Solving the Right Problem

Healthcare insurance expert Bob Laszewski summarizes what appears to be the status of the PPACA:

As I reported on this blog yesterday, starting with the administration’s more recent enrollment total of 4 million, less than 15% of the 17.2 million people the Kaiser Family Foundation has estimated are eligible for subsidies have signed-up and paid for coverage––and many of these people who were eligible for subsidies were also previously insured.

The uninsured just aren’t buying Obamacare.

I believe they are not buying it because the premium––even net of the subsidies––is too much for plans that have deductibles that are too high. Consulting firm Avalere has put the average Silver Plan deductible at $2,567 and the average Bronze Plan deductible at $4,545. People are often being asked to pay hundreds of dollars per month in premium, net of subsidies, and they don’t see the value.

Hat tip: Megan McArdle. I think they’re not buying it because one of the assumptions underlying the PPACA was incorrect. The PPACA assumes that lots of people want healthcare insurance but aren’t able to afford it. I think that lots of people want healthcare but aren’t able to afford it. Not insurance, care.

He ends his post with what I think is a bit of wishful thinking:

Starting in April, when the final numbers are in, I hope we can have a meaningful conversation over how to fix the new health insurance reform law that is clearly not working.

That’s wishful thinking for any number of reasons. For example, what makes him think that we’ll have the “final numbers” in April? The open enrollment period could be extended, then extended again, indefinitely. Even if the open enrollment period isn’t extended the final numbers might never become available. And, most importantly, rather than starting a “meaningful conversation” I think that a lot of the PPACA’s supporters are more likely to double down on a plan “that is clearly not working” than to acknowledge that their assumptions were wrong to begin with and that they’ve been exerting all that energy defending a law that solved the wrong problem.

7 comments… add one

  • jan

    “The open enrollment period could be extended, then extended again, indefinitely. “

    The government is making up the rules as they go — and anything and everything is acceptable as long as it comes from them. Of course they are capable of extending any and all deadlines, including the enrollment period if it suits them. I would think, though, the sheer arbitrary manner the PPACA is being enforced would make any person a bit wobbly on condoning such an unilateral executive intervention and over reach — no matter what their party affiliation might be.

    After all, there will be other administrations following this one, other disputed issues between parties, other than health care — are the current maneuvers precedent-setting for how we are to go forward in maintaining a healthy separation of powers, versus just having a central government dictatorship creeping in?

  • Jimbino

    This post is right-on. What we want is health care, not health insurance. We walk in the door at Walmart, are greeted, shop with no strings attached, women, men, children and illegal aliens treated alike, prices posted with a lowest-price guarantee, and, if dissatisfied, we can return the product. Who would ever think of offering Walmart insurance for our purchases?

    Our healthcare system is idiotic. Only the Amish and Mennonites can enjoy health care without participating in insurance. Obamacare has no concern for patients. Instead, it is a policy of supporting insurance, docs, hospitals, laboratories and drug companies and of transfering wealth from single, childfree, young males to married, breeding, older, hypochondriac females.

    I vote for having Walmart take over our healthcare system.

  • michael reynolds

    That is the stupidest thing I’ve read in a while. Yeah, who needs insurance, because going in for $300,000 dollar’s worth of cancer treatment is exactly like going to Wal-Mart.

    Do you have car insurance, Jimbino? Can’t you just go to Wal-Mart and get yourself a new car? Or pay for 20 years of support for the kid you crush in an accident? After all, the whole Car-Insurance-Conspiracy is just a way of funneling money into the pockets of Maaco and Midas.

  • steve

    Since we have Amish patients, let me correct a misimpression. They do have insurance as they self insure. They also tend to negotiate fees as a group. As a rule, they pay quickly.

    On topic, if high deductibles are a problem, that kind of shoots down the entire GOP plan for holding down health care costs. I am also not that concerned about the rate of sign up yet. As we know from all of the fake complaints about costs, many people refuse to even look at ACA options as they are ideologically opposed to it. I am guessing that they will eventually want insurance.

    Steve

  • When you insure yourself, you’re uninsured. The issue is the bearing of risk. Insurance is when someone other than you bears the risk.

    As I read things one of the complaints of physicians is that they do not believe they should have to bear risk, a reasonable enough position. I do not quite see quite how that reconciles with Accountable Care Organizations, which do bear risk, taking a more prominent role. My off-hand guess is that ACOs won’t be able to control costs any better than HMOs did (which is the reason that HMOs exist in the first place).

    On topic, if high deductibles are a problem, that kind of shoots down the entire GOP plan for holding down health care costs.

    That’s been my position. I think they assume, incorrectly, that excess consumption is causing higher costs and that costs can be brought down quickly if the excess consumption is wrung out.

    I am also not that concerned about the rate of sign up yet.

    Unless you can pick a date certain by which you will be concerned, that puts you firmly in the “keep extending indefinitely” camp, doesn’t it? You are, of course, aware that the insurance companies can’t work that way?

  • steve

    “When you insure yourself, you’re uninsured.”

    Most large companies are self insured. The Amish insure as a group, at least the ones in our area do.

    “As I read things one of the complaints of physicians is that they do not believe they should have to bear risk, a reasonable enough position. I do not quite see quite how that reconciles with Accountable Care Organizations, which do bear risk, taking a more prominent role. My off-hand guess is that ACOs won’t be able to control costs any better than HMOs did”

    Maybe, but I now spend a huge amount of my time working on this issue, with the blessing and financial support of our hospital. In the past, we operated by maximizing our revenue centers. We knew, just to use one simple example, that we do way too much pre-op testing. We could cut costs quite a bit by eliminating those. However, we got paid for them. Why eliminate them? In the past, I have had to use my docs in such a way as to max income. I am now looking at ways to cut costs. A much different way of doing things. The hospital is now willing to pay me to place a doc in a non-revenue generating position if that person’s work will save the hospital money, at least enough to offset the cost. That has never been true in the past. We are pretty much ignoring our professional societies, and using mid-levels in different ways they might not approve of. We are taking over roles that were controlled pretty rigidly by other specialists, at cheaper costs.

    Not to say things are all rosy. There will be, there already are, lots of turf battles. However, this is the first time I have seen anything like this in 40 years. The HMOs were nothing compared with what is going on. That was just price controls initiated by the private sector. We are changing the way medicine is practiced.

    Final example. One of the things we are specifically working on are high risk patients. We know that a lot of our costs are driven by a subset of high cost issues. Some of these are becoming predictable. In the past, no one bothered looking for these. Costs were just passed on. A surgeon bringing in these high risk patients got paid, no matter what the costs were for the hospital. With the surgeon now at some risk, when we can identify these patients we can really discuss whether the benefits are truly worth the risk. (We probably shouldnt be doing any knee arthroscopies anyway. If we know we are looking at an expected complication rate of 90%, maybe we can at least not do those.) We can look at ways to decrease the risk, even if it means delaying the surgery. (Imagine interfering with the surgical schedule. Heresy!)

    “Unless you can pick a date certain by which you will be concerned, that puts you firmly in the “keep extending indefinitely” camp, doesn’t it?”

    If we judge everything by its first few months, where would we be? Got our butts kicked at the Kasserine Pass? Time to go home. Anyway, I am in the give it a few years camp.

    Steve

  • Most large companies are self insured. The Amish insure as a group, at least the ones in our area do.

    That’s right. I think the abuse is in allowing large companies to self-insure. Basically, securing credit and insurance are being confused. The only reason the Amish are able to do this is that an exception has been crafted for them. It does bring up an interesting alternative strategy. Could everyone become insured by self-insuring? Why isn’t the law crafted that way?

    If we judge everything by its first few months, where would we be?

    I’m judging by the open enrollment period, as written into law. It’s fine with me if you’re arguing that the law was written incompetently. What are you judging by?

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