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Increasing Number of Americans Are Putting Off Seeking Health Care

By: Friday November 28, 2014 7:51 am

If you really want to understand why the Affordable Care Act hasn’t gotten more popular you should look at this graph. The number of Americans who say they have put off medical treatment continues to rise even after the ACA’s coverage expansion was implemented. From Gallup:

Percentage of Americans Putting Off Medical Treatment Because of Cost

The “Affordable” law was sold as a way to help all Americans afford health care but that is not how it has worked out.

Looking at the numbers we see things, like the Medicaid expansion, have made an improvement for the poor. The percent of households making less than $30,000 a year who said they put off medical treatment went from 43 percent 2013 to only 35 percent in 2014. Yet at the same time things have gotten worse for everyone else.

Among middle income families the percent putting off treatment jumped from 33 percent in 2013 to 38 percent in 2014. Even among families making over $75,000, in the past year the number jumped from 17 percent to 28 percent.

When President Obama kept talking about “bending the cost curve,” I suspect most Americans assumed that meant the law was going to help them pay for actual health care. In reality what Obama meant by “bend the cost curve” was that the ACA contained provisions to actively encourage the increase of their co-pays and deductibles with the goal of bending national health expenditure but often at the expensive of sick middle class families.

No, the ACA Hasn’t Ended Medical Bankruptcy

By: Wednesday November 26, 2014 7:23 am
Schumer

Sen. Chuck Schumer

I find Brian Beutler’s criticism of claims made by Sen. Chuck Schumer (D-NY) about health care reform in 2009 to be emblematic of why Democrats and liberals have not been able to sell the ACA to the public. From the New Republic:

Substantively, Schumer is understating how positive the Affordable Care Act is to the middle class—even if the law’s middle-class benefits, and the security net it places under middle-income people, aren’t always obvious or tangible. Most middle class people already had health insurance, but their risk of losing it, or of experiencing a medical bankruptcy despite their coverage, has essentially disappeared.

While Democrats, liberals, and President Obama frequently made the claim that the Affordable Care Act would eliminates medical bankruptcies it simply isn’t true. We know from Massachusetts that medical bankruptcy remains common even after their health care law was adopted.

Under the law the out of pocket maximums are still too high for many people to afford and there are still serious holes in the coverage protection. Just this month there was a high profile story of a women who faces medical bankruptcy because the ambulance took her to an out of network hospital. The ACA does improve the situation for some, but doesn’t fix the problem.

Instead of making the law actually do what Democrats promised (i.e. making insurance truly affordable, making shopping for coverage very easy, provide complete consumer protection, and eliminating medical bankruptcy) they just hopped the public would be too stupid to notice its shortcomings. It is a clear case of over promising and under delivering.

Unfortunately, many supporters of the ACA have actually bought their own hype and now seem genuinely confused why the public is disappointed. Democrats aren’t going to be able really fix the ACA and creating something the public will support, until they stop the self-delusion.

Photo by Third Way under Creative Commons license

The ACA Exchanges Can Be Fixed, But They Were Meant To Be Broken

By: Wednesday November 26, 2014 6:18 am

The serious problems surrounding auto-enrollment in the new Affordable Care Act exchanges are just starting to get real attention. The problem isn’t a lack of good solutions though. The real problem is that the exchanges weren’t intended to work well for regular people.

The fundamental problem with insurance exchanges is regular people are really bad at shopping for insurance

If you want to make these private insurance exchanges work better, the first step is acknowledging the entire Democratic message about the ACA making insurance shopping easy and useful for regular people was either profoundly ignorant or purposely deceptive. Expecting regular people to become highly sophisticated and active insurance shoppers was never realistic.

Selecting the right insurance is extremely complicated. Regular people lack the basic health literacy needed to even understand the choices and even if they do they lack the math skills to make proper use of the information. Most people aren’t going to select the best plan for them and we know from Switzerland only a very tiny percent will shop around each year because of the difficulty.

Efforts to make the ACA exchange choices marginally easier to understand or give more information to people is not a real solution.  In the Swiss system things are already dramatically more standardized and switching to cheaper policies is still rare.

What is needed is a paradigm shift to make the exchanges about insurers vs regulators not insurers vs consumers.

Having the exchanges primarily about a place where sophisticated private insurance companies trying to convince poorly informed regular people to choose them is an information asymmetry disaster. It can easily put the economic focus on tricking people, not providing better quality.

To make the exchanges better you could make it about sophisticated insurers convincing well-informed  and dedicated regulators of their quality.

This would work by mainly taking regular people out of the shopping process. Instead you have people upload their health information into the exchange and have them answer a serious of questions about their priorities. For example: How important is keeping your doctor? On a scale of 1-10 do you care more about saving money or a wider network?

The personal data would be entered into the exchange algorithm and the government system would directly recommend the plan that is the best quality, fits their priorities, and makes the most financial sense for them. People should still be able to manually choose their own plan, but I doubt many would. During each year’s new enrollment period you would have the exchanges make an aggressive effort to contact people to find out if their priorities have changed and if the system says there is a better options for them.

Since regular people are so bad at shopping for insurance this system would likely save the government and consumers significant money. You might think that is a feature, but perversely that is its flaw.

The Affordable Care Act is “broken” by design.

We didn’t get the Affordable Care Act because the public was clamoring for an expensive system using a mandate to force people to buy very complex insurance products from deeply unpopular companies. We got the ACA because our government is profoundly corrupt. Its complex and inefficient design is a direct result of President Obama making secret deals with the health care industry to protect their profits. What looks like waste and confusion for regular people is profits for drug companies, insurers, and hospitals.

If Democrats wanted to eliminate this auto enrollment issue they could have just put all the uninsured onto a basic public insurance plan. Not only would this auto enrollment problem disappear but the whole law would have been simpler, more effective, and significantly cheaper. Instead we got the private insurance exchanges.

If Democrats actually wanted people to really be able to shop for insurance they could have required all insurers to offer only very specific policies so the only differencd between them was price and networks. This would have made it possible for regular people to reasonably compare them. Instead they give insurers broad leeway within actuarial tiers that are difficult for regular people to understand.

If the Obama administration really wanted to try to improve quality and price on the Healthcare.gov they could have made it an “active purchaser” that actually negotiates with insurers. Instead they choose the more insurer friendly “clearing house” set up.

Even sticking to the stupid basic design of the ACA, policy experts could spend years coming up with changes that would dramatically improve the quality, efficiency and price for regular people; but that is all meaningless as long as that is not the real goal.

The problem is not that we don’t have solutions, the problem is the system isn’t about doing what is best for regular people.

House GOP Has Plans to Avoid Fight With Obama for Now

By: Tuesday November 25, 2014 6:54 am
Capitol Building

If Republican do want to stage a fight with Obama it makes sense to wait until next year when they have control of the Senate

The lame duck Congress has only one thing they need to before they can take the rest of the year off, fund the government. It looks like the Republican leadership may have found a way to do their job while avoiding a protracted fight with President Obama. From Politico:

The likely proposal would fund nearly the entire government through September 2015, but immigration enforcement related funding would be renewed on a short-term basis, according to several high-ranking GOP lawmakers and aides who described the plan as it stands now.

The strategy is designed to keep the government open, while satisfying the base, which is livid with President Back Obama for issuing an executive order that ends deportations for millions of undocumented immigrants.

If the Republican leadership can make this work it would be a smart political move. If Republican do want to stage a fight with Obama it makes sense to wait until next year when they have control of the Senate and a larger majority in the House.

Delaying any possible fight over immigration for a few weeks will also give the rank and file Republicans a chance to really think if they want their first big fight with Obama to be about an immigration action that is overwhelmingly popular with Latinos.

What Is the Point of an Individual Mandate if You Don’t Talk About the Mandate?

By: Tuesday November 25, 2014 5:43 am

I found this suggestion to move the Affordable Care Act open enrollment period to the middle of tax season to be very interesting in light of how the outreach operations are being run during this second open enrollment period. From Washington Post:
059:365 - 06/28/2012 - ObamaCare

Some Affordable Care Act advocates and tax preparers like Jackson Hewitt have also been urging the Obama administration to set an Obamacare enrollment period that more closely aligns with tax season, citing a few reasons. People in tax season will learn whether they’re paying the ACA penalty for not having health insurance, so they may make the calculation they’d rather get coverage. Also, people receiving tax refunds may then feel like they have the financial flexibility to purchase private coverage.

The advocacy group Families USA, one of the ACA’s strongest proponents, has also called for a marriage of the enrollment period and tax season. “Fully aligning the open enrollment period with the tax filing period would significantly increase enrollment,” the group concluded in recommendations issued earlier this year.

While I’m no fan of the current individual mandate, I found the fact that it is being advertised so little this open enrollment period very upsetting. The whole point of the mandate is to constantly scare/coerce people into buying coverage, but that only works if you are aggressively reminding people of the mandate.

I understand why the Obama administration might not want to heavily highlight the mandate given how unpopular it is, but they have fought to include it so they are obligated to constantly talk about it. Having an individual mandate that the government isn’t aggressively warning people about is the worst of all possible policy. It doesn’t achieve the stated policy goals of the mandate and serves only as a big surprise tax on people.

The Obama team has the duty to either drop the mandate or promote it heavily. Moving the open enrollment period to tax season would definitely be a good way to draw extra attention to it.

The Perverse Way More Exchange Competition Could Leave Some People Worse Off

By: Monday November 24, 2014 8:54 am

health care

The goal of the Affordable Care Act exchanges was to encourage competition among private insurers, but ironically attracting more competition could leave many people the exchanges were designed to help the worst off. To understand why you need to know a few things about the structure of the law, the complexity of selecting a policy, and human nature.

New lower quality but cheaper policy won’t save much money

Many of the people using the exchanges qualify for tax credits to help purchase coverage. The size of tax credits individuals qualify for is based on what percentage of their income they will need to pay for the “reference plan” (the second cheapest policy offered at the silver level). This means for many the official price tag has no real bearing on what they pay.

Let’s say a new policy enters the exchange. Its “innovation” is offering the skimpiest coverage and narrowest network possible to qualify as a silver level plan. As a result this new hyper narrow policy is cheaper than any of the other current silver policies. The more competition on the exchange the more likely some insurers will go this route.

This would changes the “reference plan” and reduce the amount of tax credits people qualify for. That means people receiving tax credits on the exchanges will either need to pay significantly more for their old policies or switch to a new potentially worse policy to pay the same amount they did before. People getting significant tax credits on the exchange won’t really feel any potential price decreases that competition might cause, but will feel any quality decrease competition could cause.

People rarely switch policies

We know from polling data and other health care systems most people will end up staying with their old policy and pay more. Only 22 percent of exchange users say they will even try to shop around for new coverage this year. In Switzerland, which for decades has used an even simpler system of managed competition between private insurers, only about 2% to 5% change plans each year despite the fact switching plans could save people significant amounts of money.

This shouldn’t be surprising since shopping for insurance policies is very complicated, stressful and unpleasant for most people.  Even if people did try to shop around every year most don’t have the knowledge and skills to do it correctly.

People face choice overload

The truly perverse part is that the more competition there is on the exchanges, the more likely people are to suffer by failing to regularly change policies, but the less likely they are to try shop around. Research on Switzerland strongly indicates people experience decision overload when it comes to changing insurance. It found, “The results showed a monotonically decreasing likelihood of switching with increasing choice. Cantons with more choices had significantly lower switching rates ceteris paribus.” It is worth noting higher insurance standardization in Switzerland makes comparing multiple plans there easier than on the ACA exchanges.

Too many complicated choices cause people to give up, yet the design of the ACA tax credit structure means it is probably most important to shop around in exchanges with the highest number of choices. More policies on the exchange likely increase the chance that the policy which is the “reference plan” will change frequently.

The Affordable Care Act was based on the premise that people could be made into consciousness insurance shoppers but that is simply not how people behave.

Americans’ Weird Belief Their Country Is Becoming a Lawless Hellscape

By: Monday November 24, 2014 6:49 am

One of the strangest phenomenons for me is how a clearly majority of the country still thinks crime is getting worse even though it has been on strong downward trajectory for the past two decades. From Gallup:

Perceptions of Crime in the U.S., 1989-2014

If crime is really worse than last year and last year was worse than the year before, and so on… by this point we would be living in hellscape where we for expired canned food in the ruins of old New York. Yet the fact that major cities are steadily become more popular places for people to live, work and go out hasn’t seemed to really change the public’s pessimism.

I’m left wondering what is causing this phenomenons. It is that human are naturally hardwired for certain forms of paranoia about safety? Has American media done a terrible job of highlight the drop in crime rates and a great job of turning the story of one missing white women into a month long news extravaganza? Is most of our near future Hollywood sci-fi dystopic?  Is the police-prison-military-asset forfeiture complex engaged in a very active campaign of scaring the public so more money continues to be thrown at them?

This is not just idle speculation, but a serious question with big policy implications. We wasted billions on some very misguided “tough on crime” approaches that have result in the word’s largest prison population, crippled the economic prospects of millions, and feed a a massive drug war that has killed thousands on the other side of our borders.

Undoing all these bad policies might depend on finding a way to convince the public about the very good news when it comes to crime rates in this country.

The Nuclear Option Catch-22 for Republicans

By: Friday November 21, 2014 10:14 am

Will they?

Some Senate Republicans are entertaining the idea of bring back the filibuster for executive nominees, according to the Huffington Post.

The problem is there is no way for Republicans to undo the Democrats’ rule change without validating what Democrats did.

I strongly suspect Senate Republicans won’t be able to find enough votes from Senate Democrats to change the rules using the “regular” way. That requires 67 votes. This means the only way Senate Republicans can bring back the old system is if they use the so called “nuclear option” to change the rules with a simple majority.

Using the “nuclear option” to undo the other side’s past use of the “nuclear option” just legitimatizes it as the an acceptable way to change the rules in the Senate. It affirms the precedent that the rules of the Senate are really just whatever a simple majority of senators decides they should be, which is how basically every sane legislative chambers in the world functions.

Whether Republicans decide to allow the reduction in the filibuster to stand or endorse that idea that a simple majority has the power to change the rules to bring it back, either way it undermines the legitimacy of the filibuster.

House Republicans Finally File Suit Against President Obama

By: Friday November 21, 2014 7:53 am

“The President has said before he’s not king and he’s not an emperor, but he’s sure acting like one.” (click to play)

The long promised House Republican’s lawsuit against the Obama administration based on his executive action related to health care is finally here. From the New York Times:

The suit accuses the Obama administration of unlawfully postponing a requirement that larger employers offer health coverage to their full-time employees or pay penalties. (Larger companies are defined as those with 50 or more employees.)

[...]

The suit also challenges what it says is President Obama’s unlawful giveaway of roughly $175 billion to insurance companies under the law. According to the Congressional Budget Office, the administration will pay that amount to the companies over the next 10 years, though the funds have not been appropriated by Congress. The lawsuit argues that it is an unlawful transfer of funds.

The part about the cost sharing subsidies is new, most of the focus so far has been on the decision to delay the employer mandate.

It is worth noting that House Republicans don’t approve of the employer mandate and in the past have voted to delay it. At least half the suit is about something Obama did which Republicans wanted done anyway.

The Importance of Not Being Quiet

By: Friday November 21, 2014 6:51 am

Protest and Pressure Work

Last night President Obama did the right thing and will help millions of people in this country. It was a big day for immigration reform groups and a powerful vindication of an aggressive form of activism.

I’ve repeatedly heard activist groups told to be quiet, not rock the boat, just trust the White House to reach a good compromise, and only attack Republicans. Yet time and time again the old adage ‘the squeaky wheel gets the grease’ has been proven right.

A few immigration groups have repeatedly challenged and embarrassed President Obama and this produced results. It got Obama to delay action for the DREAM kids and it got Obama to take broader action yesterday.

Similarly, when LGBT activists started chaining themselves to the front gate of the White House this spurred Democrats to take action and President Obama to finally “evolve.”

Multiple protests large and small directed at Obama kept him from approving the Keystone XL pipeline for years. While it is unknown what he will do in his last two years, it at least made him afraid to touch the issue before his re-election

Hounding Obama’s deficit commission exposed what Alan Simpson really believes and helped sink any effort to cut Social Security.

I don’t criticism the President because I have some personal grudge against him, simply want to make him unpopular, or am a natural contrarian. I criticize him because I want better policies that will help improve the lives of regular people. Naming and shaming has proven to be one of the few tools that spur people in power to take action. I would happily write only an endless string of glowing articles about Obama if he spent his time adopting better policies.

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