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The right's hypocrisy over ACA
Right-wingers have predicted a so called death spiral for the ACA (Obamacare) from the start.

A death spiral is the situation that only the sickest people insure themselves, leading to an increase in premiums and leaving of healthy people.

They are now rejoicing after another big insurer left many of the exchanges (although it looks like this was more the result of a blocked merger).

However, the thing to keep in mind is that such a death spiral is the consequence of a market failure, called adverse selection.

As in any insurance market, insurers want the best risk, whilst the worst risk have by far the biggest incentives to insure themselves.

This produces adverse selection, that is, the risk of the insured population is significantly higher than that of the general population.

We can't stress enough that this is a market failure. Left by its own devices, adverse selection is a market outcome.

The ACA actually is an effort to remedy this. Before the ACA, insurance companies had ways of dealing with adverse selection, like:
  • Refusing people with pre-existing conditions
  • Limiting, or even denying payments (the small print in your policy..)
The results were a disaster:
  • The market left tens of millions uninsured, often the most vulnerable people with the lowest means and/or the biggest health problems. That is, the market outcome left a huge demand for medical needs unmet.
  • People were afraid to change jobs, reduce the amount of hours worked (for instance to take care of children or sick relatives), or start their own companies out of fear of losing health coverage.
  • Medical debts are the single biggest source of personal bankruptcies
  • The uninsured draw on emergency care (Medicaid). Apart from serious health consequences (earlier visit to a doctor often prevent things getting much worse), this is very inefficient as the cost to society are higher than if they would have been insured.
How does the ACA remedy this?
  • End discrimination on the basis of pre-existing condition
  • Personal mandate; people have to get insurance to avoid the adverse selection, that is only the sickest taking up insurance.
  • Subsidies for those that cannot pay the premiums.
All three are necessary, you can't have the end of discrimination on the basis of pre-existing conditions without the other two. It's not perfect, but so far it has led to a big drop in the uninsured rate.

But now a few insurers are leaving some exchanges because the the newly insured turn out to be somewhat older and sicker, the right is rejoicing, "we told you so, death spiral.."

However, it is really incredibly opportunistic for the right to blame this on ACA:
  • Blaming ACA for a market failure from people who waged war on ACA as big government is incredibly disingenuous.
  • A part of insurance companies leaving is simply the outcome of the normal competitive process of the exchanges, which are markets. Markets weed out profitable from non profitable business model, and the exchanges are not really different in kind.
  • The ideological war waged by the right on ACA can itself be blamed for at least part of the problems, as it's likely it kept many young and healthy from signing up, worsening the risk pool (that is, adverse selection).
On the latter point, here is The Economist:

Quote:The main challenge, however, has been political. It is hard to implement a law when opponents want it obliterated.

We might add another quote from that Economist article:

Quote:The furore over Obamacare is baffling to the rest of the world. Most rich countries have universal coverage; developing countries are trying to introduce it. Yet in America, home to the world's biggest health system, the fight over insurance is vicious enough to bring government to a halt.
Healthcare inflation and rising deductibles in covered care (employer provided healthcare coverage)

How about this for hypocrisy: Here is a figure from Kaiser about the cost of healthcare for covered workers (that is, the vast majority of Americans that still get their healthcare coverage from their employer). It has nothing to do with Obamacare. But look, premiums rose between 2001 and 2006 by a whopping 63%, about 10% a year! In the (mostly) crisis years, they still rose 31%, over 5% per year. 

Did we ever hear these rightwingers who rile against Obamacare, accusing it of sending premiums sky high about the premium inflation in employer healthcare? Of course not..

[Image: screen%20shot%202016-09-14%20at%2012.28.12%20pm.png]

And there is more. While the right-wing hysterics against Obamacare riles about deductibles, look what happened to deductibles in covered care:

[Image: screen%20shot%202016-09-14%20at%2012.28.26%20pm.png]

Yes, you see, they've risen 63% in the last five years! Do we ever hear these right-wingers riling against Obamacare about this? 

Of course not..
Finally, some good news for Obamacare

By Editorial Board September 17

IT HAS been a summer of bad news for the Affordable Care Act, but last week brought some numbers that should put worries about the law into perspective. The Census Bureau announced Tuesday that the proportion of people in the United States who lack health-care coverage continued to plunge last year — to only 9.1 percent. This figure is even better than it looks for Obamacare, because it factors in uninsured undocumented immigrants, of which there are perhaps several million, who are not eligible for the law’s programs.

But the overall number could be cut much lower, and quickly, if Obamacare were working as it was meant to. We are not referring to the recent, much-discussed exitof some major health insurers from the marketplaces the law created. We are talking about Obamacare’s expansion of Medicaid, the state-federal health plan for the poor and near-poor. The Supreme Court in 2012 made the expansion optional for states, and a large chunk, including Virginia, have refused. The Census Bureau found that the uninsured rate was 7.2 percent in expansion states last year and 12.3 percent in non-expansion states. Five states have expanded since, but that still leaves 19, representing 4 million to 5 million people who would otherwise get coverage, irrationally holding out.

Why irrationally? In their effort to hobble Obamacare, state Republican leaders have left huge amounts of federal money on the tableThe federal government has offered to pay nearly the whole cost of the expansion, forever. Though states must pitch in a bit, they get a much lower uninsured rate, lower uncompensated care costs and other savings in return. The Urban Institute found last month that the 19 holdout states would get an average of $7.48 from the federal government for every dollar they spent on Medicaid expansion. Even those costs, meanwhile, would likely be further offset by savings elsewhere. States that have already expanded, in fact, have generally seen net revenue gains.

Other expansion critics argue that Medicaid does not help its beneficiaries enough to be worth the costs. But a recent National Bureau of Economic Research working paper found that Medicaid expansion has significantly reduced medical debt. People who got Medicaid coverage under Obamacare saw reduced medical collection balances of $600 to $1,000. Those who required a hospital stay or an emergency room visit saw a medical collection balance cut of $1,400 to $2,300.

The Affordable Care Act still has a long way to go. Its marketplaces need to stabilize further and enrollments must rise, which will be increasingly hard as the remaining uninsured are more and more difficult to reach. Congress and the White House have the primary responsibility for making the policy work. But it is also long past time for state GOP leaders to stop hurting their constituents in an effort to sabotage the law.
And of course right-wingers jumped on Bill Clinton's remark about the ACA, but here is what he really said:

Quote:On the campaign trail on Monday, former President Bill Clinton called parts of the law the "craziest thing in the world" because of a gap in subsidies that leaves many middle-income families without support. Obamacare currently provides subsidies for a family of four that makes less than roughly $100,000 combined to receive health insurance through the ACA's public marketplaces if they do not have insurance through their jobs or government programs like Medicare or Medicaid.

This leaves families making above that threshold without access to subsidies, but still requires them to get health insurance because of the law's mandate. Given the increasing costs of health insurance premiums and the problems facing the ACA exchanges, Bill Clinton bemoaned the squeezing of middle-class families. "It doesn't make any sense," Bill Clinton said at a campaign stop for Hillary Clinton. "The [health] insurance model doesn't work here. It's not like life insurance. It's not like causality. It's not like predicting flood. It doesn't work."

Bill did, however, say that the system before the ACA was even worse. He touted Hillary's plan to expand Medicaid and Medicare to catch those people missing out on subsidies.
Bill Clinton's Obamacare comments draw GOP fire - Business Insider

And try to get Republican's in Congress on board for remedying some of these defects..
In what is surely one of the best articles on Obamacare, the New York Magazine argues:
  • 20M newly insured people
  • Healthcare inflation curve bended
  • Premiums are still more than $600 below their initial forecast and 10% lower than employer sponsored healthcare premiums..
  • The probability of a death spiral is fairly remote
  • Most of the problems are caused by Republican sabotage
  • Fixing Obamacare is easy and cheap
  • Fixing Obamacare is politically impossible

6. Fixing Obamacare is technically easy. Health-care analysts can list a bunch of changes that would make the law operate more smoothly. Many of them are very cheap. (See, for instance, here and here.) It is notable that there is huge state-by-state variation in the functioning of the law. States like California are enjoying smooth success, which is itself proof that the law can work as designed.

A new Kaiser Family Foundation study digs into the sources of this variation. It turns out that two decisions played a huge role in the success of state markets. One is Medicaid expansion — in 2012, the Republican Supreme Court, as part of a compromise in denying a legal challenge to the law, created a loophole that would allow states to refuse to expand Medicaid, which is the mechanism Obamacare uses to cover the very poor. Most Republican states have leaped at the chance to deny health-insurance coverage to their poorest citizens, and the higher costs of these low-income, uninsured citizens have bled into the exchange markets, causing premiums to rise. Simply bringing every state into the Medicaid expansion, which is already funded, would bring down premiums substantially.

A second important decision is that many states decided to grandfather in existing plans in 2014. You may remember this as the “keep your plan” dispute. Before Obamacare, the individual insurance market was based on insurers denying coverage to sick people and only selling plans to customers who had no preexisting conditions. The law always intended to regulate the market and force insurers to stop skimming off healthy people. 

But some of those healthy people had cheap plans — because they are currently healthy — that they wanted to keep. They raised an uproar, and the administration (unwisely) agreed to let states keep them running for another three years. That decision bought some immediate relief but has proven costly. Those healthy customers have stayed out of the exchange pool, leaving the customers in the exchange sicker than average, raising costs. 

Kaiser found that states that grandfathered in plans also have higher exchange costs. But, the report notes, that grandfathering ends next year, which will bring relief. And there are some administrative changes Obamacare can make and a Hillary Clinton presidency could continue. But most of the important changes require either conscious cooperation by state governments, many of which are run by hostile Republicans, or changes to federal law. That’s bad news because …

7. Improving Obamacare is politically impossible. The Republican Party’s goal on health-care reform is to destroy Obamacare. Any change that makes the law function better is one they will by definition oppose. If the Republican primary has shown us anything, it is that the party remains a dysfunctional morass of resentment whose angry impulses override any sense of public responsibility.

Even if it were possible for Republican health-care experts to negotiate changes in an atmosphere undisturbed by the kind of paranoid rage on display when tea-party activists flooded town halls in 2009 to complain about death panels, those ideas are incompatible with the law’s functioning. Republicans, and Democrats can’t compromise on health care for the same reason they can’t compromise on taxes: They have diametric goals. On taxes, Republicans want to shift the burden from the rich to the poor, while Democrats want the opposite. A similar dynamic exists in health care. 

Republicans want to restore the ability of healthy and wealthy people to buy cheap plans that don’t cross-subsidize the sick and the poor — the very features of the insurance system that Obamacare was designed to stop. Since Republican ideas for improving the health-care system all involve shifting costs from the rich and healthy to the poor and sick, there’s just no way to blend them together with the goals Democrats have in mind.

Obamacare could work better. So could many things government does — Medicaid, highway spending, environmental regulation, and on and on. These programs reflect the compromises necessary in a Madisonian system that happens to have a dysfunctional anti-government extremist party controlling legislative veto points. If and when Democrats gain control of both chambers of Congress along with the White House, they could very easily pass a suite of tweaks to make Obamacare work better. In the meantime, it’s still a pretty big deal.
Market fundamentalism versus reality in health care..

Quote:When a party, or even more broadly, a political tendency, is so plainly befuddled by what it repeatedly has vowed to be its first policy priority, something very fundamental must be very wrong. And that “something” is fundamental indeed: It is the conservative belief that markets can fix any problem and address any need.

If ever there were evidence that markets can’t do that, it’s the Republicans’ inability to provide universal, or even substantial, health coverage through a more pure market system. So long as they advanced the idea that the market could handle Americans’ health-care needs at the purely abstract level, in the realm of faith, as a truth validated by incantation, conservatives convinced themselves that all would be well. Confronted now by the rude reality that any market-based replacement for Obamacare, stripped of the regulations and tax-provided funds that make it work, will lead to millions of Americans losing their coverage, a sudden weakening of Republican resolve is evident.

And what does this say of the vaunted conservative think tanks—of Cato, the American Enterprise Institute, and Heritage? They’ve had seven years to ponder a workable Obamacare replacement. Where is it?

In fact, back in 1989, the Heritage vice president for domestic and economic policy, Stuart Butler, did indeed come up with a plan of sorts. But it wasn’t really an alternative to the ideas that became Obamacare. If anything, it was their source—a mix of government and market that proposed to establish an individual mandate and impose some employer obligations that would increase coverage. In various forms, this model was passed down as the Republicans’ 1993 alternative proposal to Hillarycare, and then as the Massachusetts insurance program enacted under Republican Governor Mitt Romney, which served as a partial model for Obamacare itself....

The problem is, devising a replacement plan that still insures everyone covered by Obamacare—as the GOP has repeatedly promised it would—yet adhering to the deregulatory, subsidy-withdrawing market models to which the party fervently clings simply cannot be done.

This week, the most senior Senate Republican, Utah’s Orrin Hatch, as much as acknowledged that. According to an account in the January 18 Washington Post, Hatch “told reporters that it is difficult to commit to providing universal health coverage in any upcoming GOP replacement. ‘It would be wonderful if we could do that,’ Hatch said Tuesday of universal coverage. ‘We’ve never been able to do that before.’”

The Post noted that in 2012, Hatch had “said it was a ‘disgrace’ that so many Americans were uninsured, ‘but we cannot succumb to the pressure to argue on the left’s terms.’” In other words, universal coverage is out of reach because it requires “the left’s terms”—that is, regulation, taxation, and subsidies. It is out of reach because it goes against American conservative ideology.

Even the coverage provided by Obamacare—which falls short of universal, but which has moved the nation in that direction—is out of reach because it goes against conservative ideology. That’s why the Republicans have spent seven years without coming up with a replacement. That’s why they don’t have a plausible one yet. That’s why, so long as they remain market zealots, they never will.

And here explained, one more time..

Health Care Fundamentals

Another week of complete chaos on the health reform front. Dear Leader declares that he’ll give everyone coverage; Republicans explain that he didn’t mean that literally. CBO says the obvious, that repealing the ACA would lead to immense hardship for tens of millions; Republicans declare that this is wrong, because they will come up with an alternative any day now — you know, the one they’ve been promising for 7 years.

I’ve written about all of this many, many, many times. The logic of Obamacare — the reason anything aiming to cover a large fraction of the previously uninsured must either be single-payer or something very like the ACA — is the clearest thing I’ve seen in decades of policy discussion. But I don’t know if I’ve ever written out the fundamental principles that lie behind all of this.

So here we go: providing health care to those previously denied it is, necessarily, a matter of redistributing from the lucky to the unlucky. And, of course, reversing a policy that expanded health care is redistribution in reverse. You can’t make this reality go away.

Left to its own devices, a market economy won’t care for the sick unless they can pay for it; insurance can help up to a point, but insurance companies have no interest in covering people they suspect will get sick. So unfettered markets mean that health care goes only to those who are wealthy and/or healthy enough that they won’t need it often, and hence can get insurance.

If that’s a state of affairs you’re comfortable with, so be it. But the public doesn’t share your sentiments. Health care is an issue on which most people are natural Rawlsians: they can easily imagine themselves in the position of those who, through no fault of their own, experience expensive medical problems, and feel that society should protect people like themselves from such straits.

The thing is, however, that guaranteeing health care comes with a cost. You can tell insurance companies that they can’t discriminate based on medical history, but that means higher premiums for the healthy — and you also create an incentive to stay uninsured until or unless you get sick, which pushes premiums even higher. So you have to regulate individuals as well as insurers, requiring that everyone sign up — the mandate, And since some people won’t be able to obey such a mandate, you need subsidies, which must be paid for out of taxes.

Before the passage and implementation of the ACA, Republicans could wave all this away by claiming that health reform could never work. And even now they’re busy telling lies about its collapse. But none of this will conceal mass loss of health care in the wake of Obamacare repeal, with some of their most loyal voters among the biggest losers.
What they’re left with is a health economics version of voodoo: they’ll invoke the magic of the market to somehow provide insurance so cheap that everyone will be able to afford it whatever their income and medical status. This is obvious nonsense; I think even Paul Ryan knows that he’s lying like a rug. But it’s all they’ve got.
The simple truth is, Obamacare isn't imploding, Conservatives are lying. Says who? The nonpartisan CBO

Quote:Obamacare is not imploding. Nor is it collapsing. Nor is it a “ticking time bomb” that Obama ordered B613 to set to go off the moment he left office and he and Michelle arrived in New York City looking younger than you.

Don’t believe me? Ask the nonpartisan Congressional Budget Office, which concluded in its report on the Trump-Ryan replacement plan that the “non-group” market, the individual insurance market in which people sign up on state or federal exchanges, “would probably be stable in most areas under either current law or the legislation.”  In other words, it can survive whether or not Republicans “repeal and replace” Obamacare, because even when premiums spike, as they did in 2016, in large part because of Republicans in Congress and 19 states actively sabotaging the law, those increases are offset by the federal subsidies people get under Obamacare, which rise as premiums rise, according to people’s incomes. In fact, of the new signups this year, 84 percent were eligible for subsidies which covered 73 percent of the price of their premiums.

So while Republicans really want Obamacare to collapse, and indeed they’ve tried very hard to make it collapse so they could have an excuse to repeal it; the law is not, in fact, collapsing.

Nor is it in a “death spiral” – which actually has a specific meaning, which Politifact defines as “… a cycle where shrinking enrollment leads to a deteriorating risk pool (that is, healthy people leave the plan due to the cost). That leads to higher premiums, which causes enrollment to shrink even further, continuing the cycle." 
Well, that’s not happening, either.  

According to The Centers for Medicare and Medicaid Services, the federal government agency that keeps track of these things, 12.2 million people enrolled in health plans during this year’s open enrollment period. That’s less than the 13.8 million people the Department of Health and Human Services projected, but by definition, if millions of people are still signing up for insurance under the ACA, rather than dropping it, Obamacare cannot be in a death spiral.

On the contrary, thanks to Obamacare, roughly 22 million people have gained insurance, between the exchanges and subsidies, the Medicaid expansion, and those remaining on their parents’ plans. As a result, the uninsured rate is at a record low of below 11 percent. It would be even lower, and the CBO would not have been so wrong in its estimate of how many people would be covered by now, had 28 Republican-led states  refused to set up their own exchanges, and had 19 Republican-led states not refused to accept the Medicaid expansion. You’ll recall, they went all the way to the Supreme Court in 2012 to establish the fact that they could keep  millions of their own people from accessing Medicaid through ObamacareRoughly half of those who are uninsured by Republican fiat live in just two states: Texas and Florida.

Ryan himself bragged about the Republican-led congress withholding money from Obamacare’s risk pools in order to help elect a Republican president and cripple the lawWhen the Trump administration took over, they went so far as to cancel the TV commercials urging people to sign up.

It’s no secret that lots of insurance companies hate Obamacare, even though some of them have made quite a bit of money on itObamacare prevents them from excluding sick people from coverage; or cutting off the checks when their customer is in mid-treatment because she’s reached her lifetime cap; or charging older people much more than younger ones. Insurers did like the idea of potentially getting a flood of new, young, healthy customers who were required to buy insurance due to the mandate, and many are unhappy that they haven’t gotten more. Meanwhile, the law also made the junk policies they used to sell those younger, healthier customers illegal.

Republicans’ “repeal and replace” plan is a giant gift to those insurers, letting them bring back some of those awful – but profitable – practices; specifically, allowing them to charge older people five times more than younger customers, and restarting the junk policy machine, while also scrapping Obamacare’s limit on how much of their extravagant CEO pay packages insurers can write off on their taxes. As a bonus, Trumpcare would swap out the individual mandate that makes people pay a fine to the IRS if they go uninsured for a fine they pay directly to the insurance company when they do choose to sign up. Ka-ching!
Time to Call Out the Big GOP Lie on Obamacare - The Daily Beast
Quote:It's hard to decide which would be the more politically damaging outcome for Republican politicians: passing the American Health Care Act, and therefore owning the premium increases and coverage losses it would cause; or not passing the bill, and therefore failing to do anything that can be framed as "repealing Obamacare."

Each option is a political nightmare for Republicans for the same reason: Each would amount to an admission that Republicans cannot deliver what they have promised for years on healthcare.

For years, Republicans promised lower premiums, lower deductibles, lower co-payments, lower taxes, lower government expenditure, more choice, the restoration of the $700 billion that President Barack Obama heartlessly cut out of Medicare because he hated old people, and (in the particular case of the Republican who recently became president) "insurance for everybody" that is "much less expensive and much better" than what they have today.

They were lying. Over and over and over and over, Republicans lied to the American public about healthcare. 
It was impossible to do all of the things they were promising together, and they knew it.

Then they unexpectedly won an election and had to face the question of whether they would break all of their promises — or only some of them.
If the AHCA passes, Republicans will have delivered on a couple of promises: lower taxes (mostly for people who make over $200,000 a year) and lower public expenditure (mostly because of Medicaid cuts, the main reason the bill could leave 24 million more Americans uninsured). All the rest of the promises will be broken.

And if they don't pass the AHCA, well, then they'll have broken all of the promises.
Republicans lied about healthcare for years and deserve punishment - Business Insider
Quote:If it passes, the American Health Care Act will be Donald Trump and Paul Ryan's Iraq War. It's been sold with lies. It's been pushed forward with a shock-and-awe legislative strategy. And its architects are woefully unprepared for the chaos it would unleash upon passage.

There is an honest argument that could have been made for the AHCA. Conservatives believe it is not the government’s responsibility to ensure the poor can afford decent health insurance. They argue that if taxpayers are pitching in for someone’s coverage, that coverage should be lean; a high-deductible plan that protects against catastrophic medical expenses is plenty for charity care. Under this view, the basic structure of Obamacare — which taxes the rich to purchase reasonably generous coverage for the poor — is ill-conceived and should be reversed. The core philosophical disagreement here is real and worth hashing out. Whereas liberals see access to health care as a right, conservatives see it as more akin to transportation — important, and perhaps worth subsidizing at low levels, but if someone can’t afford a car, it’s not the government’s responsibility to buy them one, much less buy them a nice one.

This is the viewpoint the AHCA reflects. It is not the viewpoint elected Republicans are selling. Instead, their rhetoric fits the sort of plan that Sen. Bernie Sanders might offer. Donald Trump won the 2016 election promising to protect Medicaid from cuts and ensure coverage for all. After the election, he reiterated the vow, telling the Washington Post “we’re going to have insurance for everybody” with “much lower deductibles.”
The health care bill could be Donald Trump’s Iraq War - Vox
Here is a thought. Rightwingers continuously argue that Obamacare is collapsing (and they are actively engaging in producing that outcome). 

While it's not collapsing or going to collaps anytime soon (per the CBO), it's indeed a fact that some of the the exchanges face some trouble, with rising premiums and insurers leaving.

The funny thing is, these exchanges are the rightwing part of Obamacare, they come out of the Heritage Foundation and Romneycare in Massachusetts. 

The 'leftwing' part of Obamacare, expanding Medicaid and allowing children under 26 to be covered on their parents insurance, and not allowing insurers to discriminate on the basis of pre-existing conditions, works fine (apart from those states, invariably Republican governed, where they didn't expand Medicaid, needless to say).

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