“Sanctifying Defenders Of The Status Quo”: The GOP’s Obsession With Rate Shock Victims
Last week, the Obamacare war room detected a twist in the national narrative that concerned them. The media’s obsessive focus on the failed website launch was beginning to give way to stories about individuals who found higher-than-expected prices on the exchanges. A memo instructed participants to prepare for such “media inquiries”: “The media attention will follow individuals to plan selection and their ultimate choices; and, in some cases, there will be fewer options than would be desired to promote consumer choice and an ideal shopping experience,” warned the memo. “Additionally, in some cases there will be relatively high-cost plans.”
CNN’s Jake Tapper obtained the memo. Here is how he described it: “Officials expressed concern that the next shoe to drop in the evolving story about the Affordable Care Act would be disappointment from consumers once they are able to get on the troubled Healthcare.gov website — disappointment because of sticker shock and limited choice.” Notice the crucial difference in framing. The memo simply acknowledged that in some cases — a caveat that appeared twice — consumers would have fewer options and higher prices than the administration would like. In CNN’s characterization, the caveat disappears altogether. Tapper portrays the problem as “disappointment from consumers,” writ large. The minority facing sticker shock has become a stand-in for the entire public.
This turns out to be a synecdoche for the entire Obamacare narrative now. The world of the Republican Party’s fever dreams has sprung to life in the mainstream media, where the Affordable Care Act now exists primarily as a series of cruel, oppressive acts of theft against innocent Americans. Here are CBS News, The Wall Street Journal, and the Washington Post chronicling the parade of horribles.
The stories often turn out to be either more complicated than initially depicted, or wildly overblown. But it is surely true that some people will find themselves worse off, at least immediately, under the new law. That their fate has blotted out everything else about the law explains why health-care reform is so maddeningly difficult to enact in the first place.
Everybody knows about the two main ways in which the American health-care system is awful: It’s the most expensive in the world, by far, and also the only advanced health-care system that denies basic care to many citizens. There’s also a third awful trait as well: The system is resistant to change. The very insecurity of American health care, the ever-present fear of finding one’s insurance lifeline snapped and plunging into the howling void of the 50 million uninsured, renders those with insurance understandably terrified of change.
The Affordable Care Act worked around the inherent change aversion of the system by leaving the vast majority of it in place. Insuring tens of millions of Americans costs money, and that money has to come from somewhere, but the law’s author’s carefully apportioned the burden in a relatively painless way. Some of the money comes from higher taxes on the rich — a source of anger and resentment on the right, though conservatives have shrewdly recognized that complaining about higher taxes on wealthy investors to pay for covering the uninsured is not a winning message. Some of it comes from reshuffling Medicare spending, so that the government essentially shifts funds from reimbursing hospitals for treating uninsured patients in emergency rooms to basic medical care, a clear positive-sum transfer.
And, yes, some of the cost is borne by the minority of healthy individuals paying higher premiums. (These individuals will, of course, go from Obamacare victims to Obamacare beneficiaries the moment anybody in their household develops a serious medical condition, in the same manner that fire insurance is a bad deal for people whose houses don’t burn.)
Why has their plight attained such singular prominence? Several factors have come together. The news media has a natural attraction to bad news over good. “Millions Set to Gain Low-Cost Insurance” is a less attractive story than “Florida Woman Facing Higher Costs.” Obama overstated the case when he repeatedly assured Americans that nobody would lose their current health-care plan. There’s also an economic bias at work. Victims of rate shock are middle-class, and their travails, in general, tend to attract far more lavish coverage than the problems of the poor. (Did you know that on November 1, millions of Americans suffered painful cuts to nutritional assistance? Not a single Sunday-morning talk-show mentioned it.)
The point here is not that Obamacare represents a perfectly optimal restructuring of the health-care system. Almost nobody would regard it as such. The point is that it represents the least-disruptive, least-painful way to clear the minimal threshold of any humane reform. The preferred alternatives of both right and left would impose an order of magnitude of more dislocation — creating not a few million “victims,” but tens of millions. What’s on display at the moment is a way of looking at the world that sanctifies defenders of the horrendous status quo and places all the burden upon those trying to change it.
By: Jonathan Chait, New York Magazine, November 5, 2013
“Obstructing Obamacare Navigators”: The Republican Suppression Syndrome Continues
On August 15th, Jodi Ray, a project director at Florida Covering Kids and Families, a University of South Florida program that works to get uninsured children access to health care, won a federal grant to hire ninety people as health-care “navigators”: workers who will help applicants apply for insurance through the exchanges set up as part of the Affordable Care Act. In states that declined to set up their own exchanges, like Florida, the Department of Health and Human Services awarded funding worth sixty-seven million dollars for outreach efforts to help the uninsured enroll through the federal marketplace. Nearly four million people in Florida are uninsured—the third highest figure in the country—and Ray had six weeks to recruit staff from community-service groups in sixty-four counties across the state, and guide new hires through twenty hours of online federal training attached to her grant.
“But our navigators don’t only have to comply with federal requirements for the training,” Ray said. “We have state requirements that we have to comply with, too.” Last spring, the Florida legislature, apparently concerned that swindlers would land jobs as health-care experts with access to Social Security numbers and tax information, decided that the navigators should undergo fingerprinting and criminal background checks, and barred them from visiting state-run health clinics. Ray preferred not to comment on what the advocacy group Healthcare For America Now calls “navigator-suppression measures.” She only said, “I’m keeping my head down, the noise out, and focusing on what we are supposed to be doing.”
After the government shutdown ended, attention shifted to the blips and seizures bedevilling the federal marketplace’s Web site, healthcare.gov. Thirty-four states, all but seven of them Republican-controlled, chose not to set up their own exchanges, leaving hundreds of millions of dollars in outreach funding on the table, and forcing their residents onto the federally-operated Web site at the center of the current uproar. Twenty-one of those states are also expected to refuse nearly three hundred billion dollars in federal funding to expand Medicaid coverage over the next decade, which would have extended care to more than six million people; a majority of those excluded will likely be African-Americans and single mothers. To compound the effects of their recalcitrance, conservative governors, state legislators, and members of Congress have also passed navigator-suppression measures in thirteen states—Arkansas, Florida, Georgia, Iowa, Illinois, Indiana, Maine, Missouri, Montana, Ohio, Tennessee, Texas, and Wisconsin—home to seventeen million people without insurance who are eligible for coverage under the A.C.A.
Two weeks after Ray received her grant, she was notified by the House Energy and Commerce Committee that she would have to participate in a phone interview with the committee’s staff in September; she was also asked to give written answers to half a dozen questions from the committee and provide “all documentation and communication related to your Navigator grant.” Similar notifications were sent to navigator offices in eleven of the most underinsured states in which residents will need to use the federal health-care exhange—including Texas, Florida, and Georgia, home to about a quarter of the nation’s uninsured. Representative Henry Waxman, a Democrat from California, protested, in an open letter to the committee’s chairman, Michigan Republican Fred Upton, that the requests appeared “to have been sent solely to divert the resources of small, local community groups, just as they are needed to help with the new health care law.”
On September 18th, Darrell Issa, the Republican chairman of the House Committee on Oversight and Government Reform, released a report that singled out Florida as the site of “numerous reports of scam artists posing as navigators and Assisters to take advantage of people’s confusion about ObamaCare.” On October 2nd, Fox News aired footage of volunteers for Get Covered America, a non-profit advocacy campaign, going door-to-door in a Miami suburb to distribute flyers about the new insurance marketplace—but wrongly identified them as federally-funded navigators, giving the impression that these “navigators” were hawking plans like pushy insurance salesmen. Upton linked to the report on his Web site. Ray, who still spends much of her time getting new navigators licensed while the federal government fixes the Web site’s glitches, was reticent about discussing the maelstrom of controversy. “It’s been busy,” she said.
As these tactics jam up early efforts in many states, they also amplify the contrast with successful rollouts in states that have wholeheartedly embraced the new law, like Colorado, Connecticut, New York, Kentucky, and Washington.
Elisabeth Benjamin, who leads New York’s largest team of navigators at the Community Service Society, spent much her early career improving health-care capacity in developing countries like India, Tunisia, and postwar Iraq—where, she said, people often told her, “I don’t understand why you’re in our country. You have a lot of problems with health care and poor people in your country.” Back home, she started a health-law unit at the Legal Aid Society to assist low-income New Yorkers with unforgiving medical bills. In 2008, she unveiled an insurance ombudsman program at C.S.S. to help people at every income level understand their options for medical coverage. “If you need a loaf of bread, it’s a buck,” she said, explaining health care’s central distinction from other forms of assistance. “If you need a transplant, it’s five hundred thousand dollars.”
Around the same time Benjamin was starting her program, Eliot Spitzer, then the governor of New York, proposed statewide health-care reform similar to the law Massachusetts had passed four years earlier. Vermont’s legislature had expanded coverage, and Arnold Schwarzenegger had made national news by calling for a similar program in California. Benjamin joined an affordable-health-care advocacy campaign, Healthcare for All New York, and testified before the New York State Legislature. “We just assumed there would be a state-by-state movement to extend coverage,” Benjamin said. But two years later, the Obama Administration, with the help of a Democrat-controlled House and Senate, passed the Affordable Care Act. New York’s governor, Andrew Cuomo, along with the state legislature in Albany, accepted the expansion of Medicaid, and the state established its own online exchange. After the Supreme Court upheld the constitutionality of Obamacare, in June, 2012, Cuomo released a statement that said, “We look forward to continuing to work together with the Obama administration to ensure accessible, quality care for all New Yorkers.”
That spirit of coöperation has been integral to New York’s early success. Elisabeth Benjamin, in New York, and Jodi Ray, in Florida, offer exactly the same services to people who were previously unable to obtain medical coverage: they help determine voucher amounts, parse available options, and submit applications online, over the phone, or through the mail. But because New York set up its own exchange, the state received twenty-seven million dollars to fund its navigators, while Florida has just eight million dollars for outreach. Benjamin, who is herself a trained navigator, conceded that there were glitches on New York’s Web site the first week, but said that most of them have been resolved. In the second week, she helped enroll a woman who had worked as a home-health-care aid for twenty years, earning around twenty-four thousand dollars annually. Home health care “has to be the hardest job in America—so physically taxing and emotionally draining,” Benjamin said. “And we don’t give them health coverage. Are you kidding me? They’re part of the health-care system.” Benjamin helped find a plan for the woman that costs seventy-two dollars a month. “I was crying,” Benjamin said. “That’s what it’s all about.”
For the A.C.A. to succeed in its goal of providing coverage for all citizens at an overall reduction in cost, a critical mass of people—old and young, sick and healthy—will need to participate in the insurance exchanges. As of October 23rd, New York had enrolled thirty-seven thousand people, more than twice the goal set by H.H.S. for the entire month of October. Florida won’t know how many people have enrolled until H.H.S. releases its figures sometime in November. The Congressional Budget Office has estimated that a total of seven million people nationwide could enroll in the first year. But Dr. Kavita Patel, a health-care-reform expert at the Brookings Institution, and a former policy advisor in the Obama Administration, told me, “If by the end of 2014 there are three million people enrolled, that would be a success.” The politicians who are currently bemoaning the looming failure of Obamacare might consider doing more to help navigators like Jodi Ray make it work.
By: Rob Fischer, The New Yorker, November 1, 2013
“Intentionally Obscuring The Obvious”: Five Things Every American Needs To Know About Health Care Reform
“Discover the obvious,” Jonathan Cohn said on Monday.
Cohn is one of the nation’s foremost health care journalists and the keynote speaker of the journalism portion of “Hearsay or Fact: A Symposium on the Communication of the Affordable Care Act,” hosted by the Center for Healthcare Research and Transformation.
A senior editor at The New Republic and author of Sick: The Untold Story of America’s Health Care Crisis—and the People Who Pay the Price, Cohn decided to use his time to give five rules about reporting on the Affordable Care Act (ACA). His first rule was an admission that people who follow the everyday tribulations related to Obamacare — like wonks in every field — often assume they don’t need to report on “the obvious” and thus fail to report on the issues that matter most to the public.
He pointed to the success of fellow panelist Stephen Brill’s Time magazine cover story “Bitter Pill: Why Medical Bills Are Killing Us” that illuminated the outrageous variation in medical prices and profits from one hospital and one patient to the next, a well-known fact to experts that came as a shock to many Americans.
What’s obvious to everyone about the debate over Obamacare is that the public is confused. Nearly two-thirds of Americans didn’t know in late September that the health care exchanges were opening on October 1 and 67 percent of the uninsured said “they don’t have enough information about the law to know how it will impact their families,” according to the Kaiser Health Tracking Poll. The uninsured, of course, make up this law’s key demographic. They are the people this law is designed to help most, and their participation in the health care marketplaces will determine if the law is a success.
Why are people so confused? Much of what should be “obvious” has become obscured — intentionally.
Democrats passed the ACA with only Democratic votes — and Joe Lieberman. Republicans have responded with an unprecedented effort to scare voters, starve implementation and sabotage the law, an effort that helped doom the launch of Healthcare.gov, which the White House has to own as a greater act of self-sabotage than anything Republicans could have pulled off themselves.
The political battle over the law has overwhelmed any pertinent policy discussion. So it’s no wonder that people can’t even agree on the basic premises that made health reform necessary and an improvement over the current system, with 56 percent of Americans saying they’ve heard more about the politics and the controversies of the law than any discussion of its practical impact.
Here are five “obvious” premises that every American needs to understand so we can begin to have a rational debate on health care reform.
Before The ACA, America’s Health Care System Was Already ‘Socialized’
You should know by now that the United States spends more than any country on health care, even though approximately 50 million citizens have no insurance whatsoever. This is how we ended up with the 46th most efficient health care system in the world.
The Affordable Care Act attempts to fix this in a number of ways, including health care exchanges, subsidies, Medicaid expansion and regulation.
Since 2011, the government has set how much insurance companies have to spend on actual care – 80-85 percent depending on their size — and the minimum standard for the policies they can offer, among several other regulations. So even though private insurers remain in business and the government hasn’t taken control of the medical industry as it has in the United Kingdom, Republicans argue that it’s “a government takeover” of the health care system. Based on this standard, health care has been “taken over” by the government and even “socialized” for decades.
Since 1965, Americans over 65 and under the poverty level were guaranteed basic care, though it took until 1982 before the last state, Arizona, accepted Medicaid. This left America with a single-payer system, with a giant hole mostly made up of Americans under 65 with jobs, and their families.
In 1986, President Ronald Reagan signed a bill that tried to plug that hole — the Emergency Medical Treatment and Active Labor Act. This law states that any hospital that accepts any federal funds — which basically every hospital in America does — cannot turn away any patient, regardless of his or her ability to pay. As this bill provides no reimbursement for this care, the costs of those who can’t pay get passed on to those who can.
In 1996, Congress passed and President Clinton signed the Health Insurance Portability and Accountability Act of 1996 (HIPAA), which mandated guaranteed renewability for all health insurance plans, requiring that an insurer has to offer you renewals of your policy without charging you any more based on any new information it has about your health.
These are three of the key “government takeovers” that helped lead to the broken health care system that we are now attempting to fix, while maintaining a private insurance industry.
The ACA clearly isn’t a one-size-fits-all solution, health economist Thomas Buchmueller pointed out at Monday’s symposium.
That would be a two-page bill that said, more or less, “Everyone is now on Medicare.”
Rich People Get Their Health Care Subsidized By Taxpayers
Single payer is a simple, proven system that would insure all Americans, save lives and cut costs. And it will likely never happen in America as long as the filibuster exists in the Senate. Still, liberals will not stop offering this ideal solution whenever Republicans complain about costs or cancellations.
The right has its own fantasy solution that is about as improbable as single payer: getting rid of the tax exclusion of premiums for employer-sponsored insurance.
As a result of an accident of history, employers and employees do not have to pay taxes on costs of health insurance policies.
Conservatives hate this. “We call the tax exclusion for ESI a tax ‘break,’ but when you think about it, it operates more like a tax hike,” writes the Cato Institute’s director of health policy Michael F. Cannon, another symposium participant. “It coerces workers into handing control over $11,000 of their earnings to their employers, who then choose the workers’ health plans for them.”
John McCain campaigned for president on ending this “tax break,” which costs taxpayers more than the costs of all the subsidies and Medicaid expansion in the ACA, according to symposium participant Dr. John Z. Ayanian. This will never happen because it would be far more disruptive than Medicare for All and — unlike effective single-payer systems around the globe — it has never been proven to work, anywhere.
As a result, taxpayers will continue to help subsidize takers like Ted Cruz, whose family’s $40,000-a-year insurance policy from Goldman Sachs entitles them to a subsidy large enough to put a family of four on Medicaid, though the Cruzes are clearly able to afford their own health insurance.
Republican Arguments Against Obamacare Are Opportunistic And Contradictory
Republicans fought the passage of the ACA by conjuring images of “death panels” pulling the plug on grandma and a “government takeover” that would destroy America.
The problem with these warnings was that approximately 80 percent of Americans get their health insurance through their employers. Most of these people haven’t and likely won’t notice much of a change in their coverage whatsoever, unless they’ve gone in for preventive or reproductive health care and discovered that they didn’t have to pay a co-pay for it.
That’s why Mitt Romney’s continual assertion that President Obama was embracing “European” solutions never made sense to most Americans.
Republicans didn’t seize on the president’s now-disproven promise “If you like your insurance, you can keep it” until late 2013, though it was clear that it never jibed with his other promise to make sure insurance policies met minimum standards.
Now their fixation on cancellation notices boxes them in, in two ways. First, it ignores that their plot to repeal Obamacare would result in as many as 137 million cancellation notices. Second, right-wing policy proposals would force cancellations that target far more than the estimated 5 percent of Americans who are having their plans changed by the ACA.
“Even if free-market health care reformers were able to pass the plan of their dreams — which would involve tweaking the tax code to end the bias in favor of employer-sponsored insurance — it would likely mean a lot of people would get dropped from their current plans,” the Washington Examiner’s Philip A. Klein notes.
The Republicans’ advantage is that they’re so stuck on the “repeal” part of “repeal and replace” that they’ve never actually passed an ACA replacement. Their rhetoric, and the fact that the only real conservative alternative to single payer requires an individual mandate, means any plan they pass would likely end up generating the same criticisms they’re lobbing at the ACA.
We Can’t Go Back To The Pre-Obamacare Health System
Dr. Ayanian pointed out that though the ACA may not be embraced by a majority of the American public, three key policies have: young people staying on their parents’ plans until age 26, closing the Medicare Part D prescription-drug donut hole, and the ending of concerns about pre-existing conditions.
The Republican Study Committee Obamacare replacement plan, which the House has not voted on, provided pre-existing conditions protections, but only for those who are already insured.
The Washington Post’s Jonathan Bernstein puts it simply — repeal “is dead”:
No one is ever going to kick young adults off their parents’ insurance (or change the law so that insurance companies are allowed to do it). No one is going to bring back the various limitations in pre-ACA insurance policies. Some trimming of the new Medicaid rolls might be possible. But no one — no politician who has to face reelection, at least – is going to just toss all those people off their insurance with nothing to replace it.
Beyond all this is simply the Humpty Dumpty-ness of the situation: The old system has been slowly pushed off the wall for three years now, and by this point it’s really beyond repair, whatever the merits or politics of the situation. Garance Franke-Ruta captured some of this in making the point that delaying things would be impractical at this point, but it really goes beyond that. Too many people have already done too many things to make a full reversal even remotely plausible.
Before the ACA became law, millions of Americans lost their insurance, rates were rising faster than the rate of inflation and the federal government was absorbing more and more health care costs. Repealing it would be a nightmare in that it would reveal a broken health care system badly in need of some type of fix.
Republicans Are Hurting Themselves, Their States And The Working Poor To ‘Punish’ Obama
Because the Supreme Court gave them the chance to do it, about two dozen — all Republican — states have completely rejected the Medicaid expansion in the ACA, even though the government will cover 100 percent of the costs of the expansion for the first three years. States could then opt out of the coverage or continue it with the feds’ contribution decreasing to 90 percent by 2020.
Medicaid expansion should be a huge transfer of wealth from rich blue states to poorer red states, as most of America’s public assistance programs are. Instead Texas, with the largest uninsured population in the nation, has rejected expansion, but will still contribute to helping to insure Californians.
By rejecting Medicaid expansion, just four states – Florida, Texas, Georgia, and North Carolina — will leave 5 million poor people with jobs uninsured. This will result in more emergency room visits that the uninsured cannot afford, and higher rates for the insured in those states.
By: Jason Sattler, The National Memo, November 5, 2013
“The Last People We Should Take At Their Word”: In Shocking Development, Health Insurance Companies Still Suck
The Affordable Care Act was designed to solve the big problem of health security—namely that nobody in America had it—and find a way to get coverage for the 50 million Americans who were uninsured. It also attempted to address lots of other problems, and this week it’s a good time to remind ourselves that many of its provisions came about because, to put it bluntly, health-insurance companies are despicable scum who will literally kill people (more on this below) if it makes them more money. I bring this up because now, people in the news media are learning about a scam insurance companies are trying to pull on some of their customers, and are not only not portraying it as such, but are simply taking the insurance companies’ word and blaming the whole thing on the Obama administration.
I realize that part about “despicable scum” is a little intemperate, and without question there are employees of the insurers who are good people. But as a whole, outside of the tobacco companies or gun manufacturers it’s hard to find an industry that so frequently destroys people’s lives when they’re at their most vulnerable and fools so many people into thinking they’re safe when they aren’t. Because of the shocking behavior insurance companies are capable of, the ACA had a number of provisions meant to rein in the companies from their most horrific abuses. It made lifetime caps on coverage illegal, meaning that people with the worst illnesses and accidents won’t go bankrupt because their insurance companies abandon them. It outlawed denials for pre-existing conditions. It banned “rescission”—remember that one? That’s when you get the worst news of your life, for instance that you have cancer, and the insurance company swings into action. They start poring over every document you’ve ever signed to see if they can come up with a reason to kick you off your coverage and avoid paying for that expensive treatment. Like the woman who got a cancer diagnosis and was scheduled for a double mastectomy, then got booted from her policy because her insurance company’s diligent efforts unearthed that she had forgotten to tell them she had once been treated for acne, which allowed them to claim that her original application for insurance was fraudulent and therefore they could rescind her whole policy.
That’s what I mean when I talk about them literally killing people. If someone has a life-threatening illness and will die without treatment, and then the insurance company to which they’ve been dutifully paying premiums decides to say “screw you” and make it impossible for them to get treated, then that’s an accurate way to describe it.
And as you’ve heard, these very same companies are now sending letters to thousands of their customers, telling them that the policies they’re on (which in many cases are junk insurance that covers virtually nothing) are being cancelled, and they’ll now have to pay hundreds of dollars more every month. Those customers are naturally aghast. And reporters are running to find them and air stories about the horrible “rate shock” Obamacare is producing. What those reporters aren’t doing is asking what you’d think would be relevant questions, particularly since it’s health insurance companies we’re talking about. Questions like: Is this letter accurate? Is there something the insurance company isn’t telling this customer? Might they be trying to pull a fast one, to maximize their profits at this person’s expense?
Even though it was only last week, I think I was among the first to raise the possibility that these cancellation letters are a scam, and now it’s looking more and more like that is indeed the case. One after another of the people who have been featured on breathless news stories about insurance cancellations turns out to have much better options on the new health insurance exchanges, in many cases for better coverage at lower prices than they’re paying now. The letters appear to be an effort to lock customers into high-priced policies before they discover that they have other options available to them. But we aren’t finding out about that from the big media outlets, who just prefer to run the same credulous story over and over about the 60-year-old Florida woman with a $54 a month joke of an insurance plan whose insurance company is trying to sell her a plan for many times as much.
This whole thing should serve as a reminder that while the ACA tried to create a regulatory framework that would curb the worst abuses of the insurance industry, the whole thing was also engineered to maintain the position and profits of that very industry. And if you think they suddenly decided to value their customers’ physical and financial health over their own profits, you’ve got another thing coming.
While we’re on the topic, Brian Beutler gives us something else to think about:
Let this be a reminder to the Democrats on Capitol Hill and in the White House who killed the public option. It could’ve been designed as a default plan for cancelees. And its very existence would have imposed discipline on the system — if everyone knew they can enroll in a plan modeled on Medicare, insurers would be less inclined to swindle their customers. Ironically, but predictably, the Democrats who will face the greatest political consequences of the turbulent final throes of the old individual market are in many cases the ones responsible for leaving it in the hands of for-profit insurers. But there’s plenty of blame to go around here, including to reporters treating missives from health insurance companies as reliable testimony.
You’ll remember the absolute horror with which Republicans greeted the possibility of a public option being included in the law. They were terrified that if Americans were allowed to choose to enter a Medicare-like program, lots of them would do it, and the insurance companies would lose customers. This was a perfectly legitimate fear; if Medicare is any indication, a public option would have likely been less expensive than private insurance and produced happy customers, and every person who chose to get their insurance from it would represent a rejection of conservative ideology. President Obama claimed he favored the inclusion of a public option, but never displayed any enthusiasm for it and seemed eager to drop it as one of the many failed gestures intended to win the Republican support that never materialized.
That may be a topic to revisit on another day. But if there’s any rule that reporters should follow when reporting on the rollout of the ACA, it’s this: Don’t take insurance companies at their word. They’ve already shown us who they are, and there’s no reason to think they’ve changed.
By: Paul Waldman, Contributing Editor, The American Prospect, November 5, 2013
“A Range Of Options And A Very Good Deal”: Under The Affordable Care Act, Millions Eligible For Free Policies
Millions of people could qualify for federal subsidies that will pay the entire monthly cost of some health care plans being offered in the online marketplaces set up under President Obama’s health care law, a surprising figure that has not garnered much attention, in part because the zero-premium plans come with serious trade-offs.
Three independent estimates by Wall Street analysts and a consulting firm say up to seven million people could qualify for the plans, but federal officials and insurers are reluctant to push them too hard because they are concerned about encouraging people to sign up for something that might ultimately not fit their needs.
The bulk of these plans are so-called bronze policies, the least expensive available. They require people to pay the most in out-of-pocket costs, for doctor visits and other benefits like hospital stays.
Supporters of the Affordable Care Act say that the availability of free-premium plans — as well as inexpensive policies that cover more — shows that it is achieving its goal of making health insurance widely available. A large number of those who qualify have incomes that fall just above the threshold for Medicaid, the government program for the poor, according to an analysis by the consulting firm McKinsey and Company.
The latest analysis was conducted by McKinsey’s Center for U.S. Health System Reform, whose independent research has been cited by the federal government and others.
“The whole point of the law was not only to cover the uninsured, but so people didn’t have to make choices between food or drugs, or going to the doctor or dentist,” said Karen Davis, a health policy expert at the Johns Hopkins Bloomberg School of Public Health. “It’s what it is designed to do.”
Many insurers tried to price their least expensive plans so they would become free or nearly free with the addition of subsidies that are set based on a person’s income and the cost of a midlevel, or silver, plan.
Independence Blue Cross in Philadelphia has four plans that are free to some customers. But the company, along with other insurers, has been careful not to publicize its free coverage for fear of alienating customers who will need to pay more.
“We’re not advertising zero dollar,” said Brian Lobley, a senior vice president at Independence Blue Cross. But the company is promoting monthly premiums in the $20 to $30 range, he said.
The Obama administration has also stressed affordability over coverage with no monthly charge, frequently saying that the cost of coverage will be less than a monthly cellphone bill for many consumers. Officials at the Department of Health and Human Services would not comment on the McKinsey analysis, saying in a statement that the goal of the health law was to provide a range of options for people with differing needs and budgets.
The analysis found that five million to six million people who are uninsured will qualify for subsidies that will be greater than the cost of the cheapest bronze or silver plan. A million more people with individual insurance could also be eligible, according to McKinsey, although estimates of the size of the market for private individual insurance vary widely. None of the people in the analysis qualify for Medicaid.
The availability of zero-premium plans may make the deal especially enticing to the healthy young people the marketplace needs to succeed, said Mark V. Pauly, a professor of health care management at the University of Pennsylvania’s Wharton School. “This is such a good deal that you’d have to believe you were immortal not to really pick it up,” he said.
Although they vary in their design, bronze plans generally cover about 60 percent of a person’s medical costs. All plans, including bronze, must cover standard benefits like prescription drugs, maternity care and mental health treatment.
The availability of the zero-premium plans varies across the country. McKinsey found that about 40 percent of the uninsured in Missouri will be able to select a no-cost bronze plan, for example, compared with 2 percent of the uninsured in New Jersey.
Its estimate, based on an analysis of premiums for plans offered in the marketplaces in all 50 states and the District of Columbia, is in line with two other estimates, by Credit Suisse and Morgan Stanley.
The McKinsey researchers also found that about half of the people eligible for zero-premium plans were under 39 and uninsured. The Obama administration has been emphasizing the affordability of its plans for young people, a critical group because their participation in the marketplaces will help keep overall premiums low.
It is impossible to know who will actually sign up, and whether they will choose a zero-premium plan.
For many people, paying slightly more for a silver plan may be a much better option, experts said. Ninety percent of those who will have the option of buying the no-cost plans make less than 250 percent of the federal poverty level, which is $28,725 for an individual, and $58,875 for a family of four. People earning below those thresholds are eligible for the most generous assistance, but only if they choose a silver plan.
About a million of those who will qualify for free coverage will be able to buy a silver plan for no monthly cost. McKinsey, which is releasing a report about the new insurance marketplaces, estimates that the cost of silver plans for the people who qualify for a zero-premium bronze plan will range from $40 to $50 a month.
“They may be getting zero premiums, but they’re also leaving a lot of money on the table if they don’t enroll in a silver-level plan,” said Sabrina Corlette, a professor at Georgetown University’s Health Policy Institute.
All plans, including bronze policies, limit annual out-of-pocket costs to $6,350 for individuals and $12,700 for families. But insurers and advocates said out-of-pocket costs — even those under that limit — can be daunting to people with low incomes.
For Mark and Elisabeth Horst, both artists in Albuquerque, the risks of signing up for a bronze plan were outweighed by the prospect of getting it free. The Horsts, who make $24,000 a year between them, qualified for $612 in monthly subsidies, but the cost of a bronze plan was $581 a month.
“We’re in good health,” Mr. Horst said.
Besides, he said, they can always switch to a better plan next year. “At this point, it’s a little bit of a gamble.”
Not everyone selects the cheapest option. Dante Olivia Smith, a lighting designer from Manhattan, learned that federal subsidies would allow her to buy a bronze plan for $24 a month.
“It was astounding,” she said. “I almost started crying, and called my mom.”
In the end, however, she went with a silver plan for $91 a month that included dental and vision coverage. Ms. Smith, who is 30, said she opted for the more comprehensive plan because of her work, which requires her to climb ladders and use power tools.
“If I had a different job, for 24 dollars a month I would have been like ‘Woo-hoo!’ ” she said. “But the reality is, I know what my risks are in my life.”
By: Reed Abelson and Katie Thomas, The New York Times, November 3, 2013
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