“This Is How Obamacare Works”: Listen Up Dipsticks, You Can’t Fix Health Insurance Without Changing Health Insurance
Bill Clinton has been one of Obamacare’s most effective advocates—the “Secretary of Explaining Things,” as President Obama famously called him. But in a new interview already getting attention and sure to get more, Clinton didn’t explain things very well. He made a statement that’s likely to create some misimpressions about the possibilities of health care reform, while giving the administration and its allies yet another political headache. But maybe it’s also an opportunity to have a serious conversation about the law’s tradeoffs—the one that should have happened a while ago.
In the interview, with Ozy Media, the former president fielded a question about the health care law. “The big lesson,” he said, “is that we’re better off with this law without it.” He went on to put the technological problems of healthcare.gov into some perspective: Medicare Part D had similar problems, he noted, “and they fixed it.” And he made a plea with Republican lawmakers to stop blocking the expansion of Medicaid. Fine, fine, and fine.
But then Clinton made news. He said that some young people facing higher premiums under the new system should have the right to keep their old plans, even if it requires a change in the law. Clinton framed it carefully: He said specifically he had in mind only those young people whose incomes were higher than four times the poverty line, making them ineligible for subsidies. (That’s about $45,000 for a single adult.) But he also suggested it was a matter of principle, because those people had heard the vow that they could keep their plans: “I personally believe, even if it takes a change to the law, the president should honor the commitment the federal government made to those people and let them keep what they got.”
Clinton’s statement makes it seem as if there is some simple way to let people keep their current plans—to avoid any disruption in the existing non-group market while still delivering the law’s benefits. As readers of this space know, no such magic solution exists. Broadly speaking, the Affordable Care Act seeks to make two sets of changes to what’s called the “non-group” market. It establishes a minimum set of benefits, which means everything from covering “essential” services to eliminating annual or lifetime limits on payments. At the same time, the law prohibits insurers from discriminating among customers: They can’t charge higher prices, withhold benefits, or deny coverage altogether to people who represent medical risks. They have to take everybody, varying price only for age (within a three-to-one ratio) and for tobacco use.
If you buy your own insurance now, it probably doesn’t live up to these standards. For starters, it probably isn’t as comprehensive as you think. It may not cover prescription drugs, for example, or it might leave out rehabilitative services and mental health. It might expose you to out-of-pocket expenses greater than $6,350 (if you have a single person’s policy) or a $12,700 (if you have a family policy). Until three years ago, when Obamacare’s first regulations went into effect, it was even possible the insurer could yank it retroactively—a process known as “rescission”—if you got sick and the carrier scrubbed your medical records for some previous sign of illness, maybe even one you didn’t know you had.
In addition, unless you live in a handful of states, the premiums you are paying come from insurers who knew, going in, they wouldn’t have to cover people who represent high medical risks. If the policy is affordable, that’s because the insurer figured you were pretty healthy and unlikely to have big medical bills. If you’ve had the policy for a while, and prices haven’t gone way up, that’s because the insurer is still making money from this arrangement—which means, overall, the people in this plan aren’t very sick. Until now, insurers have been able to hike premiums on plans that start to lose healthy customers, and they keep doing so until they become unaffordable—leaving those remaining subscribers unable to find new policies at affordable rates.
The Affordable Care Act includes a so-called grandfather clause. That allows insurers to keep renewing plans, without changes or benefits and prices, as long as they were available before March 2010, when the Affordable Care Act became law. But the non-group market is volatile: Very few people stay on plans for more than two years anyway. And the grandfather clause is narrow, by design: If insurers made even modest changes, the protection goes away. Those plans are subject to the new regulations that take effect in January. As a result, the majority of people who buy insurance on their own are learning they can’t have what they had before, even though Obama promised everybody they could. Either their premiums are going up, as insurers accommodate the new regulations, or the plans are disappearing altogether. In those cases, people have to find new plans. And the sticker price of what they’ll find is higher than what they pay now.
This is not a glitch or an accident. This is the way health care reform is supposed to work. And it’s important to put these changes into context. For one thing, it’s a small number of people relative to the population as a whole. The vast majority of Americans get coverage through employers or a large government program like Medicare. These changes don’t really affect them. The law also anticipates these changes by, among other things, offering tax credits that discount the premiums—in many cases, by thousands of dollars. (Other provisions of the law, like a limit on insurance company profits and overhead, should restrain prices more.) As a result, many people buying coverage on their own will be paying less money for benefits that are as good, if not better, than what they have now.
But there are real people who must pay more and, in some cases, put up with less. Some of them are people walking around with junk insurance, the kind are practically worthless because they pay out so little. Some of them are young people, particularly young men, whom insurers have coveted and wooed with absurdly low premiums—and make too much money to qualify for substantial subsidies. And some of them are reasonably affluent, healthy people with generous, open-ended policies that are hard to find even through employers. Insurers kept selling them because they could restrict enrollment to healthy people. Absent that ability, insurers are canceling them or raising premiums so high only the truly rich can pay for them.
Those people are the ones everybody is hearing about now, partly because they are a compelling, sometimes well-connected group—and partly because, absent a well-functioning website, stories of people benefitting from the law’s changes aren’t competing for attention. It’s impossible to know how big this group is. The data on existing coverage just isn’t that good. The anecdotes are frequently, although not always, more complicated than they seem at first blush. It’s probably one to two percent of the population, which doesn’t sound like much—except that, in a country of 300 million, that’s 3 to 6 million people. Most experts I trust think they represent a minority of people buying coverage on their own, but nobody can say with certainty.
Is that a worthwhile tradeoff for reform? Obviously that’s a matter of opinion. The fact that some people—even a small, relatively affluent group—are giving up something they had makes their plight (genuinely) more sympathetic. They are right to feel burned, since Obama did not make clear his promise might not apply to them. And there’s a principled argument about whether people should be responsible for services they’re unlikely to use presently, whether it’s fifty-something year olds paying for maternity care or twenty-something year olds paying for cardiac stress tests.
But the principle of broad-risk sharing—of the healthy subsidizing the sick, of the young subsidizing the old, and everybody paying for services like pediatrics and maternity care—is one built into the insurance most Americans already have. Employers, after all, don’t charge employees different premiums because of their age or gender. What’s more, the people with good, affordable coverage in the old non-group market were the beneficiaries of a system that marginalized many more. They were paying relatively cheap rates for insurance only because insurers trusted they were unlikely to get sick. Of course, some of them did get sick. And when it happened, many made an unpleasant discovery: The policies they carried left them exposed to huge bills. Giving up these plans isn’t merely an act of altruism. It’s also an act of enlightened self-interest.
Oddly, Clinton himself recognized this: In his soliloquy, he mentioned that a young man he met was upset at having to pay more for a plan—even though the young man knew it would help him more if he got sick. As Clinton surely knows, the whole point of reform—not just the pricing and benefit requirements, but also the individual mandate, which Clinton has repeatedly endorsed—is that people need to take steps to protect themselves against future hardship.
Rhetorically, Clinton’s statement actually isn’t that different from what Obama said in his interview with NBC’s Chuck Todd the other night—that he’d like to find a way to let more people keep their coverage. But it wouldn’t be easy to do. Attempting to rewrite the grandfather clause, so that it applies to more existing plans, could cause insurers to raise prices in 2014 for 2015. It’s also not clear that insurers could or would quickly renew existing policies at existing prices. Clinton mentioned specifically that something should be done only for those people facing higher prices—another echo of Obama’s statement. But distinguishing between groups wouldn’t be easy.
Maybe there’s some muddled, half-solution that will ease the transition without causing real damage. Or maybe there’s some brilliant administrative or legislative fix the experts can’t see. But absent an infusion of extra money—say, to create some kind of transitional assistance fund—any effort to slow changes to the non-group market might not just stop the bad things from happening. It might also stop the good. The latter might outweigh the former, by quite a lot.
You wouldn’t know it from all the press, but Obamacare actually disrupts very little relative to what it accomplishes. The problem is that eliminating disruption altogether simply isn’t possible. You can’t fix health insurance without changing health insurance. And there are bound to be some people for whom that change isn’t good. Those trade-offs should be clear. Maybe now they are.
By: Jonathan Cohn, The New Republic, November 12, 2013
“And This Too Shall Fail”: The GOP Wants To Solve Its “Woman Problem” By Rebranding Its War On Women
Three women in Virginia have started a consulting firm to help the Republican party appeal to women voters, which seems like it will be a real challenge since the Republican party is terrible on the issues that many women care about.
The women behind the firm — two Mitt Romney 2012 campaign alums and a Republican pollster — launched Burning Glass Consulting because they “want to get smarter about how we communicate the Republican message specifically to women,” Katie Packer Gage, a former deputy campaign manager for Romney, explained to the New York Times. “Certainly there are challenges with other demographic groups, but women represent 53 percent of the electorate.”
But better messaging will do little to save the party from its core platform, which the Times frames as an opinion held only by Democratic strategists, but really just seems like common sense. The GOP has for years been buttering its bread with increasingly extreme positions on contraception, abortion, voting rights and other issues that negatively impact and alienate single women voters — the group Burning Glass would most like to reach.
“There were something like 53 million unmarried women eligible to vote in 2012, but on campaigns you don’t hear a specific strategy discussed of ‘How are we going to reach unmarried women?’” said Gage.
The firm seems to think that Democrats have just gotten very good at framing the Republican party as hostile to women, which misses the point that the Republican party is actually very hostile to women.
When you have the chair of the Republican Women’s Policy Committee laughing on Fox News about how women should have to shoulder the financial burden of maternity coverage alone because a man “has never delivered a baby,” you know the problem isn’t about messaging.
When you have a state attorney general wondering aloud why God hasn’t punished the United States for guaranteeing women their constitutional right to abortion care, you know the problem isn’t about messaging.
As Cecile Richards, president of Planned Parenthood Federation of America noted last week after single women helped defeat Ken Cuccinnelli in Virginia, “The lesson for candidates in 2014 is unmistakable: Dismiss and demean women at your peril.”
By: Katie McDonough, Salon, November 12, 2013
“No Health Insurance, Just Drink”: Koch Brothers Generation Opportunity Campaign Against Obamacare Is Insanely Irresponsible
This is the strangest P.R. campaign yet against the Affordable Care Act. Generation Opportunity, the Koch-funded group behind the Creepy Uncle Sam ads, is throwing tailgate parties to “educate” young people about the exchanges. Read: To convince young people to forgo health insurance.
The group’s communication director, David Pasch, wrote an email to The Tampa Bay Times describing a drunken event at Saturday’s University of Miami-Virginia Tech football game:
“We rolled in with a fleet of Hummers, F-150’s and Suburbans, each vehicle equipped with an 8’ high balloon bouquet floating overhead. We hired a popular student DJ from UMiami (DJ Joey), set up OptOut cornhole sets, beer pong tables, bought 75 pizzas, and hired 8 ‘brand ambassadors’ aka models with bullhorns to help out.”
Mr. Pasch specified that “student activists,” rather than anyone employed directly by Generation Opportunity, “brought (lots of) beer and liquor for consumption by those 21 and over.”
As a sort of afterthought, he added, “Oh yeah, and we educated students about their healthcare options outside the expensive and creepy Obamacare exchanges.”
According to Think Progress, this isn’t a one-time thing: “The group is touring 20 different campuses this fall in a $750,000 effort to convince college students that they’re better off being uninsured than getting health coverage through Obamacare.”
That’s a lot of money for a campaign that’s not only insanely irresponsible, but also insanely dumb. Generation Opportunity is the old guy at a house party, convinced he can win the cool kids’ respect with booze.
By: Juliet Lapidos, Editors Blog, The New York Times, November 11, 2013
“The GOP Blocking Of Medicaid Expansion”: The Huge Obamacare Story You Aren’t Reading About That Could Help Even More People
Today it’s a few hundred thousand people. By next year, it will be at least a few million. Their health insurance status is changing dramatically: What they have in 2014 and beyond will look nothing like what they had in 2013 and before. For many of these people, the difference will be hundreds or even thousands of dollars a year. In a few cases, it may be the difference between life and death.
You probably think I’m talking about the people getting cancellation notices about their private insurance policies. I’m not. I’m talking about the people getting Medicaid. Both stories are consequences of the Affordable Care Act. But one is getting way, way more attention than the other.
It’s no mystery why. Stories of people losing something are more compelling than stories of people gaining something. The policy cancellation story is also newsier, because fewer people expected it to happen. Obamacare’s expansion of Medicaid was something the advocates of reform advertised. Reform’s effect on people with skimpy or medically underwritten insurance policies they liked was something that few advocates, including the president, even acknowledged. Had Obama pointed out, all along, that some people might lose existing plans or pay more for coverage in 2014, it would seem a lot less shocking.
But there is also a class element to the way this debate has evolved. By and large, the people receiving those cancellation notices and facing large premium increases are at least reasonably affluent. They’re not necessarily rich, particularly if they live in higher cost areas of the country. Many of them sweat monthly bills just like most of the country does. But, by definition, they don’t qualify for huge subsidies that would offset premium increases mostly or completely. By contrast, the people getting Medicaid are poor. They have to be, because it’s the only way to sign up for the program. And as political scientists have shown, the poor don’t command the same kind of attention from politicians that the middle class—and particularly the upper middle class—does.
And this fact, I suspect, is also magnifying the impact of those cancellation letters. The best estimates suggest that 12 to 15 million people currently buy coverage on their own—i.e, in what’s known as the non-group market. It appears that only a fraction of them will get to keep their current policies. The rest will end up having to get new coverage, or updated versions of their old coverage, that offers greater benefits and/or is available to everybody, regardless of pre-existing condition. That will drive up the price of insurance.
But when you take into account the subsidies, which for many people will knock the price of insurance right back down, and the number of people who would gladly pay more for insurance that offers real protection from financial shock, the number of people who truly end up feeling worse off ends up a lot smaller than 12 or 15 million. And even those people will end up with good health insurance, though they’ll be paying more for it and may not want it.
Meanwhile, the best available projections suggest that 13 million people will eventually sign up for Medicaid. That’s a much larger number of people, most of whom had no insurance—none—before. That doesn’t even include more than ten million presently uninsured people expected to get insurance through employers and the new marketplaces, assuming all of the websites start working better, or the millions of seniors getting extra help with their prescrpition drugs.
Of course, the story of the Medicaid expansion is also one of suffering. But that’s because Republicans governors and lawmakers are blocking expansion of Medicaid in their states. About 5 million people who would be eligible for Medicaid under Obamacare’s new guidelines won’t be getting it. Here’s a mental exercise. How many stories have cable news and the networks run about people with private insurance getting cancellation notices? And how many have they run about people who would be getting Medicaid if only their state lawmakers would stop blocking expansion?
You can find examples. My colleague Alec MacGillis has waged a lonely crusade to remind people about this situation. The New York Times had a terrific front-page story on this in early October. In the Washington Post, Ruth Marcus on Friday wrote about Paul Tumulty, in Texas, who can’t get insurance because Governor Rick Perry has blocked that state’s Medicaid expansion. Tumulty, who is the brother of Post staff writer Karen, has kidney disease. Wiithout Medicaid he can’t get comprehensive coverage, because, as Karen put it, “he is, paradoxically, too poor for subsidies.”
But these articles are the exception more than the rule. Obama tried to draw attention to the issue last week, when he visited Texas. But the trip didn’t generate much in the way of new coverage of Medicaid.
Should the president have been more candid about the impact his plan would have on people buying their own coverage? Yes. Should we pay attention to those people, particularly when they must now pay more for equivalent coverage? Definitely. Should this put extra pressure on the administration and some states to fix their websites? You bet. But that’s not the only Obamacare news right now. The law is making life better for a great many people—and would help even more if only Republican lawmakers would relent. Those stories need attention, too.
By: Jonathan Cohn, the New Republic, November 10, 2013
“Why Isn’t Everyone More Worried About Me?”: Maybe The Most Ridiculous Obamacare “Victim” Story Yet
Apparently, there was a meeting of the editors at The New York Times op-ed page in which someone said, “You know how every time someone does a story about one of these Obamacare ‘victims’ whose insurance companies are cancelling their plans, it turns out they could do really well on the exchange, but no one bothers to check? We should get one of them to write an op-ed, but not bother to ask what options they’ll have.” And then someone else responded, “Right, don’t bother with the fact-checking. But we need a new twist. What if we find someone who’ll complain that the problem with Obamacare is that other people care too much about poor people and the uninsured, while what they ought to be doing is spending more time liking her Facebook post about her possibly increased premiums?” The editors looked at each other and said, “That’s gold. Gold!”
And this was the result. Written by Lori Gottlieb, a Los Angeles psychotherapist and author, it relates how she got a cancellation letter from Anthem Blue Cross and was offered a plan for $5,400 more a year, then had a frustrating phone call with the company. Did she go to the California health exchange and find out what sorts of deals would be available to her? Apparently not. She took Anthem at their word—you can always trust insurance companies, after all!—then took to Facebook, where she “vented about the call and wrote that the president should be protecting the middle class, not making our lives substantially harder.”
And here’s where our story takes a shocking turn. Instead of expressing what she felt was the appropriate sympathy, those 1,037 people on Facebook she thought were her friends but turned out just to be “friends” had the nerve to point out that the Affordable Care Act will help millions of previously uninsured and uninsurable people get coverage. Gottlieb was disgusted with these people she termed the “smug insureds.” And none of them even “liked” her post!
Like Bridget Jones’s “smug marrieds,” the “smug insureds” — friends who were covered through their own or spouses’ employers or who were grandfathered into their plans — asked why I didn’t “just” switch all of our long-term doctors, suck it up and pay an extra $200 a month for a restrictive network on the exchange, or marry the guy I’m dating. How romantic: “I didn’t marry you just to save money, honey. I married you for your provider network.”
Along with the smug insureds, President Obama doesn’t care much about the relatively small percentage of us with canceled coverage and no viable replacement. He keeps apologizing while maintaining that it’s for the good of the country, a vast improvement “over all.”
And the “over all” might agree. But the self-employed middle class is being sacrificed at the altar of politically correct rhetoric, with nobody helping to ensure our health, fiscal or otherwise, because it’s trendy to cheer for the underdog. Embracing the noble cause is all very well — as long as yours isn’t the “fortunate” family that loses its access to comprehensive, affordable health care while the rest of the nation gets it.
The truly noble act here is being performed by my friend Nicole, who keeps posting Obamacare fiasco stories on my Facebook page, despite being conspicuously ignored, except for my single “like.” It’s the lone “like” that falls in the forest, the click nobody wants to hear.
How terribly smug, to think that the fate of millions of poor people who will now get insurance is as important as the suffering of this one person who might have to pay more for comprehensive coverage, and also happens to have access to The New York Times where she can air her grievances! If only it weren’t so “trendy to cheer for the underdog.”
It’s one thing to feel your own problems more acutely than those of other people, even millions of other people, even many whose problems make yours look trivial by comparison. We all do that, and we could barely function if we didn’t. It’s quite another thing to expect that other people will see your problems as more important than those of millions. I sprained my ankle a few weeks ago, and I’ll admit that in the time since I’ve given more thought to my ankle’s recovery than I have to the 660,000 people who die every year from malaria. But if I asked you why you aren’t thinking more about my ankle than you are about malaria, you’d wonder if it was my brain that I had sprained.
I imagine that after her disappointment at the response to her Facebook post, Gottlieb will be even more disappointed with the response to her op-ed explaining her disappointment with the response to her Facebook post. So if she wants to feel better, the first thing she ought to do is go to the exchange and she what her options are. There’s almost certainly something better than the plan her insurance company is trying to get her to buy. And then she can go to Facebook and ask her “friends” to celebrate her good fortune.
By: Paul Waldman, Contributing Editor, The American Prospect, November 11, 2013
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