“Getting Better Coverage”: Obamacare “Sticker Shock”? What Under-Insured Think They Have Versus What They Actually Have
In a comment on resurgent talk of “sticker shock” for premiums on insurance bought through the Obamacare exchanges, Kevin Drum makes two points that are important to keep in mind. The first is that the number of people likely to see a major increase in net insurance costs–in excess of the subsidies they may qualify for–is not as large as you might think:
This probably doesn’t describe a huge demographic—people who are just barely above the subsidy threshold and currently have individual coverage and are young enough to see premium increases—but there’s no question they exist.
Those who do fit into this relatively narrow band of people will typically get better coverage for their additional dollars, but they may not appreciate it just yet. Kevin points to a woman quoted in an L.A. Times article on “sticker shock” as illustrative:
“Fullerton resident Jennifer Harris thought she had a great deal, paying $98 a month for an individual plan through Health Net Inc. She got a rude surprise this month when the company said it would cancel her policy at the end of this year. Her current plan does not conform with the new federal rules, which require more generous levels of coverage.
“Now Harris, a self-employed lawyer, must shop for replacement insurance. The cheapest plan she has found will cost her $238 a month. She and her husband don’t qualify for federal premium subsidies because they earn too much money, about $80,000 a year combined.
“‘It doesn’t seem right to make the middle class pay so much more in order to give health insurance to everybody else,” said Harris, who is three months pregnant. “This increase is simply not affordable.'”
I don’t know for sure how this plays out in the real world, but I’d be shocked if Harris’s $98 plan covers expenses related to pregnancy. If it does, the out-of-pocket max is probably astronomical. A bronze plan under Obamacare is still no picnic, but I’m willing to bet it covers a whole lot more of Harris’s maternity expenses than her current plan. In other words, there’s a pretty good chance that she’ll make up for her extra annual expense of $1,700 by sometime around, oh, April or so.
And even if she doesn’t, she now has insurance that will protect her from unforeseen medical conditions and out-of-pocket expenses even if they don’t occur. It is sometimes forgotten that every kind of insurance involves the potential of “excessive” premiums if you get lucky and don’t need it.
But more basically, the politics of Obamacare will indeed be affected by the attitudes of people who do or don’t view their enhanced insurance as having value, and do or don’t think they’re just shelling out dollars to “give health insurance to everybody else.”
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, October 28, 2013
“A Pliable Opportunist”: Spinning With The Political Winds, Marco Rubio Is Becoming The Next Mitt Romney
The Great Marco Rubio Recalibration continues.
Months after helping the Senate pass a sweeping immigration reform bill, the junior Republican senator from Florida has dropped his support for the legislation, saying he now favors a targeted, piecemeal approach to the issue.
It’s a stunning about-face from earlier this year, when Rubio’s soaring rhetoric and tireless efforts helped propel a comprehensive, bipartisan bill to a successful vote. And with that, Rubio risks appearing to have flip-flopped on a defining issue even faster than you can say “Mitt Romney.”
With the House resistant to take up a comprehensive immigration bill, Rubio’s spokesman on Monday said he believes a piecemeal approach is the only way anything will get done.
“The point is that at this time, the only approach that has a realistic chance of success is to focus on those aspects of reform on which there is consensus through a series of individual bills,” Rubio spokesman Alex Conant told Politico. “Otherwise, this latest effort to make progress on immigration will meet the same fate as previous efforts: Failure.”
Of course, a piecemeal approach will almost surely doom meaningful reform. The whole point of a comprehensive approach is give each side something they want, such as a pathway to citizenship for Democrats and tougher workplace enforcement for Republicans.
Conant added that Rubio always preferred a piecemeal approach (though many would debate that), but worked with the Gang of Eight anyway “despite strong opposition within his own party and at a significant and well documented political price.”
That gets at another force pushing Rubio away from his own bill: Public opinion. Or, more accurately, Republican public opinion.
Rubio’s standing within the GOP eroded all year as he was unable to convince skeptical conservatives the immigration bill was more than just amnesty for undocumented workers. Once one of the most popular GOP senators in the country, his approval rating slid into negative territory in his home state, and he fell to the middle of the pack in hypothetical polls of the 2016 GOP field.
To stem the bleeding, Rubio tiptoed away from the bill since its passage in June, saying after the government shutdown that President Obama had “undermined” the bill’s odds of passing by refusing to negotiate with Republicans over budget matters. Even before that, he took a backseat in finalizing the bill while two other GOP senators stitched together an almost comically robust border enforcement provision to win over the necessary Republican votes.
Though Rubio may indeed have preferred piecemeal bills all along, his walk-back could wind up earning him a reputation as a pliable opportunist.
“I’m not sure it has ever happened before that an architect of major legislation in the Senate has basically opposed its passage in the House,” Rich Lowry wrote in National Review. “The politics of this aren’t great for Rubio,” he added, saying the freshman senator would surely “take another hit, understandably, for his inconstancy.”
Inconstancy, though not unheard of in politics, is not a good habit to form. Accusations of flip-flopping dogged Mitt Romney’s presidential campaigns and kept him from winning over dubious voters. He tried to position himself, after years of presenting a moderate exterior, as a “severe conservative” to capture the GOP nomination. And, like Rubio, he ran away from his most visible legislative achievement: RomneyCare.
The move to the right didn’t work out so well for Romney, only further cementing his image as a man without convictions.
Rubio hasn’t earned himself quite the same reputation, and we’re a long way from 2016. But if he makes a habit of spinning with the political winds, the GOP will begin to see him less as the party’s savior, and more as the second coming of Mitt Romney.
By: Jon Terbush, The Week, October 28, 2013
“Obamacare Death Spirals”: The Latest Prediction Of Doom Hits The Conservative Blogosphere
A new meme has arrived on the scene from the voices and pens of the anti-Obamacare devotees who remain more committed to frightening than informing when it comes to healthcare reform.
It’s the Obamacare “death spiral”— and it’s coming to a conservative blog near you.
Through a series of articles already going viral—thanks to a piece published on National Review Online and one by my Forbes colleague, Dr. Scott Gottlieb –we learn that the threat of impending doom ‘du jour’ comes via an allegation that, due to the poor launch of the healthcare.gov website, younger and healthier participants will now be more likely to stay away than sign up.
This, the falsely fearful argue, will result in an insurance pool jammed with older and sicker people without the required participation of younger and healthier Americans needed to balance the pools.
The result of such an event?
As insurance companies are forced to pay out more claims —due to their older and sicker participant base—without sufficient premium income from younger and healthier people less likely to call upon the insurer to pay for medical care, the insurance company is forced to raise their premium costs so they don’t loose money. As this problem builds upon itself year after year, it becomes, as it is termed in the insurance industry, a ‘death spiral’ as, sooner or later, the insurers are forced out of business when the premium costs get too high to be affordable by much of anyone.
Clearly, the authors suffer from a lack of understanding of human behavior—particularly when it comes to young people who are not given to dealing with these sort of issues until the deadline approaches…meaning we really don’t yet know anything about the potential success or failure of the insurance pools available on the health care exchanges.
If you doubt this, you might want to review what took place with the forerunner of Obamacare—Romneycare.
According to Jonathan Gruber, one of the key architects of the Massachusetts health care exchange—a program that the overwhelming majority of Massachusetts residents favor and support—and one of nation’s leading experts on all things Obamacare, “Massachusetts launched its health insurance program at the beginning of 2007 but enrollment didn’t fully flesh out for a year. In fact, it was less than 6% of the year’s total by the end of the second month. (emphasis added)”
In other words, people of all ages tend to wait until the deadline is upon them before coming to grips with an obligation like purchasing health insurance. But if you have kids, you know that younger people are even more likely to delay matters such as this.
Yet, here we have the opponents of the Affordable Care Act, ready to declare the entire program DOA based on a prediction of ultimate demise via the ‘death spiral’—and all because the slow start of the federally operated state healthcare exchanges are precluding younger and healthier prospective participants from signing up during the initial weeks of availability.
Even stranger, Dr. Gottlieb argues that, as a result of the failures of the federal website launch and the negative cascading effect he suggests will likely follow, more people will be driven out of the exchanges due to higher premiums in future years. In its place, Gottlieb proposes, these people will turn to “off-exchange” policies, purchased by going directly to an insurance company, broker, etc. for policies that are not offered on the exchange.
Gottlieb writes—
“Over time, conforming and non-conforming insurance policies sold entirely outside the exchanges could look increasingly attractive to consumers; even accounting for the subsidies many people would get for staying inside the exchanges.”
Why would they do this? Because, Dr. Gottlieb suggests, the off-exchange policies will be cheaper.
Setting aside that I have no idea what Gottlieb is referring to when he speaks of “non-conforming” insurance policies as every individual insurance policy, whether available on the exchange or not, must, for all practical purposes, meet the basic benefits requirements set forth in the Affordable Care Act, I can’t quite fathom why buying less expensive insurance off the exchanges would be a bad thing.
There is a tendency among those dedicated to burying healthcare reform to miss the point when it comes to the objectives of Obamacare. They spend so much time working out how to creatively attack the law that they simply cannot recall why we needed healthcare reform in the first place.
At its core, the law is designed to do three things—get insurance company abuses under control, make healthcare coverage more readily available to virtually all Americans and institute a series of experiments designed to bend the cost curve in healthcare delivery.
This being the case, why would anyone care whether you buy your insurance coverage off-exchange or on-exchange, so long as you obtain healthcare coverage? What’s more, the individual mandate does not require that you shop on the exchanges—it only requires you to purchase a qualifying policy.
The healthcare exchanges are designed to create competition among insurance companies. Should it not work, and Dr. Gottlieb is correct that the events occurring on the exchange will produce lower costs of an off-exchange policy—even for those who qualify for subsidies which are only available on the exchange—then we will have learned that the exchanges did not create the intended competition.
But, if Gottlieb is right and people can buy a cheaper policy that meets the requirements of the ACA off-exchange, then the objective of the law will be accomplished.
The bottom line here is that, by any reasonable and rational metric, it is far too early to know whether or not the insurance programs offered on the healthcare exchanges will manage to maintain the balance required of sick versus healthy and old versus young. In the final analysis, the doomsayers may turn out to be right. Maybe it just won’t work.
Or, maybe it will.
This is something we will simply not know for quite a few years.
Therefore, where exactly is the benefit of predicting a dire result at this stage of the game based on no available evidence whatsoever? Can there be any possible use of this information aside from giving political opponents some newly minted ammunition? Will the knowledge that insurance policies offered on the exchanges could experience a death spiral—a possibility that has existed for health insurers since the dawn of the industry—do anything to improve the odds of success?
If there is anything we can be sure of, it is that there will be a great many surprises along the way as we make these major adjustments to our healthcare system—some that will be good and some that will not.
As for the suggestion that we are in some immediate crisis because the healthcare.gov website has not yet worked as required, Jonathan Gruber, again, provides a reasonable and rational explanation of what is really happening and what it means.
USA Today reports that Gruber describes the current situation as “DEFCON 1″—a political problem, but probably not a problem yet for the marketplace.
If healthcare.gov is not running by Thanksgiving, it would be “DEFCON 2″, a real problem because people want to get insurance by January, but it’s not a crisis.
The crisis, according to Gruber, arrives if people cannot get insurance until March of 2014.
Gruber added that, in Massachusetts, officials were not focused on how well enrollment went on a day-to-day basis. They looked at the long-term potential, and expected that people would sign up in time to avoid the penalty.
Finally, Gruber noted, “I’m pretty confident they’ll have it up and going by Thanksgiving.”
So, how about we leave the death spiral stuff in the back room until the moment comes to actually haul it out and parade it around?
After all, at the rate Obamacare opponents are tossing out and using up their theories of pending disaster, they will soon run through their play book and have nothing left in their quiver.
Wouldn’t that be a shame?
By: Rick Ungar, Op-Ed Contributor, Forbes, October 28, 2013
“Replace The Sequester, Not Sebelius”: While She Tries To Fix A Broken Website, Congress Allows Rest Of Government To Crash
An embarrassing mistake, which should be considered a scandal, has caused the Internal Revenue Service to perform far fewer tax reviews and cut back its fraud investigations, costing the Treasury billions of dollars. Have there been any angry House hearings? No.
That same mistake has forced the National Institutes of Health to cut more than 700 advanced research grants, delaying the progress of vaccines and experimental treatments. No hearings.
And it has cost the economy hundreds of thousands of jobs, according to the Congressional Budget Office, but there is no sign that Republicans want to investigate what went wrong.
That’s because the mistake is called the sequester, and Republicans know what went wrong: they caused it by threatening default in 2011 and then refusing any budget agreement that included new taxes the next year. They’d much rather investigate a serious bumble by the Obama administration in rolling out the health-care website — which will eventually be fixed — than examine the effects of their own actions.
The paradox of Republican complaints about the website’s failings has been widely noted: They are pretending to care about the technical problems of a law they want abolished. But in fact the hypocrisy goes much deeper than that. In virtually every department of government, the right wing has used the sequester to encourage government to stumble, creating backups and denials of service that will be far more damaging than the ones going on at www.healthcare.gov. The sequester, which has been the Tea Party wing’s sole legislative victory, is evidence that its members want government to do less with less, and that they aren’t interested in having it work efficiently in delivering services to the public.
Any lawmaker who came to Washington to improve government, rather than shrink it, would do everything possible to reverse the sequester, as Democrats will try to do in a budget conference beginning this week. (They will be joined in that effort by a few Republicans who want only to turn back the cuts to the Defense Department.) But most Republicans, ranging from Senate Minority Leader Mitch McConnell to the furthest extreme in the House, have said they have no intention of letting the budget caps expire, and certainly aren’t interested in replacing them with higher revenue.
The only thing they have clamored to replace is Kathleen Sebelius, the Health and Human Services secretary. While she tries to fix a broken website, Congress is allowing the rest of government to slowly crash.
By: David Firestone, Editors Blog, The New York Times, October 28, 2013
“Make ’Em Pay”: House Republicans Act As If They Are Immune From Majority Sentiment, But Each Is Up For Re-Election In 2014
Where do you go if you’re a “Deadliest Catch” kind of guy, manliest of manly men, but couldn’t fish for king crab because some jelly-bellied Republicans threw a tantrum 5,000 miles away and shut down the government?
What do you do if you’re a farmer in Kansas who could not put winter wheat in the ground or get this year’s cattle vaccine because your government agriculture office was deemed nonessential? Whom do you see about the home loan that was held up, the family restaurant near the federal building that couldn’t meet October’s payroll, the bookings lost at season’s end in dozens of national parks?
Real Americans, the wind-chapped toilers so often invoked by politicians in a phony froth, lost real money from the real pain inflicted on their livelihoods by the extortionists in Congress this month.
How much money? At least $24 billion was the estimate given by Standard & Poor’s. Small business was hit particularly hard. And it’s a rolling pain, affecting consumer confidence, that will be felt through a holiday buying season that can make or break many retailers.
“I am a small businessman in a big ocean with big bills,” said Captain Keith Colburn, an Alaska crab fisherman, in Senate testimony during the shutdown. “I need to go fishing,” said the skipper, who is featured in the reality TV show “Deadliest Catch,” but was being held back by “a bunch of knuckleheads,.” who prevented marine regulators from doing their jobs.
So, who pays? For years, Republicans have been trumpeting the idea that when a government action hurts a private business, the government should compensate for the loss. This principle is based on a broad reading of the takings clause of the Fifth Amendment; it’s usually summoned as leverage against environmental regulation.
But in the case of the federal shutdown, of course, the economic hit on millions of Americans didn’t come from government — it came from one political faction in the House of Representatives. You could sue the Tea Party, but what is that? A bunch of costumed zealots on Fox are not responsible for anything that comes out of their mouths and lands in the porous mind of someone like Representative Ted Yoho of Florida.
You could sue Ted Cruz of Texas for initiating the calamity with a marathon of self-absorption. But the senator, like all members of Congress, has broad protection to pretty much say or do anything he wants inside the thick-walled refuge of the Capitol, a free speech guarantee that is warranted even when abused by vanity projects like Cruz.
What’s left is the ballot box. And here, Red State America can do a huge service for the rest of country. The states hit hardest by the shutdown, it now appears, were those where Republicans prevail. Virginia, with its wealth of government jobs and businesses that depend on those jobs, is Exhibit A. There, Republicans are likely to lose the governor’s race next week in part because their party disrupted so many lives in October’s meltdown.
The more difficult job will be ousting, from hardened, gerrymandered districts, the people who put ideology ahead of common sense and commerce. They seem faceless and buffoonish. They act as if they are immune from majority sentiment. But each of them is up for re-election a year from now, and the good news is that almost 75 percent of voters say most Republicans in Congress don’t deserve to be sent back to Washington.
In some districts, it will be civil war. What’s left of moderate Republicans are organizing to go after the crazies. “Hopefully, we’ll go into eight to 10 races and beat the snot out of them,” former Representative Steve LaTourette of Ohio told the National Journal. His group of fed-up Republicans, Defending Main Street, plans to raise $8 million to target the looniest of the loons.
Make Steve King of Iowa pay. As key government offices across the country were shuttered, as farmers in his district could not get their loans processed, King crowed, “We’re right!” He exists because political theater requires new players in clown makeup. The Des Moines Register recently suggested a slogan for King: “Send me back to Washington so I can continue to embarrass Iowa.”
Make Darrell Issa of California pay. Using the vast apparatus of his House Oversight and Government Reform Committee, he is going after National Park Service rangers. Having shut down the government, Issa wants to know why popular parks and monuments were closed. The audacity! During an earlier hearing, a fellow congressman provided an answer: He held up a mirror and aimed it at Republican lawmakers.
And certainly make Marlin Stutzman of Indiana pay. This congressman gave history the money quote on the shutdown. “We have to get something out of this,” he said. “And I don’t know what that even is.” A year from now, he can find out.
By: Timothy Egan, Op-Ed Contributor, The New York Times, October 28, 2013
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