You might be interested in the Washington Post’s latest point/counterpoint on the Affordable Care Act. Is it entering a “death spiral” or not?
Taking on the defense of the PPACA are Ezekiel Emanuel (Rahm’s brother) and Topher Spiro. Their defense is the conventional one—it’s just growing pains:
So why are insurers substantially increasing premiums or withdrawing from markets? They are making a one-time correction to bring premiums in line with costs. Setting a price is difficult when entering new markets — when the ACA was implemented in 2014, many insurers did not initially price their products accurately, and some may have even underpriced their plans deliberately in an attempt to establish market share.
conjoined with a circular argument—the PPACA won’t collapse as long as more money is put into subsidies by the federal government:
Second, policymakers can take action to further improve the risk pool — for instance, by making student loan payments deductible from younger enrollees’ incomes to boost their tax credits.
The subsidy they’re proposing must come from somewhere. The only available candidate is Uncle Sugar.
This was the statement from their op-ed that caught my eye:
Finally, keeping health-care costs under control is the best way to minimize premium increases. The rising cost of prescription drugs is one major component of growth in medical costs, and the insurance industry must get off the fence and back meaningful solutions, such as value-based pricing.
According to the Kaiser Family Foundation here’s how healthcare dollars are spent:
It might well be true that spending on pharmaceuticals is increasing rapidly. From that you might reasonably conclude that an increasing proportion of healthcare spending is devoted to pharmaceuticals but that doesn’t appear to be the case. Over the period of the last 35 years spending on pharmaceuticals as a proportion of all spending has varied within a fairly narrow range, from 8% to 12%.
What does appear to be the case is that pharmaceuticals are a large proportion of out-of-pocket spending on the part of the elderly. I suspect that Dr. Emanuel is engaging in a political calculation rather than a policy analysis.
In contrast Avik Roy makes the opposite case:
All but the most hardened partisans understand that the Affordable Care Act’s insurance exchanges are in serious trouble. In 2010, the Congressional Budget Office predicted that 21 million people would have exchange-based coverage in 2016; the real number was about 12 million. As insurers head for the exits, the gap between initial hype and final reality will widen.
The tragedy is that this was entirely avoidable. The ACA’s exchanges were fundamentally flawed in their design, something that private-sector experts tried to point out at the time. In October 2009, PricewaterhouseCoopers published a report projecting that by 2016, the ACA would cumulatively increase individual-market health insurance premiums by 47 percent. (PwC’s estimate was conservative. In fact, premiums increased by 49 percent in 2014 alone and by 77 percent through 2016.)
My assessment is that the PPACA wasn’t designed to succeed. It was designed get through the Senate. That means that it satisfied the shibboleths that had surrounded the consensus that had arisen in the leadership of the Democratic Party.
Now it’s become a sacred cow that will be very difficult to amend even when amending it makes sense.