The boosters, of whom Krugman is a lucid example, have been talking up new health care law, generally called the Affordable Care Act (ACA). They make good points. Some people with pre-existing conditions are covered who weren’t before. Those under-26 year-olds whose parents are insured are able to retain coverage on their parents’ policies. These are good things.

They are also drops in the bucket. After two years of weeping, wailing, and gnashing teeth, the richest country on earth managed to extend a bit of expensive complicated coverage to a fraction of its population. And that’s the good news. The point at which we all become captive customers of the insurance industry is still two years down the road. That’s when we find out what the tiny expansion of coverage is going to cost us.

The indications so far are not good. For instance, in the case of honest — or strictly regulated — insurance, providing it to everyone is cheaper because healthy people are in the pool as well as sick people. That should lower the currently stratospheric US premiums. In addition, the law has a number of stipulations that would limit insurance companies’ ability to raise premiums at will once the law goes into full effect in 2014. So what do they do? Raise premiums at utterly absurd rates before that. That way they can have high rates and captive customers after 2014. Wheee!

We are also reassuringly told that everything will continue as before, except the uninsured will be covered. It’s to be expected that some employers near the financial edge will drop their current coverage and their workers will have to use the ACA pools. The Congressional Budget Office estimated how many might do that. Initially it was around 2%, later updated to be slightly higher. A year later, a poll by IPSOS asked employers what they planned to do. The numbers came back: 30%-50% of employers said they planned to drop coverage.

That number was disputed. Some commissioned their own survey from a company called Avalere. They said a more realistic number was -0.3% to 8.5%.

“Avalere offers three reasons for why employers will continue providing insurance: 1) to recruit and retain employees, 2) historically there has been no viable alternative for employees to obtain comprehensive coverage on their own, and 3) boost worker productivity. “

Yes. And the Tooth Fairy leaves you silver dollars these days. I’ll take the points in turn.

  • 1) Attracting or retaining workers is not a factor I’ve ever noticed except in high-paying private-sector jobs. Restaurant workers, academic temps (well over half the faculty at most institutions), baggage handlers, truck drivers, don’t have the problem of choosing between job offers with enticing benefit packages.
  • 2) The whole point of ACA is that now there will be an alternative. Officially. “Affordable” really needs quotes around it, but, officially, there’s an alternative. So I’m not sure what kind of sense it makes to say employers won’t dump workers into alternative insurance plans because there aren’t any when you’re talking about an alternative insurance plan.
  • 3) Boost worker productivity. Indeed, good health benefits are proven to boost productivity, as are shorter work weeks, on-site day care, and flexible leave policies. Have you noticed all the employers vying to provide them? Give me a minute to stop laughing uncontrollably.


Okay. I’m back.

Then, just today, I saw yet another scam in the making which I’d never imagined. “[H]ealth insurers offering new type of self-insurance for firms with as few as 25 workers are gaming the system and may undermine a key goal of the federal Affordable Care Act.” More quotes from the LATimes article:

Self-insurance is attractive for many reasons, particularly the prospect of lower costs. It’s exempt from state insurance regulations such as mandated benefits….

Self-insured plans have an immediate cost advantage since there’s no state tax on insurance premiums being passed along by an insurer. Starting in 2014, they will also avoid additional fees levied on health insurers to help pay for the federal healthcare law.

Small businesses switching to self-insurance do gain more insight into why their medical costs might be rising so fast because they have access to detailed claims data. … [C]ompanies like the ability to see whether their employees’ use of healthcare is above average and to make changes in the benefit package to bring those costs in line.

What could possibly go wrong?

None of this even gets into the whole individual mandate rat’s nest, which the Supremes will start to address on Monday. I’m a liberal with a head so pointy you could hurt yourself on it. I believe the government must regulate and support lots of things. I have no problem with paying taxes that go to Medicare or Medicaid. But even I have a problem being told to fork over money to private companies over whom I have zero control. Not even the miniscule control of not buying their product, after ACA goes into effect. And that for the same industry imposing 60% price increases when it thinks it can get away with them.

That health law mess was the “realistic,” “politically feasible,” “doable” path. Not like Medicare for All. That would simply cover everybody at half the price. That’s just Not Done.


17 Comments on “ObamaRomneyCare”

  1. bostonboomer says:

    Yes, I have a problem with the mandate too.

    Dahlia Lithwick has a really interesting post on the SCOTUS calculus on whether or not to strike down the bill even though it’s obviously constitutional.


  2. RalphB says:

    This is a portion of the ACA that I like and it could turn some insurance companies business models on their heads. Bye Bye huge overhead.

    Federal Government Issues Final Medical Loss Ratio Regulations

    On November 22, 2010, the U.S. Department of Health and Human Services (HHS) issued final regulations on the medical loss ratio requirements provided for in the Patient Protection and Affordable Care Act (PPACA). The medical loss ratio (MLR) represents the percentage of premium dollars that health insurers “lose” through spending on their insureds’ health care, as opposed to amounts that can be spent on administrative expenses or retained as net profits. The final regulations are basically unchanged from those recommended by the National Association of Insurance Commissioners (NAIC) in October.

    Beginning in 2011, insurers will be required to adhere to the MLR standards, which proponents believe will improve the quality of health care coverage and keep rising insurance costs at bay. The MLR regulations stipulate targets of 80% for small-business plans and 85% for large-company plans (i.e., 80 or 85 cents of the premium dollar). If these targets are not met, insurers will be required to pay rebates to their insureds beginning in 2012. Specifically, for plans covering 50 or fewer people, PPACA requires insurers to spend at least 80 cents of the premium dollar on health care and certain activities to improve quality. For employer plans covering more than 50 people, the MLR requirement is 85 cents on the dollar.

    According to HHS, over 20% of consumers are covered by plans that spend less than 70 cents of every premium dollar on the provision of care, and in extreme cases less than half of every premium dollar is spent on care. HHS officials believe that the new requirements will prevent insurers from spending excessive amounts on such expenses as administrative overhead, marketing, and executive bonuses. The regulations set forth reporting and disclosure requirements and the methodologies for calculation of the medical loss ratio and consumer rebates, and provide for adjustments to prevent market destabilization.

  3. peggysue22 says:

    A timely update, quixote. I did hear the report that Slate mentioned–that 85% of associated lawyers believe that healthcare will be held up by SCOTUS. I can only imagine the reaction of the diehard opponents, who would have been opposed to anything in the way of reform, period.

    Not talking about your objections, quixote–I share those opinions. Yes, the reform bill does offer some positive things but one of the purposes of reform was to bend the cost curve and curtail the gouging of the public by medical insurance companies. The ridiculous spike in premium rates flies in the face of all that.

    Be prepared–this will be the nonstop topic of the week: the Obamacrats banging the drum for ‘reform’ survival and opponents claiming the free world will end if the law is upheld. Personally, I’m eager to see what happens in Vermont as a single-payer plan is implemented.

    Read an interesting essay yesterday, written by a self-proclaimed conservative, who said single payer is the conservative way to go in healthcare–it’s the most efficient and the most cost-effective direction, despite what the Krauthammer’s of the world keep screaming.

    Link here for one conservative’s point of view:


    • quixote says:

      Yeah. The conservative objection is that, zomg!, we might get some health care. Mine being (shriek, shriek, scream,scream) Why so little? So late? At such a price for ordinary folks? In my book, if you make $30,000 a year, which is some $25,000 after taxes, premiums in the area of $4500 per year, a bit less than $400 per month, is not “affordable”!

  4. foxyladi14 says:

    I have a problem with the mandate too.a slippery slope.whats next? 😦

    • RalphB says:

      Obviously, broccoli for everyone. 🙂

      • peggysue22 says:

        Or worse–Brussel sprouts!

      • I’m against broccoli for everyone–because I’m a broccoli greedo.

      • I also lurve brussel sprouts. 🙂

      • peggysue22 says:

        You can have all my Brussel sprouts, wonk. But it’s a fight to the death over the broccoli :0).

      • quixote says:

        Well, we could get another Prznit like the Shrub who decides the best use of people’s money is to buy software from his relative’s company. He did that to the New Orleanians, post-Katrina. But at least that was a bit of a scandal. Not enough, but a bit. Once you start saying people must give money to private companies, there’s no real limit to the possibilities for funneling money to cronies.

        The difference when the government uses private companies is that the government has way more leverage. And it can be answerable to Congresscritters, other government officials, ornery taxpayers, media, etc.

  5. Fredster says:

    I actually found something good out of the Affordable Care Act. During the transition to the exchanges or whatever they’re going to be called, the Feds set up a pre-existing condition program. And, since I’m in one of the states that did not set up their own program, I’m covered by a federal program. It’s not the cheapest thing around, but where is a health insurance plan cheap these days. It does have a prescription program and a wellness program where certain procedures for men and women are covered with no charge if you go to a PPO physician. The bad thing is it’s set to expire in Jan. 2014 when the exchanges kick in. However, I’ll worry about that when that time comes.


    • quixote says:

      Yeah. a useful part of the plan, and that’s set to expire.

      The whole thing just makes me want to scream. More baroque and byzantine complexity to accomplish a small part of something the whole rest of the industrialized world does for everyone at half the price.


      • Fredster says:

        Oh I agree quixote! However, I had looked at a plan available through the Tulane Alumni Assoc., through a broker they *recommend*. It wasn’t even a company whose name I recognized. The premium was around $1400/mo and had a 5k deductible. 😯 I had to wonder how many hospitals and doctors would take it. This plan is administered through a company (GEHA) that has a plan for fed employees and they use the same PPO network. Seven of the major hospitals in B’ham participate in this ppo and just about all of the ones in nola do also. The scripts program in particular is pretty good. I was able to finally change over to generic lipitor from generic zocor with the prescription plan. The doc had been wanting me to change over to that med for a long time but w/out ins. the cost was extremely prohibitive.

      • RalphB says:

        Since plans like that are mandated to be in the exchanges, if your state doesn’t have one I imagine the Fed one would still be available.

        Medicare for All would have been the best thing to do, no question. But it really pisses me off that some of the veal pen sites which provided a lot of ammunition to kill discussion of it by pushing a non-existent and unworkable small scale public option, cough firedoglake cough, are now some of the largest critics of the ACA from the left. Considering the history, they should just STFU!

      • quixote says:

        I quit reading FDL when the Obots took over, but I heard plenty about their attitude problem during the health care “debate.” (Not sure what to call it.) And now they have the unmitigated gall to disown their own baby?

        Barf. Just barf.

      • Fredster says:

        Since plans like that are mandated to be in the exchanges, if your state doesn’t have one I imagine the Fed one would still be available.

        I hope so Ralph. Hell, I could get the wellness stuff done and that would be great. Plus, when I did a provider search both for B’ham and in nola area the query responded with almost 100 docs who are in the plan. That made me think it’s got to be at least halfway decent or else the docs wouldn’t participate.