King v. Burwell: Two American Health Insurance Markets?

King v Burwell: Differing Views of Health-care Spending Post HealthCare.gov

‘NEW YORK (Reuters) - As the U.S. Supreme Court prepares to rule on whether people in 34 states can continue to receive Obamacare health insurance subsidies, economists are projecting billions of dollars in lost healthcare spending for hospitals, drugstores and drugmakers if the justices say the payments are illegal.

The immediate consequences of such a ruling would fall on the 6.4 million people who receive the subsidies and live in states that did not establish their own insurance exchanges under President Barack Obama’s healthcare law, instead relying on the federal HealthCare.gov website.

The case, known as King v Burwell, would not affect subsidies in the District of Columbia or in the 13 states that run their own exchanges. The decision is expected sometime this month.

Health economists calculate the economic impact of a ruling against the subsidies in different ways, but one thing many agree on is that about two-thirds of people who receive subsidies through HealthCare.gov would drop their insurance altogether rather than foot the entire bill.’

‘"There will absolutely be these second-order effects," said Larry Levitt, a senior vice-president and healthcare researcher at the Kaiser Family Foundation. "A reasonable assumption is that (spending on) healthcare by people who lose their existing subsidies will drop by at least half."’

‘Conservative economist Douglas Holtz-Eakin and Brittany La Couture of the American Action Forum wrote recently that such a ruling could give a boost to small businesses by removing requirements on employers to provide health coverage.

Joseph Antos of the right-leaning think tank American Enterprise Institute says the estimates of healthcare spending effects are imprecise at best. He expects that a ruling invalidating the subsidies would be followed by a "fix" in which Congress or states somehow restore subsidies, at least temporarily.

In that case, he said, any drop in healthcare spending would be temporary and only "a very minor downward bump."

"They are going to extend the subsidies in some manner," Antos said. "I don't know how they are going to do it, but they are going to find some way."‘ - Economists predict shockwaves if Obamacare subsidies are nixed, Yahoo News, 06/17/2015

Link to the entire article appears below:

　

http://news.yahoo.com/economists-predict-shockwaves-obamacare-subsidies-nixed-142827841.html;_ylt=AwrBT9HvLYJVszAA2jVXNyoA;_ylu=X3oDMTEyZGZtdm1zBGNvbG8DYmYxBHBvcwMxBHZ0aWQDQjAwMjlfMQRzZWMDc2M-

ACA/Obamacare: Government Failure to the Tune of $3 Billion

“The Obama administration cannot account for nearly $3 billion in subsidies paid to insurance companies in 2014, according to a government watchdog.

Those dollars are untraceable because the Department of Health and Human Services (HHS) did not have “effective” methods to do so, according to a report from the department’s inspector general.

That lack of internal control means "a significant amount of federal funds are at risk," the report, released Tuesday, warns, though government health officials said they have resolved, or are working to resolve, most of the issues.

For four months in ObamaCare’s first year of offering insurance subsidies, HHS officials could not confirm that payments were made “to confirmed enrollees and in the correct amounts,” according to the report. State-run marketplaces also had no way of submitting enrollee eligibility data.” - Government can't explain $3B in ObamaCare payments, the hill.com, 06/17/2015

Link to the entire article appears below:

http://thehill.com/policy/healthcare/245257-audit-government-cant-explain-3b-in-obamacare-payments

Insight into Health-Care Supply and the Price of Health-Care

‘For over a century, we've regarded health care as qualitatively different from other goods and services – an economic Oz, where the normal rules of nature don't apply. In doing so, we waste resources, keep prices artificially high and delay life-saving and life-improving technologies. But this will soon pass.’

‘In December, Dr. Naoki Ikegami told The New York Times: "[T]he U.S. health care system … defies the laws of economics, and of gravity. Once the price is high, it just stays there."’

‘Prices don't fall because we spend resources (via regulations, subsidies, cartels) to combat downward pressure.’

‘And yet, following the 1910 Flexner Report when health care was not much better than a coin toss, America feverishly paralyzed nascent medical markets. Medical school curriculum became rigidly standardized and for-profit schools were banished until 2007. Medical licensing emerged as medieval guild, giving doctors exclusive domain over work formerly performed by nurses and others. Laws forbade doctors from working for nondoctors. Blue Cross reinvented health insurance to serve hospitals more than patients. The Food and Drug Administration and other agencies relentlessly broadened control over products and services. Given medicine's primitive state during this period, the strictures laid down were more faith and ideology than science and economics.’

‘Over a half-century later, Arrow's "Uncertainty and the Welfare Economics of Health Care" became the proof text of "health care is different." Arrow enumerated the differences: domination by nonprofits, insurers as intermediaries, consumer ignorance and so forth. His essay was brilliant and correctly described the artificial world constructed over the previous several generations.

Thus, health care markets were hamstrung before useful medicine appeared, and the hamstringing continues today. As David Goldhill, author of " Catastrophic Care: Why Everything We Think We Know About Health Care Is Wrong," has put it: "[H]ealth care is indeed different ... but primarily because we insist on treating it as different."‘ - Defying Gravity, Robert F. Graboyes, US News and World Report, 06/12/2015

Link to the entire article appears below:

http://www.usnews.com/opinion/blogs/policy-dose/2015/06/12/why-us-health-care-is-so-expensive