Wednesday, January 6, 2016

The Current State of Obamacare (Not Required)

I’ve posted this mostly for curiosity. There isn’t anything in here specifically relevant to the class this semester, but generally speaking the financing of healthcare is a macroeconomic issue (and students are curious about it).

Anyway, a reporter sent big name healthcare wonk (Bob Laszewski) a set of questions, and he posted the answers on his blog Health Care Policy and Marketplace Review.

Whether you’re pro or con, the healthcare market was not really ever well:

… These [Obamacare] structures haven't proven to be any more successful that in the last iteration in the late 1990s. But time will tell and I really hope we can get it right this time and finally find a viable way to get away from fee-for-service reimbursement.

The problem continues to be that people who don’t need healthcare don’t buy insurance for healthcare (as Homer would say “Doh!”):

I worry more about the really poor take-up rates for the healthy people who have not signed up in the 200% of federal poverty level and above brackets than I worry about the percentage of the young who have signed up. Way too much emphasis is put on this age 18-to-35 statistic. Yes, they are more often healthy but under Obamacare the youngest pay one-third the premium of the oldest. We really need the healthy to sign up in much bigger numbers, that have so far been holding out, more than we need the young.

There’s a part missing in that above quote: what Obamacare needs is the older people (who are charged more) but are still healthy (and therefore don’t cost as much) to pay up, so that they can cover the costs of the unhealthy people. But we all know why they don’t do that:

Here is one such comment I got last week: "I have had more people this year weeping and overwhelmed at the astronomical premiums, even WITH subsidies and cost sharing. Many say, 'But that's a mortgage payment."

Just as an FYI, the health insurance premiums SUU pays for my family of four already exceeds my mortgage payment.

The White House is part of the problem:

I have said for some time that the Obama administration by itself could fix much--but not all--of what is wrong with the Obamacare insurance business model if they would just get out of denial and get to work on some practical solutions.

… No one in the industry, including me, thinks Obamacare will be repealed. But it needs major repair.

Co-ops, one of the cornerstones of Obamacare, have been collapsing over the last year:

The co-ops proved what can happen when you don't get the list of these things right from the beginning.

… This is just a really bad business plan and they are undercapitalized.

Saying they are in trouble because Republicans cut their risk corridor payments is like saying a derelict boat sank because of a bad storm.

FWIW: the budget Congress passed over the break included wording (attributed to Senator Rubio) that denied increases in the size of that “risk corridor” (the risk corridor is the amount of money Congress allotted to cover the problems in the co-ops).

But, we may be stuck with it:

… Democrats can't admit Obamacare is broken and Republicans can't admit it won't be repealed.

Via Marginal Revolution.

1 comment:

  1. Medicare was much worse off than the PPACA. Those who call it Obamacare either don't know what they're talking about - or they have this rightwing tick embedded in their brains that keep them from rational thought. It is true that most of the insurance companies are either breaking even or losing by participating in the exchange. It is true that many middle to upper-middle class families are paying higher premiums. On the bright side, there are several million fewer Americans without health insurance. Those with pre-existing medical conditions can no longer be denied access to lower-cost policies [Sick people with moderate incomes were pretty much screwed prior to the ACA]. We already know that many lives have been saved as a result of ACA - so then the question becomes HOW CAN WE SUSTAIN IT? Anyone who thinks it will be repealed is pretty much delusional [The GOP has already tried 50 times in Congress, and called on SCOTUS to kill it and failed every time]. We will SUSTAIN it but the question becomes, will we sustain it by adding a public option (which allows private carriers to compete against a government-run provider; premium holders can decide whether they like private or public health) - or will we sustain it by increasing the penalties aimed at eligible Americans who refuse participation. Back to my first statement: When Medicare was enacted, it was wrought with complaints. The Republicans, even back then, tried to kill it and even used commercials with creepy music to indoctrinate Americans in to thinking Medicare is the equivalent of a Soviet Iron Curtain commune. That failed and over the years legislation IMPROVED upon Medicare. Further legislation focused on its sustainability, and to this day even Republicans heavily rely on Medicare. Let me conclude by saying that the ACA is here to stay - and we will find ways to improve upon it and sustain it.