By Lambert Strether of Corrente.
The condition of the Alexander-Murray fix for ObamaCare’s markets remains day-to-day (although we seem to be running out of factions who want to take a bite at the apple: first Ryan, then McConnnell, then Cassidy-Graham, then Trump himself, and now Alexander-Murray, the first bipartisan effort, recommended to Trump by Chuck Schumer). Here’s a summary of the bill. In this brief post, I want to look at one face of Alexander-Murray: The “copper” plans.
The plans available to people on the ObamaCare exchanges are labeled by metal: Platinum, Gold, Silver, and Bronze. You would infer that Copper plans are the worst of all, and you would be right: The first four plans must offer ObamaCare’s essential benefits. The Copper (or Catastrophic) plans do as well, but with two qualifications. First, a massive deductible:
Catastrophic plans will cover all of the essential benefits defined by the ACA, after the out-of-pocket maximum ($6,850 for an individual in 2016) is reached. Catastrophic plans cover up to three primary care visits per year with no cost-sharing, and preventive care with no cost-sharing, but virtually all [other] services will be paid by the insured until the deductible is met.
Second, there are no subsidies:
Premium subsidies are not available for catastrophic plans (nor are cost-sharing subsidies).
Now, Copper plans are available on the ObamaCare exchanges today but, ObamaCare being ObamaCare, with some complex eligibility requirements and means-testing: “[T]hese plans are currently only available to individuals under the age of 30 or those who qualify for an economic hardship waiver.” In 2014, only 2% of ObamaCare “customers” bought them. Alexander-Murray would remove these limits and make them available to everyone. Let’s look at the upsides of Copper plans, and the downsides.
The Upsides of Copper Plans
First, Copper plans could attract young, healthy risk takers into ObamaCare. Kaiser Health News:
The [Copper plan] proposals aim to attract people who haven’t yet bought coverage on the state marketplaces, and young or healthy people who may want a less expensive option.
“Plans do considerable outreach, and they’re hearing that affordability is a top priority for consumers,” says Karen Ignagni, president and chief executive of AHIP. “This is about access. It’s about how do we give people the opportunity to get into the market.”
(Ah! “Access” to health care, as opposed to “health care.”) From Forbes:
We all have different risk tolerance[1], different medical histories, and different levels of savings that we could access in the event of a significant medical claim.
For some consumers however, Copper plans could be just right….Copper plans would have higher out-of-pocket maximums than the plans currently being sold, but beyond that, they would be solid coverage.
Second, and as a result, Copper plans could help stabilize the ObamaCare risk pool. Health Affairs:
The key goal of the Copper plan strategy is to bring healthier individuals in to the market to balance the costs of higher-need patients.
However, analysis by Avalere Health in 2014 concluded that Copper plans would bring in only 350,000 additional enrollees over a decade, and it’s not clear to me that’s enough. The performance of Bronze plans has also been underwhelming, so it’s not clear how many of those young, healthy risk-takers there really are out there.
It’s also not clear that Ignagi is right in her assumptions about price sensitivity. From Health Insurance:
During the first open enrollment period, only 20 percent of exchange applicants selected Bronze plans. 65 percent selected Silver plans, including the Silver plans that come with cost-sharing reductions for eligible enrollees.
The Downsides of Copper Plans
First, Copper plans add more choice. Senators Angus King, Joe Manchin, Heidi Heitkamp, Mary Landrieu, Mark Begich, and Mark Warner, writing in Politico, 2014:
[W]e want to give consumers as many choices as possible when it comes to selecting their health plans. By providing a new, lower cost, high deductible option called the Copper Plan (in addition to the existing Platinum, Gold, Silver and Bronze-level options in the marketplace) we will give consumers more control over their own coverage, spur competition and, most importantly, increase affordability.
“Choice” is, of course, a tax on time, and another choice raises that tax, which is why I regard this as a downside. (The only “choice” we should have to make is our doctor, like Canadians.)
Second, Copper plans may have a lower price, and be a worse deal. Vox:
[ObamaCare] is designed to push people lower-income enrollees towards midrange silver plans, where they get special cost-sharing protections. “Through those protections, the actuarial value of the silver plan can rise from 70 percent to as high as 94 percent,” says Pollack. Bronze plans don’t have those added protections, and copper plans, at least as currently conceived, wouldn’t have them, either. The result is that copper plans might be a worse deal than is evident just from the price tag.
Third, Copper plans may not prevent bankruptcy. CNBC:
“With an average American family bringing home $50,000 in income, a high medical bill and a high-deductible insurance plan can quickly become something they are unable to pay,” [NerdWallet Health Vice President Christina LaMontagne] said. “If you have an out-of-pocket maximum of $5,000 or $10,000, that’s really tough,” she said.
(Recall the current out-of-pocket individual maximum of $6,850 is in that ballpark.)
Finally, people with high-deductible plans save money by foregoing care. From the Philadelphia Inquirer:
A recent study examined a large self-insured firm that shifted more than 75,000 of its employees from a zero-deductible health care plan to a high-deductible health plan. The company also contributed a $3,750 subsidy for employees to set up a health savings account that they could use for any health cost, along with online tools to look up prices.
The shift saved the firm a lot of money, as expected – a decline of about 15% in a single year. But, here’s the bad news: these savings didn’t happen because people became “better shoppers”, they just received less medical care—including fewer preventive services like recommended cancer screenings. The plan didn’t create smarter shoppers – it risked creating sicker patients.
Other studies have reached similar conclusions. A 2007 survey found that 29% of people with high-deductible health plans delayed or skipped care because of cost compared to 16% of those with low-deductible plans.
Of course, sometimes the “smart shopper” is smartest when they don’t buy the product. But when the “product” is cancer screenings?
Conclusion
For people who have chosen to pay the ObamaCare penalty, I can see why Copper plans would be attractive. After all, why pay the IRS and get nothing, when you can pay for a Copper plan, and get something, maybe? But the Alexander-Murray effort to stabilize the marketplace looks like a piece of accounting chicanery, to me. Considered as a mechanism of delivering health care, Copper plans fall short.
Oh, and Alexander-Murray looks like a lovely case of conservatives and liberals joining together to support a neoliberal solution and kick the left, which is pushing for single payer Vox, on the last Copper plan effort in 2014:
What’s interesting about the [2014] Expanded Consumer Choice Act is that seven Democrats are joining major business lobbies and the insurers to push Obamacare in a direction Republicans might well like. A longtime conservative complaint with Obamacare is that prices are too high because the government is demanding insurers offer overly lavish insurance. This would make that insurance a bit less lavish.
Why shouldn’t Schumer get together with Trump to kick the #MedicareForAll can down the road for another decade or so? What could go wrong?
NOTES
[1] Amazing that people’s health care should be an outcome of their “risk tolerance,” as opposed to being a public good. Neoliberalism!
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Hmm, that’s interesting. I have a Bronze plan from the exchanges this year and I received a notice about a month ago that the current plan I have is going away, but that I could enroll in the closest similar plan, which increased in cost from $228/mo to $298/mo, eliminated all out-of-network coverage, and increased the deductible and out-of-pocket cost to, if I’m remembering correctly (I recycled the sheet), $6,500. It not that, it was $6,350 at the lowest, and it may have been $6,850. And that’s not just maximum expense, that’s deductible. So, aside from basic exams, I can’t use the insurance until I’ve paid over $6,000 myself, on top of the nearly $3,600 annual premium. (I’m 37, btw, and in good health with no pre-existing conditions, non-smoker.)
So I’m a little curious what the difference is then between these Copper plans and a Bronze plan. Because based on my experience, they’re equally crappy. I guess it’s just the lack of subsidies? (Luckily, I got married in September and will be able to get onto my spouse’s much better insurance for a tiny bit less than what the crap insurance was going to cost me, plus will have dental. Can we just get single payer now, for god’s sake?)
I agree — the Copper plan sounds pretty close to the crappy Bronze plan that I decided to pass on in 2017 ($440 a month, no subsidy, plus total out-of-pocket of something like $6,850).
What’s next, the Tin Plan?
My money’s on the Kryptonite Plan.
I’m in the Lead Casket plan.
Is there a Pine Box plan? Maybe a Ziplock Plan?
Folgers can. (See Big Lebowski)
Same here in California. Copper is no different that Bronze for me too…
Makes me wonder which state/corporate player this crap is aimed at benefitting?
So I take it Tom never would give nothin’ to the tin plan?
The real benefit of a Copper or similar high deductible plan isn’t insurance coverage, it’s pre-negotiated prices — so you don’t get billed $700 for an x-ray for which no Plan pays more than $57.75.
Of course, a health care system designed for more than profit would offer similar protections to all, without the need to tithe an insurance company.
That is not necessarily the case. One of the key factors that Rs like about catastrophic plans is that they have much higher negotiated prices. As an example, when I had a pre-Obama policy I was billed about $150 for lab fees that are charged at about $10-15 with an ObamaCare policy.
Lamar Alexander made specific reference to what a great thing that was about the plans in the whole first ObamaCare meeting.
My guess is these Copper plans will not provide the same type of cost savings as an ObamaCare policy where that is mandated.
That’s the real evil here … the “fine print” of what the “negotiated prices” are, is not even in the fine print. You have no idea what you’ll have to pay for any service until you get your bill.
Our daughter had a baby this summer, with some mild complications, and was encouraged to stay in the hospital two nights. She’s still under 26, so covered under our Silver plan. Total retail price: just shy of $16,000. Amount approved by Blue Cross: $5000, discounted by $10,885. So you pretty much have to be signed up for the racket, or the hospital will make up for it [and then some] on a single admission.
What would the Bronze plan pay? No one has any idea.
Sure, I get that…(although “cash only” prices are pretty close to “pre-negotiated” prices).
My question is if there’s no difference between a Bronze and Copper plan, how exactly does this “change” anything?
So here is my uninformed, layman, dude on the Internet lament about health care in America. Why does it cost anything different for me to go to a doctor and get a physical as opposed to going to the doctor with a broken finger and nasty cut?
He spends about the same amount of time on both efforts. I spend about the same amount of time with his nursing and billing staff. With the cut and break I get super-glued and and a little piece of metal with some bandage wrapped around it. I’m sure all the take home stuff can’t cost more than $1.
I’m certain if someone could figure this little puzzle out, we could get some insight into why this stuff is so expensive in the USA.
The preventative visit is something you might skip if you had to pay a lot for it yourself. The medical industry is happy to usher you through the door to churn more fees from your insurance co. There’s always the chance they’ll find something wrong with you: $$$!
In comparsion the emergency cut on your finger is something you’re not likely to skip out on. Though in these dark times there are plenty of un(-der)insured people busy googling DIY instructions with $5 superglue.
As for why stuff is so expensive, go see today’s other link: Michael Hudson on “Socialism, Land and Banking: 2017 Compared to 1917” for a rundown. If you’ve ever tried to explain to a middle class white dude why high housing prices are a bad thing you’ll understand the scale of the task for those of us who aspire to a better system.
Wish I’d known about superglue for stitchable cuts cause here’s how bad my insurance is: when I gashed my cheek in a bit of a woodcutting mishap recently, I decided to skip the two or three stitches it required and just live with the minor scar rather than wait 8 hours at emergency and pay $1,000. Granted, I’m no Paul Newman to begin with and I do have quite a few miles on the old chassis, but still — in a different world I would have gotten it taken care of. But markets! Choices! Skin in the game!
If, during the winter months, you have splits in your skin where it meets the thumbnail, Superglue is a great thing. I use it as my go-to split-fixing remedy. Works like a charm.
Painter’s making tape works for me ..
By the time it takes to unravel, the wound will have clotted by then.
Works for us real manly men ! … ‘;]
omg the idea that these copper plans were both limited to those with low incomes AND paid for nothing until an outlandish deductible equal to the entire out-of-pocket limit for regular plans makes it crystal clear what they’re for:
health insurance, not health care
Any real health care costs real money. Since our money isn’t real, feel free to give as much as you like for health insurance, which isn’t health care. The insurance companies should simply move everyone to the Pirate Care Plan … shiver me timbers!
Remember, it’s not INsurance, it;s UNsurance –UNsure what your policy provides, UNsure if your doctor if you have one will accept the “coverage” or even be “in network” next week or next month, UNsure what medications are “on formulary” at what “tier” from day to day, UNsure what your premium will be in a week or a month, UNsure how much you will be billed by the complex system that may have you being “treated” or “seen” by off-network
“Providers,” UN and UN and UN…
UNsurance: the Plan that keeps on looting.
Let’s be honest here, about what “choice” and “competition” really mean:
https://www.publicintegrity.org/2014/03/03/14323/dizzying-array-options-obamacare-can-lead-expensive-mistakes
Obviously, it is incredibly important that the working poor who rely on Obamacare have their carefully chosen array of top attorneys in the field to advise them on the costs and benefits of the various options. How else could you do it?
So, as far as I can tell, American healthcare is setup like some elaborate game where you have safe years and unsafe years, but the rules change to where the status of any year can be in jeopardy. There’s the good route and the bad route:
Good Route:
Birth – 26: Covered by parents
26-65: Work insurance
65+: Medicare
Bad Route:
Birth – (maybe) 26: Covered by parents (provided they have full-time jobs)
26+ – 65: Marketplace
65+: Medicare
Of course, if you use Medicaid in your 50s, then your kids get nothing due to asset clawback. What a system!
As a Canadian, I cannot for the life of me see why you US-ians are still putting up with this garbage.
If you can’t get single-payer health care, which every other major country in the world, some minor ones as well, has had for many *decades* how ya gonna tackle climate change?
Americans put up with it because this is not democracy and these things are forced down their throats by a rapacious kleptocracy that owns the political class. Grifters got to grift. They have offshored industrial production and the only sources of income left are the US Treasury and asset bubbles. The ACA is a tax, the SCOTUS said so. It’s just a tax collected not by the Treasury but private insurance companies. Rentiers of the World unite!
News flash – we’re not going to tackle climate change. Ever. Regardless of who gets elected in 2020.
Good luck, hope you don’t have kids to worry about.
I know that I am being a pedant here, but copper is more valuable than bronze.
You should use the metal tin, the other major component in bronze.
It sounds better too, as in in tinny, tin plated, etc.
I was on a catastrophic plan for 2+ years. I was nervous about using a subsidized plan, because as a freelancer my income varies so much. I didn’t want to end owing back the subsidy at tax-time if by chance I made more money than estimated. Paying taxes as a self-employed person is already painful/stressful enough. So I paid the full cost, which was still cheaper than a subsidized “metal” plan, and just deducted it as a business expense. It started out relatively affordable (under <$200 mo), and I was fortunate to be young and healthy, so luckily I didn't have to pay for anything outside of routine care – which I didn't mind negotiating directly and not having to deal with the insurance co.
It would have made a lot of sense if paired with an HSA, so that I could have put the deductible away in a savings account. Not only would I have some peace of mind, but I would have had a bit of relief from self-employment tax (where you pay social security twice, since you are both employer and employee). But OF COURSE the only plans with an HSA were pricey gold plans.
Alas, my first provider, Health Republic, folded (didn't even make it to the end of the year) and I was automatically transferred to Wellcare for the last month of 2015. I stuck with that plan the following year– time is too precious– and then they announced they were leaving the market. For 2017 there was only one catastrophic provider left in the market in my area. And they jacked the rates way up, to the point where it made no financial sense. For the same price I could be on a subsidized plan and maybe actually receive some care. But the bronze and silver plans were all terrible – co-insurance, so you had to pay a % of your care, that sort of thing – or they limited you to a tiny number of practitioners at one complex – basically no more protection than the catastrophic plans, and arguably worse. Those plans might make sense if you have expensive prescriptions or routine things you need coverage for, but for someone who maybe goes to the doctor 2x year, its just a big a gamble as the catastrophic but more expensive. So I decided to pony up for a gold plan, which at least covered things like pregnancy.
With the subsidy, I pay about 2.5x what I was paying before. And until maybe 2 months ago, the website was broken, meaning I couldn't search to find which doctors were in my network. In a surreal twist, the address they listed as your PCP if you didn't select one was their office in Schenectady, a good 90 miles from where I live. It's almost like they put effort into making the experience so awful that you just don't even try. I pay all that money each month, yet still pay out of pocket for the urgent care clinic if I get sick because its just easier. So yeah … "gold." It's all shit.
Wait ’til you get to be my age, where you’ll be too old to get a job, too young to retire, and you’re sick of freelancing. Insurance is yet another reason why freelancing sucks.
Agreed. Who the hell came up with these tiered accounts named after precious metals anyway? Where are the rhodium and iridium plans? Where does it end?
The market. The market. Rock. Paper. Scissors.
Shouldn’t there be 10 million of us in the streets every time one of these half-assed policies is proposed?
Personally I think Patty Murray is bending more toward helping insurance companies rather than makng sure people have affordable health care. Like the article says, kind of the neoliberal thing she is doing these days
I mentioned yesterday that I think this “deal” is a joint effort by Republicans and most Democrats to silence the call for single payer health care for all for at least another generation.
Ah Yes …. P. Murray, making the rounds, locally, as I speak …. the tenni$- $hoe wearing senator visiting schools, you know .. cuz ‘it’s for the children’ lol !!
It’s when those children grow into young adulthood, that they begin to see through all that wool ……. if they have’nt yet overdosed !!
I’m waiting for the logical next-and-final crapification step in the neolib healthcare paradigm, namely the ‘lead insurance plan’, the one where they literally send you a bullet so you can Go Die.
“Please specify desired caliber of round. If you do not have access to a firearm, you may rent one from your state’s Health Exchange for a modest fee, but you’ll have to return it within 7 days of offing yourself in order to avoid overtime penalties.”
Three thumbs up for this, the best comment EVER.
The family will also be charged for the bullet, of course.
And the late fees on the firearm? Wowsers. They will be something to behold.
Don’t forget that the State will be able to seize your “heritable assets” due to your feloniously avoiding next years’ “personal responsibility” tax. Fraud, even suicidal fraud, will not be tolerated.
Don’t forget that lead extraction and recycling fee … Always remember to use, reuse, and then reuse some more !
And they’d bill you for the bullet!
I’m on the Fucked Plan.
I live in NC and I’m self-employed. I have had a private/individual policy with them for 20 years. This year they decided to kill the plan. They offered me a Gold ACA plan. My premium will go from $650 to $1430 per month. That’s 120% increase in one year. Or almost $10,000/ year more for a slightly worse plan.
Seeing similar disaster stories from my NC self-employed pals on FB. 100 to 300% increases. BCBS is the only insurer in our state.
Guess who is an advocate for Medicare for All?
Choice is sold as a good thing and perhaps it is. My experience is that most people don’t really understand something if there is too much choice. It’s extremely difficult to compare and then make a choice. For one thing you can’t predict what your health care needs will be even in the short term. I’m a 76 yearly person on traditional medicare and a supplemental policy to cover what medicare doesn’t cover. The Advantage plans look good but again you have the choice problem which is difficult. Another factor is portability. I love the portability of my traditional medicare. Something the advantage planes don’t offer. If you are healthy then the advantage plans appear to be cheaper but you can’t predict how healthy you will be in the future. One day you could be healthy and the next day something like a heart attack ,stroke, or cancer could change that. Since you can only change planes once a year you may pile up a lot of debt before you can change. That’s why I believe the choice thing should disappear and we should have a one payer medicare for all. People would know what they have and they would be able to buy private supplemental policies if they think they need them. I say this as a person with an above average education. I possess a masters degree in mathematics but still struggle in understanding what an insurance policy really says. you read something in one part and then later there is something that contradicts what you previously read. Kind of like a disclaimer in a warranty. We cover except, and then it goes on to not cover much of anything.
What people really want is the medical care they need when they need it. We’ve just been sold the idea that the way to achieve this is through a choice of a lot of different private, for profit insurance plans. That’s never worked in this country, and isn’t the basis for comprehensive universal systems that do work in other countries.
By “never worked” what I mean is it never worked for everyone. The only proven designs that do that are comprehensive, universal, and financed on a not-for-profit basis.
We still don’t understand as a society is that if what we want individually is the healthcare we need when we need it, we have to want that for everyone, and design it for everyone.
To the extent that original Medicare is still comprehensive in respect to covering most needs (though not full coverage), universal (for over 65), not-for-profit – as you say, it still works pretty well.
I just would like to not die of asthma.
The thing being, if I have insurance and I die of an asthma attack without the insurers paying out anything, then their bottom line is enhanced.
We all have this basic adversarial relationship with our insurers; the harder they make the insurance to use, the less we’ll use it, the more money they keep.
We want good care, they don’t want to pay for any of it.
Single-payer…puts the economic interest of the state on the side of us being healthy, as opposed to the insurers literally betting that we’ll die fast.
,,,Lets all look at the bright side: At least, one sector of the economy is guaranteed profitability by federal mandate…Soon, that concept will be expanded to all the others…
oaf penalized….when obama(don’t)care is finished, will oaf get fines back? …Holding breath …so hard….
…please help…
Oh my god. I was reading this post (catching up on all my blogs this afternoon) when I got the phone call that my long-deceased best friend’s younger sister died yesterday of Addison’s Disease; the exact same condition that killed my best friend when she was 23.
Her sister died, not from lack of knowledge about the potential lethal effects of Addison’s Disease, but because she was 31, underemployed, was in the process of trying to get Medicaid, and was too afraid to go to the hospital because of how far in debt it might put her.
I didn’t know her well but I hurt for her. I hurt for her mother, who nearly 2 decades ago moved to Britain and has gotten used to socialised health care, and how that mother has lost two daughters to the exact same illness for the exact same god d***ed reason.
All my conservative friends, and a fair number of my “liberal” friends keep telling me that Medicare for all will result in people dying.
Well wake the hell up. Our current health “care” system is resulting in people (young and relatively healthy in some aspects) dying.
I am so angry.
Condolences to you and to your friend’s other loved ones. This is a horrible system.