else.  I would suggest to you that as many manufacturing jobs have moved overseas, families have trended to get smaller as a response, with families focusing on grooming their children for white collar work, whether as engineers, academics, or businessmen.

The moving of blue collar manufacturing positions overseas has also been a response to the market.  Union contracts in the United States grew to the point that the manufacturing of goods locally has in large part become untenable.  I would put this largely on the unsustainable nature of a pension model for retirement, moreso than the wage rates themselves, but this is another topic altogether.  So if we are talking about a "serious problem of unemployment" I assume we are talking about it locally in the United States, because technically speaking, the jobs haven't disappeared, they have gone elsewhere, where the labor can be had for significantly less money.

I make this point because, if we were to see such a significant rise in robotics, it would be not only because the manufacture, sale and maintenance of the robots was that much cheaper than American labor, but also that much cheaper than rock-bottom foreign labor.  Looking at it macro-economically, taking the world market as a whole, and taking employment to be a worldwide phenomenon, because it is a worldwide phenomenon, I feel the possibility of a rise in robotics to replace employment of human labor to such an extent that all levels of human employment are made economically obsolete to be something that is probably a few hundred years down the line, should it ever happen.  There's an entire world's worth of cheap labor to exploit before a saturation of robotics seems likely to even begin to take place.

Now, on to your next idea:

The federal government should levy a one-time wealth tax (perhaps 10 percent for estates above $10 million, rising to 50 percent for estates above $1 billion) and use these assets to fund an infrastructure bank.

You do, strangely, caveat this by ultimately saying "Leaving aside fears of government ineptitude, please tell me why it would be a bad idea for the rich to fund such a bank voluntarily."

Let me first point out that these are two wildly different things.  The federal government descending upon the rich and absconding with 10-50% of everything they own from behind the barrel of a gun is not the same thing as our country's 400-something billionaires voluntarily pooling their money together to charter a new bank that would be used to fund infrastructure projects.  To insinuate anything of the kind is disingenuous.

The latter would most certainly not be a bad thing, though let's remember that the structure of such an entity would be as a bank, loaning money out to municipalities and states and the federal government to fund infrastructure projects.  This money would have to be paid back with interest, and that this is really not any different than how this already happens, except for the fact that this bank would be something like another Federal Reserve style central bank dedicated solely to infrastructure, though, I would assume and hope, not allowed to print money.  To that effect, I guess I don't really understand the point of it, other than that it's an accounting trick to move debt out of treasuries and into another entity.  The debt still grows, only it doesn't affect the country's balance sheet.  At some point it becomes another Fannie/Freddie-type of entity, with so much debt that it doesn't even know how much of it is even good anymore.

This is to say nothing of the point, also, that if the super-rich are the ones funding this bank, they are getting even richer because of it, thereby increasing the wealth gap you are hoping to close.

If you have taken the time to read through all of this, thank you.

Paul Kroenke

Thursday, August 18, 2011

I Do Not Think It Means What You Think It Means

Gateway Pundit finds a story so absurd you know a Democrat has to be at the center of it.

Democrat Representative Michael Sturla has made the ludicrous claim that fracking causes the spread of STD's "amongst the womenfolk."

While it's refreshing to see that someone has picked up John Murtha's mantle of severely bigoted Pennsylvania Democrat, perhaps even more refreshing is Sturla's response to criticism of his bigotry.

“This is in the heart of the drilling area” said Sturla, as he read from the report.  “Other issues: an increase in sexually transmitted diseases.  One of the recommendations: increased Department of Health availability of services related to STDs and substance abuse.” 
“I don’t make this stuff up,” said Sturla.  “Should we not have drilling in the state because of that?  No, but it’s one of those impacts that we need to deal with.  In the Marcellus Shale Commission report, it says we should deal with it.”
Bigoted Comedy Gold.

Oh, and as an added bonus, (based on Ed Schultz's criteria) he's a racist!
“It’s just you can’t whitewash it and say it doesn’t exist,” said Sturla.
Fracking?  Drilling?

Tuesday, August 16, 2011

Ron Paul is The One

Great timing on this video as a response to his being deemed the "13th floor of a hotel" by the media in general.

Brett Baier at Fox News may be rolling his eyes and smirking away in neocon hell, but there are plenty of people who recognize Ron Paul as The One.