Thursday, 02 October 2014 / TRUTH-OUT.ORG

ObamaCare's Relentless Creation of Second-Class Citizens (Part III)

Tuesday, 02 July 2013 12:25 By Lambert Strether, Naked Capitalism | News Analysis

Truthout combats corporatization by bringing you trustworthy news: click here to join the fight!

And we go to Happyville, instead of to Pain City. –Thomas Pynchon, Gravity’s Rainbow

As ObamaCare inches painfully closer to its October 1 launch date, we’re getting more and more detail on how the exchanges (or “marketplaces”) will actually work. By design, ObamaCare doesn’t treat health care as a right, and does not give all citizens equal access to health insurance, let alone to health care. By design, ObamaCare preserves private health insurance as a rental extraction mechanism, along with its complex and bug-prone system of eligibility determination by past (and projected) income, age, existing insurance coverage, jurisdiction, family structure, and market segment. I’ve heard it said in software engineering that complexity is the enemy of quality and, I would speculate, the same goes for social engineering too. In any system as baroque and Kafaesque as ObamaCare, some citizens will get lucky, and go to HappyVille; others, unlucky, will go to Pain City. The lucky are first-class citizens; and the unlucky, second class. In two earlier posts, I gave examples of the whimsical and arbitrary distinctions that ObamaCare makes between citizens who should be treated equally; in this post, I’d like to give two more.

First, ObamaCare will use consumer reporting agency data to verify your identity during the eligibility determination process.* Reuters explains, today:

The potential for problems will begin as soon as would-be buyers log onto their state exchange. They’ll enter their name, birth date, address and other identifying information. Then comes the first IT handoff: Is this person who she says she is? To check that, credit bureau Experian will check the answers against its voluminous external databases, which include information from utility companies and banks on people’s spending and other history, and generate questions. The customer will be asked which of several addresses he previously lived at, for example, whether his car has one of several proffered license plate numbers, and what color his old Volvo was. It’s similar to the system that verifies identity for accessing personal Social Security information. [No, it isn't at all similar.**]

Hmm. Never mind that this is the first time we’ve heard that the exchanges are going to ask for the color of my old Volvo; or that there are no such questions in the Enroll UX 2014 prototype. And never mind that healthcare.gov says this:

You’ll provide some basic information to get started, like your name, address, and email address….

Nothing there about license plate numbers or the color of my old Volvo, eh?

The real issue is that credit bureau data is dirty, and the credit bureaus make it very difficult to fix,as we’ve shown. How corrupt is the data? CBS:

A new government study to be released tomorrow indicates as many as 40 million Americans have a mistake on their credit report. Twenty million have significant mistakes. And our own investigation of the credit reporting industry shows that those mistakes can be nearly impossible to get removed from your record.

The bottom line here is that ObamaCare has created yet another way to treat some citizens as first class, and other citizens as second class, and on an entirely random basis (!). As I read Reuters, the first hurdle — the very first thing — you’ve got to do to get into an exchange is prove your identity by responding a series of challenges generated off your Experian data. If your Experian data is clean, and you get the responses right, you go straight to Happyville in the first-class carriage! (To the extent that being forced to purchase a defective product — health insurance — is going to Happyville, of course.) But if your Experian data is dirty, you can’t get into the exchange at all!*** So you don’t pass the hurdle, can’t get into the system, can’t fix your Experian data, and … Is there even an appeals process for people who can’t set up their ObamaCare account to begin with? Pain City even if there is, and in the slow coach. 

How many people will end up in Pain City because of dirty Experian data? I’m not sure there’s a better answer than “Could be a lot.” We do know that 10% of all Americans have been subject to identity theft, so if Experian thinks you’re John Doe2, who has a yellow Dodge Dart, instead of who you are, John Doe1, with a red Volvo, you’re in trouble. More subtly, the Experian challenge/response is to identify you, not by an identifier unique to you, like (in theory) your SSN or a retinal scan, but by the sum of your answers to the questions Experian generates from your data. So, in the exchange’s mind, you equal not “457-55-5462″ (your SNN) but {“car color: red” + “car brand: Volvo” + “LIC: GO NC!” + “address: 123 Main Street, Anytown USA”} (challenges with responses). The problem here — and I am speculating — is that not all these fields will be equally maintained. For example, Experian might be more likely to keep addresses clean and current because most of its clients want to send out bulk mailings frequently. Not so car color. The thing is, when you’re trying to prove you are who you are to ObamaCare, you could get car brand, license plate, and address all right, and then stumble on the car color — maybe you repainted it? — and have your identity rejected. You know captchas, and how everybody hates them? Because they feel random? With Experian’s Q&A system, ObamaCare’s exchanges will have the mother of all captchas.

Second, ObamaCare puts those who live on rental extraction above those who pay those rents. Here’s an example from a press release that The National Association of Health Underwriters sends out when one of its members passes a continuing education course in the PPACA:

[Agent Smith] completed this 10-hour course to receive the most up-to-date information on the key technical components of PPACA and is prepared to counsel his/her clients on upcoming required healthcare changes and new options for health plans.

“By taking this course, [Agent Smith] has joined an elite group who is uniquely qualified to assist clients in complying with the new law,” said NAHU CEO Janet Trautwein. “He understands how the market is likely to change over the next few years, and is in the perfect position to advise employers and individuals in planning for the future.”

Underwriter [Agent Smith], now a member of an “elite group” (a fine example of the workings of credentialism and meritocray) is surely on the road to Happyville! Here are the course topics:

  • Implementing healthcare reform—overview and politics
  • Grandfathered plans and the small-business tax credit
  • Medicare Part D and non-discrimination rules
  • Patient protection and changes to consumer-directed health plans
  • Medical loss ratio requirements and tax implications
  • W-2 reporting, summary of benefits, waiting periods, essential benefits and community rating
  • Individual mandate, pre-existing conditions and rating reform
  • Health insurance exchanges for individuals and small employers
  • Employer pay or play
  • Self-insured plans

But consider. The entire “continuing education” course covers topics that wouldn’t even exist with a single payer system (which, I might add, is a proven solution, and not a medical experiment performed on the American people without their informed consent). Imagine if the Democrats had abolished the filibuster in 2009 and passed Medicare for All. Given them a year to implement it. After (2013 – 2010) three years of working with a proven system that covers everybody, here’s what that “continuing education” course would look like:

  • Implementing healthcare reform—overview and politics
  • Grandfathered plans and the small-business tax credit
  • Medicare Part D and non-discrimination rules
  • Patient protection and changes to consumer-directed health plans
  • Medical loss ratio requirements and tax implications
  • W-2 reporting, summary of benefits, waiting periods, essential benefits and community rating
  • Individual mandate, pre-existing conditions and rating reform
  • Health insurance exchanges for individuals and small employers
  • Employer pay or play
  • Self-insured plans

From that perspective, the NAHU “continuing education” course looks a lot more like propaganda designed to send people like me, who pay rents, to Pain City. More importantly, the fees the course generates — $495 a pop for PPACA certification, no doubt deductible as a professional expense — represent in little the opportunity cost of the political class’s choice of ObamaCare over single payer, the road not taken; with single payer, the NAHU doesn’t — kaching! — collect the $495, and the agent doesn’t pay it. Which is good, since the transaction, like health insurance itself, brings no value to health care transactions. In a single payer system, the $495 might go to the delivery of care!

Does anybody really believe that Underwriter [Agent Smith] is going to surrender their membership in an “elite group” just for a system like single payer Medicare for All that would save the country $400 billion a year, at least, and relieve an immense amount of human suffering? It won’t be easy. OK, then, how about the “creative class” that’s building the websites and doing the training and the marketing? How about the non-profits who are getting funding from the Enroll America campaign organization for turning themselves into insurance salesmen?

Once the ObamaCare rental stream is established, everybody that’s drinking from it now will want to keep on doing that, even if total program benefit nets out to the public as zero or even negative. The real — and only — problem with single payer Medicare for All is that everybody benefits. Rentiers hate that shit, because there’s nothing in it for them.

NOTE * I did scoop the world by actually reading ObamaCare’s form and noticing the integration of consumer reporting agencies into the eligibility determination process. I assumed — at least according to current reporting, wrongly — that ObamaCare would use consumer reporting agencies for financial data to be used in income determination. It just never occured to me that ObamaCare would use credit agency data for identity verification, exactly because the data is so bad. 

NOTE ** Social Security determines your eligibility from documents, not from easily corrupted electronic data. So Social Security and Experian are operating from completely different baselines.

NOTE *** Suppose Experian thinks my old Volvo is red, when in fact it’s green. What’s the rational course of action? Well, I can’t fix Experian’s data, so the best thing to do is to order my credit report and say whatever it says when Experian challenges me; “red,” for example. That does replicate Experian’s bad data into the ObamaCare system (assuming the challenges and responses are stored) but what’s the alternative? Although, the ObamaCare data is supplied under penalty of perjury, so maybe that’s a bad idea. Finally, do note that “a current credit report” is not on the list of basic information healthcare.gov tells you to have ready, although it only takes two weeks to get one. I’m assuming, of course, that Experian will generate questions only data that is available to consumers, which not all credit reporting data is.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Lambert Strether

Lambert Strether is a contributing author at Naked Capitalism and blogs at Corrente.


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ObamaCare's Relentless Creation of Second-Class Citizens (Part III)

Tuesday, 02 July 2013 12:25 By Lambert Strether, Naked Capitalism | News Analysis

Truthout combats corporatization by bringing you trustworthy news: click here to join the fight!

And we go to Happyville, instead of to Pain City. –Thomas Pynchon, Gravity’s Rainbow

As ObamaCare inches painfully closer to its October 1 launch date, we’re getting more and more detail on how the exchanges (or “marketplaces”) will actually work. By design, ObamaCare doesn’t treat health care as a right, and does not give all citizens equal access to health insurance, let alone to health care. By design, ObamaCare preserves private health insurance as a rental extraction mechanism, along with its complex and bug-prone system of eligibility determination by past (and projected) income, age, existing insurance coverage, jurisdiction, family structure, and market segment. I’ve heard it said in software engineering that complexity is the enemy of quality and, I would speculate, the same goes for social engineering too. In any system as baroque and Kafaesque as ObamaCare, some citizens will get lucky, and go to HappyVille; others, unlucky, will go to Pain City. The lucky are first-class citizens; and the unlucky, second class. In two earlier posts, I gave examples of the whimsical and arbitrary distinctions that ObamaCare makes between citizens who should be treated equally; in this post, I’d like to give two more.

First, ObamaCare will use consumer reporting agency data to verify your identity during the eligibility determination process.* Reuters explains, today:

The potential for problems will begin as soon as would-be buyers log onto their state exchange. They’ll enter their name, birth date, address and other identifying information. Then comes the first IT handoff: Is this person who she says she is? To check that, credit bureau Experian will check the answers against its voluminous external databases, which include information from utility companies and banks on people’s spending and other history, and generate questions. The customer will be asked which of several addresses he previously lived at, for example, whether his car has one of several proffered license plate numbers, and what color his old Volvo was. It’s similar to the system that verifies identity for accessing personal Social Security information. [No, it isn't at all similar.**]

Hmm. Never mind that this is the first time we’ve heard that the exchanges are going to ask for the color of my old Volvo; or that there are no such questions in the Enroll UX 2014 prototype. And never mind that healthcare.gov says this:

You’ll provide some basic information to get started, like your name, address, and email address….

Nothing there about license plate numbers or the color of my old Volvo, eh?

The real issue is that credit bureau data is dirty, and the credit bureaus make it very difficult to fix,as we’ve shown. How corrupt is the data? CBS:

A new government study to be released tomorrow indicates as many as 40 million Americans have a mistake on their credit report. Twenty million have significant mistakes. And our own investigation of the credit reporting industry shows that those mistakes can be nearly impossible to get removed from your record.

The bottom line here is that ObamaCare has created yet another way to treat some citizens as first class, and other citizens as second class, and on an entirely random basis (!). As I read Reuters, the first hurdle — the very first thing — you’ve got to do to get into an exchange is prove your identity by responding a series of challenges generated off your Experian data. If your Experian data is clean, and you get the responses right, you go straight to Happyville in the first-class carriage! (To the extent that being forced to purchase a defective product — health insurance — is going to Happyville, of course.) But if your Experian data is dirty, you can’t get into the exchange at all!*** So you don’t pass the hurdle, can’t get into the system, can’t fix your Experian data, and … Is there even an appeals process for people who can’t set up their ObamaCare account to begin with? Pain City even if there is, and in the slow coach. 

How many people will end up in Pain City because of dirty Experian data? I’m not sure there’s a better answer than “Could be a lot.” We do know that 10% of all Americans have been subject to identity theft, so if Experian thinks you’re John Doe2, who has a yellow Dodge Dart, instead of who you are, John Doe1, with a red Volvo, you’re in trouble. More subtly, the Experian challenge/response is to identify you, not by an identifier unique to you, like (in theory) your SSN or a retinal scan, but by the sum of your answers to the questions Experian generates from your data. So, in the exchange’s mind, you equal not “457-55-5462″ (your SNN) but {“car color: red” + “car brand: Volvo” + “LIC: GO NC!” + “address: 123 Main Street, Anytown USA”} (challenges with responses). The problem here — and I am speculating — is that not all these fields will be equally maintained. For example, Experian might be more likely to keep addresses clean and current because most of its clients want to send out bulk mailings frequently. Not so car color. The thing is, when you’re trying to prove you are who you are to ObamaCare, you could get car brand, license plate, and address all right, and then stumble on the car color — maybe you repainted it? — and have your identity rejected. You know captchas, and how everybody hates them? Because they feel random? With Experian’s Q&A system, ObamaCare’s exchanges will have the mother of all captchas.

Second, ObamaCare puts those who live on rental extraction above those who pay those rents. Here’s an example from a press release that The National Association of Health Underwriters sends out when one of its members passes a continuing education course in the PPACA:

[Agent Smith] completed this 10-hour course to receive the most up-to-date information on the key technical components of PPACA and is prepared to counsel his/her clients on upcoming required healthcare changes and new options for health plans.

“By taking this course, [Agent Smith] has joined an elite group who is uniquely qualified to assist clients in complying with the new law,” said NAHU CEO Janet Trautwein. “He understands how the market is likely to change over the next few years, and is in the perfect position to advise employers and individuals in planning for the future.”

Underwriter [Agent Smith], now a member of an “elite group” (a fine example of the workings of credentialism and meritocray) is surely on the road to Happyville! Here are the course topics:

  • Implementing healthcare reform—overview and politics
  • Grandfathered plans and the small-business tax credit
  • Medicare Part D and non-discrimination rules
  • Patient protection and changes to consumer-directed health plans
  • Medical loss ratio requirements and tax implications
  • W-2 reporting, summary of benefits, waiting periods, essential benefits and community rating
  • Individual mandate, pre-existing conditions and rating reform
  • Health insurance exchanges for individuals and small employers
  • Employer pay or play
  • Self-insured plans

But consider. The entire “continuing education” course covers topics that wouldn’t even exist with a single payer system (which, I might add, is a proven solution, and not a medical experiment performed on the American people without their informed consent). Imagine if the Democrats had abolished the filibuster in 2009 and passed Medicare for All. Given them a year to implement it. After (2013 – 2010) three years of working with a proven system that covers everybody, here’s what that “continuing education” course would look like:

  • Implementing healthcare reform—overview and politics
  • Grandfathered plans and the small-business tax credit
  • Medicare Part D and non-discrimination rules
  • Patient protection and changes to consumer-directed health plans
  • Medical loss ratio requirements and tax implications
  • W-2 reporting, summary of benefits, waiting periods, essential benefits and community rating
  • Individual mandate, pre-existing conditions and rating reform
  • Health insurance exchanges for individuals and small employers
  • Employer pay or play
  • Self-insured plans

From that perspective, the NAHU “continuing education” course looks a lot more like propaganda designed to send people like me, who pay rents, to Pain City. More importantly, the fees the course generates — $495 a pop for PPACA certification, no doubt deductible as a professional expense — represent in little the opportunity cost of the political class’s choice of ObamaCare over single payer, the road not taken; with single payer, the NAHU doesn’t — kaching! — collect the $495, and the agent doesn’t pay it. Which is good, since the transaction, like health insurance itself, brings no value to health care transactions. In a single payer system, the $495 might go to the delivery of care!

Does anybody really believe that Underwriter [Agent Smith] is going to surrender their membership in an “elite group” just for a system like single payer Medicare for All that would save the country $400 billion a year, at least, and relieve an immense amount of human suffering? It won’t be easy. OK, then, how about the “creative class” that’s building the websites and doing the training and the marketing? How about the non-profits who are getting funding from the Enroll America campaign organization for turning themselves into insurance salesmen?

Once the ObamaCare rental stream is established, everybody that’s drinking from it now will want to keep on doing that, even if total program benefit nets out to the public as zero or even negative. The real — and only — problem with single payer Medicare for All is that everybody benefits. Rentiers hate that shit, because there’s nothing in it for them.

NOTE * I did scoop the world by actually reading ObamaCare’s form and noticing the integration of consumer reporting agencies into the eligibility determination process. I assumed — at least according to current reporting, wrongly — that ObamaCare would use consumer reporting agencies for financial data to be used in income determination. It just never occured to me that ObamaCare would use credit agency data for identity verification, exactly because the data is so bad. 

NOTE ** Social Security determines your eligibility from documents, not from easily corrupted electronic data. So Social Security and Experian are operating from completely different baselines.

NOTE *** Suppose Experian thinks my old Volvo is red, when in fact it’s green. What’s the rational course of action? Well, I can’t fix Experian’s data, so the best thing to do is to order my credit report and say whatever it says when Experian challenges me; “red,” for example. That does replicate Experian’s bad data into the ObamaCare system (assuming the challenges and responses are stored) but what’s the alternative? Although, the ObamaCare data is supplied under penalty of perjury, so maybe that’s a bad idea. Finally, do note that “a current credit report” is not on the list of basic information healthcare.gov tells you to have ready, although it only takes two weeks to get one. I’m assuming, of course, that Experian will generate questions only data that is available to consumers, which not all credit reporting data is.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Lambert Strether

Lambert Strether is a contributing author at Naked Capitalism and blogs at Corrente.


Hide Comments

blog comments powered by Disqus