Sunday, December 8, 2013

How to save ObamaCare

In order to survive, ObamaCare needs an influx of relatively healthy people who are well enough off not to end up in Medicaid. Otherwise, the risk pools for ObamaCare policies are going to end up with mostly sick people whose health care costs exceed the premiums they pay. The insurance companies will lose money hand over fist; the government will have to bail them out and/or insurers will bow out for 2015; the insurers who remain in the individual market will increase premiums for next year.

So far, things don’t look too good. Although information is spotty, a lot of people who go through the exchanges seem to be ending up in Medicaid. Those buying insurance policies through the exchanges seem to be skewing older, will usually means more medical costs. Anecdotally, the success stories we’re hearing about are people who are seriously or chronically ill and are grateful to finally get health insurance so they can receive treatment. That’s a good thing from a human point of view but not great for the survival of ObamaCare. Also anecdotally, there are “a lot” of people who are electing early renewal on their existing insurance plans which means they are not part of the ObamaCare policy risk pools. And there seems to be an increased interest in going without health insurance. with information about self-pay and alternatives like accident insurance being passed around - although, of course, we don’t know how many people will take such a drastic step when push comes to shove.

So if the young and healthy don’t seem interested in buying ObamaCare policies and those who currently buy insurance in the individual market are doing everything possible to stay out of the ObamaCare plans, who can offset the older people and the sicker people who are eager to sign up? Simple: Those who believe ObamaCare is worth saving and who currently have health insurance through their employers.

Currently employed ObamaCare supporters can choose to forgo their employer-provided plans and enroll in the ObamaCare plans. Because they are healthy enough to work they are, pretty much definitionally, relatively healthy. True, very few of them will be eligible for subsidies. Also true, they will almost certainly find that the ObamaCare policies provide worse coverage or cost more (or both) than their employer-provided plans. But if they want to save ObamaCare, their flooding into the ObamaCare metallics will do it. And surely if currently employed ObamaCare supporters believe it is right and good that millions of people must give up the individual policies they like and take on plans with higher costs and worse coverage in order to help the sick and the needy, those same ObamaCare supporters must also believe it is right and good that they themselves should do the same.


E Hines said...

Mechanically, your description generally is sound. However, surrounding that is the concept that Obamacare ought be saved at all, rather than repealed (as opposed to allowed to fail on its own; too much damage will be done in the interim).

A significant part of the discussion is the misunderstanding of what Obamacare is. It's privately funded under government mandate health welfare; there is no connection at all to insurance.

There certainly is a moral need (though not a Constitutional one; I'm minded of Madison's remarks concerning Federally funded welfare for Haitian refugees) to provide a mechanism that allows the poor, the aged, and the chronically sick to get access to medical care, but an effective debate over what that (or those) mechanism(s) might be must proceed from an understanding of the problem we're trying to solve.

Eric Hines

Elise said...

I understand quite well what Obamacare is and I have no interest in seeing it survive.