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Health Problem Quantified

We now know how many people have the problem most often cited as the reason for last years’ health overhaul legislation. Answer: 8,000

No, that’s not a misprint. Out of 310 million Americans, only 8,000 people have the problem given as the principal reason for spending almost $1 trillion, creating more than 150 regulatory agencies and causing perhaps 150 million or more people to change the coverage they now have.

Alert readers will remember the White House summer of 2009 invitation to all Americans to send in their horror stories describing health insurance industry abuses. Although the complaints were many, the vast majority were about pre-existing condition limitations. Then, on the eve of the ObamaCare vote, every member of Congress who appeared on television to defend the legislation was able to cite by name an individual or family in his or her state or Congressional district with a heart wrenching story.

Gone was any interest in “universal coverage” or “insuring the uninsured” or “helping poor people get health care.” The case for change was focused almost exclusively on protecting the middle class from miserly insurance companies.

Although the most important parts of ObamaCare (the individual mandate, subsidies, employer fines, etc.) do not kick in until 2014, the legislation made interim provision for those with pre-existing conditions problems. A new kind of risk pool is open to anyone who is denied insurance in the private sector and it’s available for the same premiums healthy people pay. Twenty-three states are operating their own risk pools and 27 are relying on a federal plan.

It’s been like giving a party to which no one comes. The Medicare program chief actuary predicted last spring that 375,000 would sign up for the new risk pool insurance in 2010. But by the end of November, only 8,000 had done so. As Amy Goldstein reports in The Washington Post, this includes 75 in Virginia, 80 in New Hampshire, 97 in Maryland and a whopping 700 in North Carolina.

While a lot of people are surprised by these numbers, I am not. Here is why. Don’t you think it is a bit odd for the White House to send out an appeal to victims so they can identify themselves? That’s not normally how the political system works.

The more usual scenario is: victims unite and form interest groups; they lobby Congress, write letters, testify, etc; and eventually the pressure become so great that Congress legislates.

When have you ever heard of that entire process in reverse? When has Congress ever before decided it wants to do something and then conducted a nationwide search to find people who will benefit?

The reasons for the reversal is that this whole problem has been completely hyped and exaggerated from the get go. In this country we have made it increasingly easy for people to get health insurance after they get sick. Going to work for an employer with generous health benefits, for example, is the most direct way.

Of course that system will miss people who are too sick to work. And that may explain why the few who are signing up appear to have very high medical expenses. Even though they have less than 1/40th of the expected enrollment, the plans are already running out of the money.

Meanwhile, as I’ve said before, the beneficiaries of reform are few, scattered and largely invisible. The cost of reform is falling on people who are numerous, somewhat organized and very vocal. That is why I think the prospects for reform of the reform are quite good.

John C. Goodman, PhD, is president and CEO of the National Center for Policy Analysis.  He is also the Kellye Wright Fellow in health care. The mission of the Wright Fellowship is to promote a more patient-centered, consumer-driven health care system. Dr. Goodman’s Health Policy Blog is considered among the top conservative health care blogs on the internet where pro-free enterprise, private sector solutions to health care problems are discussed by top health policy experts from all sides of the political spectrum.

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11 replies »

  1. False. The main reason for health reform is that 50.6 million people in the U.S. are uninsured or not eligible for Medicare and Medicaid. This number is growing: health care inequality is real and destructive. Reducing the purpose of health reform to the spenditure of billions on merely 8000 individuals with pre-existing conditions is simply cynical. People should be able to disagree about policy or ideology without resorting to empty rethorical concoctions.

  2. Loree Medicare has a 50 trillion shortage to pay for promised benefits, how does increasing the liabilities of a bankrupt plan help anything? Medciare can’t last as currently designed and youw ant to add 200 million people to it….doesn’t sound like a very good idea.

  3. Spouse and I are now insured after being denied for over a year. Thank you PCIP! We are not getting this for free. We have an excellent plan in the United States that we already know works very well “MEDICARE”. Open it to everyone and everyone pays, man woman and child. Something to think about. Loree B.

  4. I have to agree with Mark Spohr. The PPACA was an ungainly political compromise bowing to the power of Karen bin al Ignagni and her AHIP crowd. Endless “pools” and “plans” and “exchanges” and “never-ending eligibility” vetting, none of which does anything for actual health care but instead diverts resources into the pockets of legions of intermediaries. Isn’t that what we’ve already had? And, isn’t it obvious how well that has all worked out?

  5. I probably qualify for the high risk pool. I have been denied insurance and don’t have any. But I don’t need health care now so why should I buy insurance? It would cost me $10,000 a year. I haven’t had more than $10,000 of medical expenses in my entire life.
    If I get sick and need medical care, it is good to know that I can buy it in the high risk pool. Until then, I’ll save my money.
    I think this is a good illustration of “moral hazard” as well as the corruption of the private health insurance system and shows why we really need universal coverage.

  6. I too disagree en bloc with this post; but don’t see it as intentionally deceptive. But it is deceptive, if even the author is unaware. As a doctor in a small county of poor and working poor, my personal friends include many patients, which in turn consist of many who could never qualify for admission into the roulette game of American healthcare except as an all-in loser. I find it amazing that so many like the author don’t see the obvious fact that the average person could not sustainably afford consistent healthcare security in the pre-PPACA era. Had President Obama and the courageous Democrats in Congress not intervened, the US economy (not just healthcare system) would likely have collapsed due to the chaotic and insecure, inequitable nature of the outdated system. The number benefiting from the PPACA is much more like 300 million than 8 thousand – even if it indeed is not perfect (as was the US Constitution, which regulated slavery; yet we are sure glad they didn’t repeal THAT document just because of legitimate but limited corruptions). You repeal this thing – but beware what you will get after you do. As for me, I dream of 2014 and how medical practice will finally be with everyone on board. Can’t we give it a chance…we can always repeal it AFTER it supposedly fails? Who knows – it just might succeed….

  7. I am an insurance agent working mainly with Medicare-related products. I have talked to many people in their 50’s and early 60’s who are un-insurable or are losing group insurance. Those who are running out of COBRA benefits do not want to go 6 months without insurance while others think $750 per month is too much for them to afford (the rate in Arizona for the plan).
    From my contact with a small sample of people, I am sure there are more than 8,000 people who will benefit from health insurance reform. There is the small business that just dropped its health insurance for 8 employees who were in their 50’s and 60’s. Their rates were over $1,000 per month even with $5,000 deductible. Reform will subsidize their premiums with more than just tax cuts for the business owner.
    I have worked with one of the employees of t his company who was diagnosed with cancer just as the group plan was being dropped.
    I got a call the other day from a woman who is losing her COBRA and has multiple chronic illnesses. She has $10,000 left to her life savings and will end up on Medicaid once that is gone. I can provide multiple examples of people who worked all their lives and ran into bad luck and bad health. If they were bums on the street, they would get Medicaid health insurance. But they have to spend all their life savings until they are broke.
    You use these numbers to present a false picture that I know is a lie. Shame on you!

  8. The ACA has been in effect less than a year. The people signing up for it are finding it costs more than they thought. Revisiting this after subsidies kick in would be more telling.
    Steve

  9. The examples in the Washington Post story illustrate what Goodman is saying. E.g., a woman has a stroke, and joins the risk pool afterward, to get coverage to repair an anueryism. She says “The plan’s premiums, Murray said, are steep – $358 a month even after a rate reduction in January.” Wow! My employer-sponsored group insurance costs more per month to cover me than that, and my employer and I have been paying into for 15 years, with zero health claims for me.

  10. So the critique of getting almost everyone into the health care pool, eventually, is that not everyone has signed up yet, or that initial enrollments pre-mandatory purchase law haven’t met a politician’s expectations during a time of vast un/underemployment?
    I’m trying to find a serious objection to the law that passed and I can’t. There are dozens if not hundreds of critiques to ACA that have merit and alternatives. This wasn’t one of them.

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