The Affordable Care Act might not bend the cost curve or improve the quality of health care, but it will save thousands of lives, as millions of uninsured persons receive the health care they need.
At least that’s the conventional wisdom.
But while observers assume that ACA will improve the health of the uninsured, the link between health insurance and health is not as clear as one may think. Partly because other factors have a bigger impact on health than does health care and partly because the uninsured can rely on the health care safety net, ACA’s impact on the health of the previously uninsured may be less than expected.
To be sure, the insured are healthier than the uninsured. According to one study, the uninsured have a mortality rate 40% higher than that of the insured. However, there are other differences between the insured and the uninsured besides their insurance status, including education, wealth, and other measures of socioeconomic status.
How much does health insurance improve the health of the uninsured? The empirical literature sends a mixed message. On one hand is an important Medicaid study. Researchers compared three states that had expanded their Medicaid programs to include childless adults with neighboring states that were similar demographically but had not undertaken similar expansions of their Medicaid programs.
In the aggregate, the states with the expansions saw significant reductions in mortality rates compared to the neighboring states.
On the other hand is another important Medicaid study. After Oregon added a limited number of slots to its Medicaid program and assigned the new slots by lottery, it effectively created a randomized controlled study of the benefits of Medicaid coverage. When researchers analyzed data from the first two years of the expansion, they found that the coverage resulted in greater utilization of the health care system.
However, coverage did not lead to a reduction in levels of hypertension, high cholesterol or diabetes.
Continue reading “Will the Uninsured Become Healthier Once They Receive Health Care Coverage?”
Filed Under: THCB
Tagged: chronic care, Costs, David Orentlicher, Diabetes, Health insurance, High cholesterol, Hypertension, Oregon Medicaid Experiment, The ACA, the uninsured, Wellness
Apr 9, 2014
With the ACA exchange enrollment deadline almost behind us, this is a good time to take a look at the big picture.
Three years after the first baby steps of implementation, what has the ACA accomplished?
When we consider the ACA, we can think of two broad goals. The “easy” goal was expanding coverage to the uninsured. We say “easy” because regulators should be able to succeed by simply throwing money at the problem, and that is a task our elected officials seem particularly adept at accomplishing.
The “hard” goal was bringing down the rate of growth in health care spending.
This has proven to be a difficult task for policy makers, who have been trying (and failing) for decades and have often done more harm than good.
We first consider the goal of expanding coverage to the uninsured. From its onset, the ACA chalked up a small victory by requiring plans to continue coverage for dependents under age 26.
This provided coverage to as many as three million uninsured, albeit the healthiest members of the population. The lion’s share of the reduction in the numbers of uninsured was supposed to come from Medicaid expansions and private exchanges.
And here is where the problems emerge.
Medicaid ranks have swelled in the 27 states (including DC) that have chosen to expand the program. Republican leadership in other states continue to assert they will not expand Medicaid, but given the exceptionally generous federal funding for this expansion, we find it hard to believe that most of these states won’t soon join the expansion.
After all, even Louisiana eventually raised its drinking age to 21 to get its share of federal highway funding. Similarly, we can’t imagine that the red states will turn down billions of dollars in federal funds.
Continue reading “Taking Stock of the ACA”
Filed Under: Economics, THCB
Tagged: Craig Garthwaite, David Dranove, Dependent coverage, Medicaid Expansion, Open Enrollment, Private Exchanges, Subsidies, The ACA, the uninsured
Mar 31, 2014
Since mid-December, we’ve brought you the latest data on public opinion of the Affordable Care Act (ACA) from the RAND Health Reform Opinion Study (RHROS), a new way to measure public opinion of health reform. The RHROS allows us to observe true changes in opinion by surveying the same people over time.
The trend of overall stability masking churn in individual opinion that we discussed last week has continued with our latest data. This week, however, we delve deeper to look at differences in opinion between two groups: those who had insurance in 2013 and those who did not.
Understanding how the ACA impacts these groups differently is particularly important. While the ACA is currently changing the landscape of health insurance, its impact should be especially pronounced for Americans who lacked access to insurance through their employer or government programs in 2013.
The following graph illustrates the opinions over time of all individuals who had insurance, regardless of the source.
This includes those who had coverage through their employer, purchased it on the private market, or received it through a variety of government programs, such as Medicare and Medicaid.
This group represents about 85 percent of the overall sample.
This graph shows opinion of the ACA among those who were uninsured in 2013:
At first glance, what’s striking about these two graphs is how similar they are—more on that in a moment—but there are actually some very important differences.
Continue reading “Metrics: Surprisingly, People Who Were Uninsured Last Year Remain Undecided About the ACA”
Filed Under: THCB
Tagged: health reform, Katherine Grace Carman, Open Enrollment, RAND Health Reform Opinion Study (RHROS), The ACA, the uninsured
Mar 1, 2014
Hospitals need to overhaul their processes so they can help the un- and under-insured stay healthy.
Many people running health care institutions tell me that they have been fighting the fight, learning to be nimble, transforming their cultures, making big changes as the landscape rearranges itself like a really bad day along the San Andreas Fault.
But in comparison with the actual scale of the problems, most of the business models and strategies in health care have been sleeping like overfed dogs. It’s wake-up time in America.
Nowhere is the problem defined more clearly than in this question: How can we deal with the tens of millions of new Medicaid recipients, the tens of millions of still-uninsured poor, and the increasing numbers of the underinsured?
Today’s hospital executives formed their careers around the “volume” question: “How do we get more and better-paying customers into and through our system?”
This is a different era. Most markets do not have enough medical care to go around, between an aging population, expanded Medicaid in 25 states, and expanded numbers of insured in all states.
When there is not enough of what you are selling to go around, operating inefficiently leads to choking on volume. In order to survive under any business model we must get the volume down and the value up.
First: What can we expect in the coming years?
The Future of Medicaid, the Uninsured and the Underinsured
Medicaid numbers are astonishing if you are not used to them. Even before the projected expansion, at some time during an average year about 72 million people, close to a quarter of all Americans, are on Medicaid. At any given moment, it’s over 50 million. Medicaid is an open-ended program:
When more people are eligible, or sick, or have more complex diseases, the states and the federal government pay more.
Continue reading “What About the Poor?”
Filed Under: THCB
Tagged: Costs, health care access, Hospitals, Medicaid Expansion, Quality, the uninsured
Jan 28, 2014
In my last post, I asked, “But what if most of the uninsured literally don’t buy Obamacare?”
“Only 11% of consumers who bought new coverage under the law were previously uninsured,” according to a survey of 4,563 consumers eligible for the health insurance exchanges done by McKinsey & Company and reported in Saturday’s Wall Street Journal.
The Journal reports that “insurers, brokers, and consultants estimate at least two-thirds” of the 2.2 million people who have so far signed up in the new exchanges are coming from those who already had coverage.
This is consistent with anecdotal reports from insurers I have talked to that are seeing very little net growth in their overall individual and small group markets as of January 1.
That’s even worse than I thought it would be even considering the January 1 individual policy cancellations and small group renewals that are driving employers to reconsider offering coverage––and that is saying something. The vast majority of the individual cancellations, particularly because of the early renewal and extension programs, are yet to come. The same can be said for the small group renewals.
This also tells us why the first three months of the Obamacare enrollment had a relatively high average age––they came from the same market that tended to skew older that the health plans already covered.
When McKinsey asked why subsidy eligible people weren’t buying, 52% cited affordability as the reason. Readers of this blog will know that I’m not shocked to hear that given what I have been writing about the high after-tax premiums, net of the subsidies, people are finding, as well as the high deductibles and narrow provider networks the subsidized Silver and lowest cost Bronze exchange plans are offering people.
Another 30% cited “technical challenges” with the website as reasons they have not yet bought. That said, enrollment in the state exchanges that have generally been running well––California, Washington state, New York, Connecticut, Kentucky, and Colorado are also only enrolling a very small number of people relative to the number of policy cancellations in their markets and the size of their uninsured population.
Private exchange Health Markets reports that of the 7,500 people it has enrolled, 65% had prior coverage.
Continue reading “The Uninsured Are Not Signing Up for Obamacare”
Filed Under: THCB
Tagged: Enrollment, Robert Lasewski, The ACA, The States, the uninsured
Jan 19, 2014
As the Affordable Care Act’s (ACA) exchanges open and Medicaid expansion takes effect, millions of uninsured Americans will gain new coverage. This raises a key question: how are we possibly going to meet the demands of all of these new individuals entering the system? The physician workforce is growing slowly, at best, at a time when an aging population is increasing demand for care.
Predictions include long lines for everyone, rising prices and premiums as physicians are able to command greater market power, and reduced quality of care. Some have recommended additional government funding to help train more medical residents as a response.
But while studies predict ACA implementation will prompt an increase in demand for medical services, there is evidence that the increase in demand will not be as great as the raw number of newly insured Americans might suggest.
The latest CBO forecast projects the reduction in the number of uninsured Americans under the ACA will be 11 million people next year and 24 million by 2016. That’s an increase in the percentage of Americans with insurance of roughly 5% in 2014 and 12% in 2016. If the uninsured used zero health care today, but upon becoming insured used the same amount as a typical insured person, then the increase in demand for care would be the same as the increase in coverage.
In reality, the uninsured use substantial amounts of health care – but only about half the care that the insured use today. One reason is because they are uninsured – paying full prices for care rather than a small copay discourages use. Another reason also explains why many (but not all) are uninsured in the first place: they are healthy and don’t anticipate needing or wanting medical care.
When the uninsured gain coverage, demand does increase, but not dramatically, studies show. Evidence from the Oregon Health Insurance experiment, in which a funding cap forced the state to grant Medicaid coverage to some applicants but not others using a lottery-type system, found that those who did gain coverage increased their use of both hospital and physician care by about one-third relative to controls.
Continue reading “Will ACA Implementation Lead to a Spike in Demand for Care?”
Filed Under: Physicians, THCB
Tagged: David Auerbach, Health Insurance Exchanges, Medicaid Expansion, Physician Shortage, The ACA, the uninsured
Sep 26, 2013
In his “The Great American Health Care Divide,” Brad DeLong laments the great ideological divide that has so long prevented this great country from developing a coherent national health policy.
I am glad to have Brad’s company, because I have whined about the same divide for several decades now, as evidenced by my “Turning Our Gaze from Bread and Circus Games,” penned in 1995 and “Is there hope for the uninsured?”
Finally, after a nice visit with my friends at the Cato Institute and reading the often amazing commentary on John Goodman’s NCPA blog , I was moved to pen a post on The New York Times blog Economix entitled “Social Solidarity vs. Rugged Individualism.” It was inspired by the often hysterical description of the Affordable Care Act (ACA) as a government takeover of U.S. health care or a trampling on the freedom of Americans, as in mandating individuals to have minimally adequate health insurance, lest they become freeloaders on the system.
The basic idea of my proposal is simple.
In 2009, Paul Starr had warned Democrats of a potential voter backlash against the individual mandate and proposed instead a nudging arrangement. Uninsured Americans would be auto-enrolled into health plan, if they chose not to select one, but could opt out of it with the proviso that for the next five years they could then not buy insurance through the insurance exchanges established by the ACA at community-rated premiums, and potentially with federal subsidies.
My proposal is to make that a lifetime exclusion. An individual would have to choose one or the other system by age 25. Should individuals opting out fall seriously ill and not have the means to pay for their care, we would not let them die, of course, but to the extent possible we would cover their full bill – possibly at charges — by expropriating any assets they might have and garnishing any income above the federal poverty level they subsequently might earn. Something like that.
As Jay Gaskill’s somewhat opaque reaction in “RUGGED INDIVIDUALLISM is NOT the Essential Value of Freedom” suggests, people who oppose the ACA as trampling on their freedom are not comfortable with my prescription, which does not at all surprise me.
Continue reading “A Health Plan for Rugged Individualists”
Filed Under: OP-ED, THCB
Tagged: Economics, Individual mandate, Insurance, The ACA, the business of healthcare, the uninsured, Universal coverage, Uwe Reinhardt
Aug 5, 2013
If it is done right, the Affordable Care Act (a.k.a. Obamacare) may well promise uninsured Americans a lot more than cheap, reliable medical care. It can also open the door to the democratic empowerment of millions of poor people, who are often alienated from much of the nation’s civic life, by strengthening the organizations that give them a voice.
This year more than 30 million uninsured Americans are to begin signing up for Obamacare, but the vast majority of those eligible for either the expanded Medicaid program, or for subsidized private health insurance through state health exchanges, have no idea how to enroll. Surveys and focus groups have found that up to three-quarters of Americans who might directly benefit from the program are skeptical that the law can provide high-quality insurance coverage at a price they can afford.
Continue reading “Obamacare’s Other Benefit”
Filed Under: OP-ED, THCB
Tagged: Activism, California, Covered California, Georgia, Health Insurance Exchanges, Health Plans, Louisiana, Medicaid Expansion, Nelson Lichtenstein, Texas, The ACA, The States, the uninsured
Mar 27, 2013
If consumers could review and shop for health care coverage as easily as they do television sets, costs would decline and we wouldn’t have as large a health care crisis. At least that’s what some folks would lead us to believe. But the picture isn’t that clear.
A recent article in The Wall Street Journal reports how companies are using private health insurance exchanges to lower costs and give employees more flexibility. The exchanges are similar in nature to those mandated by the Patient Protection and Affordable Care Act (a.k.a. Obamacare)—the difference being a private company is overseeing the exchange and not the federal government or states. Employees are able to log on to a site, review coverage plans with different benefits and a range of deductibles, and choose what works best for their budget.
A consultant running one such exchange was enthusiastic about its progress thus far. “When people are spending their own money, they tend to be more consumeristic,” Ken Sperling, national health exchange strategy leader for Aon Hewitt, a unit of AON Plc, told the Journal. (Aon itself, as well as Sears Holdings Inc. and Darden Restaurants are using a new Aon run exchange.) Benefits consultants Mercer (part of Marsh & McLennan Cos.) and Buck (part of Xerox) are rolling out similar private exchanges.
There’s no doubt that consumers are more astute, on average, regarding price for benefit when directly paying for goods and services.
Continue reading “The Smarter Healthcare Consumer Myth”
Filed Under: THCB, The Business of Health Care
Tagged: Consumer-driven health plans, John S. Wilson, Price controls, The ACA, the uninsured, Transparency
Mar 20, 2013
In the aftermath of the recent election, virtually all commentators were quick to conclude that ObamaCare has been saved. The health reform law can now go forward and Republicans are powerless to stop it.
The trouble is: ObamaCare is a deeply flawed piece of legislation. Its defects are so huge that Democrats are going to want to perform major surgery on it in the near future, even if the Republicans stand by and twiddle their thumbs.
That raises this question: What changes need to be made in the legislation to turn it into a health reform that solves existing problems without creating even more serious new problems? Here are six essential short term fixes:
Subsidize all insurance the same way. The way the government subsidizes health insurance under the current system is arbitrary and unfair. Employees with employer-provided insurance get that benefit tax free — a subsidy that is worth almost half the cost of the insurance for middle-income families. However, there is almost no subsidy available for people who must purchase insurance on their own. They must pay taxes on their income and then buy the insurance with what’s left over.
Under ObamaCare the subsidies become even more arbitrary. Although the new law creates generous tax credits for low and moderate income families who must buy their own insurance in newly created health insurance exchanges, the subsidy in an exchange can be as much as $12,000 higher than the same family will get if the same insurance is obtained through an employer!
Continue reading “Repairing ObamaCare”
Filed Under: Uncategorized
Tagged: Health Care Reform, Health Insurance Exchanges, health insurance subsidies, Individual mandate, John Goodman, Medicare, Obamacare, Penalties, the uninsured
Dec 12, 2012