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Sep 07 2013

Hopeful signs on health care

Like others who strongly support a single-payer health care system, I have been highly critical of the Affordable Care Act (aka Obamacare), seeing it as a bureaucratic monstrosity that was designed to keep the useless and parasitic health insurance industry in business while also allowing the hospital and drug industries to keep making exorbitant amounts of money. I also felt that while it would help some people, it would not do enough and would not reduce costs much.

It turns out that I was likely wrong on the last point. I went to a talk at my university yesterday given by one of our professors J. B. Silvers, a national authority on health care policy and someone whose opinion I respect a lot, and he says that that given the constraints, he thinks it is going to work out pretty well, and that those who are currently uninsured for whatever reason will be able to purchase pretty good health insurance policies for less than what they currently pay. Others seem to agree.

There are still some kinks to be worked out but he is optimistic and now, so am I.

10 comments

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  1. 1
    Jeffrey Johnson

    [Obamacare] was designed to keep the useless and parasitic health insurance industry in business while also allowing the hospital and drug industries to keep making exorbitant amounts of money.

    I’d say this is a true statement, but it is not a complete one. The fundamental pillars of the ACA, guaranteed issue and community rating, the individual mandate, and low income subsidies were designed to work within our existing health framework (i.e. to keep health insurance industry in business and protect existing hospitals). But the view that it was only designed to fatten greedy capitalist health care parasites is too narrow and cynical.

    As much as I want single payer, simply destroying the private health insurance industry with one stroke of the pen would be extremely costly to millions of people, and costly to the government. This is kind of like taking property by eminant domain, or exporting a whole industry to China overnight. Lot’s of people would be unemployed, and lots of investors would be incredibly angry. So this is a sticky problem that would need care and resources to put into effect.

    The ACA was also designed to solve the coverage problem for those with pre-existing illness, to reduce costs to older sicker Americans while enlisting younger healthier Americans to enter the risk pool earlier, and to expand the number of people who could afford coverage.

    The reason it wasn’t single payer is because the US doesn’t have a benevolent dictator who can make such a sweeping change by fiat, and there is not enough political support for such a change. Just doing the ACA was hard enough.

    So the ACA was also designed to be politically feasible, which in the real world is often necessary or you get nothing at all, and it often means you have to settle for something less than ideal. A lot of very smart health care economists and industry experts contributed a great deal of work and knowledge to the design of the ACA, and the overall goal was to expand coverage and reduce costs. The claim that it is a bureaucratic monstrosity is false, relatively speaking, and one spread by Republicans to decieve the public. “Government takeover” of health care was their dishonest talking point. Single payer would involve far more expansion of government bureacracy, but it would be worth it overall. The ACA is a relatively small increase in bureacracy comparatively precisely because it was designed to piggy back on the existing private coverage industry.

    Looking at how Medicare funds were reallocated to pay for the ACA, there is an often discussed $700 Billion or so that shifted from Medicare to help subsidize the Medicaid expansion and the subsidies for low income consumers on the exchanges. Republicans often claim this is stealing Medicare from seniors. This is a big lie. Stealing that money from seniors better describes what Paul Ryan and Mitt Romney wanted to do with that money, which was to shift it into a fixed premium support voucher. The effect would have been to put the burden of increasing costs on seniors. What the ACA did was to not reduce Medicare benefits to seniors, but to reduce the amount paid by Medicare to hospitals and pharmaceutical companies, enabling the funds to be reallocated without reducing benefits. The way this worked was that the money, by funding the increase in the number of people with health insurance (the Medicaid expansion and the subsidy of low income consumers on exchanges), and by bringing younger healthier people into the risk pool (the individual mandate), would mean that more people get insured at a lower cost per person because a. more healthy people pay into the risk pool, b. fewer people go to the emergency room for routine care, and c. the market for care providers and pharmaceuticals is expanded. So the money was shifted in a way that reduced the amount per person being taken by the health care industry while expanding the number of people with coverage and preserving the level of coverage for those already insured. It was an efficient and intelligent reallocation of funds that were being captured by private companies too easily.

    A step I would like to see is to encourage the government to use taxpayer dollars to provide massive funding for non-profit medical research facilities, and to eliminate drug patents for medicine. This could replace the speculative for-profit research done by pharmaceuticals for essential medicines. If the private companies would like to profit from people’s vanity, by focusing on boner pills, hair loss, wrinkles, and weight loss, fine. But real medicine needed to save lives should be sold at generic prices. The current pharmaceutical patent system is an obscene burden on medical costs in the US. If Medicare and Medicaid could purchase exclusively generic drugs at a reasonable mark up from manufacturing costs, without being robbed by the profits of pharmaceuticals with patent based monopolies, the research efforts would pay for themselves in the long run. Even more so if we go to a single payer system in the long run.

    I also like France’s approach to medical school: it’s free, paid for by the government. Doctors who really want to treat patients study and come out without crushing debt, and can afford to work for lower salaries than American doctors, which saves money for the government in the long run.

    We could also offer visas to doctors and nurses to encourage immigration of health care professionals. This would place downward pressure on wages, as it has done in the software industry.

  2. 2
    shripathikamath

    Obamacare was never going to reduce costs. All it could do was reduce the rate at which healthcare costs increased. There is plenty of evidence that it is doing that.

  3. 3
    Anniemouse

    I had to sit through a company meeting where the rwnj owner of the company ranted and raved about how Obamacare was going to bankrupt the company. We do IT and our people all have health insurance provided through the company. When I asked for details about how Obamacare was going to make us all unemployed, I got nothing coherent back, but now I’m branded a “wave-maker”.

  4. 4
    iasasai

    “…those who are currently uninsured for whatever reason will be able to purchase pretty good health insurance policies for less than what they currently pay.”

    I am uninsured and it presently costs me $0. No matter how you look at it, I’m going to be paying MORE to get one of these “pretty good health insurance policies”, not less This isn’t a knock on the ACA, but with zero income it’s STILL impossible foe me to have health insurance. I will not even be able to afford the IRS penalty that is associated with failure to obtain an insurance plan. I have access to the internet only through the kindness of others…

    Still, it’s a step in the right direction and if employment is ever a viable option again it’ll work out better than the monstrosity of insurance situations previously, but that time is not now. But that bit I quoted? The privilege displayed angered me immensely. Entirely too many of us are without insurance not because we are unhappy with the prices and are gambling by skipping paying for it and saving some money and thus are just waiting for the right deal to come along, as Silvers seems to imply, but because we just, flat out, cannot afford ANY of the insurance options thrown our way. Okay, he didn’t directly imply any of that, but I’m being generous by not outright accusing him of being oblivious or classist.

  5. 5
    Jeffrey Johnson

    If you have zero income you likely qualify either for Medicaid or for a subsidy on the exchanges. Many people will have the full cost of their insurance paid for.

    Here is a subsidy calculator: http://kff.org/interactive/subsidy-calculator/

  6. 6
    iasasai

    Using that link results in:

    “You could receive a government tax credit subsidy of up to: $0 (which covers 0% of the overall premium) ”

    Sure doesn’t look like it to me… I’m either too old or too young or not pumping out the babies like they want, or something… Previous investigations of Medicaid resulted in “We’re sorry, but you’re not eligible.” And no, I won’t be sharing life details with someone else on the internet to examine my situation further.

    To be fair, I think ACA is a number of steps forward. For those of us without income, however, it seems to be an equal number of steps backward. Admittedly, I haven’t read through the Act to grok all of the details and loopholes and technicalities for myself, and I’m not going to since I’m not a masochist for legal speak, but it sure looks to me like the situation hasn’t changed one jot. Don’t get me wrong, I’d LOVE to have insurance, but I kind of need to ensure that I have things like toilet paper, soap, laundry detergent, and all those other details not covered by SNAP that are nevertheless crucial in attempting to garner employment again. If there are indeed other people out there with zero income who are somehow eligible for a subsidy or Medicaid, then that’s awesome for them. It does not, however, seem to apply to those of us who are single and lacking children to use as emotional blackmail…

  7. 7
    smrnda

    Most opponents are just convinced it will make the sky fall, facts and figures be damned.

    I’m a tech entrepreneur, and I got a lecture on a bus ride from the person sitting next to about how ACA and ‘crippling regulations’ are hurting businesses – a Fox News viewer who had not actually ever started or run a business but who just regurgitated talking points.

  8. 8
    lorn

    I think you summed up the compromises made to get ACA passed. Yes, hospitals, insurance companies, drug companies, and pretty much the rest of the industries making cutthroat profits by standing between patents and medical care they need, get paid off, and will continue to be paid off, as long as the ACA, as written, stays in force. The good news is that the ACA was never designed to be anything but an intermediate step between how things are and how they need to be if healthcare is going to work for people.

    Changing demographics, healthcare exchanges, and people getting used to decent service at somewhat more reasonable prices are going to militate against things sliding back to the way things were done. Getting the profiteers riding the medically needy to the bank to swallow the bait long enough to set the hook on controls, terms, and exchanges was the hard part. Essentially Obama had to give them everything they wanted for them to overlook the hook of changes yet to come.

  9. 9
    Guess Who?

    The level of hysteria over the ACA is astounding. It’s like trying to talk sense to a tantrumming toddler; they have absolutely no idea why they’re melting down, but dammit, they’re *going* to pitch a fit and don’t you dare try to bring common sense or logic, or, you know, FACTS, into their tantrum.

  10. 10
    twosheds1

    I always ask people for specifics, too, not so much to make waves but out of genuine curiosity. I have yet to receive an answer that makes the slightest bit of sense.

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