“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
“What Congress Didn’t Say”: Obamacare Outlaws Policies That Are Essentially Worthless
As I watched Health and Human Services Secretary Kathleen Sebelius being grilled by members of the House Energy and Commerce Committee last week, it was immediately clear to me just how many of them are in the pockets of the industry I used to work for.
Former colleagues of mine undoubtedly had a hand in writing the members’ comments and questions. Their behavior showed just how much more willing they are to protect the profits of health insurers than protect the health and financial well- being of their constituents.
I got the same treatment from many of those committee members when I provided testimony in March — or tried to. I had been invited to talk about the business practices of insurers — practices that have contributed to the rising number of uninsured and underinsured Americans. Among them: refusing to sell policies to millions of us because of preexisting conditions and charging exorbitant premiums for skimpy coverage to others.
When I tried to tell the tale of a Florida woman who died of cancer last year because she was priced out of the market and was unable to buy coverage at any price, Rep. Marsha Blackburn, a Republican from my home state of Tennessee, cut me off. She clearly had no interest in hearing about Leslie Elder or anything else I had to say. Instead, Blackburn held forth for more than five minutes and gave me all of 20 seconds to respond.
Throughout that hearing, a former co-worker from my Humana days, who later worked for the industry’s big lobbying group and then the Bush administration, stood a few feet behind Blackburn. That former co-worker now serves as senior policy adviser to the committee. So I was not the least bit surprised that Blackburn was determined to give me as little time to talk as possible.
During the Sebelius hearing, Blackburn and other GOP members talked about letters constituents have received informing them that their policies will not be available next year. How could that be, they asked, when the president assured us four years ago that, “If you like your health care plan, you can keep your health care plan.” Blackburn, et al accused the president of being dishonest.
Obama should not have used those exact words. That’s because one reason for the Affordable Care Act in the first place was to protect us from insurers all too willing to lure us into inadequate policies with slick marketing materials. Insurers have made billions in profits from selling such junk insurance, and people like Blackburn clearly want to get rid of the law that makes junk insurance illegal.
As I wrote in Deadly Spin, a years-long industry strategy has been to shift more and more medical expenses to patients. As part of that strategy, big insurance firms bought smaller companies that specialize in limited-benefit plans, which often provide such skimpy coverage that some insurance brokers have refused to sell them.
Cigna, for example, marketed a limited-benefit plan to narrowly targeted prospective customers: mid-sized employers with high employee turnover, such as chain restaurants. The underwriting criteria was specific. The average age of an employer’s workers couldn’t be higher than 40 and no more than 65 percent of the workers could be female. (Insurers have long charged women more than men because in their eyes being born female is a pre-existing condition.) In addition, employers had to have a 70 percent or higher annual employee-turnover rate, meaning that most employees wouldn’t stay on the job long enough to use their benefits. Employees also could not get coverage for care related to any pre-existing condition during their first six months of enrollment.
Limited-benefit plans like that one, blessedly, will not be available next year, and that’s because of the Affordable Care Act. Neither will plans with sky-high deductibles. Another way insurers have shifted costs to patients in order to enhance profits: luring or forcing them into plans with such high deductibles they join the ranks of the underinsured the moment they enroll. When people in these plans get seriously sick or injured, they are on the hook for thousands of dollars in medical bills they’ll have to pay out of their own pockets.
Millions of Americans — including my son, Alex — got letters from their insurers in the years before the ACA was enacted informing them that their plans were being discontinued. Why? To fulfill the industry strategy of moving people out of plans with affordable co-payments and co-insurance obligations and into high-deductible or limited-benefit plans. Such plans are far more profitable.
Keep this in mind the next time you hear a politician railing against Obamacare because people are getting letters from their insurers. The truth these politicians want to obscure is that Obamacare is protecting their constituents from buying coverage that provides little to no shield against financial ruin. And that protection is something the insurance industry wants to get rid of.
By: Wendell Potter, The Center for Public Integrity, November 4, 2013
“A Demographic Death Spiral”: Immigration Reform Is Just One Of Many Reasons Why Hispanics Hate The GOP
In June, as the U.S. Senate debated comprehensive immigration reform, Senator Lindsey Graham (R-SC) voiced a commonly held theme among mainstream Republicans: After getting blown out among Hispanic and Latino voters in the 2012 elections, the GOP needed to get onboard with immigration reform, or face certain doom as America’s fastest growing minority continues to add more and more Democratic votes to the electorate.
“[I]f we don’t pass immigration reform, if we don’t get it off the table in a reasonable, practical way, it doesn’t matter who you run in 2016,” Graham told NBC’s David Gregory at the time. “We’re in a demographic death spiral as a party and the only way we can get back in good graces with the Hispanic community in my view is pass comprehensive immigration reform. If you don’t do that, it really doesn’t matter who we run in my view.”
At the time, I disputed Senator Graham’s claim that immigration reform could get the GOP “back in good graces with the Hispanic community,” arguing that it was just one of many issues on which Hispanic voters fundamentally disagree with the Republican Party:
According to a wide-ranging Pew Research study from April 2012, Hispanics are politically predisposed to the Democratic Party. The study found that 30 percent of Hispanics describe themselves as “liberal,” compared to just 21 percent of the general population. Only 32 percent describe themselves as “conservative,” compared to 34 percent of the population at large.
Furthermore, Hispanics clearly favor a Democratic vision of government. When asked whether they would prefer a bigger government providing more services or a smaller government providing fewer services, they chose big government by a staggering 75 to 19 percent margin. By contrast, the general population favors a smaller government by a 48 to 41 percent.
In short: Partnering with Democrats on comprehensive immigration reform certainly wouldn’t hurt the Republican Party among Hispanic voters, but it would fall far short of being the political game changer that Republicans like Graham hope. At the end of the day, there is just too much distance between the GOP’s priorities and those of the Hispanic community to imagine a major political shift.
Four months later, this divide is more clear than ever. Not only has the Republican Party failed to move the ball forward on immigration reform — allowing it to languish in the House as the latest victim of the fictional “Hastert Rule” — but it has continued to take positions on other issues that are certain to keep pushing Hispanic voters away from the GOP.
The Republican-driven government shutdown, for example, had a disproportionately negative impact on Hispanic and Latino families. According to Leticia Miranda, senior policy advisor for the National Council of La Raza, 37 percent of children in Head Start programs and 42 percent of Women, Infants and Children (WIC) program participants are Latino. Additionally, about 24 percent of the federal employees who faced furloughs during the crisis were Hispanic. A few positive gestures on immigration won’t erase the damage the Republican Party did to these families.
Additionally, the Affordable Care Act — which Republicans vainly hoped to kill by shutting down the government — is actually quite popular within the Hispanic community. In September, a Pew Research survey found that 61 percent of Hispanic-Americans support the health care law — well above the 42 percent approval rating that the law held in the poll among the general population. This makes sense, considering that Hispanics are the most underinsured demographic in the nation, and some 10 million Hispanics could gain coverage under the law. Don’t expect them to forget that the Republican Party shut down the government in an effort to stop that from happening.
These are just two of several issues — including education and gun reform – on which polls find Hispanics siding strongly with Democratic governing priorities over the GOP’s. Ultimately, even if Republicans do shift their position and sign on to a comprehensive immigration reform deal, they cannot expect to rapidly gain support among the Hispanic community. At least not unless they fundamentally change a platform that has been specifically tailored to attract voters with a completely different set of values.
By: Henry Decker, The National Memo, October 31, 2013
“A Very Low Bar”: How A Crazy Senator Became A Sudden Darling Of The So-Called Respectable Right
Fanfare! Trumpets! There has been a Big Important Speech on the Future of Conservatism. Let’s take it Really Seriously. Sen. Mike Lee, Republican of Utah, went to the Heritage Foundation Tuesday and spoke. Milton Friedman and Irving Kristol were namechecked! Russell Kirk was quoted! The gas tax was proposed to be slashed 80 percent! Oh wait, I am supposed to still be mentioning the Serious parts.
I shouldn’t make fun, maybe. There are serious parts. Lee’s concern for “immobility among the poor,” the middle-class squeeze, and “cronyist privilege at the top,” and his desire to fashion a conservative response to them, is the right note for a Republican senator to strike. Amen to calls for “a new conservatism of the working and middle class,” because either we will get one or the failed attempt to give us one will prove it to be a contradiction in terms. Conservative intellectuals of a reformist bent welcomed the speech—Ross Douthat, Reihan Salam (they co-wrote a book on these themes), Rich Lowry, Jennifer Rubin. BuzzFeed political editor McKay Coppins called it a “lofty, agenda-setting speech” for its ringing declaration, “frustration is not a platform. Anger is not an agenda. And outrage, as a habit, is not even conservative” and for its forceful denunciation of the House Republicans’ sociopathic shutdown tactic, which futilely damaged the U.S. economy and very nearly caused the federal government to default—a narrowly evaded catastrophe.
Except, of course, Lee didn’t do that last thing. Lee was pro-shutdown! Other than Ted Cruz, he was probably the House Republicans’ most important ally in the Senate. And he did not denounce—or, in his case, repudiate—the shutdown tactics. So now you see why I couldn’t help but make fun.
I suppose if we set the bar low enough that insects can do the limbo with it, you could read his speech as endorsing a less insane way forward. But here is what happened Tuesday: One of Washington’s most staunchly pro-shutdown politicians, appearing at maybe Washington’s most important pro-shutdown organization, pointedly refused to condemn the shutdown or suggest he would not support a future shutdown if it meant trying to repeal the Affordable Care Act, a.k.a. Obamacare.
On the contrary, Lee said, “I am proud of my friend Ted Cruz and the dozens of others—including Speaker John Boehner and the House Republicans—who fought Obamacare, continue to fight it, and will not stop fighting it.” At the outset, he narrated, “It began with our effort to stop Obamacare—a goal that all Republicans share even if we have not always agreed about just how to pursue it.” Absent a declaration that he no longer agrees with how he pursued it, one is forced to conclude that he feels the same way now. Douthat, Salam, and Lowry do not mention this.
There is a broader point here. If I ever found the bulk of my political views articulated by somebody whose most prominent action ever—undertaken in the past month and unrepudiated—was as grotesquely irresponsible as what Cruz, Lee, and the House Republicans put us through, it would cause me to question my views. I would reflect upon the fact that Lee and I share these beliefs, and that he logically extends them toward something totally self-destructive and crazy. I would have to conclude either that he is correct to do this, and therefore that my views must be wrong and that I must change them, or that he is not worth listening to, because he takes perfectly good ideas and warps them into something powerfully hazardous. There is apparently no such reckoning among the right’s respectable intellectuals—most of whom did oppose the shutdown itself, and not only for pragmatic reasons.
But in the meantime, let’s stick to the matter at hand. Can’t all reasonable people agree to ignore Mike Lee completely until he says he was wrong about the shutdown? Should this be a controversial suggestion? Given the gravity of the threat of a future shutdown, isn’t that the only responsible response?
Salam highlights several promising policy sketches that Lee offered; and truly, it is hard not to appreciate a Republican concerned with work-life balance issues. But Salam and the others misrepresent Lee—who, Salam notes, holds a relatively safe seat, and so presumably may speak his mind. Giving parents greater flexibility isn’t Lee’s foremost priority. According to Lee, “The first and most important policy goal Republicans must adopt to improve the lives of middle-class families is, and will remain, the full repeal of Obamacare.” How? Again, we have no choice but to presume that Lee believes that a legitimate tactic for repealing Obamacare is, and will remain, shutting down the government and threatening its default. How about we hear Lee out, and maybe even talk to him, sometime after he puts his gun away.
By: Marc Tracy, The New Republic, October 30, 2013
“Econ 101 For The Party Of Sore Losers”: Tea Party Politics And Policy Limit Economic Freedom And Growth
Our businesses, markets and citizens are breathing sighs of relief. After wasting billions and toying with America’s creditworthiness, the so-called tea party has ceased, for the moment, holding our democracy and our economy hostage. Nevertheless, the fringe faction that calls itself by this name has made it abundantly clear that it lacks the character to own up to its folly. This Party of Sore Losers (POSERS, for short) has hacked at the proverbial cherry tree and, learning nothing from young George Washington, has failed to own up. In fact, it is holding the axe behind its back, ready to hack again.
This past month, attention was appropriately focused on the short-term consequences of the government shutdown and the POSERS’ game of chicken with sovereign default – default at the national level. This is serious. As Warren Buffett emphasized during the crisis in an interview with Fortune, we’ve spent hundreds of years building up our credibility; it takes but a moment to ruin it. Worldwide, markets have enormous confidence in our financial integrity and the functioning of our government. To date, the free market believes in America’s capacity and commitment to make good on its obligations. Let’s keep it that way.
During the Reagan years, it was liberals who thought the world was ending because of mounting federal debt. Eventually the country paid it down. We must do this again, but if we’re serious about it, first we need policies that support enterprise and growth. We have come through long wars and a stubborn recession. More of our veterans need employment in the private economy, and more of our businesses need to be able to hire and to invest in innovation again.
It is under such conditions that the Party of Sore Losers thought it would play with default at the national level. This shows a blatant disregard for growth and what growth means to our nation. In their zeal, they have put the economic cart before the horse. It’s as if they truly don’t understand that the horse – private enterprise and the growth and employment it generates – pulls the cart.
Much has been written in recent weeks about what the shutdown cost the nation and what a default would have cost. If the brinksmanship that brought us there were only a one-time tactic, it would have been bad enough. As it is, this tactic was merely the latest instance in a consistent pattern of fixation on cuts and obstruction, to the exclusion of growth. If you were out of a job, would it do you much good to stop showering, doing the laundry or paying rent and utilities, all in an effort to cut expenses? It would bring your costs down, to be sure. But it wouldn’t help you get a job.
As vivid as this analogy might be, it makes the point. POSER policies block investment in infrastructure, financial transparency, food safety, pollution controls and education. These are our Internet, our shower, our breakfast, laundry and rent; these fundamentals provide the stable conditions we need to get back to work. Investment in them is something business owners repay many times over. When a stable and functioning government does its job, we entrepreneurs can do ours: creating value and hiring people without unnecessary hindrance.
There are significant dangers when the government starts doing what private industry does best. Think of the last time you were in line at a government agency, and of the level of customer service you received, compared to what you got from a company that would lose you as a customer if it did a bad job. You can vote your representatives out, but the staff at your local government agency isn’t typically up for re-election.
There are, of course, many dedicated civil servants who give you their very best. Still, overall, beware the performer playing to a captive audience. Private companies that succeed in locking you in as a customer only underscore the point. Think of the last time you were on hold with, or tried to use the latest software from, a business with which you as a customer were more or less stuck. When a company becomes the only game in town, or seduces you into signing that contract, a certain disdain for your needs often follows.
The POSERS who call themselves the tea party appear to be seized by a great fear that we will all be waiting in line at government health clinics. The trouble is that they’re forcing their version of free choice down our throats. It can be hard to see the irony in this when you’re convinced that you’re channeling the will of the people. In an interview in Business Insider just days before the recent debt-ceiling deadline, POSER Rep. Ted Yoho claimed to know what “the people” wanted. He broke it down for the rest of us: “They have chosen not to fund the government.”
How did we get to this point? Did the POSERS get so good at dismissing their perceived political opponents on ideological grounds that they started to hear nothing but their own voices? Was it the hay this faction made by obstructing government, while screaming that the president was a socialist, that allowed its arguments to become divorced from what a functioning market economy is?
However they talked themselves into it, the POSERS have demonstrated their readiness to play havoc with the most basic needs of the business owner in America. They have shown their disregard for what it means to carry on our work with some confidence that government will do its job, while we do ours. What’s so tragic about this, among other things, is that it discredits legitimate efforts to keep government out of places it shouldn’t be.
In view of what the POSERS have put us through of late, Americans of all mainstream political persuasions should be on guard. The so-called tea party may pose the greatest threat to free enterprise in decades. The POSERS would block moves to reestablish the financial transparency on which savers and investors rely. They would make us pay the costs of other people’s pollution. They would restrict the economic opportunity for immigrants on which this country’s success is based. And they would rob us of our right to enjoy or to suffer from that which we have chosen for ourselves in free elections.
Whether “Obamacare” turns out to hurt businesses and employees more than it helps them, we’re going to find out in practice. Far more threatening to private industry is the way the POSERS would cut off our economy’s nose to spite its face. One can only assume they earnestly believe themselves to be in a mortal struggle to keep government from interfering with our choices. In reality, of course, POSER economic policies limit those choices, in the ways I’ve described.
Moreover, these policies function to keep the private economy small and constrain recovery and growth, thereby perversely increasing our dependence on debt spending. We badly need to teach these ideologues the basics of cash flows, debt and investment, value generation and growth. Alas, the Party of Sore Losers has been busy teaching the rest of us a course of its own design. The textbook is titled, “Converting Resilient American Innovation into Entirely Unnecessary, Government-Induced Economic Paralysis (A Sore Loser’s Approach: 2013 Edition).”
By: Alejandro Crawford, U. S. News and World Report, October 29, 2013
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