The not-so-successful rollout of the Patient Protection and Affordable Care Act has a lot of people unhappy. Millions have lost their insurance, millions can’t get insurance because of faulty exchanges, and millions are seeing rates rise and benefits fall. Obama has made a major change of questionable legality on short notice, which doesn’t seem to have pleased anybody.
In short, things are going pretty well, compared to where they may be a year from now.
Let’s start with a few facts. The market for private health insurance splits into two very unequal parts: employment-based and individual. Obama has said several times that only 5% of Americans have individual insurance plans. In reality it’s higher, but the individual market is certainly tiny compared to the 156 million Americans who have employment-based insurance.
The PPACA was initially scheduled to reshape both parts of the market, starting this year. Just a few weeks before the launch, Obama delayed the employer mandate, effectively postponing most changes to that part of the market. (Questionable legality once again, but I digress.) So everything that we’ve heard about in the past six weeks–malfunctioning federal website, malfunctioning state websites, millions losing their coverage, rising prices, people forced to switch doctors, the desperate “fix”–all of it comes from the individual market. Obama has mentioned this when discussing the cancellations: “Keep in mind that the individual market accounts for 5 percent of the population.”
So what’s going to happen when the focus changes to the employer-based plans next year? According to this chart from the Federal Register in 2010, the government expects a majority of employer-based plans to be cancelled as well. Consider the anger that’s erupted over a few million cancellations in the individual market these past few weeks. Think things will go well when 80 million or so people have their plans cancelled next year?
I predict that they will muddle through. Some people will end up paying less for insurance some people will end up paying more. Of these some will have better insurance as a result some will not. There will also be a small but important number of people will able to have insurance where they couldn’t before. By and large as a society we will be better off as long as the noise machine doesn’t get so loud that the system gets scrapped.
Just to put things in perspective, every year we have an annual enrollment period to sign up for the employer sponsored health insurance. Three out of the last five years I have found that the policy which I had was no longer available and I had to find a new one. In some cases the employer dropped the policy, and in some cases the insurer dropped the policy, but 60% of the time it was a mad scramble in the ten day window to sort out which of three insurance policies to sign up for, all of which had books like encyclopedias with appendices and codicils and lists of exclusions for this, that, and the other thing, and if you chose poorly and got screwed you had to live with it for a year and then try another spin on the wheel of destiny, usually with three new policies to choose from.
So what am I going to do if my policy gets cancelled? Same as I do most years, read the policy as well as I can, pick one and hope for the best. I’m used to it.
You reason based on that chart that there will be cancellations for 80 million Americans. But based on that chart, well over half of those cancellations have already happened.
So either the chart is wrong about the level of cancellations, or the political reaction to canceled group plans is not the Darrell Issa wet dream you’re hoping for.
Kinda depends on what is meant by “figure it out”. Do you mean “carefully explore and analyze, which results in finding the correct solution that offers a practical and affordable solution to the problem” or “pick the best of a bad lot and pray nobody gets sick”?
Of course, whoever made the chart in 2010 didn’t know how many times parts of the ACA would be changed, rewritten, eliminated, added, or delayed in the years ahead, so predicting the timetable would be difficult. Obviously there are big differences between the upper and lower estimates, so no one knows the exact number of cancellations to expect in the employer-based market, but I’d expect it to be a fair number.
Not really. The only arguable unknown on the legal side with respect to this issue was the precise contours of the grandfathering rules, which are of course in the document from which you took this chart.
The main other change was the delay in enforcement of the employer mandate, but since we’re talking exclusively about firms that already provide insurance, that change is irrelevant to the estimates.
This overlooks the real looming health insurance disaster; as premium increases on group health insurance policies outpace the growth of the economy, more and more of the premiums will be borne by the employee until no one but the oldest and sickest can justify the expense. This drives up costs, which drives up premiums even further and even more people drop out. This death spiral has already started, and it is only going to accelerate in the future. The end game is the complete implosion of private health insurance providers as we know it.
This sounds more like a “best realistic case” for US healthcare than a disaster. But I suppose I am assuming that those two terms are muturally exclusive. Which they may not be in this case.
I’m not particularly happy about it, but I’m resigned to the fact that this is the path we are doomed to tread to get to the single-payer Promised Land.
Yes, the real health care disaster is yet to come. Namely, a generation of geriatric patients is about to start needing gobs of medical care, while the number of people paying for that care decreases, and as their average wages continue to decrease.
And nobody, not Democrats and especially not Republicans, is willing or able to address this fundamental problem.
That’s not true. More than half of the numerous cost control measurescontained in Obamacare are targeted at Medicare costs. It’s not a fundamental restructuring of the Medicare system, but it is very serious reform with even the pessimistic estimates suggesting it will save hundreds of billions of dollars over a decade, much less a longer time horizon.
