Views on the Affordable Care Act (a.k.a. Obamacare, a.k.a. Health Reform) are mixed. Despite the fact that many people support individual provisions, overall, the measure is unpopular. Why would that be the case?
A revealing Health Affairs interview with Cythnia Morgan, may reveal the answer. Morgan is a fifty-eight-year-old former hotel manager, has been out of work and uninsured for the past three years. Her income is low, but not low enough to quality for Medicaid. She is exactly the type of person the health insurance exchange is supposed to help. So why wouldn’t like someone like her support the Exchanges?
After being told of how the ACA’s health insurance exchanges would work, she stated:
“Oh, God, that would be great—if there’s going to be a plan that’s affordable. But come on now, it’s really hard to believe.”
A Democrat would read this and claim that Mrs. Morgan is ignorant of the provisions and yes, in fact, this is exactly what the ACA will do. Republicans will say that Mrs. Morgan is 100 percent correct. Although the provisions do promise affordable care, she is correct to be skeptical that government can deliver on this promise when private industry could not.
My Take
When asked, most people support the individual provisions of the ACA. This is not surprising since expanding entitlements are generally popular. The biggest backlash against the ACA is not the individual provisions, but a skepticism that government can deliver on their promises without making the health insurance market worse than it already is. With tightening provider networks and higher deductibles, the question is whether the insurance products that will be made available in the Exchanges are products that consumers really want to buy. That remains to be seen.
Jason Shafrin is a Ph.D. Economist and Research Associate at Acumen, LLC. His research interests include all issues related to healthcare policy and economics, the health insurance market, and Medicare research. Shafrin is also founder of the blog Healthcare Economist, where this post was originally published.
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Four paragraphs? Your analysis is as superficial as the Affordable Health Care Act is outrageously long.
For the last 30 years, insurers have made money by good tight underwriting.
(I mean good for them, not the public)
Paying $20,000 vs $30,000 for heart surgey has been less important than insuring people who do not need any heart surgery.
What will happen now is different — I do not know the answer.
re: “With tightening provider networks and higher deductibles,”
Higher deductibles make sense since people save money. Insurance companies bet that on average they will take in more in premiums than they pay out in expenses and rig things so they win the bet and you lose on average. The key is to bet as little as possible by having a higher deductible and a health savings account… and Obamacare will limit the highest deductibles next year as a favor to insurers to sell more expensive policies.
Government interventions limit competition in the insurance industry so almost all markets are oligopolies, which lead companies to tend to not engage in price wars and just keep their market share and let healthcare prices rise.. and their profits along with them as they raise premiums (since their profit is a % of that).
In a competitive market an insurer would give kickbacks to people to shop around for cheaper providers for non-emergency care (and healhcare providers would be forced to be more transparent in pricing to get customers). The disparity is so large now at times that some insurers might be tempted to break franks and engage in price wars and start trying to reduce costs (e..g with a kickback) to be able to lower premiums (or not raise them as fast) and gain customers. Obamacare helped out healthcare providers by enacting “Medical Loss Ratios”. They were supposedly meant to reduce insurance overhead,but in reality they provide incentive for insurers to spend more on healthcare and let costs rise as the way to make more profit. They headed off the chance any insurers might decide to focus on trying to contain healthcare spending.
re: “a skepticism that government can deliver on their promises without making the health insurance market worse than it already is. ”
Yup, because they created the mess with favors to insurers and big companies which reduced competition and turned it into an oligopoly. You don’t have “employer food plans” where employers choose your food for you, they give you the money to select the food best for you rather than what is best for your employer. Unfortunately they give a tax break to employers rather than individuals as a favor to big business (since they can negotiate better deals for the same cost as a small business, which gives them a recruiting advantage). If everyone bought their own polices, since payouts would be comparable to what they are now, competition would drive the average prices to be comparable to what they are now. People are also more likely to consider a benefit “better” if it provides a lower deductible, so insurers like to be able to sell more expensive policies through employers rather than the cheaper catastrophic coverage an individual might buy with their own money. Overall the healthcare world is filled with myriad ways that favors for special interest groups work to drive up prices at the expense of the general public. Unfortunately Obamacare makes things worse, which many don’t realize, there is little rational reason to expect prices to do anything but keep rising despite the false advertising of it as an “affordable care act”. Details, with supporting links from everything from Harvard and U Chicago to the AMA and AHA here:
http://www.politicsdebunked.com/article-list/heatlhcare
along with alternatives for dealing with access for the poor.
I have said for years that if everyone who does not own a business or make a high salary voted Democratic, and everyone who does own a business and make a high salary voted Republican………then the Democrats would win every election by huge margins and we would have Medicare for all.
But over and over again, many potential Democratic voters take a Republican position.
We alerady know about God, guns, gay marriage and abortion as divisive issues.
The interesting question now, is what is producing the defection of natural Democrats on the ACA?
The mandate is one thing. The reduced hours fiasco for part timers is another.
Can anyone suggest other things?
Yes Becky, MEDICARE does work…but moving from a fee for service based system with multiple payers to a single payer system is a huge transition.
And I would not be totally forth coming if I didn’t opine that much of the resistance to the Affordable Care Act is a personal vendetta aimed at our current president. Just my opinion of course…but I feel compelled to mention it.
One more point is that MEDICARE has been an evolving process as will the Affordable Care Act…getting it right out of the box is never the case nor is it the goal…times change and programs need to be designed to do the same.
Ding, ding, ding, we have a winner.
I disagree. I think the part that everybody hates is forcing individuals to have to purchase unreliable, over-priced, defective products from amoral, insatiably greedy private corporations with absolutely NO right to choose any not-for-profit public option what-so-ever. When Obama said, “If you like what you have, you can keep it” he should have pointed out that “what we have” (according to all the evidence and facts) is by FAR the most expensive and least reliable health coverage non-system on Earth (and we’d have to be collective idiots for wanting to keep it).
Medicare works. Let’s build on that instead of building on what has been proven NOT to work. Creating healthcare freedom, justice and equality for ALL (from the president on down) would work too, if only we would give it a try.