“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
“The Law Of The Land”: The Patient Protection And Affordable Care Act Stopped Being A “Bill” Several Years Ago
When congressional Republicans condemn the Affordable Care Act, there’s one problematic word in particular they tend to use an awful lot. The Hill did a nice job picking up on the trend.
In floor speeches, TV interviews and town halls, Republicans often refer to President Obama’s signature healthcare law either as “ObamaCare” or a healthcare “bill” — subtly implying that it’s not truly permanent.
“The bill is named after the president. Why wouldn’t the president want to be under the bill?” Sen. Mike Enzi (R-Wyo.) asked in a floor speech earlier this month, making the case that the president should get his healthcare through ObamaCare.
It’s clear that Enzi, who famously admitted that he engaged in health care reform negotiations in bad faith, is confused. The name of the reform law is technically the “Patient Protection and Affordable Care Act,” not “Obamacare,” so it’s not “named after the president.”
But that’s not the important thing. Rather, note that Enzi refers to the law as a “bill.” So does Sen. Marco Rubio (R-Fla.), who said last week that “this bill,” referring to the health care law, is going to hurt people. Sen. Rand Paul (R-Ky.) said there are “a host of problems [with] this bill.” Sen. John Cornyn (R-Texas) said “this bill” isn’t working. Sen. Orrin Hatch (R-Utah) chastised Democrats for supporting “this dog of a bill.”
Keep in mind, all of these quotes come from this month — September 2013 — not from the debate when the law was actually still a bill.
The Hill‘s report added that the Kaiser Family Foundation recently found that roughly 40% of Americans don’t know that the Affordable Care Act is, to use John Boehner’s phrase, the law of the land. One possible explanation for such widespread ignorance is the way in which congressional Republicans mislead the public in such a brazen way.
But stepping past the rhetoric, there’s also a substantive significance to this.
If you listened to the House floor debate on Saturday night or watched the Sunday shows, you know the GOP desperately hopes to characterize the current crisis as a “both sides” problem so it won’t receive the bulk of the blame. To hear Republicans tell it, they demand that “Obamacare” be gutted, while Democrats demand that “Obamacare” be implemented. “See?” conservatives say, “both sides are making demands.”
The problem, of course, is that this is almost unimaginably dumb. What Democrats are arguing is that the law is already the law; it’s met constitutional muster according to the U.S. Supreme Court; and it’s up to the president to faithfully execute current laws. If Republicans want to change the law, they can introduce legislation and give it their best shot.
Both sides, in other words, aren’t making comparable “demands” — one side expects existing law to be implemented, the other expects to use extortion to undermine the law they claim to dislike.
It’s very likely why so many Republican U.S. senators, who presumably have some understanding of the differences between a “bill” and a “law,” keep deliberately getting this wrong. If the Affordable Care Act is just a “bill,” then it’s not fully legitimate and Republicans are justified in trying to sabotage it outside the American legislative process.
By: Steve Benen, The Maddow Blog, September 30, 2013
“A Party That Can’t Decide To Chose”: The GOP Establishment Fractures On Immigration
Over the course of this year’s immigration debate, we’ve come to view the Republican party division as follows. On one side, advocating for comprehensive immigration reform, you have a group that is sometimes called “the establishment” or “the elite,” made up of people whose primary interest is in the party’s long-term national prospects. These are the big money people, the top consultants, some senators, and so on. On the other side, opposing comprehensive reform, you have “the base,” which is not only voters but also members of the House with a narrow interest in getting re-elected, usually by appealing to extremely conservative constituencies. On that side you also have some conservative media figures and others with strong ideological motivations against immigration reform. And then caught in the middle you’ve got the Republican congressional leadership, which can’t afford to antagonize the base but also worries about the effect killing immigration reform will have on the party.
But we may be reaching the point where these categories are no longer adequate to describe what’s going on within the GOP. This morning, William Kristol and Rich Lowry, the editors of the two most important conservative magazines (the Weekly Standard and National Review) joined together to write an unusual joint editorial titled “Kill the Bill,” coming down in opposition to the “Gang of 8” immigration bill that passed the Senate. The substance of their argument is familiar to anyone following this debate—the Obama administration can’t be trusted, it won’t stop all future illegal immigration, the bill is too long—but the substance isn’t really important. What’s important is that these two figures, about as establishment as establishment gets, are siding firmly with the anti-reform side.
Those of us who have been around for a while can’t help but be reminded of a memo Kristol wrote to Republicans 20 years ago, when Bill Clinton was trying to enact health-care reform. It argued that from a substantive and political point of view, Republicans should not try to negotiate with the Clinton administration or work with them to pass a reform that was as conservative as possible; instead, they should wage all-out war to kill it. “The plan should not be amended,” Kristol wrote, “it should be erased.”
Politically speaking, it was good advice; Republicans followed it, and they won. Sixteen years later they used the same strategy during the debate over the Affordable Care Act, and they lost.( It turned out, however, that conservative Democrats like Ben Nelson and Joe Lieberman did the Republicans’ substantive work for them, extracting a number of concessions from the administration that moved the bill in a more conservative direction). There’s a difference in this debate, however. Those two efforts at health care reform were always understood as a conflict between a Democratic administration seeking a longtime Democratic goal, and Republicans in Congress trying to stop them. It was reported like a sporting event: Clinton loses, Republicans win; Obama wins, Republicans lose. Immigration, on the other hand, has been reported largely as a battle within the Republican party. President Obama, knowing full well that anything he advocates immediately becomes toxic for most Republicans, has been using a lighter touch when it comes to public advocacy for comprehensive reform. (I’m not saying he hasn’t been pushing for it, but he hasn’t done the all-out, campaign-style barnstorming tour that would help turn it into a purely Democrats-versus-Republicans issue). The story has always been, “What will the Republicans do?” and if reform goes down, the headlines won’t read, “Obama Defeated on Immigration Reform,” they’ll read, “Republicans Kill Immigration Reform,” with subheadings like “Danger ahead for GOP as Latino voters react.”
I once knew a professor who would say to his students, “Institutions don’t speak. People speak.” His point was that we often ascribe a unified intelligence or will to things like the government or a corporation or a political party, glossing over the fact that it’s individuals making those decisions and statements. There may be a single most beneficial path for the Republican party to take, but the Republican party can’t just decide to choose it. A party is made up of lots of individuals, each with their own opinions, self-interest, and levers of influence, who will push it in one direction or another. With Kristol and Lowry coming out in opposition to reform (and perhaps other people like them to follow), it may no longer even be possible to say that the party establishment has a single position on the issue.
By: Paul Waldman, Contributing Editor, The American Prospect, July 9, 2013
“They Won’t Be Moving On”: What Will Republicans Do if Obamacare Turns Out OK?
Ramesh Ponnuru has a long piece at National Review imploring conservatives to come up with a health-care plan they can swiftly put in place when Obamacare inevitably collapses under the weight of its disastrous big-government delusions. Though I disagree with almost every point Ponnuru makes along the way, from his analysis of what will happen with Obamacare to his recommendations of what a conservative health-insurance system should look like (the fact that anyone, even a free-market dogmatist, thinks catastrophic coverage plus high-risk pools would work out great is just incredible), I’ll give him credit for trying to get his ideological brethren to come up with a proposal to solve what they themselves keep saying is a terrible problem. But alas, his effort is doomed to fail. Why? Because when it comes to health care, conservatives just don’t care. I’ll elaborate in a moment, but here’s the crux of Ponnuru’s argument:
Opponents of Obamacare should plan instead for the likelihood that in its first years of full operation the law will fail in undramatic and unspectacular ways. Premium increases, cost overruns, and the like may keep the law from becoming popular, but they will not prompt the third of the public that supports it to switch sides, or even get its many soft opponents fired up about it. Meanwhile, the administration will spend millions of taxpayer dollars to advertise the law’s benefits. The law’s dogged defenders will explain away all the disappointing developments, and the polls, as the result of continuing opposition in red states. A few conservative lawmakers have speculated that the law will crash so badly that the Democrats will themselves demand repeal in the next couple of years. That is not the way to bet.
Republicans’ confidence that Obamacare will collapse has contributed to their lassitude in coming up with an alternative. It is a perverse complacency. If the program were going to collapse in the next three years, it would be all the more important for Republicans to build the case for a replacement for it. We can be sure that the Left would respond to any such collapse by making the case for a “single payer” program in which the federal government directly provides everyone insurance.
The biggest problem with this kind of appeal is that he will never, ever get anything beyond a tiny number of Republicans to invest any effort in coming up with a health-care plan. That would involve understanding a complex topic, weighing competing values and considerations against one another, and eventually getting behind something that will be something of a compromise. And let me say it again: They. Just. Don’t. Care.
That isn’t to say there are no conservatives who care about health care, because there are a few (like the folks at the Heritage Foundation who came up with the individual mandate!). But they are few and far between on the right. Your typical Republican, on the other hand, cares deeply about issues like taxes and defense policy, and works hard to understand them and come up with ideas for where they should go in the future. But had President Obama not passed health-care reform, they would have been perfectly happy to let the status quo continue indefinitely. They donned their fervent opposition to Obamacare like a new jacket, for reasons of politics, not policy. Sure, it was in many ways a conservative plan, much of whose complexity comes from the fact that it works to expand coverage within the private market. But it was big and important, and it was Obama, and it was a way to articulate their anti-government philosophy, and so they got fired up about it. But it isn’t because health-care policy is something they’re passionate about. Republicans care about taxes whether or not at the moment we happen to be having a big public debate about taxes. But if we weren’t debating health care, they wouldn’t be staying up nights coming up with interesting solutions to health-care problems, because it just isn’t their thing.
Ponnuru doesn’t allow for the possibility that Obamacare will turn out to be something less than a total failure, and he says that conservatives all believe the same thing (though he does differ from some of his allies on whether it will collapse dramatically or simply limp miserably along). But let me suggest another possible scenario: It ends up working pretty well. It doesn’t turn America into a health-care paradise, and there are some implementation problems here and there, and we still have to pay more for our system than other countries do. But people like the fact that their coverage is guaranteed, and the doomsaying turns out not to be borne out. Critically, the middle class and wealthy people who collectively hold political influence discover that their lives haven’t really been changed all that much, except in some ways that are positive. And it becomes hard to get voters too angry about Obamacare.
What will Republicans do then, if the issue doesn’t seem to have much political potency? Will they keep working to come up with new health-care proposals more in line with their values? Or will they move on to some other issues that seem to offer better opportunities to gain political advantage? If you think it’s the former, you’re dreaming.
By: Paul Waldman, Contributing Editor, The American Prospect, June 13, 2013
“Same Old Talking Points”: Republicans Are Committing Political Malpractice
Republican voters must be steaming mad.
But they don’t seem to show it despite the political malpractice of their party leaders over the last several years.
Republicans bet everything to defeat President Obama’s health care reform plan — without ever offering a real alternative or working with Democrats to find common ground. Then they doubled-down on hopes the Supreme Court would overturn the law. They doubled-down again believing that voters would deny President Obama re-election and they could repeal the law. They lost every time. Now, the country will live under a health care law — for probably a generation or more — that could have been based on many Republican ideas had they simply negotiated.
The GOP is doing the same thing with the budget sequester fast approaching on March 1. President Obama wants additional tax revenues by closing loopholes in the tax code as part of a plan to avoid the across-the-board spending cuts. He’s also promised significant cuts — including to both Social Security and Medicare — in return. But Republicans on Capitol Hill aren’t interested. They could likely win more spending cuts than they would have to concede in new tax revenues if they negotiated. Instead, they dig in.
The GOP’s stance is especially maddening since just two months ago they were willing to raise tax revenues by closing loopholes during the “fiscal cliff” debate. Now every Republican leader speaks from the same talking points saying additional tax revenues are “off the table.” As a result, the country will get fewer but more damaging spending cuts via the sequester.
Common sense would suggest Republican voters would rise up against their party leaders for failing so dismally to advance their party’s stated goals. Their silence is deafening.
By: Taegan Goddard, The Cloakroom with Taegan Goddard, The Week, February 19, 2013
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