Whither Obamacare now?


October 16, 2015 8:29 PM



Don’t know if you’ve noticed, but the Affordable Care Act (aka Obamacare) seems to have hit an equilibrium point.  It’s not clear where additional insured persons are going to come from.

You’ll recall the ACA’s goal was to “cover” most nearly everyone.  There were 3 routes to new health insurance coverage  First, Medicaid income eligibility requirements were loosened.  Originally states were not required to buy into this, but the penalty for opting out was loss of all federal Medicaid funds.  In the first Obamacare Supreme Court case (NFIB v. Sebelius) the court ruled that such a drastic penalty amounted to unconstitutional coercion.  States were free to reject the expansion.  So far, 31 states have declined.  But there appears to be not much appetite among those refusnik states to ever opt in.  That route isn’t going anywhere at the moment.

The second path was through the subsidized federal “exchanges”  Even HHS Secretary Burwell has given up on grabbing many additional enrollees when the third enrollment period opens up on November 1.  Her goal is now 10 million, down from 20 million just a few months ago.  That’s about how many who currently sign up (and actually pay premiums).  And this is in the face of a $600-odd penalty for being uninsured in 2016.  Many view the expensive, high-deductible exchange policies as not worth the money, even with the federal subsidy.  No growth on that front.

The third route to health insurance was the employer mandate.  Employers with more than fifty people (swiftly relaxed to 100), with “employee” being defined as 30 or more hours per week, had to furnish health insurance.  This was a nonstarter from the git-go.  Almost as soon as the ink was dry on the ACA, it was recognized (including by many Democrats) that this created a powerful disincentive for full-time employment.  Political pressures are all in the direction of relaxing this mandate further.  No growth in the number of insured to be had here.

The bottom line is that the ACA has cut the original number of uninsured (variously estimated at 40-odd million) by roughly half–about 10 million from the exchanges and another 10 million from states choosing to expand Medicaid..  Here it has stalled, a long way from its stated goal  That will become increasingly obvious in coming months.

What direction to take from this “equilibrium” point will be (well, at least it ought to be) a major topic for the presidential candidates.  The Left will clamor for a full-cry single payer government system with a “See, we said we should have done that in the first place”.  Those of us who are horrified at this prospect will argue for more market based alternatives.

One thing is clear.  We need Yogi Berra.  “When you come to a fork in the road, take it!”




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  • Steve de Kater

    Rates have gone up (supporters of Obamacare will say this was happening all along anyway, and was going to keep happening; somewhat accurate.) What I said from the beginning is wait until people start filing claims, and discover that, except for hospitalization, their insurance, due to higher co-pays and deductibles, really doesn’t help much. At the end of the year, total medical costs continue to eat up a larger chunk of the average family budget, especially if you have any sort of medical problem. For those in the middle to upper middle income range, the tax benefits are negligible, even with an employer provided plan.
    Finally, those in the field of medicine, from my personal experience, are opposed to Obamacare on an overwhelming basis. I make it a point to ask those in the field that I come into contact with, and it is amazing the almost universal negative opinion of Obamacare. There are still tens of millions without coverage (wasn’t that the original purpose?) and just the amount spent on implementing this monstrosity could have gone a long way towards providing relief to many. Like so many programs Obama has been behind (remember Cash for Clunkers?) this will go down as another remarkable failure for this failed administration.

    • daenku32

      “this was happening all along anyway, and was going to keep happening; somewhat accurate.”
      100% accurate, but go on..

      “their insurance, due to higher co-pays and deductibles, really doesn’t help much.”
      Look back at that previously quoted statement. Has been going all along. What the law did was actually put caps on both, by law.

      “At the end of the year, total medical costs continue to eat up a larger chunk of the average family budget”

      Also, capped by the law you don’t like. (It includes income provisions: i.e. family budget)

      Not gonna quote every other sentence, but let’s say the data doesn’t match up with a “failure”. The cost of implementing the program come from providing relief to the many.

      • Steve de Kater

        You claim that “What the law did was actually put caps on both, by law.” Assuming you are referring to co-pays and deductibles, I do not believe the ACA has caps on either. If there are caps, they are so high as to make total annual costs to middle and even upper middle class families prohibitive.

    • bill styring

      Gentlemen, gentlemen! Didn’t expect my humble scribbles to elicit quite such a reaction so quickly. Was just pointing out that Obamacare likely is near its end point. Most of the moving parts have settled in (although I concede there are a few more shoes to drop,.. e.g. the “risk corridors” for insurance companies will end, driving up premiums even more. Deliberately tried to keep my own policy preferences out of it.
      A few years ago I wrote a whole book on health care for Hudson Institute when that think tank was still based in Indianapolis, so my own thoughts are on record. In general, Obamacare is a disaster. Just a couple of points. Scooter is absolutely on point to talk about “high deductible” HI. One of the abuses of the English language is the way we toss around the term “health insurance”. What we call HI today isn’t “insurance. It’s more like a prepaid drawing account. Insurance is for big, adverse things which likely won’t happen in a given year, but might. And if we haven’t spread the risk–insured against the event–would have very bad financial consequences for us. Homeowners insurance protects against our house burning down. Not likely, but possible. Life insurance protects against future income loss if we die in a given year. Note we don’t buy insurance for routine, smallish things which are fairly predictable (e.g. oil changes, wiper blades). Similarly, HI should be for big events (i.e. a high deductible policy), not routine check ups, blood pressure pills you’ve been taking for years etc. (or, to open a worm can I’d rather not, birth control pills). For those you need a budget, not health “insurance”.
      Of course premiums, deductibles and co-pays will go up a bunch when the ACA requires one size fits all “minimum essential benefits” and requires “guaranteed issue (insurance companies must sell to very sick people at well people prices).
      I could keep rolling here nearly forever, but I suspect I’ve already provoked some of you to respond.

      • Steve de Kater

        I would love to have a policy that covered me for nothing but major medical (hospitalization). I would gladly pay for any and all routine visits and lab work, tests, flu shots, etc. As it is right now, I pay well over $4,000 annually for my employer provided plan, and I still have to shell out money left and right for co-pays and deductibles. The best part of Obamacare (guaranteed coverage) could have easily been dealt with separately.
        As I stated earlier, the main purpose of Obamacare was to provide insurance for the uninsured; as a matter of fact, the law now requires it. The fact that tens of millions still don’t have insurance is solid proof that Obamacare is a colossal failure. How many years ago was this bill passed? What a joke!

        • daenku32

          Vast majority of medical expenses come from those major medical expenses, and that is what drives the prices up. Essentially what you are asking for is a high deductible plan.

          PS. If your employer provided plan is too expensive take it up with them. They likely pay for most of it anyways.

          • Steve de Kater

            You are missing the point, but made mine for me. If, as you say, my “…employer pays for most of it anyways.” and I am already paying $4,000 for my share, don’t you think that is a little on the expensive side? And, I have very little say in what type of coverage I get; as a matter of fact, my choices as to where I can go for treatment are very limited.
            “If you like your doctor, you can keep your doctor.” Didn’t happen. Quite simply, your insurance should not be tied to your job. Your homeowners insurance isn’t, your car insurance isn’t, why should your health insurance?

          • bill styring

            You and I have somehow stumbled into many of the same conclusions. One of them them is the bizarreness of most of us obtaining HI through our place of employment (if you’re too young for Medicare and evilly make too much to qualify for Medicaid). More than half of the U.S. population still obtains HI through the place of employment,–although down from nearly 70% not too long ago.
            No one sat down and decided–or argued–that HI through employment is the best way to provide HI (you’re right…no one expects homeowners, life or auto to be tied to employment).
            HI and employment is a total historical accident generated by WWII wage controls. War contractors couldn’t raise wages to attract more workers to critical war industries, particularly Kaiser Shipyards building escort vessels to beat the German U-boat threat. They hit upon the idea of offering HI as a way to raise compensation without raising wages. Buy HI for their employees. This lifted “compensation” without raising wages and violating the wage controls.

          • Steve de Kater

            A simple solution; no more employer provided health insurance (how you do that, I don’t know- allow it, but maybe treat the cost as taxable income) and let people buy health insurance like they buy any other insurance (let the insurance companies compete in a true free market environment.) Make premiums, and all health care expenses, fully deductible, with no restrictions, even if you take the standard deduction, but phase out the medical deduction as income reaches certain levels. Health care saving accounts should be a part of all plans; people need to have a vested interest in how their health care dollars are spent.

          • deanadams

            Good luck getting that legislation enacted

          • bill styring

            Sir…I doubt that you read my book, “Health Care 2020”. (written the late 1990’s). My prescription was exactly get rid of the tax preference for employer insurance and use the “savings” for hi-deductible health insurance. Much like you advocate.

            By the way,this guy “dean adams” (below) is to be ignored. Every time I write something, he comes back with an inane something. This time it’s “Good luck getting something passed.”

          • Steve de Kater

            I ignore deana; his comments usually add nothing to the conversation.

          • deanadams

            Facts really stymie your baseless opinions

          • deanadams

            Funny how I feel the same about your writing.

            If you think that a hundred million Americans are goiing to stand by while someone taxes their benefits as income you are more significantly more naive than is already obvious

          • daenku32

            You COULD buy insurance like any other insurance. I looked into it back in 2004 when my employer changed and I went from a great plan to not-so-great plan. I shopped around, and guess what: individual market is nowhere near as affordable as group health insurance plans. Not even for a relative young individual. This was well before ACA so there were no “excuses”. The only change is that now you may actually get some help affording to buy an individual plan. And good luck trying to find a medical specialist that wants to deal with your “high deductible” plan where the chances of them actually getting paid is slim. /// OK, one more thing: yes, there should be more deductibles for medical expenses. Heck, make all of it like that. But that still benefits higher incomes more than lower ones because of the tax brackets. You can get either 10%, 15% or 25% discount depending on your income.

          • bill styring

            You make a point that’s usually overlooked in this whole HI discussion. To wit, the current exclusion from income (to the employee) of what the employer pays for employer-provided HI is one of the most regressive parts of the federal income tax. Numerous studies have found a strong correlation between income and the value of the HI package. The exclusion is worth far more to someone in a higher tax bracket.
            This isn’t confined to those evil 1%-ers. The “cadillac tax” on high end HI–part of ACA–is bitterly opposed by the unions. Union members are generally much better paid than average, so their opposition is understandable. What drives me nuts is the political reaction. The Left should be bitterly opposed to the exclusion for employer-provided insurance on the grounds of its obviously highly regressive nature. Yet, Hillary supports repeal of the “cadillac tax”. When ideology runs up against v-o-t-e-s, the votes always win (and I don’t pardon the Republicans from similar hypocrisy on other issues).

          • David Weinschrott

            Well, insurance companies liked the idea. Payments were aggregated to employer payroll departments and budgeted through payroll deduction. Moreover when commercial insurance took over the markets from the initial community rating not for profit Blues, they could experience rate employer groups rather than taking individuals one by one. So there were advantages to insurance firms that went beyond the initial factors of wage controls,.

          • bill styring

            Of course, you’re right. Employment-based insurance creates an automatic, larger risk pool. There may well have been some movement by insurance companies to sell group policies to employers anyway, for that reason. What is undeniable is that the tax exclusion for employment-based insurance was the huge “pusher”. We went from few having health insurance at the onset of WWII (roughly 20 million out of 140 million)–talk about an “uninsured problem”!!–to more than five times that barely a decade later. The only thing of note that changed was the determination (almost forced) by the IRS that employer health insurance payments were to be excluded from the employee’s income.

      • daenku32

        Ok, I just want a single clarification: where in this society do you think we need to let the “very sick people” just go away. Is this some kind of argument for some very real “death panels” that do indeed decide when someone is “too sick” to care for?

        • bill styring

          One has to have sympathy for unfortunates stuck with expensive “preexisting conditions” through accident of birth and no fault of their own. You can be critical of how ACA handles these situations without just throwing these people to the wolves.
          ACA tries to accomplish this through a kinda weird, almost Rube Goldberg, lash-up. Require guaranteed issue by the insurance companies (on which they will lose a lot of money), but then try to make those companies whole by inducing or coercing the young and healthy to buy HI they may rationally prefer not to buy. The inducing part comes from PR campaigns (remember “It’s Cool to be Covered”?) The coercing part is the individual mandate with its “penalties” (excuse me…SCOTUS says “taxes”).
          If we’re going to subsidize medical care for those with “preexisting conditions”, better to do it through a “high risk” pool with the subsidies up front and visible. Don’t jam it into a re-do of the whole health care system with all sorts of hidden parts working like subterranean moles. Don’t all these politicians say they favor “transparency”?

  • daenku32

    The “market place alternative” is letting needy people go without health insurance (both poor and actually sick) and therefore keeping the rates “low”. So go ahead and ignore the achievements it has already made (for both the working poor that benefited from expanded Medicaid and the subsidies, and those who needed coverage for pre-existing conditions but were denied in the past), and keep dreaming about the day when you have yours, and screw the rest.

  • Scooter

    The “market place alternative” is not an alternative. What you fail to acknowledge is that no one went without health care before the ACA. It was written off and paid for by the rates already imposed on everyone that paid for insurance. The ACA mandates that you have it, then rates rise dramatically, deductibles and max out of pocket limits for the most part doubled which put those that before had affordable health care out in the cold. Even if you qualify for subsidies, you now can’t afford to use the health care because of the increased cost of all the above. Where do these extra costs go? They go to the government to administer a solution that was never intended to work and the insurance companies that were told to tow-the-line or else go out of business. Many people just want a high deductible policy at a reasonable cost, but those policies are no longer there.

    • deanadams

      Millions of people had (and have) serious medical conditions — many chronic and treatable at reasonable costs in their early stages — that were ignored until the condition reached a point that emergency room care was required.

      The exchanges are full of high deductible policies at a reasonable cost — those are the same policies that you are disparaging several sentences prior