Take Two Aspirin and Blame Everything on Obamacare

How the health care law became the scapegoat for everything.

A goat eats weeds at the Urban Renaissance Agency condominium complex in Machida in western Tokyo on November 14, 2013. A Japanese condominium complex has decided to ditch noisy lawnmowers and their paid pushers for a more natural option: goats.   
National Journal
Sam Baker
Dec. 12, 2013, 2:13 p.m.

Wel­come to the Obama­care era.

The healthy are sub­sid­iz­ing the sick. In­sur­ance com­pan­ies are tight­en­ing ac­cess to doc­tors. Plans with low premi­ums have high de­duct­ibles. Some­times it rains, Nick­el­back is still a band, and people con­tin­ue to die lit­er­ally every day.

But just be­cause something is hap­pen­ing and Obama­care ex­ists doesn’t mean it’s hap­pen­ing be­cause Obama­care ex­ists — even in health care.

Don’t tell that to the law’s crit­ics: The Af­ford­able Care Act has be­come the go-to scape­goat for just about everything people don’t like about health care, if not in the eco­nomy over­all. The law is be­ing blamed for trends, eco­nom­ic in­cent­ives, and ba­sic real­it­ies that it did not cre­ate and that were part of the health care sys­tem long be­fore Pres­id­ent Obama was even elec­ted.

There’s not a big dif­fer­ence between “how Obama­care works” and “how health in­sur­ance works” — and that, health ex­perts said, is what makes the law such a con­veni­ent tar­get.

Un­der Obama­care, if you like your doc­tor, you can’t al­ways keep her.

Con­sider the com­plaint du jour about the Af­ford­able Care Act: You might not be able to keep your doc­tor. There’s some truth to this charge, be­cause many plans sold through the law’s in­sur­ance ex­changes have set re­l­at­ively nar­row net­works of doc­tors and oth­er pro­viders. There’s no ques­tion that nar­row net­works are com­mon in Obama­care ex­change plans — but they were com­mon be­fore, too.

“Nar­row net­works were hap­pen­ing already. There has been kind of a re­sur­gent in­terest in nar­row net­works,” Kais­er Fam­ily Found­a­tion Pres­id­ent Drew Alt­man said.

Nar­row net­works are one of the tools in­surers use to keep premi­ums low. Doc­tors want to be paid as much as pos­sible, while in­surers want to keep their costs down so they can charge a lower premi­um and at­tract more healthy cus­tom­ers. To get there, in­surers will some­times ex­clude ex­pens­ive pro­viders, un­less those doc­tors are so pop­u­lar that people are will­ing to pay more for a plan that in­cludes them.

“Where you have had a choice, people have made trade-offs,” said Sab­rina Cor­lette, a seni­or re­search fel­low at the Geor­getown Uni­versity Health Policy In­sti­tute.

By cre­at­ing new mar­ket­places where mil­lions of people are sud­denly shop­ping for in­sur­ance — and by cut­ting off oth­er levers in­surers could use in the past (like re­fus­ing to cov­er sick people) — Obama­care has “ac­cel­er­ated” the shift to nar­row­er net­works, Alt­man said. But he said the pen­du­lum already seemed to be swinging in that dir­ec­tion.

In­surers tried to nar­row their pro­vider net­works in the ‘90s us­ing HMOs, and con­sumers hated the plans so much that in­surers ul­ti­mately backed away. That could hap­pen again this time — the Af­ford­able Care Act doesn’t re­quire nar­row net­works and it doesn’t dic­tate how much in­surers pay doc­tors.

“No one has ever heard of an HMO? Net­works have been around forever,” said Aaron Car­roll, dir­ect­or of the Cen­ter for Health Policy and Pro­fes­sion­al­ism Re­search at In­di­ana Uni­versity. “The idea of net­works as some­how new or gov­ern­ment-cre­ated is strange…. I un­der­stand why people don’t like it. They nev­er have. But it’s not the fault of the Af­ford­able Care Act. It’s the fault of try­ing to keep spend­ing to a min­im­um.”

Un­der Obama­care, de­duct­ibles are rising.

A sim­il­ar dy­nam­ic is play­ing out with Obama­care’s next big scare: rising de­duct­ibles. Re­pub­lic­ans have trum­peted re­ports about high de­duct­ibles to ar­gue that the plans aren’t ac­tu­ally af­ford­able. And many plans sold through the ex­changes do have high de­duct­ibles — of­ten right up to the max­im­um al­lowed by law.

But de­duct­ibles were already on the rise, pre-Obama­care. In the mar­ket for em­ploy­er cov­er­age, which Obama­care barely touches, de­duct­ibles have been grow­ing stead­ily. In 2006, ac­cord­ing to the Kais­er Fam­ily Found­a­tion, 10 per­cent of work­ers covered by an em­ploy­er plan had an an­nu­al de­duct­ible of $1,000 or more. By 2010, the year the Af­ford­able Care Act passed, it was up to 27 per­cent. By last year it had reached 38 per­cent.

Shift­ing costs to in­di­vidu­als is an­oth­er tool to keep costs and premi­ums low, and an­oth­er area where the law has “ac­cel­er­ated” an ex­ist­ing trend but not caused it, Alt­man said.

The Af­ford­able Care Act will res­ult in a surge in the num­ber of people with high-de­duct­ible plans, as well as in the num­ber of plans with nar­row net­works — be­cause that’s where the mar­ket has pushed private in­sur­ance, and cheap plans in par­tic­u­lar.

And, for what it’s worth, high-de­duct­ible plans have long been a ten­et of con­ser­vat­ives’ health care plans. They’ve called for more “skin in the game,” mean­ing more out-of-pock­et spend­ing and looser be­ne­fit man­dates.

“While con­ser­vat­ives feel they’ve been los­ing big-time with Obama­care and they don’t like it at all, the plans in the ex­changes rep­res­ent just the kind of skin-in-the-game sys­tem that con­ser­vat­ives have al­ways sup­por­ted,” Alt­man said.

Em­ploy­ers are cut­ting be­ne­fits.

Em­ploy­er plans aren’t sub­ject to some of the law’s most ex­pens­ive re­quire­ments — they don’t have to cov­er “es­sen­tial” be­ne­fits, for ex­ample, par­tially be­cause most of them already do. But that hasn’t stopped private-sec­tor em­ploy­ers from cit­ing the health care law when they have cut health be­ne­fits. UPS, for ex­ample, said the law was part of the reas­on it would not of­fer its health plan to em­ploy­ees’ spouses who had their own of­fer of em­ploy­er-based cov­er­age.

Health care ex­perts aren’t so sure the law is re­spons­ible.

On av­er­age, em­ploy­ers’ health care costs are grow­ing at near-re­cord lows — about 4 per­cent per year, ac­cord­ing to Kais­er’s an­nu­al sur­vey of em­ploy­er plans. That’s par­tially be­cause health care costs have slowed over­all, but also be­cause em­ploy­ers have gradu­ally taken steps like UPS’ — shift­ing more costs to em­ploy­ees, adding or in­creas­ing de­duct­ibles, and scal­ing back be­ne­fits.

“I think in the broad­er em­ploy­er mar­ket we’re see­ing a lot of things that were hap­pen­ing any­way be­ing blamed on the law be­cause it’s a con­veni­ent scape­goat for changes they wanted to make any­way,” Alt­man said.

Obama­care makes healthy people sub­sid­ize sick ones.

“Par­tic­u­larly harmed are young people try­ing to climb the eco­nom­ic lad­der…. Obama­care de­pends on young, healthy people be­ing forced to pay high­er premi­ums in or­der to sub­sid­ize the premi­ums of older, less healthy people,” Sen. Ted Cruz, R-Texas, said in a re­cent op-ed.

Every private health care plan de­pends on healthy people sub­sid­iz­ing un­healthy people. Safe drivers sub­sid­ize bad drivers, homes that don’t burn down sub­sid­ize those that do, and people who don’t file health care claims sub­sid­ize those who file a lot of them.

“That is every risk pool in the world — that’s how health in­sur­ance works,” Car­roll said.

The law only al­lows in­sur­ance com­pan­ies to charge older con­sumers three times more be­cause of their age, while some states al­lowed them to charge five times more. So the sub­sidy from young to old might be a little big­ger, but it’s not new.

So, what does Obama­care do?

For the most part, Obama­care has simply turned up the volume on ex­ist­ing mar­ket forces. But there are still plenty of con­crete trade-offs that did really start with the Af­ford­able Care Act.

It truly did force in­sur­ance com­pan­ies to can­cel mil­lions of health care plans, for ex­ample. As much as the White House tried to paint that as in­surers’ busi­ness de­cision, the law cre­ates new stand­ards for in­sur­ance plans and makes a con­cer­ted ef­fort to push people in­to those plans. Wheth­er those stand­ards are a good or bad thing for con­sumers is a mat­ter of opin­ion, but there’s no ques­tion the Af­ford­able Care Act made it im­possible for mil­lions of people to stay on the plans they had.

That might have been a smal­ler polit­ic­al prob­lem if Obama hadn’t prom­ised that people could keep their plans. And even with trends the law didn’t cause, his sales pitches could still come back to bite him. Obama also prom­ised that you could keep your doc­tor — something he couldn’t guar­an­tee with or without Obama­care.

The Af­ford­able Care Act makes a com­plic­ated series of trade-offs to make health care more ac­cess­ible, and some people will get a worse deal as a res­ult. But many trade-offs that seem like Obama­care are really just the health care sys­tem.

“Obama­care gets the blame for much of the bad stuff hap­pen­ing any­way in the health care sys­tem, and also little of the cred­it for the good things it’s do­ing,” Alt­man said.

{{ BIZOBJ (video: 4623) }}

Under Obamacare, if you like your doctor, you can't always keep her.

Con­sider the com­plaint du jour about the Af­ford­able Care Act: You might not be able to keep your doc­tor. There’s some truth to this charge, be­cause many plans sold through the law’s in­sur­ance ex­changes have set re­l­at­ively nar­row net­works of doc­tors and oth­er pro­viders. There’s no ques­tion that nar­row net­works are com­mon in Obama­care ex­change plans — but they were com­mon be­fore, too.

“Nar­row net­works were hap­pen­ing already. There has been kind of a re­sur­gent in­terest in nar­row net­works,” Kais­er Fam­ily Found­a­tion Pres­id­ent Drew Alt­man said.

Nar­row net­works are one of the tools in­surers use to keep premi­ums low. Doc­tors want to be paid as much as pos­sible, while in­surers want to keep their costs down so they can charge a lower premi­um and at­tract more healthy cus­tom­ers. To get there, in­surers will some­times ex­clude ex­pens­ive pro­viders, un­less those doc­tors are so pop­u­lar that people are will­ing to pay more for a plan that in­cludes them.

“Where you have had a choice, people have made trade-offs,” said Sab­rina Cor­lette, a seni­or re­search fel­low at the Geor­getown Uni­versity Health Policy In­sti­tute.

By cre­at­ing new mar­ket­places where mil­lions of people are sud­denly shop­ping for in­sur­ance — and by cut­ting off oth­er levers in­surers could use in the past (like re­fus­ing to cov­er sick people) — Obama­care has “ac­cel­er­ated” the shift to nar­row­er net­works, Alt­man said. But he said the pen­du­lum already seemed to be swinging in that dir­ec­tion.

In­surers tried to nar­row their pro­vider net­works in the ‘90s us­ing HMOs, and con­sumers hated the plans so much that in­surers ul­ti­mately backed away. That could hap­pen again this time — the Af­ford­able Care Act doesn’t re­quire nar­row net­works and it doesn’t dic­tate how much in­surers pay doc­tors.

“No one has ever heard of an HMO? Net­works have been around forever,” said Aaron Car­roll, dir­ect­or of the Cen­ter for Health Policy and Pro­fes­sion­al­ism Re­search at In­di­ana Uni­versity. “The idea of net­works as some­how new or gov­ern­ment-cre­ated is strange…. I un­der­stand why people don’t like it. They nev­er have. But it’s not the fault of the Af­ford­able Care Act. It’s the fault of try­ing to keep spend­ing to a min­im­um.”

Under Obamacare, deductibles are rising.

A sim­il­ar dy­nam­ic is play­ing out with Obama­care’s next big scare: rising de­duct­ibles. Re­pub­lic­ans have trum­peted re­ports about high de­duct­ibles to ar­gue that the plans aren’t ac­tu­ally af­ford­able. And many plans sold through the ex­changes do have high de­duct­ibles — of­ten right up to the max­im­um al­lowed by law.

But de­duct­ibles were already on the rise, pre-Obama­care. In the mar­ket for em­ploy­er cov­er­age, which Obama­care barely touches, de­duct­ibles have been grow­ing stead­ily. In 2006, ac­cord­ing to the Kais­er Fam­ily Found­a­tion, 10 per­cent of work­ers covered by an em­ploy­er plan had an an­nu­al de­duct­ible of $1,000 or more. By 2010, the year the Af­ford­able Care Act passed, it was up to 27 per­cent. By last year it had reached 38 per­cent.

Shift­ing costs to in­di­vidu­als is an­oth­er tool to keep costs and premi­ums low, and an­oth­er area where the law has “ac­cel­er­ated” an ex­ist­ing trend but not caused it, Alt­man said.

The Af­ford­able Care Act will res­ult in a surge in the num­ber of people with high-de­duct­ible plans, as well as in the num­ber of plans with nar­row net­works — be­cause that’s where the mar­ket has pushed private in­sur­ance, and cheap plans in par­tic­u­lar.

And, for what it’s worth, high-de­duct­ible plans have long been a ten­et of con­ser­vat­ives’ health care plans. They’ve called for more “skin in the game,” mean­ing more out-of-pock­et spend­ing and looser be­ne­fit man­dates.

“While con­ser­vat­ives feel they’ve been los­ing big-time with Obama­care and they don’t like it at all, the plans in the ex­changes rep­res­ent just the kind of skin-in-the-game sys­tem that con­ser­vat­ives have al­ways sup­por­ted,” Alt­man said.

Employers are cutting benefits.

Em­ploy­er plans aren’t sub­ject to some of the law’s most ex­pens­ive re­quire­ments — they don’t have to cov­er “es­sen­tial” be­ne­fits, for ex­ample, par­tially be­cause most of them already do. But that hasn’t stopped private-sec­tor em­ploy­ers from cit­ing the health care law when they have cut health be­ne­fits. UPS, for ex­ample, said the law was part of the reas­on it would not of­fer its health plan to em­ploy­ees’ spouses who had their own of­fer of em­ploy­er-based cov­er­age.

Health care ex­perts aren’t so sure the law is re­spons­ible.

On av­er­age, em­ploy­ers’ health care costs are grow­ing at near-re­cord lows — about 4 per­cent per year, ac­cord­ing to Kais­er’s an­nu­al sur­vey of em­ploy­er plans. That’s par­tially be­cause health care costs have slowed over­all, but also be­cause em­ploy­ers have gradu­ally taken steps like UPS’ — shift­ing more costs to em­ploy­ees, adding or in­creas­ing de­duct­ibles, and scal­ing back be­ne­fits.

“I think in the broad­er em­ploy­er mar­ket we’re see­ing a lot of things that were hap­pen­ing any­way be­ing blamed on the law be­cause it’s a con­veni­ent scape­goat for changes they wanted to make any­way,” Alt­man said.

Obamacare makes healthy people subsidize sick ones.

“Par­tic­u­larly harmed are young people try­ing to climb the eco­nom­ic lad­der…. Obama­care de­pends on young, healthy people be­ing forced to pay high­er premi­ums in or­der to sub­sid­ize the premi­ums of older, less healthy people,” Sen. Ted Cruz, R-Texas, said in a re­cent op-ed.

Every private health care plan de­pends on healthy people sub­sid­iz­ing un­healthy people. Safe drivers sub­sid­ize bad drivers, homes that don’t burn down sub­sid­ize those that do, and people who don’t file health care claims sub­sid­ize those who file a lot of them.

“That is every risk pool in the world — that’s how health in­sur­ance works,” Car­roll said.

The law only al­lows in­sur­ance com­pan­ies to charge older con­sumers three times more be­cause of their age, while some states al­lowed them to charge five times more. So the sub­sidy from young to old might be a little big­ger, but it’s not new.

So, what does Obamacare do?

For the most part, Obama­care has simply turned up the volume on ex­ist­ing mar­ket forces. But there are still plenty of con­crete trade-offs that did really start with the Af­ford­able Care Act.

It truly did force in­sur­ance com­pan­ies to can­cel mil­lions of health care plans, for ex­ample. As much as the White House tried to paint that as in­surers’ busi­ness de­cision, the law cre­ates new stand­ards for in­sur­ance plans and makes a con­cer­ted ef­fort to push people in­to those plans. Wheth­er those stand­ards are a good or bad thing for con­sumers is a mat­ter of opin­ion, but there’s no ques­tion the Af­ford­able Care Act made it im­possible for mil­lions of people to stay on the plans they had.

That might have been a smal­ler polit­ic­al prob­lem if Obama hadn’t prom­ised that people could keep their plans. And even with trends the law didn’t cause, his sales pitches could still come back to bite him. Obama also prom­ised that you could keep your doc­tor — something he couldn’t guar­an­tee with or without Obama­care.

The Af­ford­able Care Act makes a com­plic­ated series of trade-offs to make health care more ac­cess­ible, and some people will get a worse deal as a res­ult. But many trade-offs that seem like Obama­care are really just the health care sys­tem.

“Obama­care gets the blame for much of the bad stuff hap­pen­ing any­way in the health care sys­tem, and also little of the cred­it for the good things it’s do­ing,” Alt­man said.

{{ BIZOBJ (video: 4623) }}

What We're Following See More »
STAFF PICKS
When It Comes to Mining Asteroids, Technology Is Only the First Problem
1 days ago
WHY WE CARE

Foreign Policy takes a look at the future of mining the estimated "100,000 near-Earth objects—including asteroids and comets—in the neighborhood of our planet. Some of these NEOs, as they’re called, are small. Others are substantial and potentially packed full of water and various important minerals, such as nickel, cobalt, and iron. One day, advocates believe, those objects will be tapped by variations on the equipment used in the coal mines of Kentucky or in the diamond mines of Africa. And for immense gain: According to industry experts, the contents of a single asteroid could be worth trillions of dollars." But the technology to get us there is only the first step. Experts say "a multinational body might emerge" to manage rights to NEOs, as well as a body of law, including an international court.

Source:
STAFF PICKS
Obama Reflects on His Economic Record
1 days ago
WHY WE CARE

Not to be outdone by Jeffrey Goldberg's recent piece in The Atlantic about President Obama's foreign policy, the New York Times Magazine checks in with a longread on the president's economic legacy. In it, Obama is cognizant that the economic reality--73 straight months of growth--isn't matched by public perceptions. Some of that, he says, is due to a constant drumbeat from the right that "that denies any progress." But he also accepts some blame himself. “I mean, the truth of the matter is that if we had been able to more effectively communicate all the steps we had taken to the swing voter,” he said, “then we might have maintained a majority in the House or the Senate.”

Source:
STAFF PICKS
Reagan Families, Allies Lash Out at Will Ferrell
1 days ago
WHY WE CARE

Ronald Reagan's children and political allies took to the media and Twitter this week to chide funnyman Will Ferrell for his plans to play a dementia-addled Reagan in his second term in a new comedy entitled Reagan. In an open letter, Reagan's daughter Patti Davis tells Ferrell, who's also a producer on the movie, “Perhaps for your comedy you would like to visit some dementia facilities. I have—I didn’t find anything comedic there, and my hope would be that if you’re a decent human being, you wouldn’t either.” Michael Reagan, the president's son, tweeted, "What an Outrag....Alzheimers is not joke...It kills..You should be ashamed all of you." And former Rep. Joe Walsh called it an example of "Hollywood taking a shot at conservatives again."

Source:
PEAK CONFIDENCE
Clinton No Longer Running Primary Ads
1 days ago
WHY WE CARE

In a sign that she’s ready to put a longer-than-ex­pec­ted primary battle be­hind her, former Sec­ret­ary of State Hil­lary Clin­ton (D) is no longer go­ing on the air in up­com­ing primary states. “Team Clin­ton hasn’t spent a single cent in … Cali­for­nia, In­di­ana, Ken­tucky, Ore­gon and West Vir­gin­ia, while” Sen. Bernie Sanders’ (I-VT) “cam­paign has spent a little more than $1 mil­lion in those same states.” Meanwhile, Sen. Jeff Merkley (D-OR), Sanders’ "lone back­er in the Sen­ate, said the can­did­ate should end his pres­id­en­tial cam­paign if he’s los­ing to Hil­lary Clin­ton after the primary sea­son con­cludes in June, break­ing sharply with the can­did­ate who is vow­ing to take his in­sur­gent bid to the party con­ven­tion in Phil­adelphia.”

Source:
CITIZENS UNITED PT. 2?
Movie Based on ‘Clinton Cash’ to Debut at Cannes
1 days ago
WHY WE CARE

The team behind the bestselling "Clinton Cash"—author Peter Schweizer and Breitbart's Stephen Bannon—is turning the book into a movie that will have its U.S. premiere just before the Democratic National Convention this summer. The film will get its global debut "next month in Cannes, France, during the Cannes Film Festival. (The movie is not a part of the festival, but will be shown at a screening arranged for distributors)." Bloomberg has a trailer up, pointing out that it's "less Ken Burns than Jerry Bruckheimer, featuring blood-drenched money, radical madrassas, and ominous footage of the Clintons."

Source:
×