It's The United States of SCAetna Too
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2017-10-29 12:54 by Karl Denninger
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It's The United States of SCAetna Too
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Gee, it's not just SCAmazon, is it?

I don't know why I bother, to tell you the truth.  There is simply zero outrage over what goes on in corporate America these days, no matter the facts.

And let's remind of those facts, including that every American family has a middle-class house payment stolen from them every single month.

I just got my "Obamacare" renewal "offer."  The gross increase for their generous offer is +24%.  The "net" increase cannot be determined because they can't yet tell me what the APTC will be.  If it was to be the same the "net" increase would be 19,000%.

No, I didn't mis-type that.

I think it's rather obvious I won't be "accepting" their "generous" offer.  In a few days I will have the "new" APTC amount available, which I remind you is only available to me because I have decided that I'm not going to work any more for any material amount of money, will live on a much smaller income, and this of course means that I don't buy a large percentage of both goods and services (which by the way included quite a few fancy things over the years) that I used to buy.

Yes, I take the APTC from all of you who still go to work every day to make as much money as you can and thus pay all those taxes.  It's several thousand dollars a year and I make no apology for it. In fact I put my middle finger up toward you daily for you are the ones who could choose to raise hell and withdraw your consent (exactly as I did), and if producing Americans did in concert it would force peaceful political change and an end to these scams.  Since you choose not to I will instead take your money and smile in wry bemusement as you mewl out yet another repetition of "Please sir, just the tip this time....." toward Mordor on the Potomac, smug in the knowledge that just as you didn't get "just the tip" last time you won't this time either.

My decision to peacefully withdraw consent and active participation in engaging in as much revenue-making opportunity as I can reasonably muster has probably helped put a few dozen people out of work up and down various supply chains, as I used to be involved in a fair number of pretty-expensive discretionary ways to spend time, none of which I can afford to engage in today on my much-smaller income.  I don't give a ****.  I will intentionally put more people out of work when I downsize my life further which begins in earnest in the next few months and will likely be completed sometime next year.  The planning for that is already in progress.

This is how much I care about those "side effects" of my decision:

smiley

This would be roughly the every-eth year since 1998 when I sold MCSNet that my "health premium" has attempted to be jacked by double-digit percentage rates, all "on the come" that something horrible might medically happen to me at some point in that year.  I remind you that so-called "health insurance" is not actually insurance at all, since actual insurance is only paid for (in premiums) until the bad thing happens; then the insurance company pays you.  With so-called "health insurance" you must continue to pay premiums even after the bad thing happens or they stop paying for the attempts to fix the event that already occurred.

The insurance companies, of course, all claim that these insanely-ramping price of their "service" is because of "great medical innovations."  This, despite the fact that Americans are not enjoying longer and longer lives, nor healthier ones.  I'm sure that Aetna's stock price, along with dozens of others in the same and related fields (all of which look quite similar) reflects that they're spending far more on actual care due to those "innovations" and less on padding pockets up and down the line:

By the way, if you scroll out on a 20 year chart you'll find that in 1998 when I sold my company this firm had a stock price of $8, more or less. This of course means that it has gone up 22 times since then.

A few years ago I decided I wasn't going to participate in this scam any more.  Instead of padding everyone's pockets and consenting to their extortion while trying to stay ahead of it (which is impossible over time with any geometric series, by the way) I figured out how to pay zero instead (or damn close to it).  When Obamacare was passed I decided to do exactly that, and I will continue to do so.  Since the lawful means of paying nearly zero involve intentionally cutting my income to quite close to zero (especially in comparison to what it used to be!) that in turns means that all the places I used to spend money at and all the industries I used to support with my consumer spending can fuck off and die in a fire.

If you've ever gotten a bill from a hospital or other medical provider and are "covered" by "health insurance" (whether from where you work or individually) it probably looks something like this:

Note the cute line on the bottom: "Blue Cross discounts are negotiated with hospitals, doctors and other health care providers which saves you money."

Really?  I read this differently:

Your purchase of "health insurance" is the product of extortion and an unlawful collusive practice under both State and Federal Law between our company and the medical providers on this invoice.   Since you only need one procedure (since you're one person) the charging of someone roughly three times as much for the exact same product or service can only be explained by collusion which serves to force you to buy the second service ("insurance") which you would probably otherwise not buy, by threatening you with bankrupcy you if you refuse.

On the law enforcement side there has not been one Attorney General (state or federal) that has been willing to bring such a charge despite this specific practice of "negotiated prices" being taken to the US Supreme Court and the colluding parties in the medical field LOST.

In other words medical and "health insurance" companies tried to claim exemption from Anti-Trust (under McCarran-Ferguson) and had it shot down by the highest court in the land -- in 1979 (Group Life and Health Ins. Co. .v. Royal Drug, 440 US 205). The finding was:

Held: The Pharmacy Agreements are not the "business of insurance" within the meaning of § 2(b). Pp. 440 U. S. 211-233.

(a) Section 2(b) exempts the "business of insurance," not the "business of insurers." Pp. 440 U. S. 210-211.

(b) A primary element of an insurance contract is the underwriting or spreading of risk, SEC v. Variable Annuity Life Ins. Co., 359 U. S. 65, but that element is not involved in the Pharmacy Agreements, which are merely arrangements for the purchase of goods and services by Blue Shield, enabling it to effect cost savings. Pp. 440 U. S. 211-215.

In plain English the firms made exactly the argument expressed in the bill above as being a legal practice since they claimed to be exempt from anti-trust law despite admitting to both collusion and price-fixing.

The Supreme Court said "nope" and as a result, after the case got to the highest court in the land in a decision that binds all other courts and judicial systems below it they lost.

Yet despite that here we are, in 2017 almost 40 years later and that very same crap still goes on every single day without a single person being indicted, prosecuted and imprisoned for doing so, despite the fact that 100+ year old law declares that conduct to be a felony.

This garbage bilks every American family out of a middle-class house payment every single month.  The amount stolen from the American people via these tactics amount to well over $2 trillion a year.

And now we have one of these insurance companies that a drug store chain wants to buy (at their current crazily inflated stock price) so as to privilege itself further at your expense.

I guess 40 years of intentional indifference by prosecutors will do that sort of thing.  After all if you could rob a bank every day for 40 years, openly, notoriously, brandishing your gun and threatening to kill anyone who opposed you, and no cops ever showed up, nobody ever laid a charge against you and there was always more money in the till every single day for you to rob you might get the idea after 40 years or so that just taking some of the cash you stole and buying the bank would make the act a bit easier!

I mean, why bother strolling up to the teller window with the gun, right?  Now you own the building in which the till is located and can just raid at your convenience whenever the beer in your fridge runs out.

If you expect me to willingly cooperate with producing economic output so this sort of crap can go on day after day for more than 40 years despite the highest court in the land calling bull**** on it you are missing more than a few cans from your mental six-pack.

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User Info It's The United States of SCAetna Too in forum [Market-Ticker]
Rollformer
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Saw an article on this on CNBS. People were calling it "insane". But they were concerned about leverage. Not a damn word about antitrust.
Goforbroke
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Quote:
And now we have one of those insurance companies that seeks to buy a drug store chain so as to privilege itself further at your expense.
Here in Ohio, insurance companies have already partnered up with hospitals/healthcare providers to provide "more favorable" charges. I believe vertical integration is the technical term. Didn't oil companies get broken apart for that antic 20-30 years ago?

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Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, and not our Darkness, that most frightens us. -- Marianne Williamson
Tickerguy
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Oil companies got broken apart for that nearly 100 years ago (Standard Oil, 1911!)

If the government won't enforce 100+ year old law why should we continue as law-abiding individuals toward those entities that stick the middle finger up our chute and collectively extract over $2 trillion a year from us?

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Winding it down.

Asimov
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East Tennessee Eastern Time
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My sig says all that I need to say on this:

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It's justifiably immoral to deal morally with an immoral entity.

Festina lente.
Badmoonrising
Posts: 191
Incept: 2009-09-02

State of Disrepair
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I am sure the current administration will fix all of this and lot more... NOT.

I getting to bottom of my personal insurance scam. With open enrollment coming I am trying to get off the plan at my wife's workplace and go direct or ACA. I will let you know how it turns out. I asked for documentation on why I cannot leave her plan, who knows maybe she was wrong. She said her HR manager is looking into it.

Unfortunately, I do not believe there are any catastrophic plans available in my area. Additionally, some of these are capped at 60,000 or something like that. What's that, a couple days in the hospital, LOL. Have a pacemaker, open heart, major surgery, cancer requiring special drugs, your still gonna be hosed most likely in the end.

Aztrader
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Scottsdale, AZ
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Healthcare premium have been like a frog in hot water and every year they increase the temps so that people don't whine as loud about it. Unfortunately, we are at an inflection point where people either pay their premiums or pay their mortgage, car payment, student loans or food. The insanity is now out of control and a complete collapse is needed.
The health insurance bill you posted mimics my hospital stay. Gross bill of $204,000 and $36,500 paid by blue cross made me wonder if I didn't have the coverage, was I liable for the whole thing. If so, this is blatant discrimination against the people without insurance.
Max_planck
Posts: 41
Incept: 2017-01-09

Southern Arizona
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So I checked 2018 Obamacare on healthcare.gov. Mrs. Planck's pre-APTC premium for the cheapest of the only two Silver plans from Health Net/Ambetter is $676 per month which is down $20 from 2017's $696 per month for the same plan. Deductible is $600 per year (higher than 2017). The max APTC is $688 per month, and the monthly premium is $2.71 per month. Looks like they should be paying us $12 per month to take the insurance!

However, because Max is now on Medicare, with only one person in the household on Obamacare, our taxable income must be $16,660 to get the max APTC versus $22,100 in 2017 when both of us were on Obamacare. This will require some math to see if it makes sense to keep taxable income that low. Will advise.
Goforbroke
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Quote:
Oil companies got broken apart for that nearly 100 years ago (Standard Oil, 1911!)


OK ... how long was it between when the transgressions of the oil industry got recognized and when finally something was done about them?

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Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, and not our Darkness, that most frightens us. -- Marianne Williamson
Jfms99
Posts: 219
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Msumelle, Ar
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As far as I know Vertical Integration of Oil Companies is till legal.

Back in Ford Motor Companies heyday in the 1920's Ford had total vertical integration, from mining ore to their own steel mills, to the finished product.

As far as The Standard Oil Trust, all that happened was the various Oil Companies owned by the trust were spun off as individual companies. The kicker is that the Rockefeller's owned close to third of the stock in each of the spun off companies. So in real sense nothing really changed as to control.

Read "Titan" by Ron Chernow on the story of John D. Rockefeller and Standard Oil.
Rollformer
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I've thought about this for a bit...It looks like it's actually CVS looking to buy Aetna. Prescription drug prices are likely negotiated as a discount from list. My last employer had a captive pharmacy, so I was able to purchase my long-term medications at wholesale cost. One of those drugs was around $300 per month from CVS. From the company pharmacy, it was $45 FOR THREE MONTHS.

Recently, two companies, GoodRx and Blink Health have come on the scene. The drug that was $45 for three months is roughly $75 for three under GoodRx. That is not an obscene profit margin. I think there is some fear that the insurance companies are going to figure out how they and their customers are getting fleeced.

I should note that the $300//mo. figure was under insurance. However, as I think about it, it is very possible that my insurance was not negotiating, so that the numbers would shock the conscience, and I would use the captive pharmacy.

I think Blink Health and GoodRx will bring positive changes to the market.
Analog
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arkansas ozarks
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Aztrader said
Quote:
Unfortunately, we are at an inflection point where people either pay their premiums or pay their mortgage, car payment, student loans or food


Didn't that happen before, at $4 gasoline ? People quit making their house payment and crashed the mortgage backed securities trade .

Hoping for a deja-vu to stop the [insurance/med/pharma/lobby/congress]-complex's feeding frenzy.

a.


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Never trust a computer with anything important.
Asimov
Posts: 109537
Incept: 2007-08-26

East Tennessee Eastern Time
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Quote:
I think there is some fear that the insurance companies are going to figure out how they and their customers are getting fleeced.


Something I don't think you understand - most people don't - is that insurance companies are restricted to 10% profit.

The only way for them to make more money is to pay out more money. They *NEED* higher prices to get higher profits.

That's one of the biggest ****ed up things in our whole system.

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It's justifiably immoral to deal morally with an immoral entity.

Festina lente.
Goforbroke
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We've gotten darker.

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Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, and not our Darkness, that most frightens us. -- Marianne Williamson
Keenan
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Western PA
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Rollformer, you are correct that CVS is looking to buy Aetna:

https://www.washingtonpost.com/news/wonk....

And SpAmazon is contemplating a move into the drug biz, as reported in Bezos' paper:

https://www.washingtonpost.com/news/wonk....
Bhakta
Posts: 87
Incept: 2009-12-03

Bangkok, Thailand
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Karl, I love your posts. You keep hitting the nail on the head over and over. I for one am ever grateful. I share pretty much everything you write with my followers on FB and Twitter. Sadly, it seems that few are willing to take the time to read, comprehend and take action. Personally, I saw it all coming 33 years ago, when I decided to leave The Golden State and settle in what was then a very unknown Thailand. I can still pay my medical costs from my little SSI Income.
Aztrader
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This is where all the discretionary spending went..............

http://www.zerohedge.com/news/2017-09-29....

Supernumb
Posts: 2
Incept: 2017-10-30

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Karl...I've been reading you for many years, generally agreeing and even changing my diet to low carb to boot. (Thank you for that, you may have saved my life or at least made my latter years much more enjoyable!) Because it is all about personal responsibility. This one finally got me to sign-up and post a comment back though. Wow. I've also checked out, partially in 2006 and leading eventually to fully since 2010, because it is a personal responsibility to "not feed the beast". I make just enough to get by, dodge the tax man and the financing of most everything else I disagree with on general moral and ethical grounds ("who can we bomb next?") I can and do happily live with less 'stuffs', enjoying instead my very clean conscious and a no healthcare lifestyle. I don't even take the free Obamacare, though they constantly tell me I'm eligible for it and need to sign up ASAP! ;)
Sloonie
Posts: 2234
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waaaaay up North
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Good for you, Supernumb!
The system has been sick and rotting for so long. I, as a provider/doc, got out of it 14 years ago though still 'practice' in the old fashioned way. Doubt there are many in the 'lower 48' who do so, but it can be found.
Like yourself, live simply, under the radar, and magnificently enjoy life so much more.
You folks still playing the game....get out!
Karl, keep on keepin' on.....there is change in the force.

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"If might is right, then love has no place in the world. It may be so, it may be so. But I don't have the strength to live in a world like that..."-Father Gabriel, 'The Mission'


Tickerguy
Posts: 150381
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Quote:
Karl, keep on keepin' on.....there is change in the force.
Meh.

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Winding it down.
Aztrader
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All these healthcare companies whining about not making money............

Todays report from AET:

Aetna beats by $0.37, reports revs in-line; raises FY17 guidance (171.23 ) :

Reports Q3 (Sep) earnings of $2.45 per share, excluding non-recurring items, $0.37 better than the Capital IQ Consensus of $2.08; revenues fell 5.0% year/year to $14.99 bln vs the $15.12 bln Capital IQ Consensus, primarily due to lower premiums in Aetna's Health Care segment, including lower membership in Aetna's ACA compliant individual and small group products, and the temporary suspension of the health insurer fee in 2017. Total company expense ratio was 17.4 percent and 17.9 percent for the third quarters of 2017 and 2016, respectively. Income before income taxes and pre-tax adjusted earnings remained relatively consistent at ~$1.3 billion for the third-quarters of 2017 and 2016. The third quarter of 2017 reflects continued strong performance across Aetna's core Health Care businesses and reduced losses in Aetna's individual Commercial products, which offset the negative impact of the temporary suspension of the HIF in 2017.
Co issues upside guidance for FY17, sees EPS of ~$9.75, excluding non-recurring items, vs. $9.56 Capital IQ Consensus Estimate. "The strength of our core business fundamentals in the third-quarter was driven by disciplined pricing, moderate medical cost trend and focused execution," said Shawn M. Guertin, Aetna executive vice president and CFO. "We are once again increasing our full year 2017 earnings projections to reflect the continued strength of our operating results year to date."
Nickdanger
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Quote:
My decision to peacefully withdraw consent and active participation in engaging in as much revenue-making opportunity as I can reasonably muster has probably helped put a few dozen people out of work up and down various supply chains, as I used to be involved in a fair number of pretty-expensive discretionary ways to spend time, none of which I can afford to engage in today on my much-smaller income. I don't give a ****. I will intentionally put more people out of work when I downsize my life further which begins in earnest in the next few months and will likely be completed sometime next year. The planning for that is already in progress.

DH is retiring at the end of this year. We are a couple of years away from Medicare, and at first, he was terrified of the insurance situation. After reading some of the columns here and some articles about the subsidies, he is all in for cutting our income to nothing and going for it. We are in a perfect position to do this, as we just cut a check to pay off the house, have no car payments or personal debt of any kind.

Inline

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Grammar: the difference between knowing your **** and knowing you're ****.
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