By Lambert Strether of Corrente.
The political class seems to have collectively agreed that the key metric for ObamaCare’s success or failure is the enrollment numbers; perhaps because they love a horse-race; perhaps because enrollment numbers are the only numbers we have, and so we face The Streetlight Effect. So I’ll take a quick look at the enrollment numbers, then look at some other potential metrics, and finally ask what is (in my mind) the key question: Can shopping in the ObamaCare “marketplace” enable citizens to match insurance to their health care needs? Spoiler alert: No, because the ObamaCare marketplace is a lemon market.
ObamaCare’s Enrollment Numbers
The administration — hold onto your hats, folks, this is a shocker — has been gaming and lowballing the numbers:
The U.S. administration on Monday dramatically cut expectations for 2015 Obamacare enrollment, saying it aims to have a total of 9.1 million people enrolled in government-backed federal and state health insurance marketplaces next year.
The stated goal, 30 percent lower than a Congressional Budget Office forecast of 13 million enrollees, reflects the government’s latest thinking about new enrollees and returning customers, according to officials who expect the actual number to fall between 9 million and 9.9 million
The ACA sign-ups site — surprise! — supports the 9 million figure:
With the holidays out of the way, things should be ramping up again; the only question is by how much? I’m gonna be cautious and go with about a 35% bump over last week, to around 140,000 on the federal exchange, bringing total plan selections to around 6.73 million QHP selections for Healthcare.Gov through tonight (January 9th). As always, I’ll be happy to have underestimated a bit.
Add in the other 14 states, and the national QHP total should be at around 9.05 million through today.
It would take quite an enrollment surge to make 13 million:
The Congressional Budget Office has estimated that 13 million people should be paying for plans sold under the law in 2015, a figure that would require “an enormous surge” of enrollment in the next six weeks, [Larry Levitt of Kaier] said.
Nevertheless, deadlines do generate enrollment surges, so we’ll see whether we succeed — by which I mean, whether the administration will have successfully lowballed expectations — on February 15, when ObamaCare’s open enrollment ends.
Anyhow, for “progressives” whose metric is enrollment, there’s a considerable degree of triumphalism. Kevin Drum is typical:
Chart of the Day: Obamacare Just Keeps Working, and Working, and Working….
Today, Gallup released new results for the final quarter of 2014, which marked the start of Obamacare’s second year of enrollment, and guess what? The ranks of the uninsured are dropping yet again. The percentage of adults without health insurance dropped from 13.4 percent to 12.9 percent.
Which is a pretty curious definition of “working,” isn’t it? Since when is the mere purchase of a product regarded as a sign the product works? I mean, unless you’re an insurance salesperson, which, granted, many career “progessives” (like Drum) have become. Then, whatever sells, “works,” which is another problem with career “progressives,” come to think about it. (See Joe Firestone for an alternative perspective.) So let me propose some alternative metrics.
Other Potential Metrics for ObamaCare
We might ask whether ObamaCare has decreased costs. To which the answer would be “no”:
“It definitely looks like it’s going to work,” [there’s that word again!] Caroline Pearson, vice president of the health care reform practice at the consulting firm Avalere Health, said before the HHS announcement. “All signs are that the markets are working really effectively. You’ve got an increased insurer participation and very stable premiums,” she said. The average nationwide price increase for next year is 5.4 percent, but there’s a lot of variation and some premiums even went down, according to PricewaterhouseCoopers.
So, with real wages flat for a generation and the forseeable future, why aren’t Democrats screaming about a 5.4% increase? Why isn’t Obama jawboning them down? Questions that answer themselves, once asked.
Or we might ask whether ObamaCare has improved health outcomes. To which the answers would range from “maybe” all the way to “too soon to tell.” The Los Angeles Times:
The new study, published in the Journal of the American Medical Assn., suggests the coverage expansion also measurably increased the number of young adults who reported that they are in excellent physical and mental health.
Hmm. Self-reported. This study of RomneyCare is a bit more definitive:
A Harvard team compared the mortality rates in Massachusetts before and after then-Gov. Mitt Romney (R) signed the health care reform bill into law in 2006 with the mortality rates in similar counties in other states during the same time periods. Based on their calculations, the mortality rate declined 2.9 percent overall among adults 20 to 64 years old after the law went into effect — which translates into 8.2 fewer deaths per 100,000 people.
Hmm. Since ObamaCare’s coverage varies randomly by jurisdiction (down to the county level), income, employment status, marital status, and other factors, it’s difficult to see how ObamaCare could claim that entire 2.9% decline, even if ObamaCare’s crapified system architecture variations in coverage could be controlled for.
Finally, it could be too soon to tell what ObamaCare’s health outcomes are:
Experts say that the real health benefits of the ACA may not be seen until millions of previously uninsured Americans have been able to take advantage of the law’s massive expansion of Medicaid.
Hmm. So it’s all down to Medicaid expansion, and not to the marketplaces? Just to pre-empt, here: I’m not saying that health care doesn’t improve health; it can and does. I merely propose the truism that health insurance and health care are not the same, and that if improving health care in the general population is the metric for success, ObamaCare has not been shown to achieve it.
Finally, we might lower the bar, and simply ask if ObamaCare has achieved satisfactory citizen customer satisfaction levels. Sadly, we can’t know this, at least on a national scale, because HHS hasn’t been measuring it:
The Department of Health and Human Services (HHS) is looking for vendors to run its “National Data Warehouse,” a database for “capturing, aggregating, and analyzing information” related to beneficiary and customer experiences with Medicare and the federal Obamacare marketplaces.
So, the neoliberals running the show in the administration and HHS propose a shopping model for health insurance purchase, where people are not citizens but consumers or customers, and then propose to measure customer satisfaction only as an afterthought…. Shaking my head.
The ObamaCare Marketplace is a Lemon Market
Let’s take the 30,000 foot view and ask ourselves whether any metric for ObamaCare’s success is possible in the first place. Surely the most basic question of all is this:
Can shopping in the ObamaCare marketplace enable citizens to match insurance to their health care needs?
My answer is no, because the ObamaCare marketplace — like health insurance marketplaces generally — is a lemon market. George Akerlof, in his famous paper, “The Market for “Lemons”: Quality Uncertainty and the Market Mechanism” [PDF], defines a lemon market as follows, using the market for used cars as an example:
After owning a specific car, however, for a length of time, the car owner can form a good idea of the quality of this machine; i.e., the owner assigns a new probability to the event that his car is a lemon. This estimate is more accurate than the original estimate. An asymmetry in available information has developed: for the sellers [of insurance, too] now have more knowledge about the quality of a car than the buyers [of insurance, too]. But good can and bad cars must still sell at the same price-since it is impossible for a buyer to tell the difference between a good car and a bad car. … Gresham’s law has made a modified reappearance. For most cars traded will be the “lemons,” and good cars may not be traded at all. The “bad” cars tend to drive out the good… [T]he bad cars sell at the same price as good cars since it is impossible for a buyer to tell the difference between a good and a bad car; only the seller knows.
So the key point is the information asymmetry between buyer and seller. Does such an information asymmetry exist in the ObamaCare “marketplace”? You bet. Let’s turn to an actual navigator:
There are so many variables that I can’t speak to, even if I were allowed to. I can define terms for people, but I can’t predict. There are now 143 plans in the Marketplace in my area, each with details to consider on things like deductibles, premiums and so on. These figures are probably set by actuaries figuring out what exactly the numbers should be to make money, but still have people buy the plans.
Individuals don’t have an actuary to help figure this out. So sometimes I try to make actuarial tables with them on the fly, and bring up spreadsheets to show them, “OK, this is you using your insurance in a really bad year. This is you using your insurance in a year where you’ll be healthy.”
It’s a complete farce. On the surface, individuals have all these choices, but I can’t really predict what will be best, and the patient can’t either. That’s one of the problems with the fact that all this is privatized. The people who actually have the useful information aren’t in the room.
“The people who actually have the useful information aren’t in the room.” That’s the information asymmetry.
Of course, that’s just one navigator. But we have well-conducted studies as well, which also bear out the information asymmetry:
The Kaiser Family Foundation recently conducted a nationally representative survey of 1292 adults, asking them 10 questions to gauge their knowledge of how health insurance works.
The general public did reasonably well, with 68% answering more than half of the questions correctly (though only 4% got a perfect score of 10). For example, 79% knew that a health insurance premium has to be paid every month even if you don’t use any health care services, and 72% could identify the correct definition of a deductible.
Questions involving arithmetic proved more challenging: Only 51% could correctly calculate the out-of-pocket cost for a hospital stay involving a deductible and copay, and only 16% could determine the cost of an out-of-network lab test where the insurer caps the allowable charge. ….
Not surprisingly, uninsured individuals who took part in the survey—who, by definition have less experience with health insurance—had more difficulty. For example, only 64% of uninsured adults knew that a premium has to be paid every month, only 53% could correctly identify the definition of a deductible, and only 57% knew what a provider network is.
This lack of health insurance literacy (and numeracy) has important implications for how effectively people use health care services and their insurance. Using an out-of-network physician or hospital could cost a patient thousands of dollars in higher out-of-pocket costs. Those who don’t know what a provider network is and that cost-sharing differs substantially between in-network and out-of-network clinicians and medical institutions might unwittingly run up those charges.
Similarly, how many people would think to confirm that the surgeon and anesthesiologist are in their plan’s network when having surgery at an in-network hospital? Just 41% of the general public and 29% of the uninsured knew this was not guaranteed.
The authors’ conclusion is that “insurance literacy” should be fostered. Of course, that presumes good faith on the part of insurance companies, which, to say the least, assumes facts not in evidence. The article goes on to give an example of how ObamaCare’s lemon market — though they don’t call it that — er, works:
Consider a single woman aged 40 years in Miami making $30 000 accessing healthcare.gov to shop for insurance for 2015. She would be presented with 90 different plans, described using all the terms that confused many people on the Kaiser survey.
The plan listed first has a monthly premium of $156 after applying an income-related tax credit of $68. (Even people who have received tax credits don’t always know it, which is another potential source of confusion, especially because those tax credits will be reconciled based on actual income when the recipient files her income tax return for the year.)
That lowest-premium plan has a deductible of $6500 that applies to all services except for generic drugs and pays 100% of all services after the deductible is met.
For $7 more per month in premium, our hypothetical consumer could get a plan from the same insurer with a $5000 deductible and 40% coinsurance for most services after the deductible is met.
For $50 more per month in premium, she could get a plan—also from the same insurer—with a $5000 deductible, but with physician visits and generic and preferred brand-name drugs covered with copays before the deductible is met.
Even if this hypothetical woman were a well-informed consumer with perfect knowledge of how much health care she expects to use over the coming year, she would have difficulty deciding which of these 3 plans makes the most sense.
So, amazingly, not only does ObamaCare require people with unpredictable incomes to predict their incomes, it requires people with unpredictable health care needs to predict their health care needs. (“If only I’d known about my case of Dengue Fever beforehand, I would have bought a different policy!”)
I suppose, however, that’s what happens when you deny the very concept of social insurance, and shift all the risk onto individuals. In fact, we might view ObamaCare’s lemon market as part of the neoliberal playbook our whacky elites are going to keep running until the stadium blows up or the fans start ripping the seats out of the stands and throwing them on the field. Counterpunch:
Here Wall Street and Obamacare start to come together. The issue of the complexification of health care, forcing people to know and to competently navigate every aspect of insurance contracts, medical consultation and health care provision or suffer adverse consequences, is related to Wall Street strategies of issuing mortgages that only those with a Ph.D. in math and a lot of time to waste on contractual minutiae can understand …. The most complicated mortgages were issued to the least sophisticated borrowers.
The second-order fantasy at work is that individuals can control health care costs by selecting health insurers that in turn select competent low cost health care providers. The amount of information needed to make the informed choice between policies that might actually accomplish this is beyond the ability of everyone likely to be touched by Obamacare. (Quick: what is the probability that an in network anesthesiologist will be available on any given day? Congratulations, you are one ten-thousandth of your way to making a decision).
Information asymmetries everywhere. Only they know, if anyone does, but they are asking you.
I started the discussion of ObamaCare’s lemon market with a navigator; I’ll end with a citizen consumer. From Kaiser Health News:
With the deadline looming to re-enroll in California’s insurance exchange, Kuei Lin Liu faced a tough question: Do I want to go through this all over again?
After a year of bureaucratic snags, data glitches and inexplicably dropped coverage, Liu wondered whether Covered California was worth the effort.
“I’m so frustrated right now,” she said. “I spent the last year trying to work out this mess.”
The 37-year-old Richmond resident first enrolled in the exchange last fall, when she left a senior accounting position at a big corporation and the benefits that came with it.
Note that “senior accountant.” That seems to be the skill level required to fight your way through the information asymmetries to a policy that meets your health care needs. I’ll leave out the dropped coverage, the coverage date hassles, the visit Liu’s insurance agent paid to Blue Cross, the complaint filed with the state, the disappearing computer records, and the billing issues, and all the other professional skills and privileges most subsidized ObamaCare citizens consumers won’t have, and cut to the chase:
For months, Liu went back and forth about whether to re-enroll.
She found herself thinking, “It’s just too much work. I don’t have time for that.”
In other words, Liu wasn’t sure she wanted to pay ObamaCare’s “tax on time.”
If she took no action, she and her family would be automatically re-enrolled in their Blue Shield platinum policy….
Days before the Dec. 21 deadline for coverage beginning in the New Year, Liu cautiously decided to give Covered California another try. Instead of a platinum plan, she picked a slightly less rich gold one because she doesn’t expect to need as much care as this year when she had the baby.
So there you have it. Liu — a highly motivated professional accountant, assisted by an insurance agent (not a navigator) — was able to come away with some surety that she had “matched insurance” to her “health care needs” because she knew in advance what her health care needs would be. That’s what it takes to make lemonade out of the ObamaCare lemon market. For how many other ObamaCare citizens consumers will that be true? The Times:
Selecting the best insurance plan requires not only significant knowledge about every component of insurance, but also the ability to accurately predict the likelihood of future medical needs.
Insane.
Conclusion
I’ll close with a quote from Krugman, the 2009 model:
There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn’t work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.
ObamaCare is a lemon market. It’s immoral to force people to purchase a defective product. And so we should not celebrate, with the enrollment numbers, that we have done so. Instead, we should take off the ideological blinders and move to the simple, rugged, and proven single payer system:
since the mid-70s, when Canada adopted its single payer system, we’ve conducted the largest controlled experiment in the history of the world. We’ve had two political systems spanning the same continent, both nations of immigrants and once part of the British empire, both mainly English-speaking but multicultural, both with Federal systems, and both with a free market system backed by social insurance. And the results of the experiment? The “evidence”? Canadian-style single payer wins hands-down.
Liz? Bernie? Hillary? Martin? Bueller?… Bueller?… Bueller?
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may 2014 – Taxpayer Advocate Nina Olson, writing to Congress last week, pleaded with Congress in a 21-page letter to abandon ship on the proposal. The EXPIRE Act, introduced in April by Senate Finance Committee Chairman Ron Wyden (D-Ore.) would restore the failed program. Olson has been joined by the IRS Oversight Board and a coalition of 15 organizations in opposing the plan to hire private collection firms.
i get the stressful (deaths front door) feeling outsourcing tax collections will fly this time. Ocare, overwhelming the sacred Internal-Repulsive-Sadist, will offer up privatization guaranteed by market fairness :-/
The US healthcare is anything but market based. So many lobbies, particularly Pharma, Insurance and Hospital lobbies distort the market. According to classical economic theory, competition breeds quality and lower pricing. Well, we have more insurance companies than almost the whole world combined, but are outcomes better and less expensive? Free markets and capitalism are just terms that those in power use while they are picking your pockets.
‘The percentage of adults without health insurance dropped from 13.4 percent to 12.9 percent.’
With a U.S. adult population of 244 million, that’s 31.5 million uninsured (at a 12.9 percent rate), versus 9.05 million enrolled in Obamacare.
Obamacare’s market share among the formerly uninsured, in other words, is 22.3 percent. And its growth (despite tens of billions in subsidies) appears to be leveling off rapidly.
One doubts these clowns could sell subsidized 10-dollar B-J’s.
One critical distinction ObamaCare does not make is the difference between acquiring health insurance and the ability to access care. While the law mandates you have a policy, it speaks nothing of how a working class individual is going to have access to thousands of dollars required to pay out in deductibles before his or her policy picks up a red cent. There is a direct correlation between the size of a policy’s deductible and the resistance on the part of the policyholder to utilize the service. So as my deductible rises, I become much more hesitant to go to the doctor because I just don’t have the money. You can call that whatever you want, but I call it de facto rationing. The solution to providing quality health care is not in providing less of it to lower its costs. The solution involves holding the line on costs and reversing the curve along with getting more “skin in the game.” What is it saying when 87% of those signing up require “subsidies?” If you’ve got 13% pulling the cart with 87% inside, how long do you think that wagon is going to roll?
One (now dated) estimate claimed that 71 percent of the increased coverage in the first half of 2014 was due to over 6 million sign-ups for fully subsidized Medicaid, a program that predated Obamacare.
If only about 3 million people are in subsidized private plans purchased on the exchanges, then they represent only 1.25 percent of the adult population — sort of a mirror image of the ‘other one percenters.’
Yet, small a cohort as they may be, it was reported in September that ‘the combined $707 billion that the federal government will spend on Medicaid and Obamacare subsidies in 2024 is roughly equal to the $716 billion the CBO estimates the government will spend on national defense that year.’
http://cnsnews.com/news/article/terence-p-jeffrey/cbo-cost-obamacare-subsidy-will-increase-8-fold-10-years
Perhaps never in history has so much been spent to achieve so little.
*barfs into an antique urn*
The Medicaid expansion was REALLY REALLY GOOD. I have nothing but good things to say about it. I know several people using it. It is a vast improvement over “old Medicaid”. Basically, they eliminated all the hoops and asset tests and fingerprinting and other insanity… and let a lot more people in.
The exchanges are god-awful. I wish I had low enough income to be on Medicaid every year (while having high enough income to live on).
It is kind of amazing how much strum und drang over such a itsy bitsy increase in…health insurance – and its not even insurance that covers everything!
I just got a letter from my insurer saying that Sutter won’t be in the PPO. And my doctor just retired.
Well, I like Sutter merely because the hospital is 3 blocks away and I can walk to a number of physicians and labs. So, I can still use out of network doctors, i.e., Sutter, if I want.
I am willing to pay for convenience …..
So I call up to find out how MUCH it will cost. I’m willing to pay, but I’m not willing to pay any price or an UNKNOWN price (medical care – if you have to ask, you can’t afford it). Of course, the offices of the potential new doctors have no idea of what they would charge BlueCross (and of course, its not a strict percentage anyway, but varies by procedure), and how much left over is left for me to pay. Of course, call Sutter and you will finally learn that the rate of reimbursement between Sutter and Blue Cross is a big secret….which means (dare I say…..wait for it…..wait for it) that to find out what is in the bill, I have to pass the bill….OK, its really to find out how much the bill is, I have to get a bill…but you get the drift.
Ah, I would disagree there Jim. Obamacare’s market isn’t the uninsured or the underinsured. It’s the well insured. A lot more than 22% of Democrats have gotten on board the Tribal Train to healthcare bloat town (actually, Obama didn’t even take a train, it was an OFA gas guzzling bus tour…)
I’ll never forget the survey OFA handed out at the local rallies. Single payer wasn’t even an option, let alone direct nationalization.
This metric shows Obamacare to be very successful:
NYSE:UNH
I filled out my application by Dec. 15th. I expect to make less in 2015, and not reach the poverty level, so I expected to be shunted onto my states Medicare. Sure enough, the federal website said that I would be hearing from my state.
Was out of touch for a couple of weeks, came back to find a few messages from “The Marketplace”. Two said that I needed to finish filling out my application, BUT, I had finished. Then one said that since I didn’t finish, THEY were going to re-enroll me in my last year’s plan, and all I had to do was pay the bill. Another message said again that I could expect to hear from my state.
I never received a bill for January insurance, but did get one for February, so I have to hope I don’t have any problems for the next couple of weeks, because “The Marketplace” has left me without insurance for a month. And, I still haven’t heard anything from the state.
Oh, and that 5.4% increase? MY policy increased by 16.5%, but since I was getting a subsidy, and the subsidy remains the same, all of the increase comes to me. SO, my monthly payment has gone up by 66.7%. And it’s such a lovely policy, that if I use ANYBODY out of network, I get to pay for it all, AND it doesn’t count toward my deductible. AND, since hospitals are now gaming that system, I simply have to hope that I can last a few more years until I can be on regular old Medicare.
Obamacare should be called “Obama-throwing-you-to-the-wolves-without-a-care”.
To be fair to the pundit shilling crowd, PPACA has worked almost exactly as intended. So it really is a major success, from a certain point of view.
Regarding the Kaiser study on knowledge of health care terminology, I suspect even Kaiser may not be aware how insurance companies have changed terminology to suit their own purposes. For example, all Medicare Part D plans now have a so-called annual deductible. The current favorite amount is $66 annually. However, this is not a true deductible, but a premium surcharge that escapes Additional Help from Medicare.
With a true annual deductible, if your first purchase of the fiscal year is $14 for a medication, instead of paying $14 out of pocket–and continuing to pay various amounts until you reach $66–you pay $14+$66 ($80 total for a $14 medication!) just to receive your first prescription of the year. Another classic example of the evil done by private enterprise in having any control over the health care system. It’s no wonder many citizens ration their medical care and their prescriptions in this country, and that many people find it difficult to receive accurate information on the true cost of a medical procedure.
“Information asymmetry” is of course the essence of medical capitalism and what makes it so profitable. Since the politicians show no willingness to solve this, perhaps in the future we will have to become medical consumers for real starting with more information. Few realize that the Medicare rate for various tests and procedures is available on the web. If you’ve ever had a test done it can be quite shocking to see what the Medicare rate is versus the “charge master” rate….hundreds versus thousands. Information on what a service is really worth can provide bargaining leverage for those with high deductibles or, in many cases, no insurance at all. Non profit hospitals are required to bargain in cases of financial need in exchange for the tax breaks and the many privileges that governments give to them. It isn’t charity.
Or to put it another way better let your own mechanic with a good web connection look at that “lemon” before buying. This may be a weak and ineffective (and depending on circumstances impossible) way of fighting back but it could be all we have for now.
If one goes to an in-network hospital for either emergency room or scheduled surgery, what’s the procedure to ask for & get an in-network anesthesiologist and an in-network surgeon?
Can hospitals game the system to avoid assigning in-network specialists/surgeons/anesthesiologists?
They both can and do game the system.
You can’t control who they assign.
NY State passed a law to prevent this particular scam, by specifying that you can’t be forced to pay any out-of-network bill unless you were specifically informed that it was out-of-network and agreed to it. I believe it went into effect at the beginning 2015.
http://stopsurprisemedicalbills.org/
If you’re not in NY, sorry, you’re screwed!
Liz was in agreement on single payer until she became a politician. As long as she remains in the Dem. Party she cannot credibly claim to be working for the people against corporate interests.
So when sitting in my friends obamacare office (he is to the right of Rush, but after three divorces..) and I hear the following recurring themes…
1. Many low wage workers don’t know what wages will be reported by their employer each year. They don’t know ahead of time if their employer will report 100% 50% 0% of their wages to the government. Without the right W4 or 1099s, how do they file and get their subsidy?
2. Many low wage workers don’t know what they make, if you ask what they bring home each week, they will tell you, but that is the net not the gross, they don’t know what their gross is… (FYI many rich people make the same mistake.)
3. I overheard one woman complaining that she wanted to drop her coverage because before when she was uninsured, she did not have to pay a co payment when she went to the Dr., she just waited in line at the hospital till she was seen. Co Payments at 50$ per visit was draining her financially.
The right answer is one that will piss off both left and right, we need a public option financed by taxes. But we need to accept that the public option, will be worse in access and outcomes from the health care that the wealthy and well insured will get.
In Canada, everyone is in and nobody out. The same standards of care apply to all rich or poor, young or old, government employee or starving artist. Why is anyone asking for less than that? Single payer rules.
Coverage in Canada follows you coast to coast. You are never OON (out of network) until you enter the U.S.. O’care really the best we can do? Stand away from me as far as you can before you answer.
No, we don’t need a so-called public option magic sparkle pony. That’s not a serious effort of public policy, it’s a bullet point propagated by career “progressives” in 2009 to suck all the oxygen away from single payer. See here and here.
Great post. Thanks.
In insurance, I suspect a lemon would be a policy that paid less than one expected. Under ObamaCare however, these payments are specified by law via the Medical Expense Ratio (MER). The MER requires that 80% of group premiums and 75% of individual premiums be returned in claim payments, and the buyer knows (or at least can know) this in advance. It might well be that one’s own claim is denied in this, and that may well be both unexpected and disappointing, but that doesn’t mean the policy is a lemon, and it doesn’t mean that the policy isn’t performing exactly as the premium demanded.
Sorry, but this is BS. You’re using the word “expected” in two different ways. There’s what people expect, which you can find out by polling, and which is health care if they’ve paid something for it. Then there’s the legal sense of expected, i.e. what’s in the fine print.
Sure, it’s all there in the fine print in Ocare: the astronomical deductibles, the subsidies paid against estimated income, the narrow networks, etc., etc., etc. Those of us reading Lambert’s posts (and Dromaius’ over at correntewire.com) have been hearing about this for a couple of years.
Most people heard they were getting “insurance,” figure that works like, say, car insurance or their friend’s employer-based health insurance, and *expected* to get actual care. Obama himself gave people that impression and was careful to do so without actually lying. Obamacare does not deliver what people expected. So it’s a lemon. Falling back on the fine print definition of “expected” is exactly what Obama himself does when anyone calls him on this huge handout to the insurance industry.
Depending on whether you have a platinum, gold, silver or bronze plan, you should be able to “expect” that 90/80/70/60% respectively of covered charges will be paid by the insurance. The lemon part comes in where there are services that aren’t covered, narrow provider networks and drug formularies, or costs that are so high that the cost to the patient of the premium, the deductible, and/or the percentage not paid beyond the deductible, are unaffordable.
The medical loss ratio (80% individual and small group; 85% large group) applies to all plans in and out of Obamacare. The ACA also stipulated a MLR of 85% for privatized Medicare (Medicare Advantage) for the first time, Most states do not have a mandated MLR for privatized Medicaid managed care.
The expected value is an actuarial value across the pool of risks. It includes the odds that you get hit by a bus. From what I can tell, there is no audit mechanism by HHS to determine if the prices set and the actual claim payments meet the promised level. And there is no way that you get a refund if you got too little back in your opinion since a portion of your premium went for catastrophic coverage, not just routine care.
Anyone will tell you a deal on ongoing performance with no audit rights/process is bullshit.
One metric easy to gather and telling would be medical bankruptcies. Since insurance is a financial product, it would be apples to apples to measure its usefulness protecting against financial destruction. Or, in medical terms, a less than desired outcome.
Any public health benefits would be secondary effects. The correlation between money and access to health care is conventional and has lots of points of adjustment.
Anyway, there’s a year’s worth of data out there, If ACA has any usefulness it should show up without delay.
There will likely be some improvement in medical outcomes, or medical encounters however they chose to measure O’care’s impact on actual patients, if only because consumers of overpriced underinsurance will endeavor to get some medical care in exchange for all that money. Perhaps a doctor visit and prescriptions for previously untreated conditions, if the co-pays aren’t too onerous.
Only patients with serious illness or injury will consume more than the max out of pocket–about $6,200, 12,400 or 18,600 as family size goes up, likely bankrupting them, but who cares if death was the alternative? The rest are stuck with huge deductibles that compromise their access at first contact. With $3000-5000 as the typical deductible for singles, they will doubtless try to use as little care as possible, not having the money to pay full price. Skin in the game, oddly, doesn’t lead to better utilization, just less.
So, barriers of initial cost will prevent 90% from using much care; it’s effectively catastrophic insurance. For those who need more medical care, they will be thrust into another hell of narrow networks, co-insurance and balance-billing scams, with no way to predict costs, even if they are not unconscious on a gurney.
BTW, who knew that O’care plans don’t allow you to count prescription drug costs–probably the most common expense–towards the deductible?
Symmetrical access to information won’t be enough, anyway.
What’s the purpose of predicting out-of-pocket costs, if the only knowledge gained is that you can’t afford it?
http://mobile.nytimes.com/2015/01/12/us/politics/new-rules-to-limit-tactics-on-hospitals-fee-collections.html
Thanks for referencing my site, ACASignups.net.
Not sure that the sarcasm is appropriate here, however: I’ve publicly and openly stated that yes, the HHS Dept. is lowballing this year (not surprising given all the fuss made over the “magic” 7 million number last year). I’ve also very, VERY publicly stated that my own projection for total plan selections as of 2/15/15 is 12.5 million (originally 12 million even).
However, HHS’s 9.1M is their projection of how many PAYING QHP enrollees they expect. Their projection for total selections is 10.4 million.
Conversely, my 12.5M projection is for total selections; of these I estimate only around 11M will actually pay their first premium.
Furthermore, I expect that by the end of 2015, this will dip a bit further to around 10.5 million by December, as people dropping their policies in the off-season outpace those being added via qualifying life changes (marriage, birth, etc).
Not going to comment on the rest of your piece, but I’m scratching my head as to why you say that I “support” HHS’s 9M…unless you meant the “9.05M as of today” which of course doesn’t include most of January or February, which is what both HHS and I are referring to.
A cursory scan of your site has an “article” on the 60 minutes piece about a couple in Ohio that travel to Houston to get cancer care. Ok.
Then I see passages like this, and gave up:
“they signed up for Medicaid under Obamacare in Ohio”
“their income would be about $90,000 in 2014.”
“So now they have total coverage, 100 percent subsidized by taxpayers.”
Wrong, wrong, wrong.
WTF are you talking about?
Are you stupid or deliberately trolling?
Those lines were taken directly from the 60 Minutes transcript and an earlier story about the same couple from an MSNBC source…and your question was EXACTLY mine: One story claimed the couple enrolled in Medicaid via ACA expansion, the other claims that they enrolled in a private exchange-based policy with a full tax subsidy. My entire point was that these two claims are directly contradictory.
None of which has anything to do with the error on the part of Lambert Strether, who seems to think that my estimate of 9.05M QHP selections to date represents the total number for the open enrollment period, which doesn’t end until 2/15.
Actually, I don’t think that; your text is quite clear. I should have added a sentence putting a potential surge in that context.
Sorry.
Probably reading too fast.
Just call a call close friend found dead, not really focused.
Well, I guess we agree it made no sense.
Fair enough on both points. Apologies for the “stupid” comment.
Perhaps I should have said “confirm.” Not sure why you think the irony was anything to do with you; as you point out, the lowballing is obvious to any careful observer.
Enrollment figures for Obamacare are a sign of success in exactly the same way that incarceration rates are a sign of success for the US criminal justice system.
good one!
Sorry, I couldn’t resist sharing this anecdote:
Today I called an office in our state capitol with questions concerning the 150%-200%-%300 FPL annual income thresholds for ACA subsidy levels. The chart I have may be outdated, since they are continually updated.
The woman I speak with does not have complete information on these critical charts, from which we must forecast our declared income and applicable subsidy levels.
At one point she makes reference to dropping her ACA health plan, so I ask if she’s a state employee. She says, “some of us are, some of us aren’t.” I sez, “can I ask what happened?” She sez, “I tried to figure out the best plan, checked if my doctors were in network, and if I could get coverage for the physical therapy and services I needed. It’s expensive, but I thought I had it all worked out.” And then? “When I tried to use the insurance, they told me the doctor was in-network, but his clinic wasn’t and they wouldn’t pay for any service except the doctor fee. I had to travel to another hospital that’s far away. When I did get therapy, they never paid for anything.” Nothing? “Well, a little, not much.” Why did you drop the plan? “I was a little late making the payment and they said I had a two-month grace period before they’d drop me. When I tried to login in to pay, I was about a day late, they had cancelled my password and login.” So you just let it go? “Yeah, it wasn’t worth it.”
This is from a state office that manages services for consumers trying to enroll in ACA marketplace plans. I have more horror stories I won’t share, gleaned mainly from doing surveys for the Chicago Dept of Public Health. Not a single person I spoke with who had enrolled–or attempted to enroll–in the ACA had a single positive thing to say about it. I kid you not. This thing is unsalvageable and will go down in flames.
Crapification!
but they are bending the curve, like E=Mc2
wasn’t that the sizzle?
whatever, oh well
In New York State, each county generally only has one — maybe as many as three — insurers on the market.
So, basically, private monopolies. Or duopolies. Results are exactly what you’d expect.