When Obamacare was taking shape in the Senate, a number of us recognized that 250% FPL was going to be the dividing line between winners and losers. The losers will become acutely aware of their lot as the Cadillac tax kicks in a few years from now. However if that tax is scaled back there won't be enough money to sustain Medicaid access and Exchange subsidies and the whole scheme will collapse. There was a right way to do health care reform and I think we can still there without widespread grief but we have to smarter and tougher on entrenched special interests.
20
Reality check only success with Obama care is the rates gone up on what people pay for health care an deductables risen sharply to increase profit .Guess if your stock holder in health care companys you made money
15
The only thing that will contain costs is a free market.
11
Exactly backward: the only thing that will contain costs is a single government payer. That may introduce other kinds of unfairness, but on balance it will be far better than what we have now or any other system if it is reasonably well funded -- ie, if there is a Democratic majority in Congress and a Democratic President.
67
There cannot be a free market in health care until there is an instant
Consumer Reports app that tells you where to get the best quality care at the lowest price for ambulance, surgeon, anesthesiologst, hospital stay and medications while you are having a heart attack. Of course you might not be capable of being a prudent consumer at that moment.
Consumer Reports app that tells you where to get the best quality care at the lowest price for ambulance, surgeon, anesthesiologst, hospital stay and medications while you are having a heart attack. Of course you might not be capable of being a prudent consumer at that moment.
36
This is a surprise????? Those of us who are actually productive members of society are subsidizing those who produce nothing. Our health insurance premiums have increased from $700 per month with a $5000 deductible to $1250 per month with a $10,000 deductible. Obamacare is nothing but s massive wealth transfer from the American middle class to cement pliable Democratic voters. As soon as Congress is required to buy health insurance on the same open market all other self-employed people are, the sooner this abomination will cease.
38
How is it that getting freeloaders (those without insurance) to pay their fair share penalizes you?
16
Hellooooo! Earth to Steve! Congress is required to get their health insurance on the federally run exchange.
9
It is time for progressives to "drop our buckets where they are" and deal directly with inequality. The three "most unequal" states are NY, MA and CT. All are controlled by Democrats. Geographically, of course, they are contiguous. What a great opportunity for us to show the rest of the country how progressive policies can lead to a better life for all. Let's push our politicians hard to radically address this problem: totally rewrite thet tax codes to help levelize income. Forget tryiing to get anything done in DC--let's band together and fix the problem in this region. Let's prove what can be done.
17
Your argument is a red herring. Just because the disparity is most evident where the density of the wealthiest is the greatest does not mean that the problem originates there or that it can be adequately addressed at a local level.
14
I can tell you right now there are problems with the insurance rate increases I have seen over the last 2 years. In 2014 I was able to afford a GOLD plan. The same amount of money in 2015 got me a BRONZE plan. Now, going into 2016 my rate increased 25% and I am now only able to afford the CHEAPEST bronze plan. These price increases defeat the purpose of Obamacare for both those who receive and do not receive subsidies. As a single person, I make just enough to not be able to qualify for any subsidies and my cheapest plan is $432/month with a $4500 deductible.
We need a single payer option - expand Medicare - so we can help regulate both pharma and insurance company rate increases. You will drive folks away from health insurance if rates continue to rise at this level. Inequality may increase and more folks will opt out of insurance.
We need a single payer option - expand Medicare - so we can help regulate both pharma and insurance company rate increases. You will drive folks away from health insurance if rates continue to rise at this level. Inequality may increase and more folks will opt out of insurance.
63
Health insurance is expensive and many young healthy people are underemployed. But another reason people don't buy health insurance is that they see themselves as invulnerable and they know they can always use the 'health insurance of last resort'. That is they can always go to the ER. ER visits are much more expensive than preventative care and they result in large bills which usually go unpaid. Unpaid and unpayable medical bills are a primary cause of bankruptcy in our country.
Hopefully the ACA will serve as stepping stone to eventual universal care. This America. We do things in baby steps.
Hopefully the ACA will serve as stepping stone to eventual universal care. This America. We do things in baby steps.
13
That Professor Doctor Cowen can write about the subject of health care economics without referencing Kenneth Arrow is all I need to know.
5
"because they knew that even without insurance they still would receive some health care" - that's the catch. Those people are freeloading. Somebody ends up paying for that health care they receive anyway. Hospitals recover their costs either from the government or by charging insurance companies more.
Bottom line: its the rest of us, taxpayers and those of us who are insured who end up picking up the tab when someone can't or doesn't pay.
Bottom line: its the rest of us, taxpayers and those of us who are insured who end up picking up the tab when someone can't or doesn't pay.
22
So what Mr. Cowen is saying is that a generation ago, the U.S., by CHOOSING to ignore the healthcare cost situation, missed its only chance to decisively FIX the problem. And, by his generation choosing the weaker politically expedient solution, has doomed us forever to mediocrity.
7
Unfortunately, your study fails to look at how the ACA affects different groups. For the young and generally healthy, the ACA is a great deal. For the older group, with a larger degree of ill-health, the ACA does not treat well.
My premiums, if I agreed to take on a policy, would be >$480/month. I am an active, healthy old man. I used to get by with an annual physical for $500/year and had a skin infection that plagued me for a year and cost about $800 to treat. That is a far lower sum than >$5800/year that the ACA was offering. And, that was for a policy covering 70% of my costs. So, I'd still have paid about $390 for that year.
Tell me, why is the ACA a good idea?
My premiums, if I agreed to take on a policy, would be >$480/month. I am an active, healthy old man. I used to get by with an annual physical for $500/year and had a skin infection that plagued me for a year and cost about $800 to treat. That is a far lower sum than >$5800/year that the ACA was offering. And, that was for a policy covering 70% of my costs. So, I'd still have paid about $390 for that year.
Tell me, why is the ACA a good idea?
14
You obviously don't understand the function of insurance. I certainly hope for your sake you don't need to spend a few months, or even a few days in a hospital intensive care unit. However, if you do, you might understand what insurance is for.
18
The mandate, without a public option, is responsible for about 80 percent of the Democrats' massive electoral losses since passing it.
16
That last sentence seems like it was stuck on at random.
8
If America's "grand ambitions" include coercing the lower and lower middle classes to pay for services that they pretty obviously (Obamacare enrollment is HALF expectations) don't want, then its time to rethink. And I chuckled when Cowen presented the free-market approach to coverage as "another way of looking at the problem", as if he knew NYT readers might not know that perspective even existed!
11
This is an obtusely reasoned and narrowly argued piece. I cannot imagine a person worth the air he breathes who does not believe that access to health care is central to a good human life and to social justice. Once you dismissed that premise, you settled into a purely academic exercise.
13
The ACA was a step in the right direction, but the right answer was, is and always will be single payer health care, Medicare for all.
45
Let me see if I’ve got the logic of Prof. Cowan’s final paragraphs:
There is no reason to even try to relieve massive income inequality by expanding or adding government programs.
As he explained, that is because (a) expanding Medicare coverage under Obamacare isn’t helping as many people as hoped (because so many Republican-controlled state governments have refused); and
(b) expanding health insurance through Obamacare also is short of its estimated enrollment (partly because the weak penalty for ignoring the mandate is too low to shift the demand curve for adequate purchases).
Therefore, the fact that these programs have not provided as much benefit as their supporters hoped shows that “successive improvements [in government programs that redistributed income toward the poor successfully in the past], as exemplified by the Affordable Care Act, have become harder to accomplish, as many of the easiest and most efficient opportunities have already been exploited” and are not worth further effort or resources.
The ACA, which was NOT created to redistribute income but to reduce the number of Americans denied the basic human right of adequate medical care, does remain contentious. But conservatives’ success in restraining near-universal health care is no reason to walk away from expanding government solutions to income (and wealth) inequality. It signals that we should try harder against such opposition to progress in human dignity.
There is no reason to even try to relieve massive income inequality by expanding or adding government programs.
As he explained, that is because (a) expanding Medicare coverage under Obamacare isn’t helping as many people as hoped (because so many Republican-controlled state governments have refused); and
(b) expanding health insurance through Obamacare also is short of its estimated enrollment (partly because the weak penalty for ignoring the mandate is too low to shift the demand curve for adequate purchases).
Therefore, the fact that these programs have not provided as much benefit as their supporters hoped shows that “successive improvements [in government programs that redistributed income toward the poor successfully in the past], as exemplified by the Affordable Care Act, have become harder to accomplish, as many of the easiest and most efficient opportunities have already been exploited” and are not worth further effort or resources.
The ACA, which was NOT created to redistribute income but to reduce the number of Americans denied the basic human right of adequate medical care, does remain contentious. But conservatives’ success in restraining near-universal health care is no reason to walk away from expanding government solutions to income (and wealth) inequality. It signals that we should try harder against such opposition to progress in human dignity.
21
Without reading the cited paper in this blog, I find the argument flawed. Insurance, especially health insurance is something that is very poorly modeled as a matter of consumer preferences. Behavioral economics is really the most part of the answer. Still, the bigger matter is that mos individuals really don't understand health care in anything like the same fashion as they understand normal consumer goods. So there is a third order distortion. First the difference between goods and services, then the difference between expenditure for a service and purchasing insurance for those expenditures and finally the nature of health care where it is difficult enough for health care professionals to make rational choices let alone the normal person. I suspect Tyler's ideology warps what would otherwise be a cold understanding of social insurance in general.
20
Congress could be tweaking ACA so it would work more equitably (better in many ways) but they vote to repeal it instead.
10
At some point the dimmest bulbs in congress will light up to the freakishly obvious fact that private insurers are simply rent-seeking players, taking a 10-15% cut of the federal disbursements for healthcare and providing zero in return. Wasn't there talk of a public option? On C-span yesterday we were treated to congressional grilling of HHS officials regarding the bankruptcy and abandonment of federally subsidized healthcare co-ops in NY and IN as an alternative to private insurance; these failures haven't mad the news, but they'll be the next Solyndra. Private health insurers in contrast, are overall extremely profitable and on merger binges despite the fact they all complain about massive losses on new Obamacare patients in some states. Their whining aside, the so-called healthcare companies can't lose, and will see millions or billions additional reimbursement under stop-loss language in the ACA!
30
Well, look at Medicare. They basically have no controls at all, and pay out tens of billions a year to fraudulent medical billers. Crooks across the country would chortle with glee if the government took over the entire medical billing system.
11
Well...Medicare and Medicaid do reimburse at the lowest cost per each separate item, drug or procedure, which seems like a form of cost control. However providers, make up for this by volume: more, always more tests and procedures than are warranted. Think of genetic testing companies giving out ice cream bars to folks past their child-bearing years at senior centers in exchange for a cheek swab and their Medicare card info. How lucrative is that!
7
Dr. Cowen's conclusion that the ambivalence towards the ACA is "...a sign that the age of America's grand ambitions is over." is misguided. Health care for all IS a grand ambition, but we are not there yet. The individual mandate is crucial to ensure that the pooled risk of all insured is sustainable thus ensuring that premiums remain affordable. Without the mandate, only high risk patients would choose to enroll leading to some increasingly expensive health plans. The current system under the ACA is not perfect, but it is an improvement, and hopefully a stepping stone towards a single payer system.
25
There is a group of people who believe if you are unemployed, if you work in a position which has not raised its pay in the last fifteen years; that is all about you personally.
These same people believe that the wealthy never gain through special tax incentives or rent seeking. No, every rich person is rich because they are smarter and work harder than you ever did!
This group of people vote republican, and even though they have not seen a rise in pay, they blame the current President, not the sort of capitalism America operates with. The current level of income disparity enjoyed by the United States was once the sole province of South American countries. Now that the United States is troubled by its effects, the egregious gap of wealth. A certain group will continue to deny the facts of the situation, and blame President Obama.
These same people believe that the wealthy never gain through special tax incentives or rent seeking. No, every rich person is rich because they are smarter and work harder than you ever did!
This group of people vote republican, and even though they have not seen a rise in pay, they blame the current President, not the sort of capitalism America operates with. The current level of income disparity enjoyed by the United States was once the sole province of South American countries. Now that the United States is troubled by its effects, the egregious gap of wealth. A certain group will continue to deny the facts of the situation, and blame President Obama.
19
The inherent flaws in the ACA become clearer each year as we realize it did not, as promised. deliver "affordable healthcare for all Americans." it took a dysfunctional, non-egalitarian individual health insurance market and replaced it with a different but equally dysfunctional, non-egalitarian health insurance market.
With each year of implementation the gap between the winners and losers widens. Whatever made us think middle-income Americans, those deemed able to "afford" paying for health insurance were capable of shelling out 10%, 15%, 20% of annual income for healthcare. Whatever made us think people who were paying for coverage in the individual market and not receiving subsidies could face $6800 worth of healthcare costs before insurance kicked in?
The President has said the ACA is "working better than expected". That's true if the only purpose was to extend free or nearly free coverage to those make 150% or less of the poverty level.
If it was designed to ensure All Americans had affordable health insurance, access to healthcare, and good health outcomes, as I foolishly thought, it has failed and failed miserably.
With each year of implementation the gap between the winners and losers widens. Whatever made us think middle-income Americans, those deemed able to "afford" paying for health insurance were capable of shelling out 10%, 15%, 20% of annual income for healthcare. Whatever made us think people who were paying for coverage in the individual market and not receiving subsidies could face $6800 worth of healthcare costs before insurance kicked in?
The President has said the ACA is "working better than expected". That's true if the only purpose was to extend free or nearly free coverage to those make 150% or less of the poverty level.
If it was designed to ensure All Americans had affordable health insurance, access to healthcare, and good health outcomes, as I foolishly thought, it has failed and failed miserably.
39
The largest problem with the Affordable Care Act is that it keeps profit making insurance companies in place. And they do make a profit--ask anyone who has investments in health care. This profit is the largest reason that the premiums paid by anyone making over $12,000/yr can be very high.
Cut back on the profit of the companies and eliminate fee for service doctors who order unnecessary tests and programs, and we will see premiums decrease.
Bottom line: We need a single payer system. If you feel excessively wealthy and want to spend your money on health care premiums, then you can be free to purchase a "cadillac" police for your family.
Cut back on the profit of the companies and eliminate fee for service doctors who order unnecessary tests and programs, and we will see premiums decrease.
Bottom line: We need a single payer system. If you feel excessively wealthy and want to spend your money on health care premiums, then you can be free to purchase a "cadillac" police for your family.
33
I'm financially insolvent, uninsured, unemployed, disabled, and refuse to participate in all forms of insurance and government aid.
I have narcolepsy with cataplexy and a secondary traumatic brain injury.
In a free market I could go to the store and buy the medicines I need for ~20 bucks a month.
I have narcolepsy with cataplexy and a secondary traumatic brain injury.
In a free market I could go to the store and buy the medicines I need for ~20 bucks a month.
9
I don't think you can talk about health insurance and individual economic preference because individual decisions about having health insurance or not affect society at large. By an large individuals who need health care will receive it whether or not they have the health insurance to pay for it. Even if having health insurance doesn't meet their preference criteria, my preference criteria certainly dictate that individuals have the mechanisms in place to pay for the health care they need.
Insurance, by its nature, only works when the people who don't need it pay for the people who do. In most cases insurance is used to mitigate personal risk, for example, the risk of your house burning down. No one has to pay to build you a new house if you don't have fire insurance. It's your choice to accept the risk of fire or mitigate it with insurance so society doesn't need an 'individual mandate' to have people buy fire insurance. (Though we do have fire safety building codes that individuals must follow.)
In my opinion the only rational discussion should be focused on finding the least expensive way for society to provide adequate health care to all of its citizens.
Insurance, by its nature, only works when the people who don't need it pay for the people who do. In most cases insurance is used to mitigate personal risk, for example, the risk of your house burning down. No one has to pay to build you a new house if you don't have fire insurance. It's your choice to accept the risk of fire or mitigate it with insurance so society doesn't need an 'individual mandate' to have people buy fire insurance. (Though we do have fire safety building codes that individuals must follow.)
In my opinion the only rational discussion should be focused on finding the least expensive way for society to provide adequate health care to all of its citizens.
12
Good points but one thing is obvious this UAnCA is not the way to to it all it does is take money from middle class for no return
4
Obviously the ACA does not mandate a free lunch - since the basic system is unchanged, and the profits of insurance and health-care companies are expected to increase (their stock prices have gone up faster than market), it has to be paid for. But this is hardly "a sign that the age of America’s grand ambitions is over". The very realistic ambition, which is not really grand, is to have a centralized system such as single payer. This is what all other advanced countries have and they getter better healthcare for about half as much.
The Republican Presidential candidates certainly are not going to be promoting any "grand ambitions" other than those of rich people to have their taxes cut, and the fact that they are not attacking the ACA is probably a sign that it has not failed in at least expanding healthcare without the disastrous costs that Republicans predicted.
The Republican Presidential candidates certainly are not going to be promoting any "grand ambitions" other than those of rich people to have their taxes cut, and the fact that they are not attacking the ACA is probably a sign that it has not failed in at least expanding healthcare without the disastrous costs that Republicans predicted.
16
The way to reduce inequality is to have universal health care, paid for with progressive income taxes, not taxes directed at the middle class. This is a very realistic objective, since most other countries already have such a system. The US in the past has had progressive income tax rates, and overall economic performance was better at that time than after rates were slashed. The "free-market" system, which is what Cowen slyly promotes, has been tested and its performance is clearly far inferior to true universal systems.
62
While flawed, the ACA has gotten a lot of people insured. And that's not nothing. And it's reduced the costs of economic free riders. Had we had a Congress that was more willing to engage and engage responsibly, we might have had the opportunity to fix some of the problems. Instead however, we have a (Republican) Congress that has done nothing but try symbolic attempts to completely repeal the entire law and used it as a basis for political attacks on the President. Let's not be surprised that there has been no progress in fixing what might have been improved.
12
"Practically speaking, these demand curves implied that individuals would rather take some risk with their health — and spend their money on other things — partly because they knew that even without insurance they still would receive some health care."
Practically speaking, this is known as freeloading. It has nothing to do with demand curves and everything to do with cheating the system.
Supply and demand is irrelevant in a market where the price of the products (medical services) is completely opaque to the buyer. I challenge Cowen to "shop" for actual healthcare. Will he refer to the Chargemaster? Will he ask his hospital what portion of the (unknown) charges will be borne by his insurer and what portion he will pay for? And how much?
Medical care is not a commodity to be "shopped". Disease, injury, and the human body embody significant unknowns and each treatment takes its own unpredictable course (and cost.) Insurance smooths out the extremes in cost.
Those who can afford it, but opt out of health insurance, freeload off basic human morality which affords them care instead of leaving them in a ditch by the side of the road to die.
Practically speaking, this is known as freeloading. It has nothing to do with demand curves and everything to do with cheating the system.
Supply and demand is irrelevant in a market where the price of the products (medical services) is completely opaque to the buyer. I challenge Cowen to "shop" for actual healthcare. Will he refer to the Chargemaster? Will he ask his hospital what portion of the (unknown) charges will be borne by his insurer and what portion he will pay for? And how much?
Medical care is not a commodity to be "shopped". Disease, injury, and the human body embody significant unknowns and each treatment takes its own unpredictable course (and cost.) Insurance smooths out the extremes in cost.
Those who can afford it, but opt out of health insurance, freeload off basic human morality which affords them care instead of leaving them in a ditch by the side of the road to die.
57
One obvious solution to increasing enrollment in Obamacare plans would be to drastically increase the size of the penalty for not carrying coverage. At a minimum, it should be the unsubsidized cost the individual or family would have paid had they obtained coverage under the least expensive bronze plan. That would make the wise economic decision be the one to buy insurance, rather than for so-called young invincibles or those who want to count on the emergency room to treat them, to count on largess from government or charity to pay for their treatment.
6
One has to remember that Cowen is basically a free market propagandist for the Koch brothers working in their subsidiary down at George Mason. He acknowledges the act has both substantially reduced the number uninsured and is coming at 20% below anticipated cost and then proceeds to criticize it for not reducing inequality as much as it should have done and implies the major beneficiaries have health care providers. It's all very thin. Of course Cowen has no need to use the act because like all of its critics on the right he has a very nic
34
A primary reason that some people resist buying health insurance is their assumption that they can push their costs onto someone else if they are in an accident, have a stroke or heart attack, or develop a serious long-term disease. Open enrollment occurs once per year, so they might be able to get by until they can buy health insurance to cover a chronic illness. But it seems flat-out wrong to enable these individuals who are clearly gaming the system to receive free medical care at the public's expense in the other cases. At the very least, the medical expenses they incur should be passed to the U.S. Treasury and then garnished from any future tax refunds, Social Security benefits, government pensions, etc. they might be entitled to receive until the debt plus interest is paid back.
16
We are talking about healthcare in America, which represents 18% of our GDP. Which is $3.25 trillion. That is $3.25 trillion. A lot of money.
Healthcare before Obamacare was a complete out-of-control disaster, growing in costs at double digit rates.
And unless you had corporate, government or union coverage you were left out in the cold. The insurance companies picked our bones.
Healthcare cannot be changed just with a snap of the fingers. It will take time.
The insurance companies are digging in further to hold on to power. They are doing mergers and acquisitions to consolidate more power. To strengthen their power as insurance companies, as middlemen.
The insurance companies are in trouble. We are beginning to figure out that we do not need middlemen in healthcare. We can figure out that we have no need to support exorbitant executive salaries, or non-competitive drug prices, etc.
We now demand to know ahead of time how much a medical procedure will cost, not some mysterious method afterwards. Where else in our capitalist society is so much information about costs so hidden and mysterious? And why is that?
I hope the insurance companies continue on their self destructive path that will awaken Americans to the fact that we need to get rid of the healthcare insurance companies. They are parasites and do nothing to advance healthcare in America.
It is through the actions of these middlemen insurance companies that is pushing America toward single payer. Funny.
Healthcare before Obamacare was a complete out-of-control disaster, growing in costs at double digit rates.
And unless you had corporate, government or union coverage you were left out in the cold. The insurance companies picked our bones.
Healthcare cannot be changed just with a snap of the fingers. It will take time.
The insurance companies are digging in further to hold on to power. They are doing mergers and acquisitions to consolidate more power. To strengthen their power as insurance companies, as middlemen.
The insurance companies are in trouble. We are beginning to figure out that we do not need middlemen in healthcare. We can figure out that we have no need to support exorbitant executive salaries, or non-competitive drug prices, etc.
We now demand to know ahead of time how much a medical procedure will cost, not some mysterious method afterwards. Where else in our capitalist society is so much information about costs so hidden and mysterious? And why is that?
I hope the insurance companies continue on their self destructive path that will awaken Americans to the fact that we need to get rid of the healthcare insurance companies. They are parasites and do nothing to advance healthcare in America.
It is through the actions of these middlemen insurance companies that is pushing America toward single payer. Funny.
41
I have said this elsewhere. The ACA has done some good things for those who were previously uninsured or who were paying very high rates for pre-existing conditions.
In my case, I was laid off four years ago by a large corporation and have retiree medical insurance for my wife and myself. I appreciate that the premium cost is half or less than what it would cost us on our state exchange. In addition, we are basically healthy people and make minimal use of the medical system.
I have seen our premiums increase 25% from 2012 to 2013. The same increase 2013 to 2014 and a 20% increase over the past year. We are on a basic indemnity plan that will cost $7,500 next year plus out-of-pocket deductibles of $2,500 per person. So beyond an annual physical exam and certain preventative procedures that have no additional cost, it will cost at least $10K to access the 70% of major medical costs covered by the plan.
I am not complaining about this retiree benefit, just pointing out what it costs to access medical care for a modest middle class retiree. I was led to believe that ACA would reduce costs overall for most and cause modest increases for some. However, year-to-year premium increases of 20-25% was not what I was expecting.
In my case, I was laid off four years ago by a large corporation and have retiree medical insurance for my wife and myself. I appreciate that the premium cost is half or less than what it would cost us on our state exchange. In addition, we are basically healthy people and make minimal use of the medical system.
I have seen our premiums increase 25% from 2012 to 2013. The same increase 2013 to 2014 and a 20% increase over the past year. We are on a basic indemnity plan that will cost $7,500 next year plus out-of-pocket deductibles of $2,500 per person. So beyond an annual physical exam and certain preventative procedures that have no additional cost, it will cost at least $10K to access the 70% of major medical costs covered by the plan.
I am not complaining about this retiree benefit, just pointing out what it costs to access medical care for a modest middle class retiree. I was led to believe that ACA would reduce costs overall for most and cause modest increases for some. However, year-to-year premium increases of 20-25% was not what I was expecting.
17
We shouldn't confuse what ACA has done to increase access to healthcare insurance (payment) with the overall cost of healthcare in the US. The later has received relatively little attention. The fact remains the US in total pays considerably more of its GDP for healthcare than nearly all developed countries (Switzerland is close), and but we get only mediocre benefits in terms of the level of healthcare outcomes. This disparity is a consequence of many, complex public, corporate and individual choices, and perhaps unintended consequences. When we talk about lowering healthcare costs, for instance, we need to consider that reality that most of the costs in the healthcare services sector are the costs of people. Not just healthcare providers, but administrators, billing services, insurance companies, drug company researchers, nursing home operators, etc. So, if we want to reduce healthcare costs, we should consider where else some of these people will find jobs? Healthcare services may be taking the place of manufacturing in our economy; providing skilled and semi-skilled jobs in substantial numbers and a something like middle-class compensation.
13
Year to year premium increases ( some up to 30%) where common before the ACA for those of us who didn't have employers who provided low cost insurance.
Since the ACA our premiums have gone down along with our deductibles.
Since the ACA our premiums have gone down along with our deductibles.
5
Two thoughts here. Getting a policy on my state health exchange for a comparable plan costs twice as much for me as my retiree plan. My retiree plan is more expensive than what current employees pay. Again, I'm not whining about this, just pointing out there's been a lot written over the past two years about the cost of premiums only rising 2-3% and maybe that was simply meant for state exchange rates. I am happy that people like you are paying less, but others are paying more.
5
The ACA was a gift to private insurers, and a social engineering experiment designed from the outset to funnel money from working people to private insurers, health services corporations, and big pharma. Obama promised a "government option" which would have mopped the floor with private alternatives (especially if we ditched our idiotic prohibition against Medicare negotiating with big pharma). Instead, in a monumental betrayal of the Democratic base, we got a Heritage Foundation health care system designed by corporate shills. Remind me: who was this supposed to please, exactly?
72
It was supposed to please Republicans. When the Heritage Foundation dreamed up this plan they never thought it would actually be adopted. It is a "market" based solution (read huge government giveaway to corporate med and big pharma) that they believed would never be embraced by liberals, but gave conservatives the appearance of actually having a health care reform plan. Since then no conservative has been able to come up with an alternative, for good reason. What do you do when the opposition co-opts the best you can come up with? Obama backed it expecting bi-partisan support. Not only didn't a single Republican vote for it, but the Heritage Foundation disowned it and labeled Obama a socialist. Gotta love those guys!
As for the government option, Obama mentioned that as something that was worth looking at exactly one time. He never endorsed it. Like so much about Obama, people, both left and right, have pegged their hopes and fears on the guy without ever really critically examining who he is and what he stands for. He is quite a ways to the right of every Rockefeller era Republican you can think of. In fact, ideologically, he is a lot closer to Ronald Reagan than he is to Jimmy Carter.
As for the government option, Obama mentioned that as something that was worth looking at exactly one time. He never endorsed it. Like so much about Obama, people, both left and right, have pegged their hopes and fears on the guy without ever really critically examining who he is and what he stands for. He is quite a ways to the right of every Rockefeller era Republican you can think of. In fact, ideologically, he is a lot closer to Ronald Reagan than he is to Jimmy Carter.
9
“Politics is the art of the possible, the attainable — the art of the next best”
― Otto von Bismarck
― Otto von Bismarck
1
"(I)t is worth taking stock of how it has actually been working."
My favorite example of the non-egalitarian results of Obamacare was the Times comment made by a California woman about her shock that her premium and deductible had gone up so much: "I was all for Obamacare, but I didn't think I would have to pay for it."
As of this week, most of the states' non-profit health co-ops (set up as the Obamacare alternatives to the "public option") have closed. Here in New Mexico, Blue Cross Blue Shield had to withdraw from the Obamacare Exchange due to adverse selection, leaving tens of thousands of people to hunt for a new policy
But perhaps the most damning argument as to Obamacare's failure is the simple fact that more than two-thirds of the people it was designed to help haven't bothered to sign up. There's a message there.
My favorite example of the non-egalitarian results of Obamacare was the Times comment made by a California woman about her shock that her premium and deductible had gone up so much: "I was all for Obamacare, but I didn't think I would have to pay for it."
As of this week, most of the states' non-profit health co-ops (set up as the Obamacare alternatives to the "public option") have closed. Here in New Mexico, Blue Cross Blue Shield had to withdraw from the Obamacare Exchange due to adverse selection, leaving tens of thousands of people to hunt for a new policy
But perhaps the most damning argument as to Obamacare's failure is the simple fact that more than two-thirds of the people it was designed to help haven't bothered to sign up. There's a message there.
16
If "more than two-thirds of the people [the ACA] was designed to help hadn't bothered to sign up" that would be damning indeed.
But it isn't true.
About 8.5M people have received subsidies to enrol in health insurance plans (QHPs) through the Marketplaces. There about 6M more eligible for subsides who haven't signed up.
At least another 8.5M people who are not eligible for subsidies have signed up for ACA-compliant insurance through the non-group market, mostly off-Marketplace, of course. There are only another 3.4M such people remaining uninsured.
Medicaid enrolment is up by around 12-13M, leaving another 7.5M eligible adults or children who are not yet enrolled.
Evidently, well over half the people the legislation was designed to reach are, indeed, benefiting. Indeed, it's hard to imagine how thee uninsurance rate could have dropped to an all-time low of 9% if the ACA were missing its marks has badly as you claim.
But it isn't true.
About 8.5M people have received subsidies to enrol in health insurance plans (QHPs) through the Marketplaces. There about 6M more eligible for subsides who haven't signed up.
At least another 8.5M people who are not eligible for subsidies have signed up for ACA-compliant insurance through the non-group market, mostly off-Marketplace, of course. There are only another 3.4M such people remaining uninsured.
Medicaid enrolment is up by around 12-13M, leaving another 7.5M eligible adults or children who are not yet enrolled.
Evidently, well over half the people the legislation was designed to reach are, indeed, benefiting. Indeed, it's hard to imagine how thee uninsurance rate could have dropped to an all-time low of 9% if the ACA were missing its marks has badly as you claim.
5
Everybody is getting hit with higher premiums and deductibles of many thousands of dollars. That will force many working class people into bankruptcy if they suffer even the smallest health problem. What was the purpose of this law anyway?
Regardless who wins the White House, this law needs to be fixed.
Regardless who wins the White House, this law needs to be fixed.
25
Only real solution is for government to be the sole employer and sole provider of goods and services. Citizens should work for the central government and be provided a modest stipend for their personal use. We must realize once and for all that capitalism has failed humanity. The minor repair suggested by Senator Sanders is not enough. These are revolutionary times.
3
I'll pretend to work and the government can pretend to pay me (my stipend). If you know what a mini-blighter is, you have earned some.
2
"Practically speaking, these demand curves implied that individuals would rather take some risk with their health — and spend their money on other things — partly because they knew that even without insurance they still would receive some health care."
For those people who would rather take chances with their health and not buy insurance. Solution: Don't provide them ANY health care.
For those people who would rather take chances with their health and not buy insurance. Solution: Don't provide them ANY health care.
17
Doctors will not turn away paying customers. There are many doctors who don't take any insurance, and require cash payment. People without insurance can and do go to them.
3
But not if they don't have the cash to pay. This is a complex system which helps explain complex, unintended consequences. Insurance by definition is a system to distribute risk and adverse consequences. There are ''free rider" issues associated with healthcare coverage that don't pertain to some other forms of insurance. We don't mandate people purchase life insurance because failure to be covered doesn't place substantial risk and costs on others, except the family members of a bread winner. We do mandate auto insurance because of the potential impact on others. But some note you have a choice on auto insurance. If you don't purchase, you just can't drive. But that analogy can't be easily extended to healthcare. Those without healthcare coverage will be treated and will incur costs for others; it's simply not possible to say "if you don't want to buy healthcare insurance, don't live".
9
The thing is, most voters aren't sociopaths. They won't tolerate seeing people die on the sidewalk right outside a hospital in the wealthiest nation on earth. So, yeah, that logic doesn't really work, does it?
8
Being on Medicare, the only benefit I have received, which is becoming more and more significant, is the provision to eliminate the gap for prescription drug coverage; and I HAVE noticed that my drug costs are lower each year.
Even being a Democrat, however, I HAVE been hurt by changes to home health Medicare provisions which have been instituted and, in fact, the Obama Administration has seemed to be on the war path against Medicare ever since he got in office. I presume a lot of his attacks have been under pressure from Republicans to avoid dismantling the entire system, which would, like so many Republican ideas, be immoral.
Home health agencies, which allow Medicare recipients to receive lower cost care for specific problems at home, as opposed io in a a residential facility, are now paid a lump sum figure based on estimated of how much supplies will cost, as well as the number of nursing visits will be required. If agency can care for the patient under the flat fee they hit the jackpot, but lose money whenever the care is in excess of the estimated flat fee. For severely sicker disabled recipients, care is usually longer and the agency loses money; thereby incentivizing agencies to lie to avoid those patients, or lie to dump them from their patient rolls.
Why we have set up a system where money saving home care, as opposed to in facility care appears to favored makes no economic sense, and this issue needs to be addressed.
Even being a Democrat, however, I HAVE been hurt by changes to home health Medicare provisions which have been instituted and, in fact, the Obama Administration has seemed to be on the war path against Medicare ever since he got in office. I presume a lot of his attacks have been under pressure from Republicans to avoid dismantling the entire system, which would, like so many Republican ideas, be immoral.
Home health agencies, which allow Medicare recipients to receive lower cost care for specific problems at home, as opposed io in a a residential facility, are now paid a lump sum figure based on estimated of how much supplies will cost, as well as the number of nursing visits will be required. If agency can care for the patient under the flat fee they hit the jackpot, but lose money whenever the care is in excess of the estimated flat fee. For severely sicker disabled recipients, care is usually longer and the agency loses money; thereby incentivizing agencies to lie to avoid those patients, or lie to dump them from their patient rolls.
Why we have set up a system where money saving home care, as opposed to in facility care appears to favored makes no economic sense, and this issue needs to be addressed.
9
Home health care is not necessarily "money saving" for "severely sicker disabled" Medicare recipients. That said, the rules under which assistance in the "activities of daily living" and maintenance nursing care are (mostly not) covered by Medicare are byzantine. Medicaid rules are no better.
4
Cowen forgets the reason for the mandate, which is that without it, many people did not have the option to purchase health insurance at any cost. Allowing people to buy in only when they become sick creates a death-spiral effect, where people only buy insurance when it will cost less than their care.
I think we could do this better, by providing basic health insurance for all Americans just like we provide police and fire protection for all Americans. But a situation where people are simply not covered makes no sense economically or morally.
Prior to the ACA passing, US Government entities spent as much per capita on health care as Canada did, in the process of covering only government employees, Medicare, Medicaid, and subsidizing unpaid medical bills.
I think we could do this better, by providing basic health insurance for all Americans just like we provide police and fire protection for all Americans. But a situation where people are simply not covered makes no sense economically or morally.
Prior to the ACA passing, US Government entities spent as much per capita on health care as Canada did, in the process of covering only government employees, Medicare, Medicaid, and subsidizing unpaid medical bills.
20
From my perspective- I'm a low almost middle class working stiff in Masschusetts, spending about 56% of my income on housing, and I was spending about 10% of that income on medical insurance. That cost has gone up about 100% under Obamacare, because I now have a formidable amount of 'deductibles' and Out-Of-Pocket costs that I never used to have. So, while the cost of the basic insurance has stayed mostly the same (it went up 2% last year), that used to pay for everything. Now, I'm looking at a guaranteed cost of $3000/year more to pay for the deductibles and OOP costs. Those costs also sort of just appeared without much warning or explanation, at least in my case. So, it's made me significantly less financially secure, which, these days, in my tier of income, does hurt.
50
The same cost-sharing and selective network trends are true in all facets of health insurance, it's not just Obamacare. Company-provided coverage is still better, and paid from pre-tax dollars. All health insurance should be treated equally from a tax perspective.
4
My Obamacare experience:
I was paying $174 a month for a high quality no lifetime limit BCBS policy for one person.
1st year of Obamacare premium increases to $450 & deductible does up to $5500.
2nd year of Obamacare premium increases to $468 network shrinks to local & a prescription I take is dropped from coverage costing me an additional $175 a month.
3rd year of Obamacare (2016) premium increases to $652 deductible goes up to $6850.
The out of network deductible is $13,700.
That's almost $15,000 per year before insurance kicks in.
The yearly check up isn't even free because I need a prescription refilled & they charge separately for that!
I was paying $174 a month for a high quality no lifetime limit BCBS policy for one person.
1st year of Obamacare premium increases to $450 & deductible does up to $5500.
2nd year of Obamacare premium increases to $468 network shrinks to local & a prescription I take is dropped from coverage costing me an additional $175 a month.
3rd year of Obamacare (2016) premium increases to $652 deductible goes up to $6850.
The out of network deductible is $13,700.
That's almost $15,000 per year before insurance kicks in.
The yearly check up isn't even free because I need a prescription refilled & they charge separately for that!
40
Well it worked out just the opposite for me. Monthly cost from $575 to 390.With deductible from $7500 to 5500. Plus,all the free annual services. I'm ahead.
25
Window shopping in my area shows that an unsubsized individual age 40 could obtain a bronze policy from my insurer for a cost of $250/month with a $4000 deductible and a $6850 maximum out of pocket. For a 62 year old male, that cost rises to $563. This insurance includes a wide selection of physicians and the major trauma center teaching hospital that is about 40 minutes away (the nearest hospital). I don't think that price is unreasonable, and I can vouch that this particular insurance company has been excellent at covering claims.
Looking at these prices, I would view these policies to be a good deal.
Looking at these prices, I would view these policies to be a good deal.
5
Worked out just the opposite for me, but I've been buying my insurance in the individual market (have been for nearly 2 decades). My deductible has been rising, along with premiums, for every one of those years *except* last year, when my premium actually went down by about 6%. I don't expect a repeat any time soon, but it was nice, just for once, to have medical costs go slightly down.
2
I think this piece misses the point when it brushes over a key part of the requirement. The idea is to socialize health insurance FAIRLY. The GOP is unwilling to look at it reasonably (or at all for that matter), but it is already being socialized. Those without coverage go to the Emergency Room long after routine treatment might have made it a cheap problem to solve and they now solve it in the most expensive environment possible after they are seriously really sick. Those costs don't go away when not paid, they are simply passed on to consumers with higher rates for those who do pay (back door socializing the cost).
The solution is simple, make everyone get basic coverage and pay to the extent they can. Those without coverage are not taking a risk between big Emergency Room bills and Insurance, they are mostly choosing between passing the bill to those of us who do pay. The logical question should be why is Congress not broadening the mandate. If it is flawed, then fine, fix it. Stop trying to get rid of the whole thing with no alternative.
For those Republican states that refuse to expand Medicare, I would simply ask: what is the definition of murder? If you knowingly refuse to expand coverage for political reasons and not cost reasons, are any people who die for lack of coverage your responsibility?
The solution is simple, make everyone get basic coverage and pay to the extent they can. Those without coverage are not taking a risk between big Emergency Room bills and Insurance, they are mostly choosing between passing the bill to those of us who do pay. The logical question should be why is Congress not broadening the mandate. If it is flawed, then fine, fix it. Stop trying to get rid of the whole thing with no alternative.
For those Republican states that refuse to expand Medicare, I would simply ask: what is the definition of murder? If you knowingly refuse to expand coverage for political reasons and not cost reasons, are any people who die for lack of coverage your responsibility?
84
ER visit for the few a cheaper than insurance for all.
It doesn't save money. Common sense.
It doesn't save money. Common sense.
3
Common nonsense. If people wait to go to ER, they become sicker, and more costly to treat. Plus, cost is not the only good here. Better health is even more important.
4
The ACA was not the preferred choice of many and, perhaps, most liberals. A single-payer Medicare for all type system or a more muscular private system with far greater regulation such as Switzerland's would have provided the egalitarianism we still lack in this country when it comes to health coverage. Those younger and/or healthier individuals who are taking the risk and foregoing health insurance are irresponsibly leaving it to chance that the rest of us won't have to pick up the tab if they suddenly require hospitalization or a condition requiring extensive treatment.
However, this piece also highlights the sad reality of our society which is that so many Americans live in a no-man's-land between abject poverty and affluence and have to balance whether they can afford health premiums in the face of other pressing and essential needs to pay for every month. For these people, even the ACA has not helped enough.
However, this piece also highlights the sad reality of our society which is that so many Americans live in a no-man's-land between abject poverty and affluence and have to balance whether they can afford health premiums in the face of other pressing and essential needs to pay for every month. For these people, even the ACA has not helped enough.
76
Obamacare has caused premiums to skyrocket.
Those with subsidies think insurance went down but they are sadly mistaken.
Those with subsidies think insurance went down but they are sadly mistaken.
9
Mr. Cowen's analysis doesn't mention externalities. He implies that if people choose not to have health insurance, that imposes no costs on anyone else. But if they are injured or become very sick and can't pay the cost of care, then taxpayers have to pick up the tab.
99
That is not correct. They first have to spend down their total assets. People who are not eligible for subsidies do have some money in savings and some equity in their houses. That would have to be paid out first before the taxpayers step in.
You would be surprised at the number of people who could write a check for $20K if they absolutely had to.
You would be surprised at the number of people who could write a check for $20K if they absolutely had to.
2
What about the independent market? Pity the poor individual who is too young for Medicare, yet no longer associated with a company plan and without eligibility for a government subsidy. It seems as though the insurance industry has used the ACA to limit choice, collect premiums, and deny virtually every kind of claim for these forgotten souls.
16
Prior to the ACA, a substantial percentage of the population couldn't buy comprehensive individual insurance anyway, except in states like NY that made it mandatory for companies to take all comers. In states like California, women who had given birth by C-section and people taking common medications were routinely excluded from purchasing individual policies.
9
@Elaine - True, but they didn't have to pay $800 a month with a $6000 deductible either. They could use that money to buy routine medical care. They weren't protected against catastrophe, but catastrophe is rare by definition. You are much more likely to incur routine or medium-level expenses.
5
"Pity the poor individual who is too young for Medicare." Yes, that would be my spouse and me. Prior to Obamacare, we paid less than $9,000 a year with no deductible. In 2016--and this is after doing spreadsheet analyses of every available plan in our state, we will pay a minimum of $14,000 in premiums alone, and that does not include the $6,000 deductible we must pay before we get anything for our premiums. This is the simplest of economic principles: whatever you subsidize becomes more expensive. I'm a democratic voter, but this legislation is largely a disaster, and was doomed when Pres. Obama took the single payer option off the table and allowed a couple of hundred insurance/pharma lobbyists to write the bill.
29
As more hard data becomes available we will see further evidence that the stated objectives of the program will not be achieved. What is so maddening is that the law was written explicitly to delay impact until this administration won re-election and was heading out the door.
Recall that we are still in the phase of the law where the Transition Reinsurance Program is offsetting plan losses. The billions funding this program came from fees [taxes] employers and unions with existing healthcare plans paid...it was only a three year program and that is coming to an end.
We are already seeing many plans fold up shop, even with federal help. This will accelerate now that the offsets are ending.
We are also seeing how involving the IRS made this way more complex than necessary. Many people who have never had to pay taxes due to their income levels are now finding that they must file, and that the specific forms required are complex and many therefore have encountered the shock of having their subsidy canceled for failure to administratively comply with the law. I have seen figures which indicate several million are impacted.
Last, the Cadillac tax is coming...and it will decimate union plans...if not repealed...good luck with that...will not make it through Congress unless a broader rewrite is the vehicle of amendment.
We need healthcare reform, what we got was an insurance company give-away program and expansion of IRS intrusion into our life.
Recall that we are still in the phase of the law where the Transition Reinsurance Program is offsetting plan losses. The billions funding this program came from fees [taxes] employers and unions with existing healthcare plans paid...it was only a three year program and that is coming to an end.
We are already seeing many plans fold up shop, even with federal help. This will accelerate now that the offsets are ending.
We are also seeing how involving the IRS made this way more complex than necessary. Many people who have never had to pay taxes due to their income levels are now finding that they must file, and that the specific forms required are complex and many therefore have encountered the shock of having their subsidy canceled for failure to administratively comply with the law. I have seen figures which indicate several million are impacted.
Last, the Cadillac tax is coming...and it will decimate union plans...if not repealed...good luck with that...will not make it through Congress unless a broader rewrite is the vehicle of amendment.
We need healthcare reform, what we got was an insurance company give-away program and expansion of IRS intrusion into our life.
52
My question tomyou is, who do you blame for the mess? The obvious course for U.S. health care to pursue in the interests of both equality and simplicity is universal health care insurance coverage paid by taxes. But this is the U.S. and in the interests of preserving certain kinds of businesses and certain kinds of profits, universal insurance is summarily rejected by the Republican Party with only token opposition from Democrats. Change that approach and both insurance companies and the IRS are largely removed from the problem.
3
We've seen what using subsidies to make something more affordable has done to college tuition, and now we're just beginning to see what it does to health care. Just as with college, the subsidies will be swallowed and prices will resume rising even faster than before. This year is the start of it, with a 2.5 rise in wages and a 7.5 rise in premiums. Of course, the trouble is, it's too expensive, and that was never addressed except as maybe a second thought with co-ops that are all failing. No one wanted to open up world competition in the drug market, or stop the AMA from limiting the number of medical schools being built, or stop the needless law suits for malpractice. It's just more subsidies gong directly to the insurance companies with no restraints from individuals that could be using an HSA or something. Government as usual, making everything worse while telling us it's better.
13
Malpractice suits have never contributed more than 2.5% to health care spending. By blaming medical liability for rising costs, you are disseminating corrupt right-wing talking points.
http://www.hsph.harvard.edu/news/press-releases/medical-liability-costs-us/
http://www.hsph.harvard.edu/news/press-releases/medical-liability-costs-us/
4
Also, is there any reason there is not a below the line tax deduction for health insurance premiums for people who are not self-employed. Employer provided health insurance provides a tax benefit of thousands of dollars. Without this deduction the people most financially hurt by this law find themselves hurt doubly.