NY Times: Obamacare is completely useless

[Pointedstick]

That's not the actual title, of course, but it's definitely the sense any reasonable person should get while reading this extremely sad article, from which I have excerpted some especially relevant and telling sections:

http://www.nytimes.com/2014/10/18/us/un ... octor.html

About 7.3 million Americans are enrolled in private coverage through the Affordable Care Act marketplaces, and more than 80 percent qualified for federal subsidies to help with the cost of their monthly premiums. But many are still on the hook for deductibles that can top $5,000 for individuals and $10,000 for families — the trade-off, insurers say, for keeping premiums for the marketplace plans relatively low. The result is that some people — no firm data exists on how many — say they hesitate to use their new insurance because of the high out-of-pocket costs.

[...]

[...] the average deductible for a bronze plan on the exchange — the least expensive coverage — was $5,081 for an individual and $10,386 for a family, according to HealthPocket, a consulting firm. Silver plans, which were the most popular option this year, had average deductibles of $2,907 for an individual and $6,078 for a family.

[...]

“They will cause some people to not get care they should get,”? Katherine Hempstead, who directs research on health insurance coverage at the Robert Wood Johnson Foundation, said of high-deductible marketplace plans. “Unfortunately, the people who are attracted to the lower premiums tend to be the ones who are going to have the most trouble coming up with all the cost-sharing if in fact they want to use their health insurance.”?

[...]

[...] but insurance plans with lower premiums generally have higher deductibles. Gina Brown, 37, of Nashville, was paying about $155 a month for a Blue Cross Blue Shield of Tennessee plan, after taking account of her subsidy. But her deductible was $4,000, she said, and so she avoided going to the doctor even when she got an ear infection over the summer.

“I attempted to treat it with over-the-counter and homeopathic meds,”? she said. “Eventually it went away.”?

Ms. Brown recently got a job with health benefits, so she canceled the marketplace plan. Her new insurance has a deductible of $1,000, but primary care visits and prescriptions are not subject to the deductible.

“Now that I know I can go and safely just pay a co-pay,”? she said, “it makes me feel better.”?

[...]

Carol Payne, a respiratory therapist in Gilbert, Ariz., signed up through HealthCare.gov for a Blue Cross Blue Shield plan with a $6,000 deductible. She pays $91 toward her monthly premium and gets a subsidy of $353 to cover the rest.

The plans she could have chosen with lower deductibles were from insurers that “were not as reputable,”? Ms. Payne said. She has used the insurance for preventive care and an emergency room visit after a car accident.

“I’m just doing what I can to keep myself healthy,”? she added. “I mean, $6,000 — do they think I’ve just got that under my mattress?”?

[clacy]

Imagine that.  There is no such thing as something free.  It's always a matter of WHO is paying.  In this case, just about anyone that had employer sponsored health care, will be the loser.  Frankly, I am not sure I can even find a winner in this, besides maybe the previously "uninsurable" types with chronic illnesses.

This entire debacle could have easily been solved if they would have expanded Medicaid to include those who previously weren't offered employer insurance, but made more than the previous Medicaid income threshold.

Believe it or not, the IRS hasn't even brought out the "non-discrimination" guidance for employers yet, but we have to meet said guidance by 1/1/15. 

The whole thing was written and pushed through in haste, because they knew their window was short. 

[WiseOne]

I'm not sure I see the problem here.  The bronze plan will protect people from catastrophic situations like cancer that formerly would have landed them in bankruptcy or forced a horrible decision like whether to wipe out family savings or forgo critical treatment.  It's not intended to cover costs for things like ear infections.  The plan did exactly what it was designed to do:  the person in the article had a minor, transient health problem that didn't absolutely require medical attention, she weighed the cost, and decided it wasn't worth it.  Similarly, the ER is not for minor medical issues - that's what your primary care doctor or nearest acute care clinic are for.  The bottom line is that the "Burger King" health system ("have it your way") is just not sustainable, so decisions like this are necessary.  If people don't do the care rationing, someone else (i.e. the government) will have to.

The statement "I don't have $6,000 under my mattress" is just ridiculous. Clearly this person doesn't have an emergency fund, which means that health issues are only one of many possible ways for her to get into financial trouble.  Sounds like this kind of financial illiteracy is the real problem.

I do agree that the whole in-network vs. out-of-network thing is a huge headache that Obamacare did not solve.  Similarly, it's still difficult for "providers" to know exactly what a patient is going to have to pay, because plans are so infinitely variable.  I hate to say this but a single-payer (or risk pool) system is probably the only way to fix these problems.

clacy - Medicaid WAS expanded.  You'll recall that some states e.g. Texas fought this tooth and nail.  I'm curious, what's the "non-discrimation" guidance for employers all about?

[Pointedstick]

The statement "I don't have $6,000 under my mattress" is just ridiculous. Clearly this person doesn't have an emergency fund, which means that health issues are only one of many possible ways for her to get into financial trouble.  Sounds like this kind of financial illiteracy is the real problem.

To me, this is the crux of the problem. I too laughed when I read that, and it's easy for us to criticize her poor financial situation. How hard is it to save some money? But then again... isn't someone like her the target audience?


Let's break it down:

- People who are really poor have Medicaid. Problem solved.
- Children have SCHIP. Problem solved.
- People who are old have Medicare. Problem solved.
- People who are doing well financially have employer-sponsored health insurance. Problem solved.

That leaves one final category: people who are not doing well enough for employer-sponsored health insurance but not poor enough for Medicaid, and not old enough for Medicare. I think people in this category definitely can NOT be counted on to "have $6,000 under [their] mattress."


In the end, to me, Obamacare seems like a grudging acknowledgement that there are a large number of people in the USA who are not destitute, but who are struggling mostly through their own poor decisions despite otherwise seeming "middle-class", and who it embarrasses most of us to see suffer. Obamacare was an attempt to salve this emotional wound by throwing these people a bone by making health care cheaper for them. If it's failing in that goal, well, then I think it's a failure.

[barrett]

Self-employed worker here, and I have to say that my feelings on The ACA so far are mixed.

As WiseOne says, the in-network/out-of-network problem has not been fixed and that is a big headache. Eight months in and I am still trying to figure out if I will ultimately spend more or less on healthcare.

I'm certainly not destitute and have really been conscientious about trying to save throughout my working life. But I had also been denied health insurance in the past based on the fact that I have asthma. Or, more accurately, I was able to by a policy but NOT one that covered that condition. So basically, "We'll sell it to you sir, but you can't use it when you actually need it."

It's also clear to me that a lot of doctors are going to a cash-payment system. I currently have cash-payment arrangements with two of my doctors. A dermatologist, whom I see infrequently, told me in no uncertain terms that she could give me a better price if I was willing to pay in cash. Well that works for me - at least so far - because I have some savings. Others are not so fortunate and it's not always because they are idiots with their money. The current job market is crap.

I know this post is rambling but I am just trying to give a real-world example. The healthcare conundrum makes this one area of future expenses that I just can't predict with any certainty.

[Pointedstick]

Yes, it is ironic that in compelling many doctors to go cash-only, Obamacare may actually wind up as a success, as this would be just what the industry needs.

[WiseOne]

But I had also been denied health insurance in the past based on the fact that I have asthma. Or, more accurately, I was able to by a policy but NOT one that covered that condition. So basically, "We'll sell it to you sir, but you can't use it when you actually need it."

This is the one reason why I wouldn't want to see Obamacare repealed.  The restrictions on pre-existing conditions rendered many people uninsurable.  Some were forced into the welfare system as a result, and others were tethered to their jobs as if they were indentured servants.  I'd also be interested to see what the effect of Obamacare will be on people quitting jobs with health insurance to start their own business, become independent contractors etc.

I may be all heartless & high & mighty here but I think that for people above Medicaid territory, financial illiteracy is far more of a barrier to building up adequate savings than income.  Unfortunately emergency savings will always lose to the temptations to spend money that bombard us every day.  Wouldn't it be great to have an ad campaign like the anti-smoking one to tell people how important it is to have savings!!!  Doubt that would happen though...what would happen to our economy if people didn't spend their brains out?

[WiseOne]

Perhaps the people with high deductible plans in that article might have been interested in knowing about direct primary care.  Odd that the NY Times article didn't mention it:

Under this model, patients may pay a combination of visit fees and/or fixed monthly fees which grant them access to a set of medical services, including same and next-day appointments, both in the form of house-calls and office visits.

One of the lesser known provisions of the Patient Protection and Affordable Care Act can be found in Section 1301 (and amendment Section 10104). This provision allows for direct primary care to compete with traditional health insurance options in the mandated Health insurance exchange when combined with a low cost high deductible plan.

http://en.wikipedia.org/wiki/Direct_primary_care

[TripleB]

But I had also been denied health insurance in the past based on the fact that I have asthma. Or, more accurately, I was able to by a policy but NOT one that covered that condition. So basically, "We'll sell it to you sir, but you can't use it when you actually need it."

This is the one reason why I wouldn't want to see Obamacare repealed.  The restrictions on pre-existing conditions rendered many people uninsurable.  Some were forced into the welfare system as a result, and others were tethered to their jobs as if they were indentured servants.  I'd also be interested to see what the effect of Obamacare will be on people quitting jobs with health insurance to start their own business, become independent contractors etc.

I may be all heartless & high & mighty here but I think that for people above Medicaid territory, financial illiteracy is far more of a barrier to building up adequate savings than income.  Unfortunately emergency savings will always lose to the temptations to spend money that bombard us every day.  Wouldn't it be great to have an ad campaign like the anti-smoking one to tell people how important it is to have savings!!!  Doubt that would happen though...what would happen to our economy if people didn't spend their brains out?

It rendered them uninsurable because they health insurance isn't really insurance. It's a method of prepaying for healthcare. Why would a private entity want to insure someone who has a 100% chance of costing them more than the policy premium? Car insurance companies don't insure frequent drunk drivers.

What if car insurance companies were required to insure everyone, including the person who drove drunk 100x in the past and has a revoked license? And what if the insurance company couldn't charge this person more than everyone else in his age bracket? What would happen to the cost of car insurance for everyone else?

[dualstow]

I'm also mixed on ACA. Not enough firsthand experience yet, just stories from friends.
I've been paying for most healthcare with a debit card for many, many years now, though I do have catastrophic insurance that predates Obama Bronze.

[Pointedstick]

As a concept, health "insurance" only makes sense for unexpected and catastrophic medical expenses. Everything else should be paid for in cash or with a membership cost-sharing plan or something. This is how everything else subject to insurance operates, and trying to force medical insurance to be a kind of mandatory, subsidized, national cost-sharing plan is absurd on its face. If such a thing is even a worthy goal, it would frankly make more sense to have the government do it in the form of a tax-subsidized single-payer system for health care. Coercing hospitals and insurance companies to do the government's work is what we're stuck with, and I think the results speak for themselves.

[barrett]

It rendered them uninsurable because they health insurance isn't really insurance. It's a method of prepaying for healthcare. Why would a private entity want to insure someone who has a 100% chance of costing them more than the policy premium? Car insurance companies don't insure frequent drunk drivers.

What if car insurance companies were required to insure everyone, including the person who drove drunk 100x in the past and has a revoked license? And what if the insurance company couldn't charge this person more than everyone else in his age bracket? What would happen to the cost of car insurance for everyone else?

But, TripleB, there is surely a difference between a person who is driving drunk by choice and someone who has a chronic health condition due to bad genetic luck. Or am I not understanding your position correctly?

[barrett]

As a concept, health "insurance" only makes sense for unexpected and catastrophic medical expenses. Everything else should be paid for in cash or with a membership cost-sharing plan or something. This is how everything else subject to insurance operates, and trying to force medical insurance to be a kind of mandatory, subsidized, national cost-sharing plan is absurd on its face. If such a thing is even a worthy goal, it would frankly make more sense to have the government do it in the form of a tax-subsidized single-payer system for health care. Coercing hospitals and insurance companies to do the government's work is what we're stuck with, and I think the results speak for themselves.

A tax-subsidized single-payer system is the only thing that makes sense to me. I think a lot of people would be on board with that. WiseOne, I'd be curious what your take is from the medical side? Is this feasible here in the US? Is there ever the political will/capital to accomplish this in Washington?

Agreed, PS, that what we are stuck with is a crappy middle ground non-solution (sorry if I am putting words in your mouth).

[Pointedstick]

But, TripleB, there is surely a difference between a person who is driving drunk by choice and someone who has a chronic health condition due to bad genetic luck. Or am I not understanding your position correctly?

The difference is irrelevant. They're both things insurance companies don't want to deal with, as they represent known financial liabilities for the firm rather than potential future ones. A homeowner's insurance company similarly wouldn't want to renew your policy if they discovered that--through no fault of your own--your house had become in imminent danger of structural collapse.

If medical care were mostly paid for on a cash basis and therefore subject to market competition and very cheap, this would be a non-issue. People with chronic conditions would just buy the medicines they needed to control their conditions in cash.

My wife also has Asthma. Right now she is dependent on the medical-industrial complex to buy the medicines that control the condition (Albuterol, Qvar). In a saner world, the following would be true:

1. These medicines would be much cheaper due to the lack of patents restricting competition
2. She would not need a prescription to buy them

As a result, her Asthma would be easily self-controllable with cheap OTC medication available at the CVS within walking distance.

Agreed, PS, that what we are stuck with is a crappy middle ground non-solution (sorry if I am putting words in your mouth).

I would prefer a market-based system, but yes, I agree. Even single-payer would be better than the colossal mess we have now.

[dualstow]

For me, the only good thing about insurance has been the bargaining down on my behalf from the exorbitant price of care to the real price that people with insurance (from their employers) pay.

[barrett]

Aaaaahhhhhhh! This is too complicated to resolve on a Sunday afternoon with limited time!

PS, I hope your wife benefits some from the climate there in NM. You and TripleB are, of course, correct about the insurance companies. Sometimes the emotion in connection with my own personal medical history obscures my sense of logic.

Not needing prescriptions to buy medications is to my mind going down a slippery slope though. As you probably know with asthma specifically there are tons of folks who die because they rely exclusively on an inhaler, say Albuterol, when they should have a more comprehensive medication regimen. OTOH, when I was working in Italy a bunch in the 1980s, I used to be able to buy an OTC inhaler there that combined a corticosteroid with a bronchodilator. It worked great with no noticeable side effects. A similar combination was not available here in the US. My doctor tried giving me both medications individually but that wasn't effective. I had to keep scoring work in Italy to keep my stash fresh.

For me, the only good thing about insurance has been the bargaining down on my behalf from the exorbitant price of care to the real price that people with insurance (from their employers) pay.

Yeah, I feel the same. Last year I paid $7,000 in premiums and another $4,000 for medications and doctor visits. And some people not covered by employer plans would consider those numbers fantastically LOW.

[Pointedstick]

Not needing prescriptions to buy medications is to my mind going down a slippery slope though.

The slippery slope of trusting people with their own health? I feel like the whole regime of needing to ask a doctor's permission to access life-improving or -saving medication is insulting and oppressive. It encourages people to trust experts with their own biases and flaws rather than taking initiative to learn anything for themselves. And besides, the government already trusts people to buy all kinds of products that could be super dangerous if misused or used without knowledge (motor vehicles, firearms, chemical pesticides, power tools, cattle prods, knives, bleach, trampolines, etc).

[WiseOne]

What a discussion...guys, it's a gorgeous Sunday afternoon, what are we all doing inside diddling with computers instead of going apple picking or something?  (My excuse:  I'm in here frantically working and taking occasional "breaks" at the forum.)

PS, +1.  I've thought for quite a while that there's not much reason to control the sale of any medication except those that could result in some serious harm to people apart from the one buying the drug.  Mainly that's antibiotics.  The routine of having to write prescriptions and constantly call pharmacies is totally ridiculous, and incidentally it KILLS PEOPLE when the inevitable glitches happen.

Most of us in health care would give our left arms for a single payer system.  Insurance really is more like a social cost sharing device, because unfortunately some people lose the genetic roulette and as a society we can't simply throw them out into the snow headfirst.  Taking care of its more vulnerable members is one of the basic functions of a society.  If private health insurance doesn't serve this function, then we shouldn't be using private insurance as a social safety net.  Until that basic reality is recognized, our system will remain a broken mess.

Unfortunately, the overhead of billing, documentation, coding, etc etc has gotten so extreme that even this wouldn't be enough to fix our frankly unsustainable system.  I don't have any solutions though, except that rolling back some of the Obama era regulations would work wonders for reducing costs, making physicians want to continue working, etc.

[Tyler]

This is the one reason why I wouldn't want to see Obamacare repealed.  The restrictions on pre-existing conditions rendered many people uninsurable.  Some were forced into the welfare system as a result, and others were tethered to their jobs as if they were indentured servants.  I'd also be interested to see what the effect of Obamacare will be on people quitting jobs with health insurance to start their own business, become independent contractors etc.

It rendered them uninsurable because they health insurance isn't really insurance. It's a method of prepaying for healthcare. Why would a private entity want to insure someone who has a 100% chance of costing them more than the policy premium? Car insurance companies don't insure frequent drunk drivers.

Extending the car insurance example to the health insurance market pre-ACA, the frequent drunk driver could not get individual car insurance but could immediately hire into a company with a group policy and drive all he liked.  Because of the way it was tied to employment, health insurance wasn't really insurance in the classical sense even pre-ACA.  It was just a cost sharing plan tied to employment, where the costs of everyone subsidizing the sick people were hidden because the employer picked up much of the bill out of the money they'd otherwise pay their employees.

I'm with WiseOne on this one.  The ACA has a ton of problems, but IMHO some form of guaranteed issue system (cost sharing, insurance, single payer -- whatever name you want to give to it) disconnected from employment altogether is something that needs to be figured out with or without the law as written.  Part of it is a matter of not abandoning those who lost the game of genetic roulette.  But another is economic -- going back to hiding the price signals from the public will do nothing to control the cost of healthcare.

[moda0306]

If you have 'lost the game of genetic roulette', you are not the drunk driver in that analogy. You are the congenitally nearly blind guy who needs expensive eye glasses / surgery to see clearly enough to navigate through no fault of your own. The drunk driver is the guy who refuses to control his weight and blood sugar through diet and exercise and smokes a pack per day, and develops a series of preventable chronic diseases. Let's stop conflating the two because they are not the same.

I agree with what you are trying to say. I think, however, these examples were for the purposes of looking at risk from the insurance company's point of view. And in many ways, then they are effectively the same. A risk is a risk, regardless of irresponsibility or intent.

[Pointedstick]

I feel like health care policy should be fairly low-hanging fruit for the Statist-Anarchist Common Sense Union party, armed with the beliefs that if you subsidize something you get more of it, that some things are superior to others, that responsibility being superior to irresponsibility is an example, and that genuine market competition is better than no market competition in almost all instances and better than cronyistically-controlled market competition in all of them.

+1

[Tyler]

If you have 'lost the game of genetic roulette', you are not the drunk driver in that analogy. You are the congenitally nearly blind guy who needs expensive eye glasses / surgery to see clearly enough to navigate through no fault of your own. The drunk driver is the guy who refuses to control his weight and blood sugar through diet and exercise and smokes a pack per day, and develops a series of preventable chronic diseases. Let's stop conflating the two because they are not the same.

Fair enough.  I completely agree. 

To my previous point, though, even a blind man could easily purchase auto insurance through an employer (paying the same rate as everyone else) via the pre-ACA healthcare model.  The system was already something more than free-market "insurance", and employed people were generally fine with it.  For the benefit of choice and transparency, I would prefer the legal requirement to launder eligibility through a 3rd party employer to be done away with. 

But don't get me wrong -- there are likely plenty of simpler ways to accomplish this than the ACA.  For example, removing the legal restrictions on the sale of health insurance across state lines (like auto insurance) is one obvious low-hanging move in the right direction. 

[Libertarian666]

I would prefer a market-based system, but yes, I agree. Even single-payer would be better than the colossal mess we have now.

Surely you don't think that is an accident!