Is Michael Cannon really this clueless? (Updated w/real beef)

OK, this one may seem a bit petty, but I'm recovering from a nasty flu at the moment (healthcare!!), so I'm in kind of a petty mood this morning.

Yesterday, Michael Cannon of the CATO Institute (aka the guy behind the infamous King v. Burwell case), who describes himself on Twitter as "Obamacare's Single Most Relentless Antagonist", tweeted out the following:

Wow. | Business Roundup: KP to Acquire Seattle-based Group Health Coop - HealthLeaders Media https://t.co/OzivNilKB9

— Michael F. Cannon (@mfcannon) December 7, 2015

The article he links to is somewhat interesting...

Kaiser Permanente has announced that it will acquire Seattle-based Group Health Cooperative, a member-governed, nonprofit health system, in a deal worth $1.8 billion.

In a joint press release, KP and Group Health Coop said the acquisition would expand KP's reach to an additional 590,000 people in Washington and northern Idaho and advance the growth of an integrated care model. When the deal is finalized, Group Health will become the eighth KP region.

Because Group Health is governed by individual corporate members, and "owned" by the communities it serves, the funds from the $1.8 billion transaction will go toward the creation of a not-for-profit community foundation dedicated to improving community health, the two systems said.

...and a little depressing, I admit, because it means further consolidation of the health insurance market into large behemoths. On the other hand, as noted in the third paragraph, it looks like there's some sort of not-for-profit clause involved, given the non-profit status of Group Health.

Anyway, as I said, it's somewhat interesting, but that's about it.

However, shortly after he posted this tweet, someone posted this response...which, just moments ago (and this is crucially important), Cannon retweeted, without comment:

@mfcannon this just all seems so shady to me. Billions spent on co-ops, they fail. No accounting. $ came from taxpayers to fund them...

— LisaLee,MS Nutrition (@LisaLeeM) December 7, 2015

There's one little problem with Ms. LisaLee's tweet: the Group Health Cooperative isn't one of the Co-Ops created by the Affordable Care Act.

That's right: Look at the list of ACA-created Co-Ops (sadly, half of these are gone now). Note that none are located in Seattle, or even operating in Washington State.

Don't believe me? Take a look at the official NASHCO (National Alliance of State Health Co-Ops) website. Nothing in Washington State.

In fact, if you read Group Health Cooperative's history, they clearly state:

Group Health Cooperative is a member-governed, nonprofit health care system that coordinates care and coverage. Founded in 1947 and based in Seattle, Wash., Group Health and its subsidiary health carriers, Group Health Options, Inc. and KPS Health Plans, serve more than 600,000 residents of Washington and North Idaho.

Yup, they've been around since the Truman Administration.

Anyway, I'm not ripping on Ms. Lee here. From her bio, she doesn't appear to have any particular knowledge of the health insurance field or healthcare in general (well, aside from being a nutrition consultant).

However, you would think that Mr. Cannon, being "Obamacare's Single Most Relentless Antagonist" and all, would know whether or not a given Co-Op was funded with federal taxpayer money or not.

UPDATE: OK, on a more serious note, I do have a larger beef with Mr. Cannon.

Last week, in my "Gaming the System" post, I noted that Cannon and L.A. Times reporter Michael Hiltzik have been embroiled in a bit of a pissing match about just how big of a problem insurance carriers are having with people taking advantage of the Special Enrollment Periods to avoid enrolling until they absolutely had to, digging up an SEP exception to do so, running up huge medical bills and then dropping their coverage as soon as they could do so.

Hiltzik's stance is that this likely isn't that huge of an issue. Cannon's stance is that it's a major issue. My stance is that it may or may not be a major issue, but that the carriers should have known damned well that it was likely to happen given their decades of experience with similar programs via Medicare and ESI coverage, which have similar "off-season" exceptions.

Anyway, as part of his argument, Cannon cites the situation in Massachusetts (where Mitt Romney's "Romneycare" was the precursor to Obamacare, of course) by quoting a 2010 Boston Globe article:

This was all predictable. Something similar, but apparently less dramatic, happened in Massachusetts after that state enacted a nearly identical law. In 2010, the Boston Globe reported:

Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.

In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion, according to data the state’s largest private insurer provided the Globe.

Sounds bad, right?

Well, except for one thing. As Hiltzik brought to my attention, from the very same Boston Globe article:

Governor Deval Patrick recently filed legislation that state regulators believe will help fix the problem, by restricting insurance enrollment to twice a year for people who buy on the open market and allowing waiting periods before coverage kicks in. But insurers say stronger action is needed. Consumer advocates caution, however, that many people who sign up for short-term coverage may merely be between jobs.

...Insurers want rules that would restrict enrollment for individuals buying on the open market to a designated month each year, unless they have had a major life change, such as a divorce — similar to the practice used by most employers. They say this would curb the practice of buying coverage just before an expensive elective procedure that can be planned ahead, such as knee or hip replacements or fertility treatments. Imposing waiting periods for coverage on this group, which was effectively disallowed by the 2006 law, would also deter this practice, insurers say.

...In February, Patrick filed legislation that would give his administration sweeping authority to cap rates charged by insurers and medical providers. The bill included a provision that would restrict enrollment for consumers who are buying insurance on their own to two annual periods — in June and December — but includes exceptions for people facing life changes, such as loss of workplace insurance or the birth of a child.

Remember, this article is from 2010. That means that the "Massachusetts experience" Cannon is using as evidence is meaningless, since at the time, Massachusetts allowed anyone to enroll at any time for any reason they wished to. There were no "special" enrollment periods because there was no enrollment "period"...it was year-round for everyone.

Again, none of that means that the SEP "gaming" isn't still happening; I'm sure it is to some degree. However, as the article itself notes, limiting open enrollment to a limited time with SEP allowances is exactly the same as the "practice used by most employers" already.

As I noted last week, the solution with regard to SEPs and potential gaming re. the ACA exchanges appears to be just a matter of verification/enforcement and tightening up the rules a bit, not scrapping the whole system.