Fire the CEOs

With the "fumbled" rollout of Obamacare giving us all a 24/7 inundation of administration statements such as: "This is the law of the land, it was voted on by Congress, upheld by the Supreme Court and will be enforced by a rabid pack of gun-toting IRS agents."

Alright, I confess, I made up that last bit about the gun-toting IRS agents. Neither Obama nor his talking sock puppets ever said that -- at least out loud.

Within a month of these spirited defenses of an indefensible law, the White House did what became an impression of the "Saturday Night Live" character, the Church Lady. The President stood in front of the assembled White House Press Corps and basically said "Never mind!"

This managerial disaster is only eclipsed by the sheer scale of stupidity exhibited by the CEOs and senior executives of the health insurance industry.

I understand that the health insurer's thought "Wow! ObamaCare is going to be great for business. Lots of new customers are going to be forced into our plans, and not only that, because we're going to be "forced" into charging more for young, healthy enrollees, we should end up in financial clover! This is going to be great!"

Was there no one in a senior management position asking a very simple question: "What do we do if this thing crashes on take-off?" Or "What do we do if Obama says 'Never mind'?"

Was there no one who saw that the policies that most of their policyholders currently held would be a lot cheaper than what ObamaCare even when the penalty/tax was added to the total? I know I would have stayed with the plan I had if I could have kept it and simply ignored the "tax." After all, I wouldn't actually have to send the Feds a check. ObamaCare was written in such a way that the only way that "tax" could be collected would be to deduct it from my tax refund.

Unfortunately the poobahs in the health insurance industry never saw this coming. They obviously only read the Financial Times and the Wall Street Journal, ignoring anything that might burst their lollipop and unicorn business plans which were totally based on the actions of a government that is totally attuned to political polling.

Having spent most of my life as a financial executive, I always looked for the worst case scenario in any new project, and tried to toss a little reality into the fantasy world of the marketing types. I would always have to ask (and receive looks from patronizing marketers who would be selling the next "Big Idea" and the engineers who designed it) that although this next Big Idea is actually better than what exists, is it better enough to justify customers tossing out their current product, and spending 50% to 100% more for our "new and improved" version.

Apparently the CEOs and financial folk in the healthcare industry were dazzled by the prospect of all those new customers who would be forced to buy "new and improved" ObamaCare policies.

I suppose they never noticed the loophole about staying on your parent's policy for those younger and healthier people which enables "adverse selection." I suppose they didn't foresee that the huge increases in health insurance policy costs forced by Obamacare on everyone would result in a response from companies to minimize their increases in costs by cutting hours for everyone they could to 29 hours per week or less and not hiring people at all. I suppose they couldn't imagine that the very persuasive Barack Obama still failed to sell the idea after 11,267 speeches.

(For the professional skeptics and trolls who question that 11,267 number, if Obama can "make up" unemployment statistics, so can I, right? Consider it to be "seasonally adjusted.")

Had I been sitting in the executive suite or mahogany row (or whatever term you are comfortable with) at a major healthcare insurer, I would have made the following recommendation:

Fine, develop these new plans that meet the legislated requirements. We would have to do that. But do not eliminate the current plans. There is no apparent provision in the law that requires that. ObamaCare, or as it is now defensively referred to as the Affordable Care Act, does not say that selling or owning non-compliant health insurance policies is illegal.

Let me repeat that: The selling of "substandard" (or more accurately, noncompliant) policies is not illegal. Likewise, the purchasing of noncompliant plans by consumers is not illegal either. Not owning a plan that conforms to Barack Obama's whims is illegal, but only punishable via a "tax" that cannot be collected, but only be a reduction in the customer's tax refund.

Thanks in large part to that pesky Constitution, in particular the 10th Amendment, the only way that Obama and his "Thugs 'R' Us" crew could make such noncompliant health insurance policies illegal would be by muscling every single one of the fifty state insurance commissions into declaring that such policies would no longer be allowed to be sold in each of their respective states. Politically that would be suicidal for the state commissioners and the state governor and members of the state legislature. Tell people in Washington State, for example, that they can no longer buy Plan "X", but the folks in Idaho can with no problem, there would most likely be a firestorm in Washington State.

Using this would have made Obama's "Never mind!" moment the cause for chuckles around the boardroom table, not the cause of angina attacks. Anyone who doesn't include a fallback position in a plan that involves tens of thousands of employees, customers, contractors, and one-sixth of the entire economy of the United States shouldn't be at the helm of the ship. Keel-hauling sounds much more appropriate. Sadly those on the left would fall down with the vapors should that be suggested, no matter how justified.

In leading a major business, managers should have been taught the military axiom that one should never plan on what you expect the enemy to do. Plans should always be based on what the enemy is capable of doing. Given that that the word "unexpected" is used so frequently by this administration whether talking about the economy, the impact and unintended consequences of their policies or the success they're had in foreign relations, there is absolutely no plausible excuse for the health insurance industry to have been caught flat-footed by that "Never mind" moment.

Since we have been denied the option of keel-hauling the CEOs and senior executives in the health insurance industry, the best we can hope for is that the stockholders rise up and fire these incompetents, and deny them any silliness such as a multimillion dollar bonus for a job well done. With their performance in this fiasco, they have shown that they didn't earn what they've already been paid, so not being tossed in jail with Bernie Madoff should be considered their "bonus."

As for how the geniuses that drafted ObamaCare in the first place should be treated, well, you might want to visit your local hardware emporium soon, before they run out of torches, pitchforks, tar and feathers.

Jim Yardley is a retired financial controller, a two-tour Vietnam veteran and writes frequently about political idiocy, business and economic idiocy and American cultural idiocy. Jim also blogs at http://jimyardley.wordpress.com/, and can be contacted directly at james.v.yardley@gmail.com

With the "fumbled" rollout of Obamacare giving us all a 24/7 inundation of administration statements such as: "This is the law of the land, it was voted on by Congress, upheld by the Supreme Court and will be enforced by a rabid pack of gun-toting IRS agents."

Alright, I confess, I made up that last bit about the gun-toting IRS agents. Neither Obama nor his talking sock puppets ever said that -- at least out loud.

Within a month of these spirited defenses of an indefensible law, the White House did what became an impression of the "Saturday Night Live" character, the Church Lady. The President stood in front of the assembled White House Press Corps and basically said "Never mind!"

This managerial disaster is only eclipsed by the sheer scale of stupidity exhibited by the CEOs and senior executives of the health insurance industry.

I understand that the health insurer's thought "Wow! ObamaCare is going to be great for business. Lots of new customers are going to be forced into our plans, and not only that, because we're going to be "forced" into charging more for young, healthy enrollees, we should end up in financial clover! This is going to be great!"

Was there no one in a senior management position asking a very simple question: "What do we do if this thing crashes on take-off?" Or "What do we do if Obama says 'Never mind'?"

Was there no one who saw that the policies that most of their policyholders currently held would be a lot cheaper than what ObamaCare even when the penalty/tax was added to the total? I know I would have stayed with the plan I had if I could have kept it and simply ignored the "tax." After all, I wouldn't actually have to send the Feds a check. ObamaCare was written in such a way that the only way that "tax" could be collected would be to deduct it from my tax refund.

Unfortunately the poobahs in the health insurance industry never saw this coming. They obviously only read the Financial Times and the Wall Street Journal, ignoring anything that might burst their lollipop and unicorn business plans which were totally based on the actions of a government that is totally attuned to political polling.

Having spent most of my life as a financial executive, I always looked for the worst case scenario in any new project, and tried to toss a little reality into the fantasy world of the marketing types. I would always have to ask (and receive looks from patronizing marketers who would be selling the next "Big Idea" and the engineers who designed it) that although this next Big Idea is actually better than what exists, is it better enough to justify customers tossing out their current product, and spending 50% to 100% more for our "new and improved" version.

Apparently the CEOs and financial folk in the healthcare industry were dazzled by the prospect of all those new customers who would be forced to buy "new and improved" ObamaCare policies.

I suppose they never noticed the loophole about staying on your parent's policy for those younger and healthier people which enables "adverse selection." I suppose they didn't foresee that the huge increases in health insurance policy costs forced by Obamacare on everyone would result in a response from companies to minimize their increases in costs by cutting hours for everyone they could to 29 hours per week or less and not hiring people at all. I suppose they couldn't imagine that the very persuasive Barack Obama still failed to sell the idea after 11,267 speeches.

(For the professional skeptics and trolls who question that 11,267 number, if Obama can "make up" unemployment statistics, so can I, right? Consider it to be "seasonally adjusted.")

Had I been sitting in the executive suite or mahogany row (or whatever term you are comfortable with) at a major healthcare insurer, I would have made the following recommendation:

Fine, develop these new plans that meet the legislated requirements. We would have to do that. But do not eliminate the current plans. There is no apparent provision in the law that requires that. ObamaCare, or as it is now defensively referred to as the Affordable Care Act, does not say that selling or owning non-compliant health insurance policies is illegal.

Let me repeat that: The selling of "substandard" (or more accurately, noncompliant) policies is not illegal. Likewise, the purchasing of noncompliant plans by consumers is not illegal either. Not owning a plan that conforms to Barack Obama's whims is illegal, but only punishable via a "tax" that cannot be collected, but only be a reduction in the customer's tax refund.

Thanks in large part to that pesky Constitution, in particular the 10th Amendment, the only way that Obama and his "Thugs 'R' Us" crew could make such noncompliant health insurance policies illegal would be by muscling every single one of the fifty state insurance commissions into declaring that such policies would no longer be allowed to be sold in each of their respective states. Politically that would be suicidal for the state commissioners and the state governor and members of the state legislature. Tell people in Washington State, for example, that they can no longer buy Plan "X", but the folks in Idaho can with no problem, there would most likely be a firestorm in Washington State.

Using this would have made Obama's "Never mind!" moment the cause for chuckles around the boardroom table, not the cause of angina attacks. Anyone who doesn't include a fallback position in a plan that involves tens of thousands of employees, customers, contractors, and one-sixth of the entire economy of the United States shouldn't be at the helm of the ship. Keel-hauling sounds much more appropriate. Sadly those on the left would fall down with the vapors should that be suggested, no matter how justified.

In leading a major business, managers should have been taught the military axiom that one should never plan on what you expect the enemy to do. Plans should always be based on what the enemy is capable of doing. Given that that the word "unexpected" is used so frequently by this administration whether talking about the economy, the impact and unintended consequences of their policies or the success they're had in foreign relations, there is absolutely no plausible excuse for the health insurance industry to have been caught flat-footed by that "Never mind" moment.

Since we have been denied the option of keel-hauling the CEOs and senior executives in the health insurance industry, the best we can hope for is that the stockholders rise up and fire these incompetents, and deny them any silliness such as a multimillion dollar bonus for a job well done. With their performance in this fiasco, they have shown that they didn't earn what they've already been paid, so not being tossed in jail with Bernie Madoff should be considered their "bonus."

As for how the geniuses that drafted ObamaCare in the first place should be treated, well, you might want to visit your local hardware emporium soon, before they run out of torches, pitchforks, tar and feathers.

Jim Yardley is a retired financial controller, a two-tour Vietnam veteran and writes frequently about political idiocy, business and economic idiocy and American cultural idiocy. Jim also blogs at http://jimyardley.wordpress.com/, and can be contacted directly at james.v.yardley@gmail.com