Wednesday, March 19, 2014

Response to Gaba's Garbage

I tried to post a response on Charles Gaba's website, but he decided it best to block me after writing a hit piece on me.   He definitely does not like it when anyone disagrees with him, especially if his facts are wrong.  Here is what I tried to post on his website, in response to his hit piece.  Sorry he is not man enough to accept a differing point of view.

For those who want a factual response to Mr. Gaba' s piece, read it quickly. He will most likely delete it.

The key is in three sentences of Peter Lee's letter.

1. "The number of people who have picked a Covered California health insurance plan now tops 1 million." I have no quarrel with that number. I accept that 1 million have picked a plan. Picking a plan is just like selecting a book on Amazon. It goes into your shopping cart. Picking a health care plan on Covered California does not mean the person picking it is enrolled.

Enrollment is a process, whereby one lists pertinent information, such as dependents, etc.

2. "The health insurance companies report that more than 85 percentof those who have enrolled are paying their premium and getting coverage." This may also be true. However, the insurance companies did not say that 85% of those who picked healthcare plans are now enrolled. That number is not presented by Mr. Lee. Mr. Gaba assumes that the number is everyone who picked a plan, which may or may not be true. It may be 100,000, 500,000; could be more or less that either of those numbers.

3. "That means 850,000 Californians are on their way to coverage through Covered California." Actually Mr. Lee may be correct, if he believes 850,000 Californians who have "picked" healthcare insurance plans will eventually enroll. There is nothing in his letter that indicates the insurance companies have reported that 850,000 people have actually enrolled.

It's a very carefully worded marketing letter, for which I give Mr. Lee kudos. He walks up to the line, but stops short of saying 85% of people who picked healthcare plans are now enrolled and have paid. There is no question that Mr. Lee wants you and Mr. Gaba to infer those numbers.

If Mr. Lee had to testify, under oath, there is no way he would testify that 850,000 people have actually paid for their healthcare plans. In fact he is careful to not make that statement in his letter. He is selling the fact that 1,000,000 people have picked a plan and let's you infer 85% of them have paid. If he were under oath, Mr. Lee would do as Health and Human Services Secretary, Kathleen Sebelius, has done with respect to healthcare.gov. Mr. Lee would say, "Those numbers are not yet available."

As for the shots Mr. Gaba took at me in the piece; no harm done. I took a few shots at him as well. We are both big boys and can take it.

I will address one item; he wondered why I only wrote about Athem Blue Cross of California. I picked it because it represented the largest numbers on his spreadsheet, suggesting that checking his facts with respect to that company might be worthwhile; to perform some due diligence on the facts in his blog.

Sorry Charles, I couldn't get all of this in 140 characters, so I thought it best to respond here, rather than on twitter. Although your facts are totally wrong, I am flattered that you wrote this piece especially for me. Thanks for unblocking me long enough to respond. Have a great evening

7 comments:

  1. This comment has been removed by the author.

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  2. "Picking a health care plan on Covered California does not mean the person picking it is enrolled."

    The March 17 press released entitled "Covered California Reaches 1-Million Milestone" says, in it's opening sentence, "Covered California™ announced today that 1 million people statewide have enrolled in health care coverage in the exchange’s first historic open-enrollment period, which ends March 31" (http://j.mp/1lRnqRY). The word is "enrolled," which Covered CA pretty clearly uses interchangeably with "picked."

    "However, the insurance companies did not say that 85% of those who picked healthcare plans are now enrolled."

    That's true. They didn't say that. What they said, rather, is that 100% of those who picked healthcare plans are now enrolled, because "picked" and "enrolled" appear to mean the same thing for Covered CA. However, 85% of those enrolled have paid, and therefore have benefits forthcoming.

    "Actually Mr. Lee may be correct, if he believes 850,000 Californians who have "picked" healthcare insurance plans will eventually enroll."

    No, he believes (because the insurance companies have reported) that 1 million+ Californians who have picked their insurance plans are already enrolled. 15% of them haven't yet paid, but, as you know, 33% of them aren't yet due, so there's no reason to revoke their enrollments...yet.

    "He walks up to the line, but stops short of saying 85% of people who picked healthcare plans are now enrolled and have paid."

    Covered CA does not stop short, since the above referenced press release shows they are saying 100% of people who picked healthcare plans simultaneously enrolled (since Covered CA seems to regard them as the same thing), and of those, 85% have paid.

    "In fact he is careful to not make that statement in his letter."

    But Covered CA DID say it, in the letter published earlier in that very same day.

    Once more, just to be clear, Covered CA says "1 million people statewide have enrolled in health care coverage in the exchange’s first historic open-enrollment period, which ends March 31" (http://j.mp/1lRnqRY).

    Regards,

    Rich Simpkins

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    Replies
    1. Follow up to Rich Simpkins response.

      What CoveredCA considers to be enrollment is not the same thing California insurers consider to be enrollment. In fact, I would argue that CoveredCA is actually reporting people who have selected an insurance policy, but have not yet completed enrollment with an insurance company.

      CoveredCA transmits information from people who have selected an insurance plan to the Insurance companies; for example, Anthem Blue Cross of California (ABCC). (I picked ABCC because it is the largest insurer on Frank Gaba's spreadsheet.) When ABCC gets the information from CoveredCA, ABCC completes the enrollment process with the people who selected an insurance policy. There is drop off, people who do not complete the enrollment with ABCC after selecting a policy from CoveredCA.

      ABCC places the drop off number at around 20%. To make the math easy for me, assume information from 100 people is transmitted to ABCC from CoveredCA, then apply the drop off factor. That leaves 80 people who will complete the enrollment with ABCC. Of that 80 people 15% have completed enrollment with the insurance company, but have not paid, to date. I think that leaves 68, if I hit the right keys on the calculator, who have actually paid for their insurance policies.

      Now apply the couple of calculations I used in the previous paragraph to the 1 million people who have selected an insurance policy, according to CoveredCA. The number of people who have actually paid for their policies drops to 680,000.

      What's wrong with Frank Gaba's claim that 850,000 people have already paid for insurance policies? He decided to carry the water for Obamacare before he performed any due diligence on the information he gathered. He just put together the spin for his democratic friends. Somehow he added 2+2 and got 5. My dad used to tell me, when I used stupid reasoning, "son, you put a Volkswagon bumper on a Chevrolet, hoping to make a Lincoln Continental." Mr. Gaba tried to make a Lincoln Continental. It couldn't be done with the parts he had at his disposal, but he put Gaba's Garbage out on the used car lot and tried to sell it as a Lincoln Continental.

      If you follow blindly you may be persuaded to buy Gaba's Garbage as a Lincoln Continental.

      In reality, what really matters is the total number of people who actually pay for healthcare insurance policies. If Mr. Gaba wants to say CoveredCA has signed up 1 million people, let him puff the numbers for his democratic spin. In the end, if 680,000 people pay for their policies, the pain will be felt when the new insurance rates for 2015 are released, and of course you and I will have to support an Obamacare bailout. Frank Gaba's friends call it a risk corridor, but it is really nothing more than a bailout.

      Frank Gaba laid out a good report in his piece, if you discount the fact that he tried to structure it to fit the spin, instead of doing the research and reporting the true results of the research. In short, he tried to make chicken soup our of chicken poop. The results do not go down easily if you have to eat it.

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  3. "ABCC places the drop off number at around 20%. To make the math easy for me, assume information from 100 people is transmitted to ABCC from CoveredCA, then apply the drop off factor."

    But, now, you're doing the assuming. You're assuming that when the 20% drop off enrollment that they aren't subtracted from the number "enrolled," even though the logical thing to do is purge the "enrolled" list of those names. In your parlance, that would mean something like 122 "picked" becomes 100 "enrolled" becomes 85 "paid." However, I'm guessing you have some document that shows the process you're talking about?

    "What's wrong with Frank Gaba's claim that 850,000 people have already paid for insurance policies?"

    The problem is that Covered CA does the calculation, too. Not only does the article say "85%," it even triangulates on the data by saying "850,000 Californians." So, really, there's no legitimate reason for Gaba not to report the numbers as Covered CA reports it. I'm not saying your scenario isn't *possible*, I'm just saying that you are now making a claim that California CA has lied (which wouldn't be a reflection on Gaba, at all). That puts the burden of proof on you. I'm guessing that you have such proof in the form of a number of paid (whether it be from ABCC or elsewhere) that is either at variance with 850k or with one of the published subsets? If so, could you link it?

    "In reality, what really matters is the total number of people who actually pay for healthcare insurance policies."

    Absolutely, which is precisely why it is not in Covered CA's best interests to lie. These numbers will out, after all, and the insurance companies want to maximize their profits, so they don't want anyone to overestimate how they are doing, when that could only result in a negative correction of the balance sheet.

    "if 680,000 people pay for their policies, the pain will be felt when the new insurance rates for 2015 are released"

    That's not true, at least according to the insurance companies. They say 3 million would be enough, and that, after that, it doesn't really matter what the total numbers are, so long as the proportions (sick to well patients) are where they want them. This is a phenomenon I'm certain you are well aware of, since the proportion of young enrollees has been in the news quite a bit. At this point, the total number is only important for followers of the horse race (those who want to stick to the president with a sub 6M number, and those who want to defend the CBO's predictive power). Don't get me wrong. I'm a follower of that horse race, but let's not pretend the "death spiral" narrative is till as sustainable one. It had it's own death spiral in January.

    "you and I will have to support an Obamacare bailout"

    If the proportions are off, then the "bailout" (risk corridors) would, indeed, kick in. However, CBO estimates that at the current proportion, we can expect a $8 billion surplus on risk corridors (the opposite of a bailout): http://j.mp/1l7SO1d.

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  4. We will agree to disagree. You seem to be the president of the Gaba's Garbage fan club, willing to blindly accept anything he writes. Nothing wrong with that. You both have every right to be totally wrong.

    I made no assumption, I used the information given to me by ABCC when I did some of the due diligence that Frank Gaba did not bother to do. Instead of the word "assume", insert the word "use". I used a smaller number for illustration purposes of the math illustration. If you will note, I applied the math to the actual numbers in Gaba's Garbage later in my response to you. I guess you missed that part. Too focused on jumping on the word assume? It's not always a bad word.

    Your other criticisms are baseless and were previously addressed. No point in rehashing. Enjoy the democratic Kool-Aid. I will stick to the truth.

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  5. But that citation is still forthcoming, I take it?

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  6. Sorry I assumed (perhaps I shouldn't have assumed in this case) that you are capable of doing math. I'm not sure what citation you are looking for. If you are referring to the 20% drop off, dial the phone and talk to ABCC yourself. I've done the work on my end and I did it because I wanted the truth. I was willing to accept it if my thinking was wrong. It was not wrong and I now know Gaba's Garbage cannot be trusted and is of no value to me going forward.

    Frank did his hit and run piece on me like the chicken shit he is, now he has you carrying the water for him while he's in hiding. Instead of attacking me on his behalf, why don't you ask him why he can't speak for himself. Wish you the best!

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