ObamaCare

You are currently browsing articles tagged ObamaCare.

Do Republicans actually Like ObamaCare?

May 3, 2012 in Current Events, Health Reform | 1 comment

Joe Paduda has some interesting points:

“requiring insurers accept all applicants is favored by most Republicans (according to Politico) but a) some senior Republicans hate the idea and b) there’s zero consensus re how to actually make that work. Do they forbid upcharging for older/sicker people? Adopt some form of risk-adjustment and/or financial transfer among/between insurers based on the risk profile of their members? Or allow the free market to operate, hoping that insurers will somehow figure out how to insure people with pre-existing conditions at affordable rates?”

One option–an individual mandate–is certainly off the table for Republicans.  So the question is, if you want to prohibit insurers for varying premiums based on your health condition, how do you prevent premiums from skyrocketing or insurers acting illegally to avoid certain types of enrollees.  The answer to this question is not a simple one in the political realm.

Tags: ,

How to drop the individual mandate and avoid the collapse of the private health insurance market

March 28, 2012 in Health Insurance, Health Reform, Medicare Part D | 1 comment

Today, the Supreme Court is deciding  whether to let many of the provisions of the Affordable Care Act (a.k.a. ACA, a.k.a. Health Reform, a.k.a. Obamacare) stand.  One of the key provisions is the individual mandate.  The individual mandate requires all individuals to purchase health insurance.  If you don’t buy health insurance, you must pay a penalty or fine.

The reason Obama claims the individual mandate is necessary is due to the prohibition of setting premiums based on pre-existing conditions.  Currently, if you don’t have insurance, you become ill and try to buy insurance, it is very expensive.  The ACA, however, would prohibit insurers from price discriminating based on your health status.  Although this may sound good in theory, there are problems in practice if the individual mandate is not in place.  Many individuals will have an incentive not to buy insurance when they are healthy.  When they become sick, they can purchase an insurance plan for the same price as someone who has had insurance for 10 years.  Because only sick people will be insured, the average cost of health insurance will rise for everyone.  Hence, the need for the individual mandate arises.

The individual mandate, however, may not be constitutional.  Can the government compel individuals to buy something?  Many states already require auto insurance.  This requirement is only applied to those who own a car whereas the only condition for the health insurance mandate is that you are alive.

Americans have already found a way around this problem, however.  Medicare’s prescription drug program (Medicare Part D) is an optional program.  No one has to buy prescription drug coverage.  Further, premiums do not vary based on health status (although insurers receive different subsidies based on individual’s health conditions).

To incentivize individuals to purchase prescription drug coverage while they are healthy, Medicare Part D relies on a late enrollment penalty.  Any individual who does not purchase prescription drug coverage when they are eligible has to pay an increased premium when they are eligible.  This increased premium depends not on your health status, but on the number of months you were not enrolled when eligible.  From the Medicare website:

The late enrollment penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($31.08 in 2012) times the number of full, uncovered months you were eligible but didn’t join a Medicare drug plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium.

This approach could solve both problems.  The one short-coming is determining how much the late-enrollment penalty should be for private plans.  Allowing the government to set prices is generally a poor idea.  One could allow private plans to set the late enrollment penalty, as long as this were regulated to prohibit price discrimination based on individual health status.  Although this approach certainly has a number of challenges, it may be more palatable to the American public (and the Supreme Court) than an individual mandate.

Tags: , , , ,

The Death Panel

August 17, 2009 in Current Events, Health Insurance | 3 comments

Is Obamacare going down in flames? Is Sarah Palin’s “Death Panel” comment the culprit? Is the government going to start killing its own citizens?

In Sarah Palin’s Facebook post, she explains her concerns by quoting from section 1223 of HR 3200:

Section 1233 authorizes advanced care planning consultations for senior citizens on Medicare every five years, and more often “if there is a significant change in the health condition of the individual … or upon admission to a skilled nursing facility, a long-term care facility… or a hospice program.” [3] During those consultations, practitioners must explain “the continuum of end-of-life services and supports available, including palliative care and hospice,” and the government benefits available to pay for such services.

How does one interpret this Section? Some extremists have claimed that this section will encourage or require euthanasia among sick patients. If you support ObamaCare, you likely think of these consultations will proceed as follows: a benevolent nurse will advice patients of their health care outcomes and may recommend care best suited for the patient. If you do not support ObamaCare, then you may still believe that these nurses are good hearted, but pressure from their superiors to cut cost may cause these consultations to become distorted. Practitioners may push for more hospice care and less invasive medical treatment–not because it is in the patients best interest–simply to save costs.

The truth is, no one knows exactly how these consultations will play out in reality. Some pracitioners may feel pressured to recommend less invasive care to save money and some may not. However, believing that this type of rationing does not occur in the private sector is incorrect. Let us look at another Sarah Palin statement:

“The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their ‘level of productivity in society,’ whether they are worthy of health care. Such a system is downright evil.”

Palin fears that government rationing will deny care to certain groups. But as Robert Reich understands, health care is already rationed. In the private sector, different insurance companies cover different treatments. When an insurance company decides not to cover some type of end-of-live medical treatment, these private sector administrators can be considered just as much of a death panel as in Obama’s public sector plan.

We need politicians to now to offer real solutions to the health care problems in America. Pandering to American’s fears by using terms such as “death panel” and “rationing” will likely help the Republicans win votes, but it will not improve health care. If Republicans were truly opposed to any government-run healthcare, then their hyperbole could be seen a ploy to end government-run healthcare. However, very few politicians (even Republicans) endorse ending Medicare. Even the supposed anti-government George W. Bush enlarged Medicare by added prescription drug coverage (Part D).  Thus, I see lots of criticism, but few proposals for improvement.

Arnold Kling makes a provocative case for real reform: end Medicare and institute vouchers. Kling proposes that insurance be deregulated and Medicare ended. Won’t individuals with pre-existing conditions pay more for health insurance? Yes. However, in order to make this proposal fair, Kling would make the voucers conditional. The amount of the vouchers would be “based on need. Need would depend on income and pre-existing conditions.” With more people paying for their own health care and the government leveling the playing field, a fairer, more efficient system would emerge. For more on vouchers, see my post on vouchers in the U.S., as well as vouchers in Chile.

Tags: , , ,

Obama vs. Tanner

July 21, 2009 in Uncategorized | 9 comments

President Obama says:

  • “If you like your current health-care plan, you can keep it.”
  • “You will pay less.”
  • “Quality will improve.”

Michael Tanner says:

  • You can’t buy any insurance, only “insurance that includes all the benefits government thinks you should have.”  Further, the government plan may dominate the market because the public plan “would be subsidized by American taxpayers, the government plan could keep its premiums artificially low or offer extra benefit.”  
  • ” The Congressional Budget Office has made it clear that the reform plans now being debated will in crease overall health-care costs.”
  • Tanner believes that the VA and Medicaid are examples of how government-run health insurance does not work.  Further “Obama endorsed the creation of a government board with the power to dictate how your doctor practices medicine and all but endorsed the rationing prevalent in nationalized health-care systems around the world.”

Which side are you on?

Tags: , ,