Judging Obamacare: A How-To Guide

A step-by-step list for separating facts from flacks.

Dueling protests have been a regular Washington feature throughout the Obamacare debate.
National Journal
Patrick Reis and Clara Ritger
Patrick Reis Clara Ritger
Aug. 26, 2013, 2 a.m.

It’s go­ing to be a mes­saging war for the ages.

When some of the Af­ford­able Care Act’s most crit­ic­al fea­tures go in­to ef­fect Oct. 1, so too will a massive struggle between the law’s ad­voc­ates and al­lies, as sup­port­ers at­tempt to con­vince Amer­ic­ans that the law is help­ing them af­ford their in­sur­ance, while crit­ics scramble to prove it’s send­ing in­sur­ance premi­ums sky­ward.

But as politi­cians pon­ti­fic­ate and flacks flack, health care ana­lysts are grow­ing ex­as­per­ated with a de­bate that is rap­idly filling with faulty lo­gic and fuzzy math.

“You can make those num­bers look like al­most any­thing you want,” said Car­oline Pear­son, vice pres­id­ent of the D.C.-based health care con­sult­ing firm Avalere Health. “It has been highly politi­cized top­ic.”

So, amid the spin, how should every­day Amer­ic­ans judge Obama­care’s suc­cess in con­trolling the cost of health in­sur­ance? Here’s step-by-step ad­vice from the ex­perts.

1. Don’t be­lieve the hype.

The Oc­to­ber kick­off will be fol­lowed by a flood of stud­ies and press re­leases, most of which will cherry-pick data while claim­ing to render a “fi­nal judg­ment” on wheth­er the law is mak­ing in­sur­ance more or less af­ford­able.

But those should all be taken with a ta­ble­spoon of salt, as no single piece of evid­ence — nor even any single study — can provide a defin­it­ive an­swer, Pear­son said.

“There’s not really a good way to an­swer the ques­tion. There’s no apples-to-apples com­par­is­on,” she said. “Is one product be­ing sold today to one group of people go­ing to be more or less ex­pens­ive than a totally dif­fer­ent product sold later to a totally dif­fer­ent group of people? There’s no way to com­pare those two in a way that would be deemed fair.”

Rather than bank­ing on a single study, un­der­stand­ing the law’s ef­fects on in­sur­ance costs will re­quire a sus­tained, broad look. And even then it will re­main a mat­ter of of on­go­ing con­ten­tion — as neither camp is show­ing any signs of giv­ing ground.

“I don’t think the pro­ponents will ever ad­mit it’s a fail­ure,” said Devon Her­rick, seni­or fel­low at the Na­tion­al Cen­ter for Policy Ana­lys­is.

2. For­get your arith­met­ic, re­mem­ber your cal­cu­lus.

Un­less there is a sud­den and shock­ing break from the long-term trend, health in­sur­ance premi­ums will con­tin­ue to rise after the law takes ef­fect — but that by it­self isn’t an in­dict­ment of the law.

In­stead of lower­ing costs ab­so­lutely, the law’s im­me­di­ate aim is to slow the rate at which they are in­creas­ing, mov­ing the rate closer to the rate of in­fla­tion. And it’s by that met­ric that the law’s in­sur­ance costs ef­fects should be judged, Pear­son said.

Mov­ing to­ward the pace of in­fla­tion would be a ma­jor im­prove­ment from the past dec­ade. Av­er­age premi­ums for fam­ily cov­er­age rose by 80 per­cent and single cov­er­age by 74 per­cent, ac­cord­ing to the Kais­er Fam­ily Found­a­tion’s sur­vey about em­ploy­er-sponsored in­sur­ance cov­er­age.

Al­though the rate of growth has slowed in re­cent years, premi­ums are up nearly 5 per­cent from last year for single cov­er­age and nearly 4 per­cent for fam­il­ies. The growth out­paces wage earn­ings and in­fla­tion, which rose 1.8 per­cent and 1.1 per­cent re­spect­ively.

3. Ditch the God com­plex.

Des­pite what the Belt­way crowd would have you be­lieve, Obama­care won’t be the only factor driv­ing in­sur­ance costs in the years to come. In many cases, it won’t even be the most im­port­ant one. In­stead, eco­nom­ics, demo­graph­ics, and tech­no­logy will of­ten be in the driver’s seat.

Take, for ex­ample, a Kais­er study re­leased last week that found that al­though premi­ums rose again in 2013, it was at a slower rate than was seen be­fore the pas­sage of the law. Obama­care back­ers were quick to cred­it the law, but the mod­er­a­tion in costs were at least par­tially driv­en by the Great Re­ces­sion, Her­rick said.

“As jobs be­came less stable, em­ploy­ers cut back on med­ic­al cov­er­age first,” he said. “As the eco­nomy im­proves, you’ll see people who oth­er­wise wouldn’t go to the doc­tor start­ing to use the sys­tem.”

Ad­di­tion­ally, med­ic­al tech­no­logy can also move the premi­um needle, Per­son said, not­ing that in­nov­at­ive new break­throughs can im­prove health res­ults while sim­ul­tan­eously in­creas­ing health costs.

And then there are the na­tion’s demo­graph­ics, which are propagat­ing a price bump that no law could in­ter­rupt: The baby boomers are get­ting old, mov­ing a mass gen­er­a­tion in­to the age range where more — and more-ex­pens­ive — med­ic­al care is needed.

4. Don’t ig­nore “It de­pends.”

Cov­er­age un­der Obama­care is not con­sist­ent. The up­front cost de­pends on which plan you se­lect — and how much you use health care will de­term­ine your total an­nu­al ex­pense.

The health in­sur­ance ex­change has four tiers: bronze, sil­ver, gold, and plat­in­um.

The bronze plan of­fers the low­est premi­ums but the least cov­er­age once a work­er reaches the de­duct­ible and in­sur­ance kicks in. On the bronze plan, the pro­vider cov­ers 60 per­cent of the cost of care and the work­er is re­spons­ible for 40 per­cent. This is, of course, after the work­er has paid full out-of-pock­et costs to reach the de­duct­ible.

So, if a work­er has a healthy and safe year, out-of-pock­et costs will re­main low. Com­bined with the bronze plan’s lower premi­um, this is the most eco­nom­ic­al choice for those us­ing Obama­care.

Sil­ver, gold, and plat­in­um plans raise premi­ums but also raise the level of re­spons­ib­il­ity for the pro­vider to 70, 80, and 90 per­cent re­spect­ively, of­fer­ing great­er pro­tec­tion in ex­pens­ive and un­fore­seen health emer­gen­cies.

In an ideal world, you’d be on the plat­in­um plan the year you broke your leg and on the bronze plan every oth­er nor­mal and healthy year, giv­ing you the most for your money. But the suc­cess of your in­sur­ance choice, like the suc­cess of Obama­care, is a gamble.

5. Re­mem­ber Olive Garden … then for­get about it.

Hor­ror stor­ies and tales of tri­umph have been reg­u­lar fea­tures of the Obama­care de­bate, and they will con­tin­ue to be go­ing for­ward.

Con­ser­vat­ives were crow­ing earli­er this year when res­taur­ant CEOs — in­clud­ing top brass at Olive Garden and Ap­ple­bees — said their chains would shed jobs and cut back hours be­cause of the law’s reg­u­la­tions. And the law’s back­ers have not hes­it­ated to do cherry pick­ing of their own, re­peatedly point­ing to hard-luck in­di­vidu­als who suffered un­der the old health care re­gime and are already bet­ter off un­der the new one.

But while such an­ec­dotes mat­ter tre­mend­ously to the people in­volved, they are — when taken alone — a ter­rible basis for eval­u­at­ing a na­tion­al law that is set to af­fect nearly every fa­cet of the Amer­ic­an eco­nomy.

Like nearly every oth­er law, the Af­ford­able Care Act will have its in­di­vidu­al win­ners and losers, but when it comes time for judg­ment, it’s the big­ger pic­ture that mat­ters.

6. Pa­tience, pa­tience, and more pa­tience.

Amer­ic­ans won’t get their an­swers on Obama­care any time soon, ex­perts say.

In­deed, the White House de­cided re­cently to wait a year to en­force em­ploy­ers’ man­date to provide their em­ploy­ees health in­sur­ance, and the ad­min­is­tra­tion has turned back the clock on a key con­sumer pro­tec­tion: out-of-pock­et ex­pense caps.

Even after the law is im­ple­men­ted, its fate will be far from settled. For ex­ample, the ef­fic­acy of the state in­sur­ance ex­changes — which Her­rick called the biggest de­term­in­ing factor in the law’s suc­cess — will be de­term­ined largely by how suc­cess­ful they are in per­suad­ing  people to en­roll, es­pe­cially young, healthy adults.

But while the law is still in its nas­cent stages, the doom­say­ers and cheer­lead­ers have not — and will not — wait to make their case.

“I think the chal­lenge is that people want to have something to weigh in on,” Pear­son said, “and noth­ing has star­ted yet.”

What We're Following See More »
FIRST CHANGE IN FOUR DECADES
Congress Passes Chemical Regulations Overhaul
2 hours ago
THE DETAILS

The House on Tuesday voted 403-12 "to pass an overhaul to the nation’s chemical safety standards for the first time in four decades. The Frank R. Lautenberg Chemical Safety for the 21st Century Act aims to answer years of complaints that the Environmental Protection Agency lacks the necessary authority to oversee and control the thousands of chemicals being produced and sold in the United States. It also significantly clamps down on states’ authorities, in an effort to stop a nationwide patchwork of chemical laws that industry says is difficult to deal with."

Source:
NO MORE INDEPENDENT VOTERS?
GOP Could Double Number of Early Primaries
2 hours ago
THE DETAILS

"Leaders of the Republican Party have begun internal deliberations over making fundamental changes to the way its presidential nominees are chosen, a recognition that the chaotic process that played out this year is seriously flawed and helped exacerbate tensions within the party." Among the possible changes: forbidding independent voters to cast ballots in Republican primaries, and "doubling the number of early states to eight."

Source:
LEVERAGE
Kasich Tells His Delegates to Remain Pledged to Him
4 hours ago
THE LATEST

Citing the unpredictable nature of this primary season and the possible leverage they could bring at the convention, John Kasich is hanging onto his 161 delegates. "Kasich sent personal letters Monday to Republican officials in the 16 states and the District of Columbia where he won delegates, requesting that they stay bound to him in accordance with party rules."

Source:
EFFECTIVE NEXT MONTH
House GOP Changes Rules for Spending Measures
4 hours ago
THE DETAILS

"Speaker Paul Ryan is changing the rules of how the House will consider spending measures to try to prevent Democrats from offering surprise amendments that have recently put the GOP on defense. ... Ryan announced at a House GOP conference meeting Tuesday morning that members will now have to submit their amendments ahead of time so that they are pre-printed in the Congressional Record, according to leadership aides." The change will take effect after the Memorial Day recess.

Source:
LOST BY HALF A PERCENTAGE POINT
Sanders Wants a Recount in Kentucky
6 hours ago
THE LATEST

Bernie Sanders "signed a letter Tuesday morning requesting a full and complete check and recanvass of the election results in Kentucky ... where he trails Hillary Clinton by less than one-half of 1 percent of the vote. The Sanders campaign said it has asked the Kentucky secretary of state to have election officials review electronic voting machines and absentee ballots from last week's primary in each of the state's 120 counties.

Source:
×