Monday, August 19, 2013

Obamacare Rollout

Here's a prediction: By this time next summer, every single one of the GOP predictions about Obamacare will have been proved wrong: Now let's count the ways:
  1. Young, Healthy Won't Sign Up: This is the central flaw in the ACA, per the best of GOP pundits.The structure is wrong; its incentives are "perverse", which means they will accomplish the opposite of what was intended. The $95 year one penalty is way too small to be a real incentive for the young and healthy to sign up. With this group staying out, the risk pool will be "soured" with mostly unhealthy folks; costs will go up causing premiums to skyrocket; and the program will collapse.
  2. Upfront Premiums Will Skyrocket: Because Obamacare requires coverage of preexisting conditions; because the ACA requires all Exchange participants to offer standardized policies at four different levels of coverage, with no "bare bones" policies, no ability to discriminate based on gender, and only limited ability to discriminate price-wise on age - premiums will explode, right out of the gate.
  3. Employers Will Dump Workers into the Exchanges: Shortly after the ACA passage in 2010, conservative pundits began predicting disaster for employer-sponsored insurance. One reputable estimate predicted that 30 MM workers would lose their employer coverage. Carly Fiorina, former HP CEO, said on Meet the Press this Sunday, "We all know that the most repeated President Obama quotation from the beginning was that if you had insurance, then you would be able to keep it - this is just not going to be true."
  4. Healthcare Quality Will Go Down. Costs will Go Up: Dumping many millions more people into the healthcare system will lead to a shortage of doctors. Waiting times will shoot up. And the stress on the system, plus rapid increases in premiums, will cause healthcare costs to move up.
  5. State Exchanges Will Not Be Able to Open On Time: The delay of the employer mandate; the delay in the system for income and corporate insurance verification; and the delay in the new out of pocket caps for large group policies - all are indications that Obamacare is not ready for primetime, and that its October 1 kickoff will be a "train wreck."

I heard all of these claims on the Morning Shows yesterday. In conservative blogs and throughout Fox News, the above problems are "self evident truths." To a large extent, the MSM has bought into this picture: Obamacare, as it rolls out, will be a "train wreck", a "partial train wreck", or simply subject to innumerable, possibly crippling problems. That's why it was great fun to see this piece by Paul Krugman in this morning's New York Times, labeled in Real Clear Politics as "The Unstoppability of Obamacare". Here's Krugman:

Oh, there will be problems, especially in states where Republican governors and legislators are doing all they can to sabotage the implementation. But the basic thrust of Obamacare is, as I’ve just explained, coherent and even fairly simple. Moreover, all the early indications are that the law will, in fact, give millions of Americans who currently lack access to health insurance the coverage they need, while giving millions more a big break in their health care costs. And because so many people will see clear benefits, health reform will prove irreversible.

This achievement will represent a huge defeat for the conservative agenda of weakening the safety net. And Republicans who deluded their supporters into believing that none of this would happen will probably pay a large personal price. But as I said, they have nobody but themselves to blame.

Krugman is right on the money. Obamacare will work. Because of the subsidies, the young and healthy "invincibles" will sign up. Premiums will not skyrocket. At the worst, there will be a small decrease in the number of people receiving employer-sponsored insurance; and a more likely scenario is for a small increase in this number. Some areas, especially low to moderate income communities, may see a shortage of primary care doctors; but this situation will be rectified, quite possibly through Nurse Practitioners being given a larger scope in states under pressure. Costs will not go up; they will continue to moderate - we are in the 5th year of an historical turnaround in healthcare cost trends, based partly on the recession, but also on a combination of the stimulus investment in Electronic Medical Records, and the ACA's focus on supporting tests and providing new incentives to wean the healthcare delivery system off its terminally self-defeating, cost-increasing system of fee for service. And finally, the Exchanges will open on time, especially in Blue States. Where Exchanges will have glitches, where poor and lower income people will NOT be well-served, will be in Red states, where the GOP state government has refused to accept the Medicaid expansion, and refused to set up Exchanges. This Red-Blue State comparison will form an essential part of the narrative running up to November, 2014.

Do politicians pay a price for being wrong? And not just wrong, completely, totally, absolutely wrong on everything? My guess - not so much. Unfortunate, but probably true. What they do get hit for is not providing their constituents the same deal other folks are getting.

I think Red State Republicans will pay a price. Probably a big one.

1 comment:

  1. I know my two young adult offspring cannot afford to pay for high cost health insurance. The health policy my son's employer offered has a $5,000. annual deductible. That can rarely be met in any one year. What's the point. We all know it's not really about "health" care. it's about paying doctor or hospital bills. This kind of insurance logic is designed to protect someone's property not their health. Most young people don't own houses yet. And they can't afford to pay premiums on health insurance.

    What is it going to take to get us to "universal single payer" health insurance?