From her perch at Bloomberg View, Megan McArdle speculates on the direction in which the healthcare insurance exchanges established under the PPACA are moving. Her scenarios vary from the fairly benign:
Rates will settle down because insurers are just finding their footing. For the first few years, supporters of the law had a mantra: “Look how great Obamacare is; rates are lower than expected.” They had to stop chanting that in 2015, when insurers started asking for — and getting — great big price hikes. The new mantra became: “It’s a new market and insurers needed time to figure out how to price, but rates will settle down.”
to the disastrous:
Insurers will just give up on a bunch of markets, leading to a crisis in which a number of exchanges have no policies at all offered. I assume that the government does something at that point. Not sure what. Maybe we get the public option. Maybe Democrats are hounded from office by angry voters and Republicans get to actually try having a health-care plan. Maybe the sweet meteor of death arrives while we’re still arguing about it.
Back in 2009 my judgment was that over time the PPACA would tend to become “Medicaid for all” and I see nothing to contradict that judgment.
I think the more interesting question is what the legislative fate of the Affordable Care Act will be. Assuming that Hillary Clinton is elected president, I think there will be a perceived need to preserve President Obama’s legacy of which the PPACA is the greatest part. To whatever extent that means leaving the PPACA as originally constructed, eschewing even commonsense reforms, it will create ever more serious problems with the passage of time. Politics always has a way of overruling policy.
The so-called 45 million without insurance turned out to be 15 million working poor. The other 30 million were healthy young people, who only needed catastrophic insurance, and rich people, who paid out of pocket. The easiest thing would have been to change the Medicaid eligibility rules to let the working poor get it. It would have solved the problem and would have been the cheapest and least disruptive way to go.
That won’t get anybody into the history books. And you can’t spur Congress to act on behalf of just 15 million working poor. You’ve got to have a crisis.
“The easiest thing would have been to change the Medicaid eligibility rules to let the working poor get it. It would have solved the problem and would have been the cheapest and least disruptive way to go.”
If you threw in provisions for pre-existing conditions and portability you would have the position that I, and I think most with my general philosophical leanings, have held from the start of this.
If the motivation for what we got was truly just to get someone in the history books I hope they burn in hell. I suspect it had broader control and voter constituency development motives. Perhaps still worthy of hell.
I’ll still be damned if I know what to do about free riders.
We did have a crisis. There was a rising percentage of people going w/o health insurance. That has changed, which was the purpose in passing the reform.
Steve
The percentage of people without healthcare insurance had been stable for years:
and, as noted above, most of those newly insured are the working poor, now insured under Medicaid.
There is a crisis but it’s not the thing that the PPACA solved. The crisis is the rate at which healthcare spending is growing:
It has persistently grown at 300%-400% the non-healthcare rate of inflation and this year it will be much, much more because the rate of inflation is so low.
NHIS data is always a bit different than CPS data. Pick your poison. Anyway, your data shows total population data I believe. The SCHIP program was started in 1997. Uninsured rates among children had been dropping while that among adults continued to rise. By 2007 it had hit about 20%, and rates of private insurance had been steadily dropping.
https://www.cdc.gov/nchs/data/nhsr/nhsr017.pdf
Steve
You’re moving the goalposts, steve. Here’s a recap of the discussion:
bob sykes: a more limited strategy could have solved the problem we had
Me: no crisis
You: crisis because the number of people without insurance was rising rapidly
Me: evidence that number of people without insurance was not rising rapidly
You: crisis because the number of children without insurance was rising rapidly
All of this just supports the argument bob sykes made above. The law was not tailored to solve the problem that we had.
It should also be mentioned that there are numerous alternative explanations for what you’re pointing out, including that the birth rate among the working poor was too high, the number of working poor was rising too quickly, not enough jobs were being created that carried benefits, healthcare costs rising too fast, and on and on.
I’m not disputing that there’s a problem. I just think it’s a different problem than you do.
What I said was that the rate of Uninsured children had been dropping. The rate among adults was rising. Your graph shows, AFAICT, the total effect, which makes sense. It actually shows a very small increase in the rate of those w/o insurance, which is made up of kids doing much better and adults doing worse. This is something a lot of people wouldn’t feel, especially if you are comfortably above the median income in the US. However, if you work at the hospital on the wrong side of the tracks or worked with the poorer element in the community, you were very aware of it. Also, if you had a family member die like we did, we couldn’t get him insurance at any price and he stopped accepting our financial aid, couldn’t buy his meds and died, you were also aware of what was really going on in the country.
In a way, you are ultimately correct. As all of the health care economists and policy people on the left noted then, and now, the inability to obtain insurance, and hence care, is related to costs.
Steve
As you should recognize by now I don’t care about left, right, or what. The policy adopted does not suggest that policymakers had much interest in reducing costs.
When you cap the supply of anything below the equilibrium and increase the amount of money available to spend, prices will rise. When you increase the number of people demanding any good or service and the supply is capped or relatively inelastic, prices will rise. That’s basic.