Obamacare

On November 7, 1940, Gallopin’ Gertie collapsed.  If you are not familiar with the story, there is a great video clip of the failure in Tacoma, Washington.  The bridge was only open for 130 days.  “From the time the deck was built, it began to move vertically in windy conditions.  Despite numerous warnings,  officials decided to open the bridge anyway.  In a 40 mph wind storm the bridge collapsed after a dramatic period of enormous up and down movement (seriously, if you have not seen the video, its worth the watch).

ObamaCare is just about at this point.  The PPACA was passed by a partisan congressional vote, despite warnings by almost every insurance professional, commissioner, and organization in the country that this law was seriously flawed in its inception, and would fail.  As we approach the end of the third year of ObamaCare being in force, here are the facts:

  • 14 of 23 Co-ops created by the bill have failed, due to the lack of promised funding.
  • Aetna, who reports losing $200MM from the ACA, Humana and United Healthcare have all but pulled out for 2017.
  • Substantial increases are expected this fall, in some cases above 50% for individuals.
  • 27 Million Americans remain uninsured. The exchanges have enrolled 11 Million, about half of the original estimate by the plan authors.
  • Fully one third of Americans will have only 1 insurance company available in 2017.
  • 17% of Americans will have no choice of insurance carrier next year.

So on the Republican side we hear “Repeal and Replace” and on the Democratic side we hear a variation of “its working, kind of, and we can fix it.”  What failed?

Competition-  In theory the Co-ops would provide competition for the regular insurance carriers and lower prices.  They might have done so, if they had been allowed to survive by the very bill that funded them.  Both Hillary Clinton and President Obama have raised the concept of adding a “government option,” moving us closer to her stated goal in 1994 of a single-payer government-run system.

Cost-  For some people, those below 250% of the Federal Poverty Level, the law has made coverage more affordable, at least from a premium perspective.  However, the bill has done little or nothing to control health care costs in the country and indeed they continue to rise.  For most Americans this is the “unaffordable care act.”

Worse, for those that can now “afford their premiums” they have deductible amounts of $3000- $6850 – just having coverage doesn’t mean they can afford to take their kid to the doctor.

Premiums were supposed to be supported by forcing the young & healthy to join the plans, but there was little incentive for them to do so, and they have not.  Therefore the claims are much higher on a per person basis then the authors guessed they would be.

Hillary Clinton has floated the idea of giving more people more subsidies (note that we don’t yet know the real bill for subsidies in 2015, or how the country will pay for it).

Republicans have fielded the idea of cutting down the level of “required benefits” which drive the costs up.  As an example, in the past, maternity coverage was an option, now everyone has to pay for it.  This is a difficult conversation – what benefits a minimum level plan should be required to cover – but every mandated coverage raises the price.

REPEAL AND REPLACE- With what, exactly?  Repealing the law will not change a lot.  Insurance companies have made it clear that, after being forced to spend billions of dollars on revamping their entire software and operations platforms, they are not going backwards.  Eliminating the individual/employer Pay or Play penalties will further reduce revenue to an already underfunded mess.  The biggest expense is probably subsidies, and eliminating them would pull the rug out from underneath the 11 million Americans who have finally been able to afford their insurance premiums.

We need more than a sound bite from the Republicans, and the Democrats have seen to have forgotten what Albert Einstein said – the definition of insanity is “Doing the same old thing , with the same old people, the same old way – and expecting different results.”