"Friends and foes of the Affordable Care Act (ACA) alike tend to
target the relative effectiveness of the (soon-to-be-repealed)
individual mandate as the key factor behind relatively higher levels of
insurance coverage since the law was enacted in 2010.
ACA supporters might wish that the mandate was much stronger, but
they still claim that its repeal will trigger rising premiums and leave
millions more Americans uninsured in the years ahead.
Many ACA foes often can’t decide whether repealing the mandate
remains the key to unraveling Obamacare or if it simply should be
eliminated as a matter of principle, regardless of the cost and coverage
consequences.
Spoiler alert: They were both wrong about the past. They are likely to remain mistaken about the future.
In reality, overall coverage gains under the ACA hit a modest, but relatively stable, plateau
well before last month’s tax-cutting budget reconciliation law decided
to eliminate further penalties under the individual mandate as of 2019.
Those initial reductions in the number of uninsured Americans were due primarily to expanded eligibility for Medicaid and, secondarily, to generous subsidies for lower-income enrollees in state-based health insurance exchanges.
The less-explored question involves why Obamacare’s overall
combination of taxpayer subsidies, expanded insurance programs, health
benefits requirements, AND coverage mandates had so much less of an
effect than the law’s architects envisioned.
It turns out that many of the nominally uninsured still have other
alternatives to health care than just through heavily-subsidized
Medicaid and exchange-based insurance. You might call such uncompensated
care either an option for “implicit insurance” or a hidden tax on acquiring more formal coverage.
Health policy researchers Amy Finkelstein, Neale Mahonem and Matthew Nolowidigdo unravel the puzzle in a recent National Bureau of Economic Research paper.
They explain why there is less “demand” than expected for the increased
“supply” of subsidized coverage for lower income individuals and more
limited take up of subsidized coverage than once predicted.
The bottom line is that the nominally uninsured (before and after
Obamacare’s implementation) pay only a small share (one-fifth to
one-third) of their medical expenses. Hence, they value formal health
insurance at substantially less than its full cost to insurers providing
such coverage.
Among the sources of other financing for care provided to the
uninsured are federal and state subsidies for uncompensated care, such
as Disproportionate Share Hospital (DSH) payments (reduced more
gradually and later than originally envisioned under the ACA), as well
as part-year insurance coverage, direct care programs, and private
donations.
The federal Emergency Medical Treatment and Active Labor Act
(EMTALA) also requires hospitals to provide “emergency care” to screen
and stabilize uninsured patients on credit. Nonprofit hospitals claim
provision of charity care as one of the primary ways to fulfill their
community benefit requirements for tax-exempt status. Retroactive
look-back coverage under Medicaid also has provided a further modest
financial cushion for some providers treating the nominally low-income
uninsured.
Keep in mind, too, that the accounting lines between charity care and
bad debt are far from clear cut, and they can be adjusted somewhat to
match the financial reporting needs of nonprofit versus for-profit
providers. Recovery rates for uncompensated care provided to low-income
uninsured individuals with few assets are limited (roughly 10-20 percent
at best) and further shielded by personal bankruptcy protections.
So, while financial and medical life for lower-income uninsured
individuals is far from comfortable or stable, Finkelstein, Mahonem,
and Nolowidigdo find that these various backup “options” do reduce the
willingness of low-income individuals to pay for the full --and in many
cases even the generously subsidized, out-of-pocket -- premium costs of
insurance coverage. For example, other research by Finkelstein estimates
that adults living below the Federal Poverty Level would be willing to
pay only 20 to 50 cents per each dollar of Medicare insurance coverage
spent on their “behalf,” and they would rather give up Medicaid than pay
the insurance costs of providing it." - The Real Hidden Tax on Increased Insurance Coverage, economics21.org, 01/25/2018
Link to the entire essay appears below:
https://economics21.org/html/real-hidden-tax-increased-insurance-coverage-2816.html
“In the employer-sponsored market, costs continue to increase. According to the Kaiser Family Foundation, average family premiums for employer-sponsored plans have increased almost 32 percent from 2010-2016.
In the individual market, where the bulk of Obamacare’s new rules and regulations have taken effect, the average nationwide premium increase has been 99 percent for individuals and 140 percent for families from 2013-2017, according to an eHealth report.
Deductibles keep rising, too, especially for Obamacare exchange plans. According to an analysis by HealthPocket, the average deductible for a bronze plan in 2017 is $6,092 for an individual and $12,383 for a family. The average silver plan deductible for an individual is $3,572 and $7,474 for a family.” - 8 Reasons Why Obamacare Should Be Repealed, daily signal.com, 01/23/2017
Link to the entire article appears below:
http://dailysignal.com/2017/01/23/8-reasons-why-obamacare-should-be-repealed/?utm_source=TDS_Email&utm_medium=email&utm_campaign=MorningBell&mkt_tok=eyJpIjoiWVRVMFltWTJORGxtTkRFMyIsInQiOiJ5Z3hKTlNCSlVtNk9PTG5jM3RYQVNlSDhQU0U5N0Z6RHBxNUtHNnhrQmN6RG1tVVlXbnpHdGppMHY2TnlqQWZsSVJxeG5GUjE1Z0VudDdcL1E0c2RxSzcyYTdYSDE5eVArYnFjeGlhQjFxR0IyQjZMaUlIckJ2U0E0T1NvU2JFcGkifQ%3D%3D
“Amid reports that consumers could be hit with Obamacare health insurance premium hikes of 10 percent or more, the administration is providing state insurance regulators with $22 million to encourage them to beef up their reviews of requests for rate hikes from the health insurance industry.
The decision announced on Wednesday to provide states with additional resources to evaluate and challenge rate increases, in addition to undertaking other activities related to Obamacare, appears to be as much a political maneuver as another attempt to bend the health care cost curve.
A new Kaiser Family Foundation analysis of Obamacare insurance markets in roughly a third of major metropolitan areas projects that premiums on the most popular silver plans will increase by an average of 10 percent to 11 percent next year, twice the rate of increase approved last fall. And that doesn’t include almost certain increases in co-payments or other out-of-pocket costs to consumers.
Obama administration officials reportedly are wary of the political impact of a rash of double-digit premium increases so close to the election, despite warnings from major insurance providers they will need higher revenues in order to remain in Obamacare. Millions of Americans are likely to get their first notice of Obamacare premium rate increases for 2017 shortly before the November election.” - White House Is Spending Millions to Battle Obamacare Rate Hikes, thefiscaltimes.com, 06/17/2016
Link to the entire article appears below:
http://www.thefiscaltimes.com/2016/06/17/White-House-Spending-Millions-Battle-Obamacare-Rate-Hikes
“NASHVILLE — Hospitals and medical practices share a growing problem with those they treat: Patients aren’t paying their bills.
Working people are on the hook for an increasingly large portion of the cost of their care, as insurance policies pay for less. It’s a trend that is not reversing — and it’s causing financial distress for families and CEOs alike.”
“In health care, the billing process is called revenue cycle management. It’s a complex system of diagnostic codes, services, insurance benefit analysis, billing departments and software.
Hospitals and providers, historically, received 90% of the reimbursement from insurers, according to The Advisory Board. The patient portion was more of an afterthought.”
“For every patient dollar being billed, hospitals have historically failed to collect 65 cents.”
"The hospital operator is not alone, and the problem is not simple.
Billing practices are not designed to collect small, incremental payments from hundreds or thousands of patients. They are designed to bill a handful of large entities — insurance companies — not individuals who walk in the door.”
“Streamlining billing into a single itemized list is essential to helping turn patients into bill-paying customers.
One might not go back to a restaurant that gave you a bill for the appetizer then a bill for the bread then individual bills for the entrée and drink.
But that’s how health care is presently billed. An open heart surgery could bring individual bills from the cardiologist, the surgeon, the lab, the anesthesiologist, a consulting doctor who helped read charts and more.” - Why more than half of hospital bills don’t get paid, usatoday.com, 03/09/2016
The Seen and Unseen
The above excerpts, from the above mentioned report, do manage to explain the “seen”, but what about the “unseen”? How so?
The above statements are based on the assumption that insurance historically paid the vast majority of bills, which it did not. As recent as 1960 patients paid 90% of the bills and third party payers 10%. Stated alternatively, as recently as 1960 the percentages paid by third parties and the patients were exactly opposite of today i.e. today third party providers pay 90% and patients pay 10%, whereas 1960 third party providers paid 10% and patient 90%.
Somehow patients managed to pay 90% of bills as recent as 1960 and those bills were somehow manageable to be paid from a household budget. Conversely, somehow patients in 2016 can’t manage to pay 10% of bills and those bills are not manageable to be paid from a household budget.
With the 10% patient responsibility existing in 2016, the report mentions: “Hospitals and providers, historically, received 90% of the reimbursement from insurers, according to The Advisory Board. The patient portion was more of an afterthought”, “hospitals have historically failed to collect 65 cents” and “Billing practices are not designed to collect small, incremental payments from hundreds or thousands of patients. They are designed to bill a handful of large entities — insurance companies — not individuals who walk in the door.” Suppose one could look at the above statements many ways. One way is to state: The customer is not the customer, rather the customer is the third party payer.
Moreover, if the third party payer is indeed the indirect or direct consumer from the point of view of the healthcare provider as the report indeed suggests, then as such, it confirms the oft mention non-price signal discussion in healthcare. That is, the statement confirms the regularly discussed scenario that healthcare in conjunction with health insurance is akin to buying “grocery insurance” and paying a monthly premium. As the scenario goes, one arrives at the grocery store to shop where no prices are posted (price is not a signal). When checking out with the cashier one never knows the single item price nor total price as the bill goes to the “grocery insurance company”. One merely laments their monthly grocery insurance premium along with complaints and moans about their ever escalating monthly “grocery insurance” premium.
One can also make a grand argument that the unpaid patient bills are directly related to the process of non-price purchases. If price is not a signal at the point of exchange and only a signal after exchange, are the unpaid patient bills merely an adjustment to mutual exchange, after the fact, in that the patient doesn’t pay the bill to adjust for mutual exchange? Stated alternatively, had price been a signal many exchanges would have never occurred as the patient would have been unwilling to pay such price at the point of exchange (transaction rejected as a non-mutual exchange). As an extension to the argument: Are the unpaid patient bills merely part of the process, a process of non-price signal, a process self-produced by healthcare providers, and hence not a surprise but rather a known-known of such a process?
A final point one might consider involves the following observations from the article: “Streamlining billing into a single itemized list is essential to helping turn patients into bill-paying customers“, “One might not go back to a restaurant that gave you a bill for the appetizer then a bill for the bread then individual bills for the entrée and drink“, and “But that’s how health care is presently billed. An open heart surgery could bring individual bills from the cardiologist, the surgeon, the lab, the anesthesiologist, a consulting doctor who helped read charts and more.”. Why all the bills?
What about the “why” concerning the several and many bills received by patients? The “why” is related to the non-competitive nature of much healthcare (CON [Certificate Of Need] legislation and other related legislation protecting the incumbent healthcare provider) and the consequential failure to reach scale in healthcare.
The several and many bills are not going to change as it is part of a conscious process. Nay, nay there is absolutely no reason to wring one’s hands over the flood of bills received by the patient as it is by design, not by error. Many and varied healthcare providers, in a self-produced and politically [legislation] protected non-scale environment, send many bills by design. Nope, no Wal-Mart or Southwest Airlines of healthcare in this supply, just a gazillion little shops sending non-price signal bills….and expecting to be paid.
Yep, one might think twice about the supply-side of healthcare.
‘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
“The insurance industry responds that critics are confusing legitimate cost-control with bias. Some state regulators, however, say there's reason to be concerned about policies that shift costs to patients and narrow their choices of hospitals and doctors.
With open enrollment for 2015 three months away, the Obama administration is being pressed to enforce the Affordable Care Act's anti-discrimination provisions. Some regulations have been issued; others are pending after more than four years.
More than 300 patient advocacy groups recently wrote Health and Human Services Secretary Sylvia Mathews Burwell to complain about some insurer tactics that "are highly discriminatory against patients with chronic health conditions and may ... violate the (law's) nondiscrimination provisions."
Among the groups were the AIDS Institute, the American Lung Association, Easter Seals, the Epilepsy Foundation, the Leukemia & Lymphoma Society, the National Alliance on Mental Illness, the National Kidney Foundation and United Cerebral Palsy. All supported the law.
Coverage of expensive drugs tops their concerns.
The advocates also say they are disappointed by how difficult it's proved for consumers to get a full picture of plans sold on the new insurance exchanges. Digging is often required to learn crucial details such as drugs covered, exact copayments and which doctors and hospitals are in the network.”
“Much of the concern is about coverage for prescription drugs. Also worrisome are the narrow networks of hospitals and doctors that insurers are using to keep premiums down. Healthy people generally shop for lower premiums, while people with health problems look for access to specialists and the best hospitals.”
“Some plans are requiring patients to pay 30 percent or more for drugs that go for several thousand dollars a month. HIV drugs, certain cancer medications, and multiple sclerosis drugs are among them.
Although the law sets an overall annual limit on what patients are required to pay, the initial medication cost can be a shock.”
“The insurance industry trade group America's Health Insurance Plans says there's no discrimination because patients have many options on the insurance exchanges. Gold and platinum plans feature lower cost-sharing, but have higher premiums. Standard silver plans generally require patients to pay a greater share of medical bills, but some have fairly robust drug coverage.
"There are plans on the exchanges that are right for people who have these health conditions," said Brendan Buck, a spokesman for the group.” - Groups claim insurance discrimination in new forms, MSNnews, 08/17/2014
Upon further review, the purchase of health insurance upon the ACA exchanges was advertised as being much like, if not exactly like, the experience consumers have when shopping at Amazon. Implicit in the advertised mantra was consumers with great knowledge in the field of health insurance. Stated alternatively, the implicit argument is that consumers when shopping at Amazon, with great knowledge of blue jeans, shoes, toasters and microwave ovens also have the same basic knowledge in health insurance.
Price really is a signal. Yep, that platinum colored microwave seems nice, but that silver microwave is less expensive. But the bronze microwave is cheap!
Total price as a signal, that is, premium outlay, maximum out-of-pocket (MOOP), doctor office co-pay, specialist co-pay, drug co-pay, network width and breath …..that was merely a shopping experience like Amazon. Total price was considered every time, all the time: Consumer knowledge was king!
Maybe not so much, huh?
Link to the entire MSN article appears below:
http://news.msn.com/us/groups-claim-insurance-discrimination-in-new-forms
“Health industry officials say ObamaCare-related premiums will double in some parts of the country, countering claims recently made by the administration.
The expected rate hikes will be announced in the coming months amid an intense election year, when control of the Senate is up for grabs. The sticker shock would likely bolster the GOP’s prospects in November and hamper ObamaCare insurance enrollment efforts in 2015.
The industry complaints come less than a week after Health and Human Services (HHS) Secretary Kathleen Sibelius sought to downplay concerns about rising premiums in the healthcare sector. She told lawmakers rates would increase in 2015 but grow more slowly than in the past.
“The increases are far less significant than what they were prior to the Affordable Care Act,” the secretary said in testimony before the House Ways and Means Committee.
Her comment baffled insurance officials, who said it runs counter to the industry’s consensus about next year.
“It’s pretty shortsighted because I think everybody knows that the way the exchange has rolled out … is going to lead to higher costs,” said one senior insurance executive who requested anonymity.
The insurance official, who hails from a populous swing state, said his company expects to triple its rates next year on the ObamaCare exchange.
The hikes are expected to vary substantially by region, state and carrier.
Areas of the country with older, sicker or smaller populations are likely to be hit hardest, while others might not see substantial increases at all.” - O-Care premiums to skyrocket, thehill.com, 03/19/2014
Link to the entire article appears below:
http://thehill.com/blogs/healthwatch/health-reform-implementation/201136-obamacare-premiums-are-about-to-skyrocket
‘One in three Americans who lack health coverage plan to remain uninsured, citing cost as their chief obstacle, according to Bankrate's latest Health Insurance Pulse survey.
Fewer than a third (30 percent) of the uninsured realize that federal tax credits available through the new Obamacare health exchanges can make health insurance affordable to lower-income individuals and families.
In a telephone survey of uninsured adults drawn from a nationally representative sample of more than 3,000 Americans, one-third (34 percent) said they intend to continue without health coverage. When asked why, 41 percent said health insurance is too expensive, 17 percent cited opposition to the Affordable Care Act, and 13 percent said they're healthy and don't need coverage.
Just over half (56 percent) of the uninsured said they plan to obtain health coverage.
If a late January Pulse survey demonstrated how familiar the overall population is with health reform penalties and deadlines that won't affect most Americans, this first Bankrate.com survey directed specifically at uninsured adults suggests that efforts to reach those most in need of affordable coverage may have fallen short.
"It's hard to generalize, but for some of these folks, it's a case of, 'I'm in pretty good health, I don't think about these things, I know I can't afford it now,'" says Michael Morrisey, professor of health economics at the University of Alabama at Birmingham School of Public Health. "I think it's just rolling past them, and they're not giving it a whole lot of attention." ‘ - Many uninsured still unaware about Obamacare, bankrate.com, 03/17/2014
Link to the entire article appears below:
http://www.bankrate.com/finance/insurance/health-insurance-poll-0314.aspx?ic_id=Top_Financial News Center_link_1
Update: Uninsured: Obamacare Is Unaffordable, American Spectator
http://spectator.org/articles/58149/uninsured-obamacare-unaffordable
“What has happened, at least so far, presents itself in several layers. One key problem, which to date has been the most prominent in public, has to do with a late-in-the-game decision to require users to go through a complex account-creation process before even reaching any coverage options. Administration officials apparently went back and forth several times on this question, and the ultimate decision required the creation of a series of patches over an already developed site in a very short time. Most of the problems people have faced so far are a function of that decision, and have had to do with creating user accounts and so getting through the very first steps involved in purchasing coverage. Some journalists and analysts have speculated that this decision was made in order to prevent people from seeing premium costs before they could also see any subsidies they might be eligible for, so that the shock of higher prices could be contained and so that simply curious observers and journalists couldn’t get a picture of premium costs in the various states. This explanation strikes me as plausible, and it struck several of the people I spoke with as plausible, but none of them could confirm it. It may be true, but it’s surely not the only possible explanation. Whatever the cause, that decision has created crippling problems that are still largely unresolved.”
“The calculation of subsidies continues to fail tests, and it’s pretty clear that some actual consumers have made actual purchases with bad information, which will become apparent to them when they get their first bills. If the interface problems are addressed and the volume of purchases increases, this calculation problem could become a huge concern.” - Assessing the Exchanges, NRO, 10/17/2013
“What happens if tens of thousands of consumers get their first insurance bill and discover they’re paying more than they thought? Or get a notice from the IRS that the subsidy they thought they were getting is incorrect? Imagine: pitchforks, tar, and feathers.” - Is the White House Now Thinking the ‘Unthinkable’ about Obamacare?, 10/19/2013, pjmedia.com
Links to above articles appear below:
http://nationalreview.com/corner/361577/assessing-exchanges-yuval-Levin
http://pjmedia.com/tatler/2013/10/19/is-the-white-house-now-thinking-the-unthinkable-about-obamacare/
Updated 10/28/2013:
“A lot of people may be in for a rude awakening if they foolishly trust the new-and-improved government website to accurately estimate their monthly premiums. What are the actual premiums people will have to pay if and when they're ever able to sign up for Obamacare? Someone unearthed this spreadsheet earlier today, and it's been making the rounds for a few hours now. At first glance, it appears to list every plan and every monthly (pre-subsidy) premium within Obamacare's federal exchanges. Time will tell if this data is genuine -- but weren't these numbers supposed to be hidden behind a registration wall? The idea was to hide the sticker shock from consumers until their government assistance could be calculated to soften the blow. An independent analysis performed by National Journal concluded that the "vast majority" of individual market consumers would see costs rise, even after subsidies are factored in.”
“As President Obama promises to fix HealthCare.gov, his administration is touting what it calls “improvements” in design, specifically a feature that allows you to “See Plans Now.” White House press secretary Jay Carney has said, “Americans across the country can type in their zip code and shop and browse.” Industry analysts, such as Jonathan Wu, point to how the website lumps people only into two broad categories: “49 or under” and “50 or older.” Wu said it’s “incredibly misleading for people that are trying to get a sense of what they’re paying.” Prices for everyone in the 49-or-under group are based on what a 27-year-old would pay. In the 50-or-older group, prices are based on what a 50-year-old would pay. CBS News ran the numbers for a 48-year-old in Charlotte, N.C., ineligible for subsidies. According to HealthCare.gov, she would pay $231 a month, but the actual plan on BlueCross BlueShield of North Carolina’s website costs $360, more than a 50 percent increase. The difference: BlueCross BlueShield requests your birthday before providing more accurate estimates. The numbers for older Americans are even more striking. A 62-year-old in Charlotte looking for the same basic plan would get a price estimate on the government website of $394. The actual price is $634.” - Fail: New Obamacare Website Snag 'Dramatically Underestimates' Health Costs, townhall.com, 10/23/2013
http://townhall.com/tipsheet/guybenson/2013/10/23/fail-new-obamacare-website-snag-dramatically-underestimates-health-costs-n1730678?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm
Obamacare at the grocery store? No way! Way.
Yes, the Affordable Care Act (ACA) otherwise known as Obamacare will be available on grocery store shelves very soon in the form of a one billion dollar annual price increase passed onto consumers.
The do-gooder intentions of the few become the price increase for the many. The notional proposition is that James and Jane Goodfellow are unable to properly shop at the grocery store hence big brother needs to lend a hand, at a price.
As reported by Cheryl Chumley of the Washington Times:
"New Food and Drug Administration rules to be imposed under ‘Obamacare’ could lead to higher food prices, according to grocery store executives who are casting wary eyes on the looming mandate.
The mandate could boost grocery owners’ costs by $1 billion in its first year, Fox News reports. And that means higher food costs to consumers.”
The following is a link to Chumley’s report:
http://www.washingtontimes.com/news/2013/feb/7/obamacare-rule-could-hike-grocer-costs-1-billion/
