OP-ED

Scrapping Obamacare Would Be an Rx for Chaos

Sharp questioning in oral arguments before the Supreme Court raised serious questions about whether the “individual mandate” — the requirement that people carry health insurance — will survive.

At issue is Obamacare’s central requirement that every American buy health insurance or pay a penalty. Critics say this is an unprecedented expansion of federal power — that if the government can force people to buy insurance, it can force them to buy anything.

Supporters, including me, say the mandate is just a logical extension of federal authority to regulate this market — a market that everyone eventually participates in at one time or another. We also know that if the mandate is struck down chaos is inescapable.

Under one scenario, the court would invalidate the requirement while leaving the law’s many other rules and regulations in place.

In that event, insurance companies would have to insure anyone who asked for coverage — but they would be barred from charging premiums equal to a best guess of what the new customers will cost.

Limiting how much insurers charge can work, but only if the mandate is in place — if everyone, the healthy as well as the sick, has to have insurance. It can’t work if people can go without insurance until they get sick and only then call up their friendly insurance broker and say “Cover me.”

So, Congress would have to do something. But what? One option would be to repeal the parts of the law that the Supreme Court left standing. Finding the votes to repeal the health reform is unlikely, as the next Congress is almost certain to be closely divided.

A second option would be to do nothing. But that can’t work — not for long.

Many people would drop insurance coverage and come back to buy it when they get sick. That outcome would doom insurance, insurers, or both. Premiums low enough to be affordable would not cover insurers’ costs. Premiums high enough to cover the insurers’ bills would be exorbitant.

And what if the Supreme Court throws out the whole bill?

That would leave America, including the nearly 50 million uninsured, even worse off than we were four years ago: with higher costs, more uninsured and a political atmosphere poisoned by the failure of an all-out effort to reform a health care system everyone knows is flawed.

Health insurance costs, driven by the steady march of new technology and population aging, will claim ever larger shares of our income. Those higher costs will make health insurance unaffordable for more and more people.

It would be hard to imagine any President or Congress returning for a generation to touch the endless political grief of basic health care reform with a ten-foot pole.

Is that the future we want?

For that reason and despite its unpopularity, the best possible outcome would be for the Supreme Court to find the requirement that people have health insurance constitutional. The health reform legislation is very far from perfect. But the right thing to do is to fix it, not scrap it.

Henry J. Aaron is a senior fellow of economic studies at the Brookings Institution. Aaron focuses on the reform of health care financing; public systems such as Medicare and Medicaid; Social Security; and tax and budget policy. This piece originally appeared at the Brookings Institution.

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someasshatBobbyGMargalit Gur-ArieHub Mathewson, MDMD as HELL Recent comment authors
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DeterminedMD
Guest
DeterminedMD

“The VA is already doing this-with great success”. Yeah, what a great formulary, treating our veterans who fight wars for the politicians who started them by nickeling and diming true heroes with 30 year old generic drugs while the politicians access the newest and most innovative options. You gotta love these defenders who just echo these false hopes and dreams by their party loyalists who don’t practice what they preach. You know what, this week is revealing the game is up with PPACA. Hope and change, we just didn’t know the words between: “hope you’re ready for more of the… Read more »

BobbyG
Guest

“And, GET OFF MY LAWN!!!”

DeterminedMD
Guest
DeterminedMD

?

Maggie Mahar
Guest

Hub Matthewson– I really can’t easily afford the isurrance. I spend about 15% of my income just on health insurance for myself. But for me, it’s a priority. (And I’m not suffering from any major chronic disease that I know of.. But if I suddenly am diagnosed with a serious long-term disease, I don’t want to lose my home. And I don’t want to leave my husband with no savings. In Europe, people are accustomed to spending 10% of their income for health insurance. It’s only in the U.S that empoloyer based insurance has led us to think that someone… Read more »

DeterminedMD
Guest
DeterminedMD

I gotta just say this, thank god this case finally went in front of the Supreme Court this week, because the issue needs to be put to rest.

Unless these 9 people take the cowardly way out and punt it down the road to others to take the heat. Wait a minute, that is the standard operational procedure that is D.C.!

But, the ultimate truth is not quickly resolved, is it!?

BobbyG
Guest

6-3 to Uphold. Maybe only 5-4, but maybe 6-3. __ “…Virtually everybody agrees that a vote to strike down the Affordable Care Act would be five to four—a bare majority. And it would be a bare partisan majority, with the five Republican appointees overruling the four Democratic appointees. The decision would appear nakedly partisan and utterly devoid of principle. Appearances would not be deceiving. The second distinction is even more more significant. Today Brown is a nearly universal icon of social progress, while Roe remains an object of great controversy. But, for better or for worse, both cases represented efforts… Read more »

Hub Mathewson, MD
Guest

Maggie,
You sound like you have great health insurance which you buy and have the money to do so. Why couldn’t people who have the money to do so buy supplemental insurance under a Medicare single payer system and enjoy similiar benefits?

Blaming high care medical costs under Medicare partially on the inlfuence of lobbyists raises the interesting notion that private insurance companies would be less vulnerable to lobbyists’ (stock holders’) influence. Do you really believe that?

I cerainly agree that the ACA, current Medicare, and private insurance will have little effect on medical care costs.

Maggie Mahar
Guest

Nate– Private insurance loses as much to fraud as Medicare–if not more. Private insurers ackowledge that they can pass the cost on to customers in the form of higher premiusm. (I write about this in my book, Money-Driven Medicine.) Medicare can’t pass the cost on to anyone unless it can persuade Congress to raise Medicare taxes, deductibles or co-pays which is never popular politically. So Medicare takes fraud pretty seriously– though it doesn’t have as money as it needs to investigate fraud. Medicare administrative costs ARE lower–but not as much lower as many claim. The big problem in that in… Read more »

Nate Ogden
Guest
Nate Ogden

“Private insurance loses as much to fraud as Medicare–if not more.” BOLD FACE LIAR you could not be any more incompetent in your writing. You have reached the point you just wholesale make up arguments without even trying to be honest. Then have the gale to claim writers should be truthful. You can’t find any piece of data to even come close to backing up that claim. “Medicare can’t pass the cost on to anyone” Really so tax payers don’t have any liability for Medicare? “So Medicare takes fraud pretty seriously” Keep digging, these fish stories keep getting better and… Read more »

Nate Ogden
Guest
Nate Ogden

Medicare administrative costs ARE lower–but not as much lower as
many claim.

http://timerealclearpolitics.files.wordpress.com/2009/06/admincosts1.gif

2005 Medicare cost to admin per member $509.00
Private insurance cost to admin $453.00

Medicare 12.3% higher. Do you know what the word lower means?

Nate Ogden
Guest
Nate Ogden

Private insurance loses as much to fraud as Medicare–if not more. So Medicare takes fraud pretty seriously http://abcnews.go.com/blogs/ But there’s a bigger point – the connection between “low” administrative costs and staggeringly HIGH levels of fraud and waste. As Michael Cannon at the Cato Institute and Regina Herzlinger at Harvard Business School have pointed out, much of the 10 to 20 percent of private insurance administrative costs goes to preventing fraud. Private insurers, you see, care about whether or not they lose money. Medicare, with its unlimited claim on the public purse, does not. It’s only taxpayer money, after all.… Read more »

Nate Ogden
Guest
Nate Ogden

http://online.wsj.com/article/SB10001424052702304760604576428300875828790.html

Almost all discussions about Medicare reform ignore one key factor: Medicare utilization is roughly 50% higher than private health-insurance utilization, even after adjusting for age and medical conditions. In other words, given two patients with similar health-care needs—one a Medicare beneficiary over age 65, the other an individual under 65 who has private health insurance—the senior will use nearly 50% more care.

You can’t make up that difference. Under no feasible scenario on earth is Medicare more efficient or cheaper then private insurance.

Nate Ogden
Guest
Nate Ogden

Private insurance loses as much to fraud as Medicare–if not more. http://money.cnn.com/2010/01/13/news/economy/health_care_fraud/ Increasingly, criminal groups are hacking into digital medical records so that they can steal money from the $450 billion, 44-million-beneficiary Medicare system — making the government, by far, the “single biggest victim” of health care fraud, according to Rob Montemorra, chief of the FBI’s Health Care Fraud Unit. Even the FBI says your a liar Maggie. So Medicare takes fraud pretty seriously One key reason having Medicare information is a virtual “goldmine” for fraudsters, according to Montemorra, is the system’s “pay and chase” system — under the law,… Read more »

DeterminedMD
Guest
DeterminedMD

“…we will have a public option that offers better care for less.” Excuse me, but does the adage “you get what you pay for” apply to anything that Democrats, or for that matter equally what republicans have offered when they were the only game in town? I love the denial and delusion that these defenders and apologists continue to sell in promoting and, really the way some people are talking now that their pipe dream of the legislation being approved by 7 or 8 Justices prior to this week is now dissipating, now trying to rudely and cruelly demean as… Read more »

Margalit Gur-Arie
Guest

Lots of people who don’t read blogs would go.

The reason we cannot have universal health care in this country is because we need to create it without disturbing the rich and powerful, both on the left and on the right.
The rich on the left would be just fine with everybody (other than themselves) enjoying the plentiful cornucopia of knockoff medicine at Walmart, and the rich on the right would be just fine with everybody lining up for charity, or dropping dead naturally.

DeterminedMD
Guest
DeterminedMD

Nah, I disagree with your perspective, the rich on either side of political perspective want people to drop dead, because let’s face it, rich people are as narcissistic and selfish as addicts can be and don’t give a rat’s ass about anyone else but themselves and their cronies. Universal health care can only come to fruition if the sizeable majority of Americans accept the fact that people will die prematurely because, wait for it Ms G-A, the FINITE resources that are health care will deny some who appropriately deserve the access will still in the end be denied. And what… Read more »

Agis
Guest

No Republican voted in favor of the legislation because of party discipline. I daresay some of these Republicans had been supporters of the Republican-sponsored health care reform proposal of 1993 that is nearly identical to PPACA. I am no fan of PPACA, but I recognize that Republicans are putting partisan politics ahead of solutions.

DeterminedMD
Guest
DeterminedMD

Yeah, partisan politics was some of it, but it was lousy legislation from the get go, so you look a bit good not being forced to vote just to benefit the few. As long as this alleged 2 party system of hate stays in place, the public is tarnished!

Maggie Mahar
Guest

Hub Mathewson The problem with trying to convet to a single-payer system is that many people like the private insurance they have– which in some cases is actually better than Medicare–and don’t want to give it up. I, for instance, have insurance witih no annual limits and no lifetime limits on coverage. Medicare imposes limits on how much it will pay it. If you go over the limit (which is not that hard to do) you most spend most of your savings–and perhaps sell your home– before you qualify for Medicaid. And then you will probably have to switch doctors… Read more »

Nate Ogden
Guest
Nate Ogden

Doesn’t the $700 per member Medicare loses to fraud exceed the entire administrative cost of private insurance per member?

Nate Ogden
Guest
Nate Ogden

point being my administrative cost would be much lower if I just paid every bill anyone sent me.

It’s a very slippery slope to claim Medicare admin cost are lower. Apples are cheaper than oranges, but what does that mean?

Agis
Guest

In Switzerland, basic health care is available to all. People who want “better than basic” can pay for a plan that includes things like private hospital rooms etc. This solution could your concern about some people having private insurance that is superior to what they would receive in a public system. Some people could still have so-called “Cadillac” plans, but everyone would have basic health care.

Nate Ogden
Guest
Nate Ogden

Switzerland is a few million white people. Do you see Utah or Idaho having nearly the crisis as other states?

Agis
Guest

If you are implying that a “white only” country and (essentially) white only states can manage health care effectively, that position is so despicable that it hardly deserve a reply. France is an example of a multicultural society with one of the best health care systems in the world. States with low population densities will not have the same conspicuous problems (e.g., number of people with expensive-to-treat chronic conditions) as other states.

Nate Ogden
Guest
Nate Ogden

Let me get really despicable, if it was all Asians it would be even more cost effective. I read you link through you screen name and am now 100% certain your an idiot and don’t know what your talking about. Regardless of where they leave different races have different health predispositions. If you put a population of pure Africans in a Swiss or any other model they would have different outcomes then a pure Asian population. Nothing despicable about facts unless you have something against the truth. genetic illness, body type, etc etc all are predisposed, nothing racist about it,… Read more »

Hub Mathewson, MD
Guest

How about order out of chaos? Since everyone agrees that the federal government has the constituional right to tax and distribute benefits why not just extend Medicare insurance to everyone over 18 years old and produce the ‘single payer system” that the majority of providers say they want? Let the health care inusrance companies scramble for the rest and contract for the administration of the system.

Nate Ogden
Guest
Nate Ogden

Because Medicare is alredy 40 trillion in the red. Why would we add 100 million more people to an already unsustainable system?

As far as providers wanting Medicare when I try to pay them Medicare +20% instead of using a PPO that is not the responce I get. Trying to get a hospital to take anything under 200% of Medicare is nearly impossible.

BobbyG
Guest

“responce”?

someasshat
Guest
someasshat

Really? Your best response was to be the spelling police?

BobbyG
Guest

“someasshat’

Appropriate screen name.

Nate? Sock puppet?

Margalit Gur-Arie
Guest

To make it sustainable. To extend the pool beyond elderly and sick patients, and to collect some real money into it, so you can pay hospitals a little more.

Nate Ogden
Guest
Nate Ogden

How does adding more people to a broken system make it sustainable? If CMS is actively trying to push the over 65 off Medicare into private insurance how does pushing all those post 65 plus pre 65 fix their problems? For Medicare to assume those currently on private insurance you would see an immediate double digit jump in rates. That is assuming Medicare paid hospitals current Medicare allowable for these new patients. Hospitals say this is not possible and your saying you want to pay hospitals more. If Medicare paid hospitals private insurance rates you would be looking at a… Read more »

Margalit Gur-Arie
Guest

How does adding healthy paying customers to private pools make them sustainable?

Nate Ogden
Guest
Nate Ogden

so Medicare is going to cherry pick and only take the healthy ones?

After paying claims there is 5% profit for insurance, add another coupel percent medical could save eliminating some marketing expenses. Lets be real generous and say Medical could reduce cost 10% over private insruance which would be roughly $350 per year.

Medicare loses $700 per year to fraud. That best case scenerio $350 savings is now a $350 guaranteed loss.

MD as HELL
Guest
MD as HELL

Let the chaos begin.

Agis
Guest

The Obama administration chose to pursue the goal of increased access before pursuing the goal of cutting costs. PPACA does not, in my opinion, do enough to rein in these costs. As a result, the individual mandate has ended up costing more than it otherwise would have. People who are poor but not poor enough for subsidies will still be forced to choose between food and healthcare. http://newindependentwhig.blogspot.com/2012/03/on-health-care-reform.html

BobbyG
Guest

“the individual mandate has ended up costing more than it otherwise would have.”
__

Can I borrow your time travel machine?

Agis
Guest

Obviously, if PPACA had made a stronger effort to contain costs, this would have resulted in the individual mandate being less costly. PPACA fails in cost containment by (a) allowing for-private health insurers to administer reimbursements, (b) refusing to negotiate with big Pharma for reduced price medicines, (c) failing to set reasonable prices for all medical procedures.

Nate Ogden
Guest
Nate Ogden

Who should administer reimbursements? And what benefits are you referring to? I administer benefits and I am not for profit private health insurer. Don’t seem to know what your talking about.

Agis
Guest

Regardless of your opinion of Medicare, it is notable that their administrative costs are only 2%. These costs are over 20% among for-profit private insurers. When multiple private insurers distribute payments for medical claims, multiple and redundant bureaucracies will result.

Nate Ogden
Guest
Nate Ogden

As I mention below your an idiot. Medicare is not 2% its not even close. You would need to take ignorance to a whole new level even Maggie hasn’t reached to claim Medicare admin is 2%.

Your % are wrong
Your comparison is flawed
You ignore the end results and the basic question if the lowest possible admin cost is the ideal outcome.

Your taking this argument back 10 years. No one has claimed something this stupid in that long…because it was disproven that long ago. What rock have you been buried under for all these years?

Nate Ogden
Guest
Nate Ogden

http://timerealclearpolitics.files.wordpress.com/2009/06/admincosts1.gif

Medicare Admin per member $509
Private Ins Admin per member $453

10 times more effective huh Agis?

try 12% more expensive and far in-superior. Add $700 lost to fraud on top of that $509 admin fee. Your looking at $1209 compared to $453.

DeterminedMD
Guest
DeterminedMD

And by the way, the public does not fully understand the strengths and weaknesses of this legislation, and there are some strengths. But, you can’t mandate people buy things. You can’t muscle the states to do federal biddings. And you can’t have 15 people set policy for 300 million people without accountability.

Personally, anyone who just argues these three points are fine and dandy are idiots, tyrants, or just selfish bastards. Hmm, maybe all three!

Nate Ogden
Guest
Nate Ogden

I notice you never actually worked in insurance, with that in mind I guess its possible your unaware that there is right now numerous plans across the country that community rate, the same mechanism required under PPACA. So how have those plans survived for decades without a mandate? “That outcome would doom insurance, insurers, or both.” If you knew the insurance market at all you would know only the individual market would be destroyed. It wouldn’t even effect the self funded market which is 60% of private insurance. More business would move self funded and everything would continue on with… Read more »

DeterminedMD
Guest
DeterminedMD

Really, what Democrat representative is actively speaking out to fix it!? What, your pals Pelosi and Reid? After they had to quit giving out waivers, what did they then promote to fix.

Oh yeah, their next elections!!!

Maggie Mahar
Guest

I agree. The Affordable Care Act is far from perfect, but the right thing to do is to fix it, not scrap it.

Inevitably reform that is this large and this complicated is a process, not an event.

Overturning the law would create great uncertainty– and chaos.

BobbyG
Guest

I don’t think the public or most pols have the first clue regarding how much goes down with the ship here, stuff having nothing to do with the Individual Mandate.

Bill S
Guest
Bill S

According to the gov’t everybody is in the market already, so why didn’t they make it mandatory at point of sale? That is harder to contest if services are being rendered. Again, the SG insisted everyone is already in, so you’re not “waiting” for anyone.