IRS Failure: Disappointing But Easily Foreseeable

Mom's 2019 status on 3/6/21.

Some government entities, such as Foster City where I live, seem to be functioning well, but the Internal Revenue Service, long the bane of nearly everyone, seems to be cracking up.

The IRS can't even perform its basic function of processing returns. One year after I mailed in Mom's 2019 tax return, the IRS2GO app (right) continues to report that the return is still being processed. From February 18, 2021: [bold added]

A group of Republicans on the House Ways and Means Oversight Subcommittee sent a letter Wednesday to IRS Commissioner Charles Rettig complaining about the backlog of approximately 11 million unprocessed tax returns from the 2019 tax year. The backlog of unprocessed mail from the pandemic has created a ripple effect that’s continuing into this year’s tax-filing season, which opened last Friday.

The problem isn’t only with the mail, which piled up last year in trailers outside IRS facilities until IRS employees could return to their offices and open it. While most of the millions of pieces of mail have reportedly been opened, much of it remains unprocessed. That’s causing headaches for taxpayers and tax professionals alike, who are coping with past due notices sent automatically by IRS computer systems, even when payments were sent months ago, according to the investigative news site ProPublica. Taxpayers have had trouble with receiving their Economic Impact Payments from last year and are also having trouble reaching the IRS by phone this year, with the agency continuing to be understaffed due to the pandemic and budget cuts in past years.

Some have tried to blame Republican Congressional representatives for underfunding the Service, and indeed that is one reason the IRS is failing.

But in my humble opinion the primary problem is that Congress has assigned new responsibilities to the IRS that it was never designed to do, such as administer penalties and credits for the Affordable Care Act, aka Obamacare, and then to dole out stimulus payments ("refundable tax credits") resulting from pandemic legislation.

When an organization is being strained, one does not pile on additional tasks without a great deal of planning. Any experienced manager knows that you can't just throw money at the situation, you have to lay out the new requirements, figure out how they can fit in with the current systems, design and test the add-ons before widespread adoption, and then train the staff.

Of course, the COVID-19 response shut down the offices for months, just when a 24/7 work schedule was necessary to give the IRS even a chance to fulfill its new duties. Large tech companies, who have people who are accustomed to working around the clock to develop new products and services, would have had a prayer. But the IRS, or any other government agency? Not a chance.

California Insurance Mandate: Another Reason to Leave

Tomorrow is a deadline that's largely escaped notice, but to those who are affected the financial penalties are significant. [bold added]

Californians who do not receive health insurance through their jobs or public insurance programs have until Friday to sign up for health coverage for 2020 — or face a tax penalty....California for the first time is requiring all residents to buy insurance or pay a tax penalty of $695 per adult and $347.50 per child under 18, or 2.5% of one’s annual income, whichever is higher.

It's been widely reported that Congress repealed, effective 2019, the individual mandate in the Affordable Care Act (ACA). However, that's technically not what happened; the language for the ACA's mandate was left in place while the penalties for not buying insurance were reduced to zero.

The California penalties are the same as Obamacare's (graphic from visitorscoverage.com)

The elimination of penalties at the Federal level will result in some healthy, uncovered people to choose to remain uninsured. California has reinstated the penalty at the State level and will provide subsidies to push uninsured Californians on to the rolls.

The ACA was a hoped-for step on the way to the progressive dream of universal coverage under a single-payer system. The election of Donald Trump and Republican control of Congress in 2017-2018 not only halted that effort but partially reversed it.

California Democrats, which hold the governorship and super-majorities in the state legislature, tried to pass universal health insurance in 2017. But that effort died in committee in 2017 primarily due to cost estimates in the hundreds of $billions, and no serious attempt has been made to resurrect the bill.

But back to the California version of the ACA mandates and penalties: we'll see if the populace views the benefits as being worth the costs, or whether some productive individuals will just have another reason to leave the formerly Golden State.

My betting is on the latter.

The Decade Past: Remind Me Again?

WSJ montage: I could name about 80% without looking anyone up.

There were no World Wars or moon landings, but the past decade did have its share of memorable events that will have an impact far into the future. The WSJ's Decade in Review shows just how much happened and how much we may have forgotten.

Every year had at least eight such items. Below is your humble blogger's entirely subjective assessment of the top three each year:

2010: 1) iPad introduced; 2) Obamacare signed; 3) Deepwater Horizon explodes.

2011: 1) Arab Spring; 2) Japan quake and tsunami; 3) Steve Jobs dies.

2012: 1) Facebook IPO; 2) Xi Jinping is leader of China; 3) Obama re-elected.

2013: 1) Pope Francis named; 2) Boston Marathon terrorism; 3) U.S. #1 energy producer

2014: 1) Ferguson riots and verdict; 2) Malaysia Flight 370; 3) Trade with Cuba ok'ed.

2015: 1) Gay Marriage legal; 2) Apple joins Dow; 3) Paris Accord.

2016: 1) Brexit; 2) Trump elected; 3) 4 states approve recreational marijuana.

2017: 1) Hurricanes Harvey and Maria; 2) New tax bill passes; 3) Harvey Weinstein resigns.

2018: 11) Tariffs imposed; 2) North Korea diplomacy; 3) Wildfire destroys Paradise, CA.

2019: 1) 737 MAX grounded; 2) Hong Kong protests; 3) Trump impeached (kind of).

There is a possibility that none of the above will be regarded with importance in a few years. It may turn out that we'll all be dead from climate change by 2030 or that life extension science will enable human beings to live well past a hundred.

But very few people are betting hard dollars as if either of those are coming to pass, and neither am I.

But They Meant Well

(Image from verywell.com)

Staying in bed doesn't help recuperation; in fact, immobility harms: [bold added]

Numerous studies have shown that immobility increases the likelihood of muscle atrophy, blood clots, bed scores and delirium. For elderly or very sick patients, the danger is even greater: Being immobilized even for a few days can lead to a permanent functional decline, making it more difficult for patients to return home.

Why then, don't hospitals encourage mobility? Because hospitals are penalized for falls.

CMS [Centers for Medicare and Medicaid Services] may have inadvertently exacerbated the immobility problem in 2008 when it stopped reimbursing for fall-related injuries having decided that patients should “never” fall within a hospital. Two years later, the Affordable Care Act began financially penalizing hospitals with high fall rates.

...hospital administrators, focusing on reducing the number of falls, put pressure on nursing staff. The units and nurses under the most pressure ended up confining patients to beds or chairs and sometimes even monitored patients while they were on the toilet, lest they or their unit be seen as negligent.

The people who administer Medicare, Medicaid, and ACA meant well by trying to reduce patients' falls and instituted penalties into the compensation system in 2010.

But if the system is found to hurt rather than help, why does it take so long to change?

Obamacare: Let the Situation Ripen

Yesterday I made the following statement about Obamacare: "government spending is rising much faster than originally projected while revenues are falling short."

These days one should not just throw out a statement like that without a link or two. Here is Investor's Business Daily, on the signs of collapse:

The Centers for Medicare and Medicaid Services reports that the number of insurers applying to participate in ObamaCare exchanges next year plunged by 38% compared with last year, and is half what it was in 2016.

CMS also reported that 40 counties in Indiana, Ohio and Nevada are at risk of having zero insurance companies in their ObamaCare exchanges next year. The Kaiser Family Foundation put the number of at-risk counties at 38.

In addition, CMS reported that 2.4 million enrollees in 40% of the nation's counties will have just one insurance company in their area.

The average increase in premiums next year for a Silver plan in eight states will be 18%, according to Avalere. One of the last ObamaCare insurers in Iowa has put in for a 43.5% hike. In Washington state, the average boost is 22%. In Tennessee, the proposed rate hikes range from 21% to 42%. And so on.

As we noted before in this space, these insurance defections and gargantuan rate hikes have nothing to do with the Republican's repeal effort, but with the continued deterioration of the ObamaCare markets.

States are also starting to struggle with the costs of ObamaCare's "free" Medicaid expansion. A report from the National Association of State Budget Offices said that the expansion will cost states nearly $9 billion next year, more than twice what it cost in 2016.

CMS reports that the per capita costs of the Medicaid expansion are 50% higher than expected.

Arkansas scaled back its Medicaid expansion in May, and Ohio lawmakers voted in June to freeze the expansion in that state. Oregon's Medicaid expansion contributed a $1.6 billion gap in the state's budget. In California, the Medicaid expansion will cost the state $1.3 billion this year, putting additional strain on the state's budget.

Today President Trump repeated his call to the Senate to continue working on a health care bill. It's my belief---hold on to your hats---that he thinks it's the right thing to do despite the fact (not a probability) that he and the Republicans will be vilified no matter what they come up with. As a person with life experience, he knows that trying to help people who don't wish to be helped not only is unappreciated but resented.

He should just call off his effort, declare Obamacare to be the law of the land until the people overwhelmingly want something different, agree to provide funding according to the 2009 CBO projections, and let the Obamacare advocates tell us how to fix it as long as they stay within the budgetary guidelines (plus 10% because he's a reasonable guy). Let the situation ripen, as the saying goes.

Let's See Who Was Right

What I wrote in March about the House's original failure to repeal Obamacare ("It Would Have Been a Catastrophic Victory") applies to yesterday's Senate "failure" as well.

The Republican Senators couldn't overturn Obamacare because it was a great system (it's not--government spending is rising much faster than originally projected while revenues are falling short); the Senators didn't want to be blamed at the ballot box for the pain of the transition---just as the Democrats were blamed from 2010 to 2016.

One doesn't go changing a system where hundreds of billions of dollars are spent without some good, innocent people being harmed. In 2017 we would have been treated to stories about people who lost due to Obamacare's repeal. The difference was that in 2013 we didn't hear about people who lost their doctor and/or their insurance plan because of Obamacare. Unfair, but that's the media landscape.

The next order of business is to decide how much to fund the health care system that so many Republicans disagree with. Frankly, I'd start with the 2009 CBO projections that were used to pass the bill, perhaps adding 5-10% for overages.

Opponents at the time said that Obamacare advocates were lowballing the costs in a classic get-it-passed-so-we're-stuck-with-it move. Let's see who was right.

AppleCare for Watches, not People

Apple Store, Hillsdale Mall, on a Friday afternoon.

While at the gym I knocked the Apple Watch off a shelf onto a tiled floor. The crystal cracked, and the watch wouldn't turn on at all. I made a Genius Bar appointment for today.

Eric, the Genius assigned to my case, said that the repair would cost a $69 "deductible" under my AppleCare plan. I cheerfully proffered a credit card (Apple wouldn't take ApplePay, ironically).

The repaired watch will be shipped home in a week. The transaction took 15 minutes. Easy-peasy.

Note: a young college acquaintance recently likened Obamacare to "AppleCare for people". Sure, except for rising annual premiums and deductibles, disqualification from buying the policy if you either make too much or too little money (copy of your tax return, please), and not being able to go to the doctor/Apple Store of your choice, Obamacare and AppleCare are exactly the same.

My friend is a nice person, and her observation didn't deserve an argument from your humble crank. If only Obamacare were like AppleCare, we would have a lot fewer problems...

Why Price Controls Don't Work

CNN [bold added]:

Blue Cross and Blue Shield of Kansas City is the latest insurer to announce it is withdrawing from Obamacare next year, citing big losses and uncertainty. The move would leave nearly 19,000 residents in Western Missouri without a coverage option unless another carrier steps in.

On the bright side, premiums aren't going up.

Coverage is Not Care

A few thoughts on the American Health Care Act (HR 1628, plus amendments) that was passed by the House last Thursday:

1) Senate Republicans are composing their own bill. Assuming it passes (a big if under the Senate's complex procedures), the House and Senate will have to reconcile their respective versions. There is zero chance that HR 1628 will be sent to President Trump in its present form. (As a matter of academic interest, see WSJ analysis if the House bill does become law.)

2) House Democrats mocked their Republican counterparts, suggesting that the latter would be thrown out of office in 2018 by the vote repealing supposedly popular Obamacare. Be careful, Dems, losers who believe they have no life after November, 2018 may ram the whole conservative agenda down your throats in the next 18 months.

3) House Republicans were divided over both how and how much to fund hard-to-insure people with pre-existing conditions, but the Senate Republicans' thorniest issue seems to be over Medicaid expansion.

20 million Americans gained health insurance after Obamacare was passed. Most were added under Medicaid. Politifact:

[Senator Rand] Paul said the vast majority of people that got insurance under Obamacare got it through Medicaid. About 20 million people gained coverage and about 14.5 million of those were under Medicaid or CHIP. But a sizeable fraction of that 14.5 million were eligible before the Affordable Care Act took effect. One estimate said about a quarter of them were previously eligible. Another estimate put it as high as half.

There is some guess work behind all the reports. Medicaid might account for slightly more than half of those who gained coverage. Most people wouldn’t say that amounts to the vast majority, but it is likely still the majority.

The numbers tell the story: if Obamacare is great coverage, then Medicaid (Medi-Cal in California), with more than half the Obamacare additions, must also be great. In 2012 the Mercury News detailed why many doctors do not accept Medi-Cal patients. In a 2015 follow-up editorial the Mercury News said the problem is getting worse:

But it’s becoming increasingly clear that the influx of 2.7 million Californians to the Medi-Cal roles [sic] is putting a strain on the state’s medical system....It’s not hard to discern why so many California doctors are loath to treat Medi-Cal patients. The paltry $16 reimbursement rate for a primary care visit makes it difficult for physicians to justify the appointment.

12 million Californians, about 30% of the population, are covered under Medi-Cal. They are putatively "covered," but are they getting health care?

It Would Have Been a Catastrophic Victory

The failure to repeal and replace the Affordable Care Act (ACA, aka Obamacare) has been covered--gleefully---as a defeat for President Trump, House leadership, and Republican governance in general, but the outcome was foreseeable. There were too many disputes about what should be in the "replace" portion of the bill, and, frankly, the one-sidedness of media coverage made the mountain too high for politicians with an eye on 2018.

No, this is not another leftwing-media-are-biased post because the Republicans must shoulder the principal blame, but, dear reader, what do you remember most about the original coverage of the debate in 2009 and 2010? It was individual, heartbreaking stories about people who couldn't get coverage and who went bankrupt trying to care for a loved one.

The result was a government health care system that is inefficient, didn't drive down costs, didn't achieve universal coverage, didn't allow patients to keep their doctors, and had numerous other flaws. Yet while the Republicans debated this month, what were the media stories about? It was individual, heartbreaking stories about people who may lose their coverage and may go bankrupt if Obamacare were repealed.

One doesn't go changing a system where hundreds of billions of dollars are spent without some good, innocent people being harmed. In 2017 we would have been treated to stories about people who lost due to Obamacare's repeal. The difference was that in 2013 we didn't hear about people who lost their doctor and/or their insurance plan because of Obamacare. Unfair, but that's the media landscape.

President Trump is viewing this week's event as a setback, while others are making it seem as his Waterloo. I'm inclined to think it is a setback that he should be grateful for.

Peggy Noonan: [bold added]

Fatal? No. Damaging and diminishing? Yes. It is an embarrassment too for Speaker Paul Ryan...

Seven years ago, when ObamaCare was on its way to passing with not a single Republican vote, I called it a catastrophic victory. It wouldn’t work; the government would not be able to execute; it was a Rube Goldberg machine. It was a bill created not by visionaries or political masters but by technocrats—and the worst kind of technocrat, the one who sees himself as a secret visionary. On top of that the Democrats would always own it, and when the program failed, Republicans would have no motivation to help them save it.

That is what RyanCare or TrumpCare would have been if it had passed: a catastrophic victory. No Democratic support, an opaque and impossible-to-understand bill, one that is complex and complicated, one that would be unpopular back home. And created by technocrats who think themselves visionaries.

Dilbert cartoonist Scott Adams has a different take on why this is really good news for Donald Trump [bold]:

In the 2D world, where everything is just the way it looks, and people are rational, Trump and Ryan failed to improve healthcare. But in the 3D world of persuasion, Trump just had one of the best days any president ever had: He got promoted from Hitler to incompetent. And that promotion effectively defused the Hitler-hallucination bomb that was engineered by the Clinton campaign.

It's much more advantageous for people to think you are incompetent instead of one of the most evil persons in history. Not only are opponents willing to talk to you, they want to talk because they can take advantage of you. The Trump turnaround begins today.

Donald Trump Will Make The Opposition Great, Too

Having spent my entire working life in the private sector, I’ve found the political developments over the past 11 days to be stimulating, upsetting, encouraging, and amusing, but above all highly entertaining.

Every business person I know has worked under tremendous pressure at points in his or her career. The source of the stress can be positive, for example, laboring on an acquisition, or negative, i.e., trying to keep one’s company out of bankruptcy; sometimes it’s both. Staying alive is a 24/7 proposition for many businesses.

Very few sections of the government work under such tough conditions---the military does so, of course, as do police, fire, and emergency services.

But the regulatory agencies? Here’s how I imagine how a regulator thinks: I’m writing rules that you have to follow---and I’m sure you have questions but it’s after four and Monday is Indigenous People’s Day (what, you don’t get that day off?)---and by the way I need more money next year to do the same job. You've got a timetable, I've got mine, and mine trumps yours. (Your humble blogger would be happy to be proved wrong.)

I’m sure you have heard non-government people wish “If only government operated like a business.” Yes, generally Republicans say that, but it’s really independent of policy. The bureaucracy needs to move faster---even if the answer is no, tell the petitioners now so that they can move on. And needing months to deliberate does not necessarily make the decision better; sometimes it’s terribly flawed (Obamacare, I’m looking at you) even with a lot of time to analyze and discuss.

Every day President Trump has issued three or four directives that each would have constituted the media headline of the day in Administrations past. That’s how it’s done in real-world organizations when there’s a change in management.

The media, Hollywood, and academia and other centers of opposition are no strangers themselves to rapid change and should not feign shock at the pace of pronouncements because their organizations have likely experienced this pace themselves. The opposition will soon come to realize that trying to drum up outrage on crowd size, fake news, a fake "Muslim ban" and Russian election hacking is a losing strategy while the Trump train has loaded the cars and left the station.

Now that the President has nominated Judge Neil Gorsuch to the Supreme Court, the opposition does have an issue on which to focus its fire for several weeks. However, it won't be able to give full attention to what the President's doing on tax law, regulatory procedures, Cabinet appointments, Iran, China, public education, the "wall", sanctuary cities, and a host of other topics.

The media defenders of statism have grown fat and lazy carrying water for a government that was their friend only if they agreed with it. They don’t see this yet, but Donald Trump will force them to hone their message and pick their fights. He will make them great, too.

When Public Servants Do Product Management

No surcharge: he's not enrolled either (collegecandy.com)

Another brilliant idea by the designers of Obamacare: impose higher premiums on smokers, especially older ones ("age-dependent tobacco surcharges"); the surcharges would incentivize older smokers to quit.

Instead, smokers simply didn't enroll in Obamacare.

[Yale researchers] found a lower likelihood of enrollment—as much as 11.6 percent—for smokers who faced surcharges versus smokers who didn’t. The higher the surcharge, the bigger the dampening effect. And smokers under 40 were nearly 20 percent less likely to be insured.

Those people--smokers young and old--refused to behave as the central planners wanted them to.

How deplorable!

Tax Day, 2015

Reflective of our efforts to de-clutter our financial affairs, we completed our tax returns on Monday. Form 1040 is only 37 pages, and California Form 540, which includes a copy of the 1040, was 44 pages.

We were aided by the fact that all K-1's (information from pass-through entities) came in by the first of April. When the K-1's arrive dictates whether we need to file an extension request (2013 yes, 2012 no).

We are also in the fortunate majority that had health insurance through our employer. For those who had no coverage or who had received tax-credit subsidies to purchase insurance through the exchanges, the calculations may be very complex. It's too late to simplify the program retroactively for 2014, and unlikely anything will be done for 2015. We'll probably have to live with the system until the elections of 2016 point us in the direction that the American people wish to go.

Happy Tax Day!

Not the Final Straw, But Close

Obamacare Form 8962: big step backwards from the
goal of tax simplification for middle-income taxpayers

Normally unflappable CPA's are particularly "vexed" this year by the complexity of new tax rules, particularly the requirements of the Affordable Care Act and the repair regulations (over 200 pages) that govern whether business equipment should be capitalized or expensed. [Update-4/7/15: see overview of tangible property regs here] Per Cecilia Kuhn, CPA, from Alexandria:

The tangible property regs is a prime example, but there are numerous others. We failed to push back on the complexity of these regulations. There should be a very simplified version for small businesses and rental properties....

We also need to get our clients to make sure they include all of their tax documents before it comes to us. It’s obvious that the system is starting to break down. Older clients are overwhelmed by all the paperwork; younger clients don’t do paperwork; yet tax filing requirements continue to become ever more complicated.

Sure, tax preparation software is used nowadays by almost all professional preparers, but the changes are so numerous and complicated that programmers who aren't usually accountants often don't get the software to perform the calculations correctly. To say that accountants can just bill for the additional work is too cavalier. Many feel sympathy for clients and "eat the time". Even if accountants can charge for it, the work is mind-numbing.

Older CPA's if they can afford to are quitting, and the jobs are being assumed by less experienced professionals who often don't even know that there are problems much less how to solve them. The good news is that the IRS staff is so overworked (and inexperienced---IRS staff suffers from the same burnout phenomenon that the private sector does) that the odds of being audited have declined well below 1%.

Silicon Valley to the Rescue

Earlier this month Time featured a behind-the-scenes look at the hastily assembled team of engineers and programmers who rescued Healthcare.gov from total disaster. Silicon Valley work methodologies and work ethics, which are alien to the carry-out-orders-and-ask-permission ways of Washington, accomplished in a few months what the Federal Government's bureaucrats could not accomplish in three years.

The task force set forth rules which anyone who's been thrown into an IT crisis will find familiar [bold added]:

Rule 1: “The war room and the meetings are for solving problems. There are plenty of other venues where people devote their creative energies to shifting blame.”

Rule 2: “The ones who should be doing the talking are the people who know the most about an issue, not the ones with the highest rank. If anyone finds themselves sitting passively while managers and executives talk over them with less accurate information, we have gone off the rails, and I would like to know about it.” (Explained [Google exec Mikey] Dickerson later: “If you can get the managers out of the way, the engineers will want to solve things.”)

Rule 3: “We need to stay focused on the most urgent issues, like things that will hurt us in the next 24–48 hours.”

By Christmas Eve, the sign-up deadline, the site's response time was down to less than a second, and it could handle nearly 100,000 simultaneous users without crashing. As of this week Health and Human Services claims 5 million people have enrolled. Although the billing interface with the insurance companies is still months from completion, processing obstacles no longer appear insurmountable.

Comments:
1) President Obama has formidable technical resources at his disposal. Some of the most skilled tech wizards in the country were willing to drop what they were doing (and they had bosses who would let them) to work round-the-clock for three months on a project which could well have gone nowhere.

2) Obamacare may still fail because of program design (e.g., not enough subscribers, huge deficits, etc.) but the website won't be the reason.

"They didn’t ask the customer[s]" what they wanted"

Ezra Klein interviews health care expert Robert Laszewski about Obamacare. Excerpts:

I think we’re going to ultimately need about 20 million people for a sustainable pool. It doesn’t need to be this year. That’s what the transitional risk corridors are all about. But it needs to happen in the first few years. So when I hear people talk about the goal being seven million, I think, “time out.” This needs to be 20 million people within three years.

I think the [individual] mandate is almost worthless because the word is getting around that they can’t really collect it. And by year three, it’s really a lot of money. I think there’ll be real pressure to just get rid of it. I don’t think you can force people to buy this insurance. If they don’t want it there’ll be a political groundswell to get rid of it. So in my mind the individual mandate is kind of irrelevant to this.

I think the 2015 rates will be the rates you’re looking at today, more or less..... Having said that I do have a concern that people are looking at these plans and not finding value. Some people are looking at paying 10 percent of their income for plans with huge deductibles, and then you have politics of Obamacare and the bad press of the launch and if you put all those things in a bag and mix them up, I am really concerned that the uninsured who are healthy are not finding Obamacare the value they hoped it will be. That’s the real risk for Obamacare.

The problem with Obamacare is it’s product driven and not market driven. They didn’t ask the customer what they wanted. And I think that’s the fundamental problem with Obamacare. It meets the needs of very poor people because you’re giving them health insurance for free. But it doesn’t really meet the needs of healthy people and middle-class people.

4½ years ago we looked at the health care debate through the prism of the good-fast-cheap project triangle. What has resulted for many (not all) Americans is an objectively worse product that is not as good (narrower networks), slower (e.g., signing up takes hours, hospitals can't determine whether a patient is covered), and more expensive (see Robert Laszewski interview above).

Obamacare advocates had years to design, implement, and test the system. It will be surprising if the voters do not to exact a penalty at the ballot box this November. © 2014 Stephen Yuen

The Profundity of Pelosi

Nancy Pelosi explains her choice of words.

Former Speaker of the House and current House Minority Leader Nancy Pelosi has produced two of the most memorable quotes of the Obamacare era: 2010's "we have to pass the bill so that you can find out what is in it" and 2013's "embrace the suck."

The latter quotation came into widespread use by the military during the second Iraq war. "Embrace the suck" means that the situation is bad, but deal with it. The phrase is vulgar, funny, and...wise. An honest appraisal of and full engagement with one's condition is the first step toward climbing out of a hole. Wishing that things were different is often an exercise in futility.

While her supporters have argued that these quotes were taken out of context, Mrs. Pelosi has never apologized or offered a retraction. Her sayings may make her an object of mockery by opponents, but they are not silly. After her party lost the House in 2010, Democrats nevertheless re-elected her as leader. Republicans would be wise not to underestimate her. © 2013 Stephen Yuen

Losing Letterman

British PM Cameron, Danish PM Thorning-Schmidt,
with President and Mrs. Obama (Getty Images)

Five years after George Bush left office, David Letterman finally took a break from bashing the ex-President and commented on Barack Obama at the Nelson Mandela memorial:

Did you see that picture where the President was using an iPhone to take a selfie? And it was him and a guy from Great Britain and the woman in charge of Norway, or whatever Denmark? And I thought it was interesting---he knows how to operate the camera to take a picture but they can't figure out to operate the Obamacare website

1) As humor goes, it wasn't much funny, but David Letterman has to start somewhere.

2) If he's lost Letterman, he's in deep....trouble.

Medical Bypass

A family member was referred to a San Mateo ear-nose-throat doctor and was treated promptly and effectively. What was unusual about this story is that the doctor didn't accept insurance or even credit cards. Payment is via cash or check only.

By avoiding the elaborate medical payments bureaucracy Dr. Kelly charges a fraction of what other doctors bill (a good portion of which the insurance companies disallow anyway). He's literally old school, that is, he's eligible for full retirement under Social Security and his nurse-administrator uses a typewriter.

Opponents of the Patient Protection and Affordable Care Act should not fall into the trap of defending the pre-2009 system that has multiple middlemen coming between the doctor and patient. Obamacare may or may not be repealed, but we will not go back to the old system either.

Dr. Kelly's clean, simple, and very old-fashioned method of handling payments won't work in most cases today, but what about tomorrow? Changes in everything, not just health care, are happening more often and more quickly. The one surprise is that people are still surprised when the unexpected happens.

BTW, Dr. Kelly's Yelp rating is five stars. © 2013 Stephen Yuen

Losing the Narrative

Over the last half century the non-STEM academy has embraced postmodernism, which has as one of its premises the lack of an objective "truth", that is, everyone has his or her own equally valid experiences, truths, and stories to tell. This philosophy, plus our embedded preference to listen to stories over other styles of communicating, is one reason why we are inundated with people telling their tales throughout the day. Narratives are fine for entertainment, but they're often a lousy way to set public policy. Nevertheless, that's the world we live in and the way decisions get made.

Over the past 20 years the debate over health care has raged, primarily driven by (true) stories about the rapacious behavior of insurance companies, and to a lesser extent drug companies and heartless hospitals. In 2009 the Democratic Party, which controlled the legislative and executive branches of government, birthed the Patient Protection and Affordable Care Act, aka "Obamacare," under which the Federal Government took control of the health care sector of the economy. No, the government does not technically "own" the health care sector, but through a combination of massive regulation, spending, and taxation the government controls it.

Now the horror stories are going the other way. They are so compelling that the Administration and its Obamacare supporters are finding it impossible to control the narrative. One example: stage-4 cancer patient Edie Sundby's story of insurance cancellation because of Obamacare regulations:

Since March 2007 United Healthcare has paid $1.2 million to help keep me alive, and it has never once questioned any treatment or procedure recommended by my medical team. The company pays a fair price to the doctors and hospitals, on time, and is responsive to the emergency treatment requirements of late-stage cancer. Its caring people in the claims office have been readily available to talk to me and my providers.

But in January, United Healthcare sent me a letter announcing that they were pulling out of the individual California market.

The narrative is lost, and in the postmodern world probably the battle is, too. © 2013 Stephen Yuen