There’s an awful lot being written in the major online news media and the blogosphere about the high deductibles in the insurance plans being offered under the new healthcare exchanges. I wonder what in the world people thought? How did they think that the insurance companies would conserve when they were being required to cover all comers with policies with specified contents regardless of previously existing conditions at constrained rates? How did they think that the PPACA would “bend the cost curve downward”, as we were repeatedly assured by Peter Orszag, if not by exposing consumers to more of the costs of their own healthcare (read: higher deductibles)?
My conclusion about our healthcare system, as it has been for some time, is that, since the federal government is not willing to control healthcare costs directly, it will be done indirectly or not at all. I wonder if the press will have the heart to cover that?
The PPACA also requires a long list of free preventative services for which insurance companies really have no way to control costs other than to pass their cost back to the consumer at a premium to cover administration and profit. Its an expensive way to buy aspirin, particularly as I see no incentive to buy generic.
Competing on price, which is sort of what the exchanges try to emphasize, therefore requires, major care items to be subject to high deductibles, etc. I think this is probably completely backwards.
There’s also an increasingly-supportable argument that the PPACA does what a lot of our tax system does (e.g. with mortgage tax deductions, etc.): Make things that members of the middle-middle class (and higher) could have attained a bit easier to attain.
From today’s Tribune: “only about 41 percent, or 944,531, qualified for federal assistance aimed to help offset the cost of buying a policy. That’s a far lower percentage than the initial Congressional Budget Office estimate of about 90 percent.”
In other words, those signing up skew towards those who make over 400% of the federal poverty guidelines, and a probably self-employed people making a decent wage, and could have probably afforded healthcare already. That 41% number may trend upwards as the enrollment date closes (there’s reasons to think that those who make less money might complete an application later), but I don’t think we’ll be at 90%. http://www.chicagotribune.com/business/breaking/chi-illinois-obamacare-enrollment-20131211,0,1293518.story
I think it’s more likely that of all those using Healthcare.gov the group that was presumably targeted, the “working poor” who don’t earn enough to be able to afford insurance in the individual policy market but earn too much to qualify for Medicaid, are possibly the least represented. Many are qualifying for Medicaid under the new rules.
But many qualified under the old rules and that will end up presenting the states with a bill they may be hard put to pay. The states that refused to participate may have the last laugh. Or they may not. We’ll see.
I also suspect that the very concept of the site—a high performance web site—which basically means that you need access to a modern technology personal computer and a highspeed Internet connection also means that it can’t be used by the very people it’s supposed to be helping.
If they were really targeting the young, you would have been able to sign up using your cell phone. Can we all agree that’s beyond the present state of the art?
@TimH, my concern w/ your homeowner subsidy argument is that those subsidies tend to increase the cost of homes. If there aren’t cost constraints built in somehow, the benefit is eaten up by inflation, i.e. the $5 bottle of aspirin becomes a $10 bottle of aspirin.
Tim H speculates that Obamacare serves to “Make things that members of the middle-middle class (and higher) could have attained a bit easier to attain.”
If that’s the case, I can’t wait for Obamafood (If you like your Thai food, you can keep it).
Or Obamasex (If you like your old partner, you can keep him).
My plan has 100% deductible, 100% co-pay, 100% actuarial value and NO premiums: I take a vacation overseas and pay 1/9 to 1/3 the USSA costs in cash. I have a world-wide network. There is no waiting time. All I have to do is make sure I leave no withholding on the IRS table at year’s end.
A young man who follows my lead, putting his $500 per month premium on the S&P index instead, will emerge a multimillionaire at age 65, AFTER paying for all his health care in cash. Those millions in the bank represent what he would have paid over the years in support of superstition, breeding females, senior Amerikans, and drug and hospital conglomerates.
Those millions he will pass on to his heirs even if he doesn’t make it to retirement age (which will be closer to 35 than 65!).
According to the WSJ the average deductible is $5000 on the Bronze Plan, with a premium that will cost approximately 40% more. However, beyond the higher deductibles are nagging problems dealing with shrunken networks of hospitals/doctors, and now even prescription drug options. The rules/regulations, added to the PPACA, after it’s passage, have turned this program into a virtual meat cleaver, cutting health services for some, while not being the magnet it was supposed to be in attracting huge numbers of the uninsured into it’s web of freebies.
Basically, I can’t remember a policy that was thrust onto people, containing so much lunacy and deception! It just keeps growing too, in it’s negative surprises! In fact, the PPACA was the major topic of conversation between my girlfriend and myself, at our weekly breakfast together. She has found a policy, through her old insurance company, that is outside the exchanges. It allows her to keep her doctors/hospitals, while raising her deductibles, premiums and reducing some annual services. Nonetheless, she is relieved to have a plan. Her son, my son’s age, though, will have to go without insurance, as will mine.
It seems that “winners and losers” is the new HC application of the law.
Jimbino, instead of advising the young man to invest in the S&P, he may want to consider investing in companies that sells goods or services that the government is requiring to be made available for free, perhaps pharmaceutical companies that sell aspirin or contraceptives. May want to think twice though about whether free colonoscopies will radically change demand.
Jan, it’s not “winners and losers” but “Who? Whom?” The joke is that the answers to the questions were sold one way, but will be something else in practice. (It usually is.)
PD, better than investing in some required business, just have the young man invest in a politician. Much better return if you invest wisely.
PD Shaw,
I’m smart enough to know that any future exceptional growth in those Obamacare-favored companies has already been discounted by folks smarter than me, mainly those who have inside info.
To become a multimillionaire, you don’t have to think much about stock values, just put your dough in index funds and diversify if you must. Do you realize that if you place your monthly Obamacare premium on a spin of the Roulette wheel and invest the proceeds, you will still end up a multimillionaire laughing at all the fools who believe in insurance of any kind.