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The Obamacare Stool Wobbles

Last week, Bill Clinton went on one of his blunt centrist tirades, calling Obamacare “the craziest thing in the world.” He explained that while many have gained insurance under the law, premiums are spiraling out of control for those who don’t qualify for large subsidies. Indeed, come 2017, insurers in the individual market will raise premiums [1] by an average of about one-quarter. Many of those facing high premiums are opting out of insurance, paying the individual-mandate penalty instead—and in turn, sick of losing money, many insurers are opting out of the exchanges, leaving entire states with just one company operating [2].

Perhaps even more telling, though, was the diagnosis of Sara Rosenbaum, a professor of health law and policy at George Washington University. “The subsidies were not generous enough,” she told the New York Times [3] in a recent story explaining the law’s troubles. “The penalties for not getting insurance were not stiff enough. And we don’t have enough young healthy people in the exchanges.”

Why is that so striking? Because Rosenbaum was describing the very foundation of Obamacare.

The law sits—according to MIT Prof. Jonathan Gruber [4], one of its architects—on a “three-legged stool.” The first leg is made up of rules limiting discrimination against expensive enrollees. Insurers can’t charge more for people with preexisting conditions, and they can’t charge the oldest enrollees more than three times what they charge the youngest, even though the disparity in actual costs is about twice that.

That leg is popular, but it can’t stand on its own. It makes insurance a bad deal for the young and healthy, and it encourages people to remain uninsured until after they get sick, because insurance will cost the same amount either way. Thus the second leg, the individual mandate, which simply requires everyone to buy insurance or pay a penalty.

But those two legs aren’t really stable, either, because not everyone can afford health insurance, requiring the third leg: subsidies for the poor.

So if both the subsidies and the mandate aren’t functioning properly, two of the three legs are loose, and the only one planted firmly on the ground is the one that creates the problems necessitating the other two. This puts Democrats in a very bad position.

The Democrats own Obamacare. Not only did they enact it with zero Republican support, but when Massachusetts (of all places) threatened to derail the process by sending Republican Scott Brown to the Senate, Democrats responded by passing what was basically a rough draft of the bill through a constitutionally questionable process [5] to avoid a filibuster. Years later, the law remains unpopular [6] with the public.

Granted, I’m much more of a policy guy than I am a politics guy. But unless Democrats manage to win the presidency and both houses of Congress—which is unlikely, though less so than it once was [7]—I don’t see them being able to do things like strengthen the individual mandate, hike premium subsidies, bail out insurers beyond what the law already requires (and perhaps not even that [8]), let older and more expensive enrollees “buy in” to Medicare before they would normally be eligible (Hillary Clinton’s idea), or create a “public option” to compete with private plans.

These are all big-government solutions that Republicans will oppose. The only way to achieve any of them would be through executive action. Maybe that’s a possibility, given recent trends [9], but it’s also an enormous gamble, both in the court of public opinion and in actual courts.

Assuming Republicans hold the House, Obamacare’s drunken stumbles could be an opportunity [10] for them to exert some firm control over the law’s course. True, unless things get really bad, they won’t be able to enact repeal-and-replace plans like those of the House GOP [11], the American Enterprise Institute [12], or the 2017 Project [13]. They won’t even be able to advance conservative health wonk Avik Roy’s plan [14], though it’s designed to work as a gut renovation of Obamacare, not necessarily a replacement for it. But they could demand, in exchange for their votes, that the law be steered in a free-market direction.

With that in mind, I spent some time going through the various conservative plans, looking for specific reforms that could stand on their own and would either reduce costs or make insurance more attractive to the young and healthy. Some even have bipartisan support [15]. Here are the standouts:

Allow a wider variety of plans. The current law strictly limits the types of plans that count as legally adequate insurance. Such regulations could be rolled back in ways big and small, allowing consumers to pick the plans that best fit their needs—ideally including cheap, high-deductible coverage for all who want it, both because such plans are appropriate for healthy enrollees and because they encourage patients to control their own costs. Most conservative experts would like to see this accompanied by an expansion of “Health Savings Accounts,” where patients can save money tax-free to use on medical expenses. At the very least, struggling states could be given waivers to experiment with these possibilities.

Reduce gaming. Under Obamacare, if you decide to game the system—remaining uninsured until you get sick, and in the meantime paying a mandate penalty that is often much cheaper than insurance—you still have to wait until the “open enrollment” period starts. But this year, that period lasts for a month and a half beginning November 1, meaning that for one-eighth of the year, people don’t have to wait at all. To discourage gaming, Republicans could make the period shorter and/or schedule it only once every several years. The rules for when “special enrollment” is triggered—events like the loss of a job, etc.—have also proven vulnerable to abuse [16] and could be tightened. Further, legislators could allow some degree of discrimination against those with preexisting conditions who have been uninsured by choice.

Let older enrollees pay what they cost. Older Americans have a lot of sway over our political system, and keeping insurance affordable is a core goal of the law, but legislators could increase the 3-to-1 allowable discrepancy to some higher number so that insurers can offer cheaper plans to the young.

Get rid of the lines around the states. ’Nuff said. (In all seriousness, though, allowing people to buy insurance across state lines—at least if they live in states with uncompetitive exchanges—seems like a good idea right about now.)

It has long been observed that it’s easier to create a new entitlement than to eliminate an old one. That will certainly be true of Obamacare—enough people have health care because of it, and enough of the law’s individual components are popular [17], that it’s not going anywhere. Even Republicans want to replace it with something else that achieves the same goals, not just repeal it, if they get the votes to do so.

There’s isn’t an opening yet for the full frontal assault that many conservatives would like to see, and there may never be one. But the law’s ailments do provide a chance to push the policy a good bit in the right direction.

Robert VerBruggen is managing editor of The American ConservativeFollow @raverbruggen [18]

38 Comments (Open | Close)

38 Comments To "The Obamacare Stool Wobbles"

#1 Comment By Bela On October 10, 2016 @ 1:04 am

We paid $650 for the Shared Responsibility payment this year, because the Marketplace ignored a request for exemption by mail – I did not use certified mail. Last month, I looked at Covered California and found out *we* could pay $2/mo and be subsidized for over $1,000/mo. That is not okay with me, for the health insurance CEOs to get a welfare check every month because we exist, and would never be able to use the insurance. Indeed, when going to a doctor or medical facility, the *patient* signs to the effect that the insured and not the insurance company is 100% responsible for all charges. However, what I wonder is why it is said that the “fine” is less than insurance – most people ignore the taxpayer subsidy and consider (in our case) the cost of insurance to be $2/mo.

#2 Comment By Scott_api On October 10, 2016 @ 6:17 am

“But they could demand, in exchange for their votes, that the law be steered in a free-market direction.”

The ONLY thing this GOP can or will do is ‘Repeal and Replace’. The only thing any GOPer has said since the law was enacted has been ‘Repeal’ and occasionally, one of them adds ‘Replace’. There is no way their base and their donors let them do anything else but at this point. And since there is no plan or idea what to replace it with, even repeal looks highly unlikely.

#3 Comment By Fran Macadam On October 10, 2016 @ 9:08 am

Capitalism’s become predatory, and the health care industry has become a key component of that – yes, including physicians. Costs will never be reduced, because government has been captured and made servile to predatory greed. Privatization is a joke under such subservience to one per cent interests. You cannot make something affordable by forcing people to buy it; that’s a contradiction in terms. I suppose that the next reality will be akin to the answer to educational inflation: government guaranteed medical loans to cover the cost of insurance. Some states already have that, de facto – if medical care can’t be afforded, then Medicaid covers it – with the proviso that it becomes an undischargeable lifetime debt. A good way for the unemployed middle class to lose their savings, their home and enter penury – all courtesy government-financed and corporate-benefitting medical extortion.

Your money or your life? How much is affordable? Anything up to 100% of disposable and future income.

#4 Comment By SteveM On October 10, 2016 @ 9:53 am

American health care is systemically busted and cannot be fixed by machinations of the insurance marketplace.

The common pricing strategy of the insurance companies now is very high premiums and exploding deductibles of over $5,000. A working class person with an Obamacare policy can’t afford the first dollar cost of treatment. The example I’ve used before is a guy with bum knee with an Obamacare policy. If he seeks treatment, he’s looking at $250 for the ortho consult, $400 for x-rays and $1,200 for an MRI. He’d need $1,850 in cash just for the diagnostic. So instead he sits and home an suffers.

Only the Republican model is more of the same. I.e., premium subsidies when it is a sky high deductible that is the concomitant source of economic rationing. And these pricing structures are now baked into the models of the insurance companies.

Obamacare may go away, but the high premiums with metastatic annual rate increases coupled with multi-thousand dollar deductibles won’t. And with more and more people are pushed into the 1099 “gig” economy with no benefits, it’s only going to get worse.

Obamacare is cruel illusion that provides access to health insurance but not health care. And it’s even crueler when the government puts a gun to your head to buy an insurance policy that provides no effective benefits. Republican plans will reveal the same pathological outcomes.

BTW, selling policies interstate is a non-solution for a variety of obvious reasons that have been well documented.

Stick a fork in American – because it’s cooked.

#5 Comment By JonF On October 10, 2016 @ 1:09 pm

No, Clinton did not call the ACA “the craziest thing in the world”. That was his description of the status quo ante as an explanation of why the ACA had to be structured in such a Rube Goldberg manner.

#6 Comment By JonF On October 10, 2016 @ 1:13 pm

Re: A working class person with an Obamacare policy can’t afford the first dollar cost of treatment.

Hyperbolic nonsense. A visit to the doctor’s office (assuming in-network) will cost somewhere around 80$. In-network standard diagnostic test (CBC, etc.) will cost as little as 10$ (mine from August just cost a grand total of $9.85) and there are many generic prescriptions which cost no more than a dollar or two (I just paid $1.24 for one). Any ordinary working person can afford those types of charges.

#7 Comment By Ken T On October 10, 2016 @ 2:25 pm

The problem with the low-cost, high-deductible plans you advocate is that they are nothing more than a fig leaf to cover the “free-rider” problem. They do not cover “healthcare”, they are only bankruptcy insurance. All they do is allow a person to pay a small amount in order to claim to be covered, when in reality it is doing nothing to bring them into the insurance pool. They are still free-riding, they still are not paying anything into the pool until they need more expensive treatment at which point they can switch to a real plan with no pre-existing condition exclusion.

On the other hand, the steps you outline in the “Reduce Gaming” paragraph all sound to this progressive liberal like areas that could be open to honest negotiation and compromise. So how about it? Forget all the “repeal and replace’ nonsense (what has it been, 60 meaningless votes so far?) and convince your representatives to do some real work to improve things.

#8 Comment By Nelson On October 10, 2016 @ 2:42 pm

The thing that disappoints me most about Repiblicans is they had an opportunity to impact the law in positive ways when it was being written but decided politics was more important than good policy. Obama said on multiple occasions that if you have good ideas, bring them to the table. All Republicans did though was criticize without being constructive.

#9 Comment By JohnH On October 10, 2016 @ 2:44 pm

If this is best our conservative thinkers can do on health care policy, we need to just throw in the towel, go with single payer, and concentrate on issues where we can win, like trade, immigration, foreign adventurism, and law & order. Actually, single payer might be surprisingly popular in the new, populist Republican Party.

Besides that, what SteveM said above is essentially true.

#10 Comment By Louis On October 10, 2016 @ 2:58 pm

So VerBruggen stands with the Nancy Pelosis in struggling to ignore the 20th amendment.

#11 Comment By JWJ On October 10, 2016 @ 3:43 pm

“I don’t see them being able to do things like strengthen the individual mandate, hike premium subsidies, bail out insurers beyond what the law already requires …”
“The only way to achieve any of them would be through executive action. Maybe that’s a possibility,”

We live in the times of an imperial presidency. Herself will do whatever she wants to do. We already know the FBI and Justice are completely corrupt and will do whatever Herself orders.

Herself will gut the first amendment through executive action and/or some acting assistant secretary of something writing a memo making new “law”.
Make a video criticizing Herself, and you will go to jail.
Deny a male access to the women’s bathrooms in your church. That church will be shut down.
Gun ownership, de-facto illegal through a myriad of “reasonable” restrictions (except for bodyguards for the “elite”)

Anywho, onto the medical field. One thing you could add to your list is somehow provide to the consumer/patient accurate pricing information. It is nearly impossible to get an accurate price quote on something as simple as an MRI.

Can you imagine buying a tv set, and you only find out how much it costs two weeks after the purchase?

#12 Comment By FiveString On October 10, 2016 @ 3:44 pm

This is the sad story of today’s GOP. As acknowledged by many, “Obamacare” is the Republican plan originally proposed as the alternative to “Billarycare”, and then implemented in MA under Mitt Romney. Obama even angered his own base by removing the public option as a compromise. The fact is that the GOP is in part to blame for problems with the ACA because they are so convinced that it — their own plan — is a bad idea (because Obama proposed it) that they have taken every attempt to sabotage it from day 1. They aren’t thinking of the good of the country, they are playing to their base who have been whipped up to hate that plan. It plays into the GOP’s larger role: do what is good for the party; attack Obama at every opportunity, rather than putting country first and working in good faith with Dems to improve a plan (again, the GOP plan!) that can be improved.

#13 Comment By Bagby On October 10, 2016 @ 4:13 pm

Enrollment time for the faculty at my private school is a time of despair and dark humor. The cheapest family plan on offer costs more than half of my salary. The insured among us are those lucky enough to date in the medical schools of their universities, and we all secretly envy the two teachers who married nurse practitioners. Not only can their wives take care of them when they get ill, but their wives have excellent medical benefits.

One of my friends on staff here is a family man with three young children, and his wife is a homemaker. What is the use of a ten dollar job when daycare costs the same? Homemaking is not only exactly what my wife would prefer to be doing, but also the economical choice for most families with children. He is in a bind because our administration has offered him an employer-subsidized health insurance plan that is affordable on an individual basis. The plan is more than my mortgage, but it falls inside the limits of what the Feds consider ‘affordable.’ The trouble is, because he has been offered this plan, he is not eligible for subsidies in the Obamacare marketplace for his family. The system is designed assuming both parents work and are offered ‘affordable’ insurance by their employers. Because my friend’s wife does not work, insurance is an impossible expense. At the insurance meeting this year, my friend asked if the school could stop offering him insurance so he could qualify for a subsidy on the marketplace. My headmaster replied that this was impossible because the Feds impose stiff penalties on employers who do not offer ‘affordable’ insurance to their employees.

Aflac Insurance does brisk business with us each year by offering insurance that resembles a game of Russian roulette. They sell pancreatic cancer insurance, breast cancer insurance, heart disease insurance, and other delectable products. If you have a feeling about what is going to take you out, you can get coverage at an affordable price! The remarkable thing is that the stuff is affordable, but you had better make the right bet, or you are screwed. I signed up for something that covered ER visits for my wife and I and included something about doctor visits after a year of payments. None of this stuff qualifies to avoid the Obamacare penalty, of course, but that penalty increasingly motivates the working man into action.

The Obamacare penalty has been a summer project for my wife and I for the last two years. Last summer, we spent three months paying off our bill to the IRS. This summer, we spent four months. I’ll send in my last tax bill this month. It has drained our savings and postponed needed repairs to the house. In response, we have signed up for a “health share” scheme that is supposed to help us avoid the fine next year, but I do not count on any actual health coverage from it. It is kind of like registering as Amish to avoid Social Security taxes.

Living without insurance is a way of life for me. I have not had it since college days, and so I have treated it as an exotic luxury all of my adult life. For a short time, I worked for a bank that gave me insurance, and yet never thought to go to a doctor when I was sick. That was ruinous behavior when my friends indulged in it, and so the thought rarely crossed my mind. One of my former roommates passed out on the street while he has in college, and a good Samaritan called an ambulance. Tens of thousands of dollars worth of tests later, he awoke in the hospital with no signs of illness and no diagnoses. He had to drop out of school to pay his bills, and has not returned for his degree since then.

I struck up conversation with the Aflac lady this year and told her there were untapped insurance markets her company ought to investigate. I suggested policies that covered everything from the waist up, and assured her that I could do my job very well without the lower half of my body. I also suggested policies that would cover quadrants or halves of the body. This would not be unlike the heart insurance or renal failure insurance. Insurance for the right half of the body wouldn’t cover a stroke on the left side of the brain or cancer in the left lung, but everything that went wrong on the right side would be taken care of. Intestinal issues would be tricky. I can see a new market there for those that can manipulate the guts into the right hemisphere of the belly in order to qualify for the insurance coverage. I really ought to take the proposal to some insurance man with an imagination. In theory, such coverage would be half the cost of the current offerings, dropping the price from 60% of my salary to 30% for a family plan. As this would still be the single largest item in my family’s budget even at 30%, I’m not sure the problem is solved, and it seems a ridiculous price to pay for something I’ve never used. I understand that I will need it someday.

I would like to see a plan where I could opt out of the use of multi-million dollar imaging machines and multi-million dollar drugs. Is it possible to construct a plan that does not include all of the things that make modern medicine impossibly expensive? I get it: I cannot afford modern medicine. Few can, apparently, and good riddance to it. Who wants to live an extra five years by shoveling in handfuls of drugs full of nasty side effects only to die riddled with tubes, far from one’s own bed and one’s own consciousness? Teachers used to be able to afford medical care, and I would much rather have medical care circa 1900 than no medical care at all. Who wouldn’t?

I have no confidence in market forces or centralized planning. The American medical system is insane and deserves whatever disaster befalls it. I am inclined to think the private insurance companies that profit off of this system are evil. I have no idea what might replace the game.

#14 Comment By Potato On October 10, 2016 @ 6:15 pm

Long story short: American health care COSTS are too high. “Insurance” is all about how we’re going to pay. COST is all about how much we’re going to pay. Let’s talk about cost and let insurance take care of itself for a minute.

It is often said, mostly because it is true, that the US spends TWICE PER PERSON on health care what Europe spends. The Europeans cover everyone, and the statistics say the health care is better. I have a daughter who has lived in Europe with her husband and family all her adult life. Except for my kid none of these people has ever lived in the US. I have seen her and her husband’s parents and grandparents through the whole cycle of life, from birth to not-serious illness to serious illness to death, and I can testify that the medical care is in every way the equal of ours, and sometimes better.

How is this done, you say? First, if there is insurance (some countries use it, some do not) profits are strictly regulated. No executives making seven figure incomes. Hospitals are rather simple by our standards, and their prices too are strictly regulated. No Palaces of Healing such as I see being built in my neighborhood. Doctors more often make shy of six figures than more than that. (Of course they don’t have gigantic educational debt either, which is a whole other topic.) They live reasonably well and are well respected, but the parking lot at the hospital is not full of $100,000 automobiles. And Big Pharma? Those prices get bargained down to something reasonable.

So now all the good conservatives will start hopping up and down and telling me that all this price control (and the universal taxation that pays for medical care for everyone, just as taxation pays for roads and schools and other public goods) is omg socialism!!

Well yes, perhaps it is. (Although, why? Universal education (or, universal road paving) paid for by taxes is not socialism but universal medical care paid for by taxes is?) But unlike the “free market” or whatever it is that you are defending, it gets the job done. Why is it that the only people who are better off under the so-called “free market” are the predatory rich, not schoolteachers like Bagby? And indeed, not most of us.

We are suffering and lacking care and being impoverished to enrich the few. How wonderful. If this is “conservativism” I’m opting out.

#15 Comment By cecelia On October 10, 2016 @ 7:42 pm

It is refreshing to see that not all conservatives take the “repeal” tack but are willing to recognize the need to deal with the issue.

I agree that the insurance companies are not to be trusted. Part of what has created the current ACA crisis is that the Obama administration refused to allow Aetna to merge with Humana (a provider of health care).
Aetna retaliated by withdrawing from the exchanges – in fact Aetna told Congress if they refused the merger they would retaliate.
Nice stuff right?

Hillary will fiddle around the edges to try and improve the system. The state line plan does not hold all the promise some GOPers think – where it has been tried the insurance companies have not bought in. It seems like a rather pitiful attempt on the part of the GOP to pretend they have an alternative to ACA.

Ireland has an interesting system which is a kind of cross between the Uk and US systems. So there are some working models we could look at. It seems to me that we must control cost which of course meets such resistance from the hospitals and the AMA. Then we need to deal with the insurance companies which is another point of massive resistance.

I think perhaps just expanding medicare to everyone may be the way to go – the current system is a disgrace especially for a country with so much wealth.

Of course – just getting the GOP Congress to admit that repealing ACA is not a solution would be a nice start.

#16 Comment By kalendjay On October 10, 2016 @ 8:02 pm

“Reduce Gaming” actually sounds very much like a return to the concept of Medicare. Your strict open enrollment period consists of a sufficiently high age at which to qualify for a subsidy or benefit, and to constitute sufficient and substantial need. Period.

“Letting older enrollees pay what they cost” likewise involves a Medicare system with sliding premiums or taxbacks, perhaps of a kind that could be calculated as a one-time wealth tax or virtual estate tax, based also on actuarial calculations applied by the IRS to defined benefit pensions (rich people live longer, and also collect disproportionately large social security).

This and other things suggest that the ultimate solution is to frame Obamacare as a tax benefit, built around the existing Health Savings Account provision, but with strict defined benefit provisions to constitute a subsidy for the poor and chronically ill, and a taxback for well endowed pensioners and receivers of other corporate benefits, to encourage long range health planning around financial planning.

The fact is, Democrats never seriously say “no” to Republican sponsored tax measures. For all Obama’s stubbornness, he could not refuse a renewal of Bush tax provision in 2010. It is highly unlikely that cries of “tax the rich” will be heard from the Schumer-Pelosi obstructionists.

Which raises the question: Exactly what does Hillary want to tax the rich for? She never mentions the words “national debt”, and “pay taxes for our military” is a policy that only seems to apply to Donald Trump.

But remember. In her world, Obamacare does not involve tax.

#17 Comment By Sandra On October 10, 2016 @ 8:30 pm

Benefits are the one aspect of Health Care that no politician wants to touch. One of the tenets of the ACA was that “everyone will receive the same benefits that members of Congress receive”. Trouble is no one can afford it. I agree with option one which is to allow people to choose from an array of policies that meet their needs.

#18 Comment By Gregory On October 10, 2016 @ 9:49 pm

Bagby, that was one of the best comments I’ve read on anything, anywhere.

My previous employer offered coverage to me at a minimal cost, aside from copays and a fairly reasonable deductible. As soon as children and a spouse were added to the plan, though, the cost jumped to $1200 a month. That was literally 45 percent of my take-home pay after taxes and retirement. That was double my freaking mortgage payment. My wife and I would love for her to forgo work entirely to raise our daughter, but it’s not financially possible with the cost of insurance for my family.

Although I’m skeptical that Washington could design a functioning national healthcare system, I’m also fully aware that other countries pay less for medical care of the same or similar quality.

Between housing, education, and health insurance, many Americans are being slowly turned into debt serfs.

One study in 2007 found that 62 percent (!) of bankruptcies in the U.S. were tied to medical debt ( [19]). It’s enough to make me think that the system is deliberately designed for that outcome.

#19 Comment By Eric377 On October 11, 2016 @ 8:29 am

People do not want to (or can’t) pay for correctly underwritten healthcare individual insurance as part of a risk pool that increasingly looks like the general population. So they drop out, making the risk pool increasingly costly to underwrite. But this sequence of actions and reactions neither increases nor decreases the national healthcare bills. Just subsidize the risk pools to pricing that people will pay. All this nonsense about bailing out insurers should stop…the bailouts are fundamentally healthcare bills that the insured population doesn’t want to deal with on an individual basis. If the country would rather do away with the insurance industry, okay, but that has a lot of negative issues associated with it also. Better is to just decide what pricing can be sustained and pump in tax dollars to keep it there. And work like crazy to bring down actual costs.

#20 Comment By BJ On October 11, 2016 @ 8:44 am

To accept any change short of repeal for Obamacare, Republicans must eliminate the individual mandate.

That is the price.

Otherwise, bask in the glory of its slow motion collapse.

#21 Comment By Bob Jones On October 11, 2016 @ 11:14 am

Bagby and Gregory,

The issue with your coverage is that your employers are simply passing a very high percentage of the cost on to you, rather than including those as a portion of you wage/benefit package. They are also either small employers (i think the private school likely fits that) or a large publicly traded company obsessed with cost cutting.

My previous employer was exactly that, and each year they jacked up the rate by about 15%, so I was paying around $750/mo (back in 2009 and 2010) for a family of 4 on a low deductible PPO plan. Given they had 25,000 US employees they should have been able to negotiate a pretty good rate structure, which they did, and then passed the bulk of the premiums on to the employees. In 2010 they actually blamed the ACA for the 20% rate increase, even though it had only been signed 3 months before open enrollment and was not yet in effect. In fact an internal memo leaked to employees, which talk about reducing the employer portion of the benefit to reduce costs.

My current employer, on the other hand offers better coverage, and I pay only about $190/mo out of my pay, because they choose to pick up the bulk of the premium as part of my wages/benefits.

I think you need to separate the issue of pricey employer-provided health insurance from the exchanges. You employer does have a big say in how much you pay, and they are the ones doing the negotiations for the packages. If they do not plan to cover a large portion of the premiums, they are likely not doing too much negotiations, and simply passing as much of the costs as possible on to you.

#22 Comment By Austin On October 11, 2016 @ 11:57 am

“Stool…leg?”

Ohhh. You meant *that* kind of an Obama stool.

#23 Comment By Glenn On October 11, 2016 @ 12:06 pm

Conservatives are never going to wake up. Obama and his group of Prog-Marxist revolutionaries knew ACA as passed was never going to last. They are playing the long game while conservatives aren’t even on the field. The very conditions he cites were all predictable. The fact that Obamatons claimed publicly that this wouldn’t happen means nothing, that is just how they do politics. They want to kill the private insurance industry and have single-payer govt health care. This was always the plan, but they knew it wouldn’t pass. So they instead passed a bomb that they knew would blow up, allowing them another crisis to politically exploit.

#24 Comment By anonymousdr On October 11, 2016 @ 12:13 pm

This is only tangentially related to the ACA, but in response to the complaint about greedy doctors. There are some, I’ve met them, but…

I’m obviously an interested party, but cross-country comparisons of physician income are notoriously difficult.

It is easy to look at physician pay in terms of absolute numbers or multiples of GDP and conclude that American physicians are overpaid. A better model is to look at the price of a comparable worker. In most countries around the world (except some of Scandanavia) physicians are paid in the 95-99th %ile. So by that measure, US physicians are appropriately to slightly undercompensated. Yes, even specialists. This does not take into account the cost of education or the other benefits you would get from living in Europe.

Here are two decent references on the subject. One is by Uwe Reinhardt who is a fair minded centrist. His article is interesting to me because there were 3 Princetoneons in my residency (I wasn’t one of them). I don’t know the other writer but it jibes well with what I have read in the primary literature.

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Another thing to take into account is the quantity of work done by US physicians. I know physicians who have worked in NZ in both surgery and radiology and who have said that their day to day workload was an order of magnitude less than in the US. The surgeon I know who worked in NZ said that he basically took 3 mos. off because he was limited in how many surgeries he could do. I would take that deal for a pay cut. Many days my wife doesn’t get a chance to eat—even when she was pregnant.

There is some room to push specialist salaries down, but not much. In the early 90s when Cilinton was pushing her health reform and anesthesia was under the gun, only 36% of residency spots were filled by US grads! It is hard to explain how crazy low that number is. By 2010, that number had risen to 87%.

There is probably no room, without complete debt forgiveness, to push down PCP salaries. Why? Well, for one the fail rate for 1st time takers on the internal medicine boards, which covers a lot of the same ground as medical school, is 10-20%, and for recerts is about 15% (FWIW these exams are not curved but based on historical absolute cutoffs through a very complicated metric). We are clearly hitting about as low in the intellectual range as is feasible for physicians.

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My wife and I are in our mid 30s and we won’t break even with what we would have made had we just become engineers or managers at a decent company, let alone if we had gone into banking or consulting, until well into our mid-late 40s—especially had we been able to buy a house in a good real estate market like Seattle, Denver, DC, SF, etc. We are both in very lucrative specialties, for PCPs it is worse.

Given the structure of the economy, the availability of other high paying jobs, and the cost and length of medical education, you probably can’t pay a native born US person to be a physician for much less than 200k (last I saw peds average ~190k). Remember, even old Enoch “ Thybrim multo spumantem sanguine cerno” Powell supported immigration when he was health minister to fill “understaffed” aka “underpaid” jobs in the NHS.

I’m not arguing that American healthcare system is good, let alone great (being right-leaning I wish we were more like Switzerland or Singapore), or even that physician pay meets some idealized vision of justice, but you can’t cut pay without consequences.

#25 Comment By Bismark Tidwell Scruticious On October 11, 2016 @ 1:50 pm

Amazing to read all these alternative proposals to and fixes for ACA when the obvious answer is to abort it and replace it with nothing. Nothing about it is Constututional and government has no business intruding into this aspect of American’s lives.

#26 Comment By mulp On October 11, 2016 @ 1:51 pm

What keeps people from buying the cheap plan that does not cover the things they do not have like cancer, heart disease, mental illness, and then switching to a comprehensive plan after getting cancer to get access to the $250,000 cancer treatment?

If you select the no frills plan at age 25, are you forever stuck with no frills for the rest of your life?

Otherwise, point 1 leads directly to point 2, just a different way to game the market.

#27 Comment By Jeff H On October 11, 2016 @ 2:45 pm

“Allow a wider variety of plans…Reduce gaming…Let older enrollees pay what they cost…Get rid of the lines around the states.”

Sounds like…oh, I don’t know…a free market place. An idea so crazy, it might work!!!

#28 Comment By tz On October 11, 2016 @ 5:40 pm

Also remove the national borders – lets get drugs and devices at Canadian or Mexican prices.
Then force hospitals and doctors to post prices and not form cartels (override Cert of Need laws)and other anti-trust things.

#29 Comment By SmartiCat On October 11, 2016 @ 7:49 pm

With respects particularly to Bagby’s comments – the primary problem is using the property insurance model as a vehicle to cover health care. Bagby’s comments point exactly to the futility of the issue: insuring against very specific events like “breast cancer” or “pancreatic cancer” makes as much sense as insuring the top half vs. bottom half or left half vs. right half of the body. Put simply, breast cancer is not just a disease affecting the breasts. It can spread to the rest of the body, and anyone whose gone through the treatments understands the treatments themselves affect the entire body. Insuring just “parts” or specific conditions ignores completely the fact of human biology. We are not just a collection of moving parts all independent of each other but of integrated systems. If your right hand falls off and goes untreated because insurance only covers the left hand than eventually that right arm is going to go septic and infect the rest of the body. And unlike property insurance that uses underwriting to predict risk, human health events are not as easily predictable. Some are born with conditions and some incur them later in life despite doing all the “right” things, and some conditions require lifetimes of treatment versus a property insurance claim that is typically a single payout for a single event.

Solving the problem is not introducing more “market behaviors” into a complex and varied area like health care where consumer decisions are not being made on a supply/demand curve like buying TV’s. The economic term for it is “elastic demand” in that demand for health care is often times irrespective of the price for it. Markets may work for certain aspects of health care that are generally accessible and optional, laser eye surgery fits that model well, as those who can’t afford laser eye surgery can continue to wear contacts and/or glasses. There’s not a “life or death” choice being made as there is for heart surgery or any other sort of catastrophic/illness care. The “selling across state lines” trope has been debunked much, but simply: it’s just an end run around state regulations which is a very odd position for conservatives who supposedly favor state’s rights to regulate and control their own markets. The initial result may be lower premiums, but on bad policies sold from states with “light” regulations so that the policies themselves are worth little when they are needed. And once insurance companies congregate in those states and corner the markets from those policies they are then free to raise those premiums sky high.

Conservatives may not want to hear it, but national single payer or state single payer plans are probably the only answer. Obamacare was the last ditch effort to maintain the outmoded system of employer based coverage with private for profit insurance. We are seeing the results. Or other options in the middle such as heavily regulated/ mandated purchase and issue “insurance” utilities that are not profit driven and that provide base level coverage, for profit insurance can exist as optional and supplementary coverage to that base plan (Switzerland and Germany have a form of this).

Finally, to Bagby, your comment made me sad to read about the reality of how our messed up system punishes the average middle class person and yet the political system seems only capable of discussing this in the abstract “socialism”, “capitalism”, instead of doing what is pragmatic regardless of whether it offends the ideology of choice.

#30 Comment By Micha Elyi On October 11, 2016 @ 8:06 pm

But they could demand, in exchange for their votes, that the law be steered in a free-market direction.

The law cannot long stand as half-slave and half-free. It will become entirely one or the other. I’m not betting on a public, the majority of which wants something for nothing, to choose freedom.

#31 Comment By SmartiCat On October 11, 2016 @ 8:17 pm

Bob Jones – you raise a very important aspect of this discussion that often goes overlooked, which is the employer based coverage issue. Many of us with employer based coverage mistakenly believe that the pre-tax deduction from their paycheck represents the full cost of their health insurance premium. So those with “good” large employer provided coverage operate under the assumption that their insurance is *much* cheaper than it actually is. The reality is that a lot of larger employers cover the rest as part of the “employer contribution” which is really just salary that the employer gets a special tax deduction for providing. A lot of times this hides the problem of costs from a lot of Americans who get this kind of coverage through their employer and blinds them to the full costs on the individual markets – which makes them more resistant to reforming the system. After all, if you’re under the impression that your family insurance costs you only $300/month (as my “contributions” amount to roughly for my family of 3) than of course it’s easy to lecture others on the “facts” that forgoing cable and cell phones will pay for health insurance. But when you add in the $600/month my employer “contributes” to this coverage as part of my “real” salary that equation changes. Now we’re talking close to a mortgage payment and if that wasn’t given a tax preference on either side would be an even bigger divot from monthly income – and is not a cost that forgoing a few “luxury” items a month will cover for those on the lower income level of the scale.

Employer “contributions” also artificially hold down W-2 wage increases. Wonder why you’re only getting a 2% raise per year? If your insurance premiums under your employer have only risen modestly or stayed steady that is the reason why the low raise – your employer “contribution” is swallowing the health care inflation while deflating your actual wages.

So any real solution has to provide a incentive to opt away from employer based insurance that makes sense for those currently under that system. Requiring the employer to remit in salary wages the amount of the current “contribution” while allowing them to still deduct that contribution amount from taxes as a “grandfather” will be a good boon to raising wages in the transition and ensuring that wages/salaries don’t drop in the absence of employer based coverage. If the employer chooses not to remit the amount in wages they should be taxed that amount instead (carrot and stick). We can’t just shut off the system and expect current salaries to go into these markets and pay full price for coverage they were currently only paying 1/3 of without radically pissing off (and rightly) a large segment of the middle class whom needs to be on board to support any reforms whatsoever. And certainly allowing employers to simply pocket the savings from this form of salary is unjust as well. But at least getting the general population into the same coverage “mode” will increase the “skin in the game” for all so that we’re not dealing with a vast disparity in coverage access that is largely dependent on the quality and availability of the employer coverage, leaving small business employees and contractors in the “ghetto” of the individual insurance markets. Certainly increasing the coverage pools and risk pooling to include more payers will bring in the benefits associated with large employer plans were costs and risk are better managed..

#32 Comment By SmartiCat On October 11, 2016 @ 8:33 pm

@anonymousdr
I think it’s entirely appropriate to address physician educational loan burdens as part of any reform. Certainly if health reform involves a pressure on service pricing we need to take into account that we can’t just give providers a haircut and expect they will still participate in the field. But I do think that “fee for service” will need to remodeled in to salaries, perhaps, at least for routine/GP type work…

#33 Comment By Gregory On October 11, 2016 @ 10:21 pm

@Bob Jones

The issue with your coverage is that your employers are simply passing a very high percentage of the cost on to you, rather than including those as a portion of you wage/benefit package.

You’re absolutely right.

I wasn’t commenting on the exchanges, which are an absolute cluster (several friends of mine bought insurance for their spouses on there at highway-robbery rates), but rather just on how high the cost of insuring a family can be.

#34 Comment By devilsadvocate On October 11, 2016 @ 10:27 pm

Let’s just go back to how insurance was before Obamacare. I had excellent employer paid insurance back in 2005. My share was $60.00/mo. $500 deductible $90 prescription drug deductible. No copay for office visit. Today, my pension sponsored health plans are totally unaffordable. I can’t buy it and so I don’t have it.

#35 Comment By JLF On October 12, 2016 @ 1:56 pm

You can eliminate the myriad of bureaucracies and make health care available to all using market forces, but no one is interested because one of their sacred cows will disappear in the process.

Essentially, government should be the sole source of medical care dollars, a monopsony, if you will. By eliminating the insurance companies and private pocket books, health care providers would only look to a single source for payments, accepting what that source will pay or find another business. The market place, that is the interaction between suppliers and the purchaser, and not the government would determine what is offered. The government, following the demands of the citizenry, must meet the demand for medical goods and services and negotiate the lowest possible price suppliers would be willing to accept. Simple, efficient, and above all, fair to all . . . except those whose deep pockets that have always demanded – and received – more than the “little people”.

#36 Comment By anonymousdr On October 12, 2016 @ 5:52 pm

@smarticat

“Conservatives may not want to hear it, but national single payer or state single payer plans are probably the only answer. Obamacare was the last ditch effort to maintain the outmoded system of employer based coverage with private for profit insurance. We are seeing the results. Or other options in the middle such as heavily regulated/ mandated purchase and issue “insurance” utilities that are not profit driven and that provide base level coverage, for profit insurance can exist as optional and supplementary coverage to that base plan (Switzerland and Germany have a form of this).”

I think the second part of your answer contradicts your first. As a patient and a doctor, I would vastly prefer to be in a Swiss or German style system with some private insurance, than the NHS (or, God help us, an expanded VA style system). Having some choices, even if constrained by regulation, would be far preferable to taking whatever you could get from the state—as a patient or a doctor.

I do get your point that both patients and doctors will have to accept some price fixing (which we already have through medicare) and that much of medicine does not operate on normal rules of supply and demand.

However, I also don’t understand why Singapore never gets more traction. They have great results and spend half what we do. There is a huge amount of care that is routine and elective that could be paid for using HSAs and shouldn’t be “insured for”. Think about it—everyone knows that they need a colonoscopy at age 50 or a mammogram at age 40, or that kids need 1 year well child visits. Similarly, for most people, you could shop around if you needed many types of surgery like joint replacement, spinal fusion, or an elective cholecystectomy.

If, say, a pediatrician knew that he was going to get cash for all his well child visits, or a GI knew he would get cash for routine screening colonoscopies, he could lower his costs substantially by not having a biller deal with the insurance companies for routine stuff and knowing that the practice would have some cash flow. A system in which routine/screening care was paid in cash would promote doctors to be more aggressive with capturing all of the screening stuff that they could–which is what public health people want. Insurance would still involve a wealth transfer from the young, healthy, and/or wealthy to the old, sick, and/or poor, and weather it was based on capitation or some kind of quotas, would still need to have a way keep costs down, but it wouldn’t involve pre-paying for care you know that you will need.

TL;DR— I’d rather have some choice in insurance, like Switzerland, Germany, or Singapore, rather than none. It seems silly to insure ourselves for routine care; we (the top 75% or so), should just pay for it, and use insurance/or capitated health systems to cover chronic illness and catastrophic injuries.

#37 Comment By Robert Charron On October 13, 2016 @ 4:21 pm

Have you lost sight of the fact the purpose of having insurance is to spread the risks. Now it is true that an insurance pool of the young and the healthy would not cost the young and the healthy as an insurance pool of the old and unhealthy, but is that desirable3 from a national standpoint? Isn’t this a bit selfish? And won’t the young and healthy ever get old and infirm? O f course they will.

#38 Comment By Dave Turner On October 14, 2016 @ 6:46 am

I am sick and tired of all the complaints about “Obama Care”. My oldest daughter is a dentist. She has a chronic disease. While attending Harvard our family paid six thousand dollars a year for her insurance which did not include most of her prescriptions. The costs to the insurance company were tallied and they were less than a thousand. My grand daughter was born with a heart defect. The costs of her operation exceeded a quarter million dollars. My wife is a retired teacher. I am a retired police sergeant. We work out, walk and don’t eat until we are fat. We qualify for the state sanctioned government employee plan each year. Qualifying includes low A1C scores, no smoking, no drug use, low glucose scores, and a whole host of other markers that keep the costs of our plan at a lower level. We can decrease the costs by working out. She’s a ballet dancer, we do ballroom dance, and I am a martial artist. Our costs are still over thirteen hundred dollars a month. Stop complaining if we didn’t have Obama Care it would be even more. My granddaughter would have had the operation and we would be bankrupt. My oldest daughter would still be a dentist, but we would have not paid off our credit cards that we maxed out to pay for her “insurance”. Last I knew big pharma owners, medical devices manufactures, and most medical providers were doing just fine and paying a lot lower in premiums. We need a healthy populace. We need healthy children and healthy citizens. They are a natural resource just like oil, coal, and natural gas. Our family would be bankrupt without some form of it. Oh yeah my French, Canadian, New Zealander and German friends pay less and they don’t come to America for medical operations.That is pure myth.