When it comes to Obamacare, I’m firmly in the “significantly better than nothing” camp. Obamacare has increased coverage—although not as much as one might have hoped. The percentage of people uninsured has fallen from around 17% in 2013, when only a few coverage-related provisions of the ACA were in effect, to around 11% in early 2015, after the major changes kicked in in 2014. That’s six percentage points, or millions of people—but it’s still much less than half of the pre-ACA uninsured.
There has also been a lot of controversy over the impact of Obamacare on health insurance prices. According to the Kaiser Family Foundation, the weighted average pre-subsidy price of a silver plan on the exchanges only increased by 3.6% from 2015 to 2016, which certainly seems good. But one way the ACA keeps premiums reasonable is by pushing people into plans with high levels of cost sharing. The average silver plan has a combined annual deductible (including prescriptions) of more than $3,000; the deductible for an average bronze plan is close to $6,000. In other words, one reason that insurance premiums are affordable is that those premiums don’t buy you what they used to, as insurers shift more and more health care costs onto their customers.
This is exactly what we should have expected. Obamacare is an example of “managed competition,” something that Bill Clinton talked about on the campaign trail twenty-four years ago. The basic principle is that competitive markets will generally produce good outcomes—low costs, efficient allocation of resources to meet consumer needs, etc.—but need to be managed around the edges. Moderate Democrats (what we used to call moderate Republicans) have fallen in love with this idea, because they can talk about the wonders of markets while blaming anything they don’t like on “market failures.”
The classic example of correcting for a market failure, of course, is the individual mandate. By now, every liberal interested in policy has learned what adverse selection is and, more specifically, can explain why community rating will produce an adverse selection death spiral unless you have mandated universal participation. This is the image that Obamacare’s most ardent supporters want you to take away: cleverly designed regulation preventing a market failure and ensuring universal coverage, while enabling markets to reduce costs, encourage innovation, blah blah blah. What could be better?
The dirty not-so-secret of Obamacare, however, is that sometimes the things we don’t like about market outcomes aren’t market failures—they are exactly what markets are supposed to do.
Hillary Clinton Takes a Step to the Left on Health Care
by Alan Rapport and Margot Sanger-Katz - NYT
For months during the Democratic presidential nominating contest, Hillary Clinton has resisted calls from Senator Bernie Sanders to back a single-payer health system, arguing that the fight for government-run health care was a wrenching legislative battle that had already been lost.
But as she tries to clinch the nomination, Mrs. Clinton is moving to the left on health care and this week took a significant step in her opponent’s direction, suggesting she would like to give people the option to buy into Medicare.
“I’m also in favor of what’s called the public option, so that people can buy into Medicare at a certain age,” Mrs. Clinton said on Monday at a campaign event in Virginia.
The Medicare program covers Americans once they reach 65. Beneficiaries pay premiums to help cover the cost of their coverage, but the government pays the bulk of the bill. Mrs. Clinton’s suggestion was that perhaps younger Americans, “people 55 or 50 and up,” could voluntarily pay to join the program.
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She made the remarks as she continues to face a determined challenge on the left from Mr. Sanders, forcing her to essentially fight a two-front war as she seeks to turn her attention to Donald J. Trump and the general election. While Mr. Sanders trails by a substantial number of delegates, his effect continues to be felt in the race as he pressures Mrs. Clinton to adopt more progressive positions.
“Bernie Sanders’s campaign is having an effect on Hillary Clinton’s policies,” said Steve McMahon, a Democratic political consultant from Purple Strategies. “From a progressive point of view, that’s exactly what was hoped for and that is exactly what is happening.”
The idea of allowing people to buy in to Medicare has been discussed in policy circles and in Congress for decades. Mrs. Clinton’s husband, former President Bill Clinton, floated a similar proposal in 1998, including it in his State of the Union address that year. The strategy has been embraced by many advocates of single-payer health care as a way to move more Americans into the existing government system. An incremental expansion of Medicare was the hoped-for strategy of Medicare’s original authors.
But it is a new idea in Mrs. Clinton’s presidential campaign. She has called for a range of health policy overhauls to preserve and expand the Affordable Care Act. She has proposed expanding financial protections for people with high health care costs and expanding subsidies to help middle-income people buy their own insurance. She also has proposed a package of policies to lower the price of prescription drugs.
But more recently, she has moved further. In February, she began discussing the possibility of a “public option,” a government-run insurance plan available to people shopping on the existing marketplaces. That idea was considered when the Affordable Care Act was being debated in Congress, but it was ultimately removed from the law.
Mrs. Clinton’s latest suggestion regarding Medicare, first reported by Bloomberg News, takes another step by proposing that Americans still in their prime working years be given the opportunity to obtain the same government insurance that is provided on a universal basis to their older peers.
“The politics in the short term are good,” said Jonathan Oberlander, a professor of health policy at the University of North Carolina at Chapel Hill. “Medicare is a popular program — people don’t know too much about health reform, but people know about Medicare.”
Before the Affordable Care Act, people older than 55 tended to have difficulty buying their own insurance, because insurance companies saw them as bigger risks. Since the health law passed, insurance plans have been banned from discriminating against people based on health history, but they can charge premiums that are three times as much as younger adults are charged.
The attack on Bernie Sanders’ single-payer plan is 'ridiculous'
David U. Himmelstein and Steffie Woolhandler
The Urban Institute and the Tax Policy Center have released an analysis of the costs of Bernie Sanders' domestic policy proposals, including single-payer national health insurance.They claim that proposals would raise the federal deficit by $18 trillion over the next decade.
We won't address all of the issues covered in these analyses, just single payer, Medicare-for-all. To put it bluntly, the estimates are ridiculous. They posit outlandish increases in the utilization of medical care, and ignore vast savings under single-payer reform, and ignore the extensive and well documented experience with single-payer systems in other nations — which all spend far less per person on health care than we do.
The report also makes incredible claims that physicians' incomes would be squeezed (which contradicts their own estimates positing a sharp rise in spending on physician services), and that patients would suffer huge disruptions, despite the fact that the implementation of single-payer systems elsewhere, as well as the start-up of Medicare, were disruption-free.
We outline below some of the most glaring errors in the analysis regarding health care spending under the Sanders plan:
A Single-Payer Plan From Bernie Sanders Would Probably Still Be Expensive
By MARGOT SANGER-KATZ
MAY 16, 2016
Bernie Sanders’s chances at enacting a “political revolution” are all but gone. But that doesn’t mean his policy agenda won’t continue to be felt in this election or future Democratic platforms.
But also last week, a detailed analysis of the Sanders health care plan from researchers at the Urban Institute showed that it would probably cost the government double what the campaign proposed. It is the second credible analysis to suggest that the Sanders plan costs more than advertised. (The other comes from the Emory health policy professor Kenneth Thorpe.)
If you look around the world, lots of countries have single-payer systems. And all of them pay substantially less for health care than we do in the United States. I am reminded of this often, in the comments of some of my articles. So how could a single-payer system here still be so expensive?
One reason is that the Sanders plan covers far more than typical insurance plans in the United States — or abroad. The Sanders plan would charge no premiums, require no out-of-pocket spending and would pay for services like dental care and long-term nursing home stays. Those things boost the total price tag.
But imagine a universe where we had a single-payer health plan that was more like normal insurance. Perhaps it would be a true “Medicare for all,” where everyone has exactly the insurance that the federal government currently provides to older people and the disabled.
That Medicare-for-all plan would still cost more than single-payer plans in other countries. Here’s why: Medicare pays doctors and hospitals higher prices than single-payer systems do in other countries.
“The big thing is that providers here make quite a bit more money than they do anywhere else, and in order to get in the ballpark of where these other countries are, you’d have to reduce payment rates to physicians to much, much lower levels,” said John Holahan, one of the authors of the Urban analysis. “That’s just hard to do.”
The Organization for Economic Cooperation and Development, which looks at a group of developed countries, has found that the United States pays substantially higher prices for doctors, hospital stays and prescription drugs than the rest of the group. Medicare pays less than the United States average, but not enough less to make up that difference.
If you knew that virtually the entire medical community was talking about an issue causing risk and harm to patients across the country, wouldn't you want to know what it is and take part in the conversation?
My bet is patients want to know if their medical tests and treatments are exposing them to undue harm. They need to be empowered to ask about the risks caused by some tests and treatments, and whether they are really necessary. Remember when patients used to get their tonsils out when they had recurring sore throats? That doesn't happen anymore because we realized it was overkill.
The conversation that is sweeping the medical community, both here and abroad, is called Choosing Wisely. Choosing Wisely began in the United States in 2012 and we started it in Canada in 2014 -- just a short two years ago. Part of our goal is to empower patients with information that enables them to speak to their doctor about what's right for them and what's not the best choice. Many within the medical community believe we are facing an epidemic of over-diagnosis and overtreatment.
Patients sometimes ask for tests and treatments that are not necessarily in their best interest.
Kwak's article is terrific--one of the best explanations I've seen as to why Obamacare is ultimately unworkable.
Re. the presumption of the sanctity of the market which unbderlies such reforms: Kwak mught have added that consumer choice is supposed to be what makes a market-based system fair and just. But nobody choses to get sick, and sick people have zero bargaining power when determining what they pay for treatment.
Kwak's article is terrific--one of the best explanations I've seen as to why Obamacare is ultimately unworkable.
ReplyDeleteRe. the presumption of the sanctity of the market which unbderlies such reforms: Kwak mught have added that consumer choice is supposed to be what makes a market-based system fair and just. But nobody choses to get sick, and sick people have zero bargaining power when determining what they pay for treatment.