Obamacare’s Effects
A good place to start is to estimate who is affected by the ACA. The New Yorker interviewed MIT economist and health-care expert, Jonathan Gruber. He breaks it down as follows:
80% of Americans will be largely unaffected. They are already covered by employers (or perhaps Medicare.)
14% are uninsured and the A.C.A will give them access to affordable healthcare. They are clear winners.
6% buy their own insurance. Half (about 3%) will have little change. The other 3% will have to buy different plans.
It is tempting, of course, to price insurance by the premiums, but, just as a cheaper car constantly needing expensive repairs may be no bargain, so too insurance with low premiums, high deductibles, high copays, low caps, and stingy claims processing can be more expensive to own than real insurance with reasonable deductibles, copays, and caps. The quality of insurance can matter a lot: the leading cause of bankruptcy in this country, and bankruptcy happens to people who are on insurance. Crumby insurance.
Oh, and subsidies. Many people are eligible for subsidies.
Grandfathered Plans
We have been hearing two things: The ACA allows healthcare plans to be grandfathered and companies are canceling plans because they are not up to the ACA standards. How could these both be true?
Grandfathered plans do not have to offer free coverage for preventative care or guarantee a right to appeal, but they must do the following:
- End lifetime limits on coverage
- End arbitrary cancellations of health coverage
- Cover adult children up to age 26
- Provide a Summary of Benefits and Coverage (SBC), a short, easy-to-understand summary of what a plan covers and costs
- Hold insurance companies accountable to spend your premiums on health care, not administrative costs and bonuses
Remind me, again, who really needs a health insurance that can be arbitrarily canceled by the insurer? If the insurance company can do that to you, what you have is not really insurance. It’s just a bit of hope you pay premiums on.
At least two of these features, coverage of adult children and ending lifetime limits, were already being phased in beginning in 2010.
Insurance Company Scams
It works like this. You tell your individual subscribers in September that their plans are coming to an end — perhaps due to the ACA. You then tell them that can automatically be enrolled in a newer but more expensive plan. They should do that right away! The idea is that you lock your subscribers in to more expensive plans before the health care exchanges roll out and they wander off to competing insurance companies.
LifeWise in Washington state did something just like that. So did Humana in Kentucky and Colorado.
One Anecdote
Under the title “Policy cancellations, higher premiums add to frustration over Obamacare”, CBS introduces us to Dianna Barrette:
Last month, she received a letter from Blue Cross Blue Shield informing her as of January 2014, she would lose her current plan. Barrette pays $54 a month. The new plan she’s being offered would run $591 a month — 10 times more than what she currently pays.
Barrette said, “What I have right now is what I am happy with and I just want to know why I can’t keep what I have. Why do I have to be forced into something else?”
Consumer Reports took a look and found
Barrette’s expiring policy is a textbook example of a junk plan that isn’t real health insurance at all. If she had ever tried to use it for anything more than an occasional doctor visit or inexpensive prescription, she would have ended up with tens or hundreds of thousands of dollars of medical debt.
…
- The plan pays only the first $50 of doctor visits, leaving Ms. Barrette to pay the rest. Specialist visits can cost several hundred dollars.
- Only the first $15 of a prescription is covered. Some prescriptions can cost hundreds or even thousands of dollars a month
- The plan only pays for hospitalization for “complications of pregnancy,” which are unlikely given Ms. Barrette’s age and in any event only the first $50 is covered.
- It pays $50 for a mammogram that can cost several hundred dollars, and only pays $50 apiece for advanced imaging tests such as MRIs and CT scans and then only when used for osteoporosis screening.
“She’s paying $650 a year to be uninsured,” Karen Pollitz, an insurance expert at the nonprofit Kaiser Family Foundation, said. “I have to assume that she never really had to make much of a claim under this policy. She would have lost the house she’s sitting in if something serious had happened. I don’t know if she knows that.”
Happy ending. As more details came out Ms. Barrette became more informed too. Jonathan Cohn at the New Republic: “But as she’s become more aware of her options, she said, she’s no longer aghast at losing her plan—and curious to see what alternatives are available. ‘Maybe,” she told me, “it’s a blessing in disguise.'”
Another Anecdote
One famous anecdote was provided by Edie Sundby, a survivor of stage 4 gallbladder cancer who wrote an oped for the Wall Street Journal. She reports that the five-year survival rate for her kind of cancer is 2% after diagnosis. She is lucky to be alive. She writes:
My affordable, lifesaving medical insurance policy has been canceled effective Dec. 31.
My choice is to get coverage through the government health exchange and lose access to my cancer doctors, or pay much more for insurance outside the exchange (the quotes average 40% to 50% more) for the privilege of starting over with an unfamiliar insurance company and impaired benefits.
She attributes her survival to doctors at a wide number of locations: University of California in San Diego, Stanford University, and a center in Houston. (“Stanford has kept me alive—but UCSD has provided emergency and local treatment support during wretched periods of this disease.”) All this was provided through her United Healthcare PPO which has spent $1.2 million on her care.
ThinkProgress points out
But Sundby shouldn’t blame reform — United Healthcare dropped her coverage because they’ve struggled to compete in California’s individual health care market for years and didn’t want to pay for sicker patients like Sundby.
The company, which only had 8,000 individual policy holders in California out of the two million who participate in the market, announced (along with a second insurer, Aetna) that it would be pulling out of the individual market in May. The company could not compete with Anthem Blue Cross, Blue Shield of California and Kaiser Permanente, who control more than 80 percent of the individual market. “Over the years, it has become more difficult to administer these plans in a cost-effective way for our members,” UnitedHealth spokeswoman Cheryl Randolph explained. “We will continue to keep a major presence in California, focusing instead on large and small employers.”
United Healthcare also fears that early enrollees will demonstrate adverse selection. Their CEO expects “first enrollees will have a ‘pent-up appetite’ for medical care.”
It’s difficult, too, to generalize from Ms. Sundby’s rather atypical circumstance and experience. It is, in fact, unknowable whether Stanford was or was not essential to her surviving stage 4 cancer. Would she have survived without their support? Not impossible.
In any case, there’s some evidence that Blue Shield of California’s Gold 80 PPO plan would cover her just fine.
John Tehan says
To the folks who downrated my rant in DFW’s post – this is the proper way to respond to Dan. Don’t feed him – do some research and write a post describing the reality, and let Dan’s fantasy world version fall of the list. We’re supposed to reality based around here, after all.
JimC says
This is all fine, but we’re still left with the political problem, and I’m still left wondering whether the Obamans deliberately lied about cancellations.
Had they said “Some plans are so poor they will automatically be canceled,” that would be fine. But the president created a credibility problem — the last thing we need.
Americans are big on choice, especially consumer choice. They want the right to buy useless stuff.
Oh well, not a permanent problem. But a headache.
striker57 says
I believe that the Republicans have been rushing to discredit the ACA because they are aware the longer the law is in effect the more Americans will recognize and enjoy its benefits. The website rollout was unfortunate and gave the opposition another avenue to run down. However, like Ms. Barrette, the more people learn and deal with the ACA the better the reactions will be.
Next November is a year away. That’s a lifetime in politics. The Repubs know this and are frantic to blowup the ACA before the law takes firm hold and Americans grow comfortable with it. Plenty of time for the Dems to recover ground for 2014.
Thanks to Kbusch for a great post
JimC says
But there is this, which is the second delay. There will surely be a third.
Put another way, how long are going to let this problem linger before we really fix it?
kbusch says
Perhaps you could? As I think about it, there are a few levels to your question.
1. Are this cancellations beneficial or harmful? That’s what I address above: some cancellations were intentionally deceptive, some of them are a good thing, we haven’t seen cases where they are specifically bad, and we certainly haven’t seen data beyond anecdotes that say the cancellations are bad in their effect on a lot of people.
2. Should the Obama White House or the Democratic message machine have known about these cancellations? Well, maybe. There are a number of possibilities. (This is why research is involved.) When the law was hammered out, there might have been informal understandings with major insurance carriers. Or perhaps legislators (wrongly) imagined that the grandfathering requirements would not lead to policy cancellation. Or perhaps they underestimated the fear insurance companies would have of upfront adverse selection. Or possibly they didn’t think the rule on administrative costs would spur carriers to leave states in which they weren’t competitive. We now know these things were going to happen. Was the size of these effects underestimated or were Cassandras ignored?
3. Did they know these things would happen on this scale and hush it up? Again, I don’t know, and maybe we should find out. Even if they did “know”, it seems more likely to me that wishful thinking, confirmation bias, etc. made the White House and the Democratic messagers believe a more sugary prediction of how things would turn out. How do we find out?
4. Does this question matter? The Right, of course, will take this as further evidence of Mr. Obama’s extremely suspect character. Okay. They’ll take anything he does as evidence of Mr. Obama’s extremely suspect character. Those less ideologically driven will care more about whether the A.C.A. works and less about the soap opera aspects. Those of us on the liberal wing shouldn’t ever be deifying Democratic presidents anyway. (Much of the good, say, Johnson accomplished was not exactly done in the nicest possible way. Clinton and Carter did a lot of things liberals disapproved of.) Personally, I doubt people were lying; more likely they were believing too strongly in “happy horseshit”.
Let’s be clear on what matters: Health care matters. In a big way, it matters.
Not just because it profoundly affects the quality of life people can attain, but also because the costs of health care threaten to grow so much that they are main threat to our economy. Getting the health care system right is crucially important.
JimC says
I’m not talking about healthcare. I’m talking about the political rollout of the President’s signature accomplishment. It goes without saying that the healthcare is what really matters; this is a political blog, and I’m discussing a political topic. Let’s not hide behind the healthcare.
It violates a fundamental Americanism to tell people “you can have X” and then say “Oh sorry, you can’t have X, but here’s Y which is better.” They’ve already been wrong once, why should anyone believe them that it’s better?
THEY CAUSED A PROBLEM. THEY NEED TO FIX IT.
And you know what? They F’d up Benghazi too, and continue to do so.
We can say our opponents aren’t credible, and we’re right, but it doesn’t matter because Obama hands them too many weapons. It’s going to hurt us in 2014, and 2016.
SomervilleTom says
I agree with you that health care isn’t the issue, and I agree with you that the politics are the issue. I think the GOP is waving a bright shiny object, and I fear you are allowing yourself to be distracted by it.
Five years from now, nobody will care about the start-up problems with the ACA. Health care will be dramatically improved, millions more Americans will have good health care, and I suspect we’ll be well on our way to single-payer. This political problem solves itself.
Meanwhile, the savage effects of the GOP political terrorism continue to unfold. The economy continues to bump along, and America continues to lose credibility with the international community with each and every shutdown. The GOP has no “plan” and no proposals except to destroy Barack Obama and, apparently, destroy and dismantle a functioning national government.
Five years from now, THAT direction will have devastating consequences. Many or most Americans know that. The GOP knows that too many Americans know that. The most important political issue in 2014 and probably every subsequent national election after that for the foreseeable future is THE ECONOMY. Specifically, the obscene and intensifying wealth concentration.
Every day that the ACA stays on the front page is another day that the GOP destruction of the consumer economy and the GOP war on everyone except the top one percent stays off the front page.
The technical problems with the ACA rollout are being fixed. The plan itself is far better than the garbage it replaces.
I think expending more political energy on the ACA is a self-defeating waste of time. I think we should focus our political energy on the economy, on the efforts of the GOP to destroy the economy, and on the many and myriad ways that the Democratic Party approach to the economy is the only approach that works.
doney says
for every anti-Obama, anti-ACA comment and news story in the conservative media needs to be met with a story about how the ACA is good or how its saving people money or providing better care…
for every sob story there should be a heart-warming sotry
instead the liberal media spends too much time talking and complainging about conservatives… more pro-ACA coverage and less anti-anti-ACA coverage
JimC says
I think the actual fixes will create the political fix. But time is short, and this needs real urgency.
Of course, so do jobs and the wars, but this is paramount at the moment. We’re held to a higher standard when it comes to government services. It’s not fair, but that’s our position, and we have to live up to it.
dasox1 says
It’s true that the political problem isn’t going away soon. But, it may go away over time. Unfortunately, there’s no excuse for the roll-out and website failures–self inflicted wounds. Here’s what I think is getting lost. Health care in this country is so expensive, inefficient, and ingrained that the changes are going to be difficult, painful, and yield counterproductive outcomes for a period of time. We are talking about fundamental changes to a system that accounts for a huge percentage of GDP (18%). That kind of change doesn’t come quickly and easily. The key is going to be whether or not over the next several years (1) the ACA survives the political turmoil of the botched roll out, and (2) some of the expense and inefficiency is removed from the system. At the end of the day, everyone in this country gets health care. If you get shot on the street in Boston and have no health insurance, you’re going to MGH where one of the best trauma surgeons in the world will operate on you. If you can’t pay, those costs will get passed on to premium payers. One way to deal with the problem is to force everyone to get quality insurance coverage. That’s the road we’re travelling down and it’s not going to be easy in the short run. Of course, a far more efficient way to do it would be to move to a single payer model, but that’s a bigger political battle for another day. I just hope with the botched roll-out and toxic political environment that the ACA will be given a chance to work because it has the potential to reduce costs and remove inefficiencies.
danfromwaltham says
This should be just as scary as any horror movie sequel, Freddie Kruger comes to my mind when reading the sample survey of health insurance agents brokers across 16 major cities.
“In parts of California, for example, low reimbursement rates have resulted in a doctor rebellion, as nearly seven out of 10 doctors refuse to participate in the exchanges.”
“On the other side of the country, broker Carol Taylor of Roanoke, Va., estimated that participating doctor networks there are shrinking by 70 percent in the exchange plans.
Meanwhile, nationally known health insurance providers like United Healthcare, Aetna, Cigna and Coventry are staying out of the Obamacare exchange marketplaces.
Other well-known companies such as Blue Cross Blue Shield are in, but are sharply narrowing their networks to exclude many doctors, as well as elite hospitals.”
“As a result, well-known hospitals like Los Angeles’ Cedars-Sinai, New York’s Memorial Sloan-Kettering and the NewYork-Presbyterian Hospital will be out of reach for many exchange patients.”
Draw your own conclusions.
http://m.washingtonexaminer.com/survey-doctors-rebelling-against-obamacare-hospitals-declining-to-join/article/2539830
jconway says
Dan reports, we decide (to ignore him)
Mark L. Bail says
in crayon.
kbusch says
Three typical troll maneuvers:
1. When commenters answer some harped-upon issue, trolls frequently simply start harping on a new issue; they don’t defend their previous shoddy assertions.
2. Trolls often rely on weak, poorly sourced articles.
3. Trolls often quote ideologically biased sources to back them up.
We have all three here.
1. From cancellation to doctor shortage.
2. A very weak article. If you don’t believe me, click on it. Notice even the oddly inaccurate phrasing about doctors joining exchanges: Doctors treat patients whose insurance was purchased on exchanges; they don’t “join” exchanges.
3. The Washington Examiner is a conservative publication owned by the same rich guy that owns the Weekly Standard.
dasox1 says
If so, you have been overcharged for years because you have the costs of coverage for uninsured people built into your premiums. Since the mantra of the Republican party is “every man for himself,” that should drive you crazy. Why should you have to pay medical bills for the uninsured? That’s un-American! Republicans (like the Heritage Foundation, Mitt Romney, etc.) should all embrace the concept that insurance is necessary to make the system more fair and efficient for everyone. If everyone gets quality coverage, hopefully, over time, the expense associated with coverage will go down. As an employer who has been paying for my employees’ coverage for years, we must get a handle on costs. That means everyone MUST get good, quality coverage so that I don’t have to pay to covered the uninsured. This is the essence of every man for himself.
Christopher says
“Republicans (like the Heritage Foundation, Mitt Romney, etc.) should all embrace the concept that insurance is necessary to make the system more fair and efficient for everyone.”
I distinctly recall exactly that plan being drawn up by the Heritage Foundation and adopted by a former Governor of ours who happened to also be named Mitt Romney:)
danfromwaltham says
Title is not me using crayons, it’s straight from The New York Times.
Many doctors are not accepting new Medicaid patients, b/c the Govt. is too cheap to pay the them what they deserve.
http://www.nytimes.com/2013/11/29/us/lack-of-doctors-may-worsen-as-millions-join-medicaid-rolls.html?partner=rss&emc=rss&smid=tw-nytimes
bluewatch says
Republicans simply cannot stand Obamacare. Their desire to see Obamacare fail is exceeded only by their desire to see our president fail.
For example, if President Obama planted a seed in the soil, republicans would be there to immediately say, “Look, there’s nothing growing. Obamaseed is a failure”. Then, as they continued to criticize Obama for socialized farming, republicans would pour salt water on the ground. If something actually started to grow, they would condemn the growth as being small and late.
Republicans are experts at obstruction and obfuscation. They can never accept anything positive that is said about Obamacare. Whenever something positive is said, their trolls will spread misinformation.
kbusch says
I tend to agree, bluewatch.
However, there are going to be problems rolling out Obamacare. It’s big. It’s complicated. It’s unlikely they got everything right in 2010. The Republican lock on the House keeps it difficult to fix. As Democrats are particularly vulnerable on this, we will be very strongly tempted only to hear what we want to hear, believe what we want to believe, and trust sources that confirm our hopes.
That’s dangerous. It exposes us to being politically blindsided.
So while I don’t want to debate trolls on this issue, we should, for example, think about both the political and policy implications of California’s threatened shortage of doctors. We can’t make the impact of that dissolve just by pointing to Republican obstructionism.
Republican obfuscation and obstructionism are a real things. They don’t explain everything, and charges of obstructionism and obfuscation don’t have good political legs.
jconway says
I think, particularly in MA, we have a blue bubble and also the advantage of having a great state connector. The federal website sucks, ILs site sucks, and enrollment is done in a very confusing way. Kentucky has had a great rollout and its program is incredibly popular with that states voters (and the state officials went to great pains to market it without mentioning Obamacare). Lets talk about that!