Obamacare, Crony Capitalism, Economics & Mispricing Risk

I am a libertarian but there are two things I 100% have no issue with the govt. pouring resources into, free education (both k-12 and college) and public healthcare. The disparity between those who have and those who don't in these two areas is embarrassing for us as a country. You have high schools less than 10 miles from each other and one is basically a prison while the other is a bastion of learning, you have a certain subset of society receiving the best HC money can buy and another subset receiving healthcare reminiscent of a 3rd world country's level of service; it is a terrible humanitarian issue we need to address in this country and further enforces the vast divide we currently have between the rich & the poor. Let us introduce a true public healthcare plan and do away with this govt. health care administered by private corporations bullshit.

Besides the multitude of issues (some obvious) with Obamacare...when people spend more on Obamacare coverage than their mortgage payments...you have an obvious problem.

Sure poor people will benefit and the wealthy probably couldn't care less but the middle class does and they were screwed by Obamacare.

Working at a major healthcare system, the ACA been pretty good to us. Can't really speak for the payors because I'm not on that side of the business, but it's obvious that it's squeezing them. Our uninsured population has decreased which has brought down bad debt. However, the landscape of healthcare is changing so much that it's hard for us to really single out the impacts of the ACA when Medicare is changing their contracts to risk sharing and the whole provider based billing back and forth. All of the programs going on currently are forcing hospitals to become very lean and look at cutting costs, which is good - to an extent. But, if you need a heart surgery, you don't want to go to a surgeon who works at a place cutting costs wherever possible. You want to go to see the surgeon who has the state of the art tools and staff to perform your surgery. Trying to provide the best care with the best service and the best quality at a cheap price just doesn't work well. Healthcare is decades behind other industries and I think we'll start to see some huge changes in the next x years.

Obamacare suffers from the same failures as federal education policies for the same reason (among others): Neither are concerned with getting to the root problem of the product's cost and reforming the systems to lower said costs. They are only interested in paying for it. Costs will only go up under a model like this.

The system is broken because the failures at the top are trickling down to the most ignorant crevices of our country. Exporting provides jobs, which means free trade is good. Manufacturing adds trillions to our economy. Yet, uncertainty holds back investment and makes business leaders still remain afraid to grow. The tax system and regulatory environment is strangling this economy. All of this is happening while people are still failing to get an education to help them and the country move into the 21st century. This election cycle doesn't even look promising at fulfilling what is missing either. Hillary wants to give out more free shit while increasing regulatory burdens and Trump doesn't know what he's talking about in anything even if they both claim to have American interests at heart.

It's been 7 years, so I don't remember the exact stats from 2009, but back then the argument for the ACA was that there were something like 45 million uninsured Americans. However, when you looked at the actual stats it was pretty remarkable how distorted that claim was. Of the, say, 45 million uninsured, once you removed illegal aliens, persons who could afford health insurance but who simply chose not to have it, those who qualified for existing government health plans but didn't know about it, and those who were temporarily uninsured (i.e. between jobs), there were only about 5 or 6 million chronically uninsured Americans. In other words, the private insurance market and current government programs had failed for about 2% or less of the U.S. population who were denied coverage because they were too sick or could not afford the coverage offered.

While I give credit to the Democrats for putting the plight of the uninsured front and center, they sought to destroy one of the world's best health insurance systems to benefit a tiny minority. It would have been far cheaper to simply expand Medicaid (which the ACA did) in a manner that allowed for the chronically uninsured to be covered. The ACA, however, is so convoluted that one must be forgiven if he were to think that it was designed to fail for ideological reasons. And so many aspects of the ACA were counterproductive to the mission of expanding the insured and bending the cost curve--the ACA, for example, attacked health savings accounts, high deductible plans, and union plans, and then added on a bunch of mandates about coverage.

I recently had major knee surgery and, before the surgery, literally no one could tell me how much the surgery was going to cost. The doctor referred me to the office manager, who referred me to the payment department, who referred me to the insurance company, who told me "it depends." It was truly a nightmare. Total sticker price for the surgery was over $100K.

I honestly don't feel qualified to comment, as I didn't pay much attention to the whole thing when it was happening. I lived in France for the majority of the Obama administration, and from that distance it appeared to me that the major problem was that the insurance companies weren't brought to heel or eliminated altogether.

I say that only as a person who once owned a health insurance agency and saw the deficiencies in the system firsthand, and not as someone with any experience with the ACA.

It was a time bomb from the start, built on complete misinformation and lies. We are the R&D giants of the world. The prime biotech/pharma innovator. We have the highest cancer and infectious disease survival rates in the world. We had the highest customer satisfaction in the world, the best hospitals, the most MRI's per million, etc. Literally all of this was overlooked because of an idiotic WHO study that determined the quality of the healthcare system based on the health of its population.

As is always the case, the liberal agenda is based on misinformation, intended not to promote growth or equality, but to destroy the market system.

http://www.cancer.org/acs/groups/content/@epidemiologysurveilance/docum…

One of the challenges in approaching this topic, is that it is very hard to get solid and reliable information on it. There is no transparency, and healthcare is largely an 'all you can eat' buffet if you have decent coverage via your employer. That, IMO, is the root of the issue. We are disassociated with everything related to shopping for our healthcare. We get a few plans, or are just given one, and then pick one. If you suddenly decide to pick a high deductible, then it gets even worse because people don't really get it. There's in-network, out of network, blah, blah. Then to add onto that, there are a million other things and technicalities that can screw you.

I had a conversation a few weeks ago about this, and something we came to is that 'if' you want to do the ACA thing, you have no choice but to make insurance companies private; owned either by the government or a co-op type system. Fiduciary responsibilities to shareholders will, always, equal as many denied claims as possible. I don't believe this is the way to do it at all, but I think in America if you want government sponsored healthcare that's free, that's a first huge step.

If you want to solve the real issue, you need to motivate people to take care of themselves. I'm absolutely astonished at the shape we, as a country, are in. We envy super hero physiques, then go and eat a quadruple baked cheesecake slice with a diet coke to feel less bad about it. I'm not going to touch on smoking, drinking, drugs, etc. since they are their own can of worms. But food? Jesus christ. I don't have an issue with someone who gets cancer or some other awful thing, but if you eat your way to insulin resistance... well we just can't help you.

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Public health consultant here, literally spent the last several years helping government clients figure out what the hell Obamacare means and how it's working in their states.

To get started on whether the US health system works, let's get a quick review of the way the system currently works, then how the ACA has changed it, and follow up by what remains to be done and how things could have / need to be done better. If you want a past-looking review of how we got here (and if you hate yourself), look into Paul Starr's "The Social Transformation of American Medicine." The book is the densest thing I've ever read, but reading the prologue is sufficient to get anyone up to speed on the history of medicine in the United States.

Overview of American Healthcare:

1. Health care is a unique service in that there is no willingness from consumers to make the traditional trade-off between cost and quality. Nobody will accept treatment from a 75-year-old doctor with a rusty scalpel in exchange for 50% off the cost of the procedure.

2. Employer-sponsored insurance coverage was invented to compete for labor after WWII wage restrictions. This led to people being disassociated from the cost of services and allowed providers to charge stupid cash for simple services.

3. Reimbursement for services has traditionally been based on the volume of services received ($180 for a physical, $70 per stitch, etc.). This incentivized the over-utilization of services and contributed further to rising costs.

4. The United States prohibits hospital emergency departments from turning people away due to failure to pay. This leads to a significant overuse of the ED from the poor / illegals, who essentially use it as a walk-in clinic and outright don't pay their bills. This forces hospitals to up-charge other services to make up the gap, or to request 'uncompensated care' bonuses from the federal government which adds another layer of bureaucracy / cost to receiving payment for services. Another impact of this rule is that even after receiving coverage through Medicaid expansion, the poor who are newly-insured are just used to going to the ED as their primary source of care and continue to do so, which now places Medicaid (which is paid for from both state and federal funds) on the hook for the costs of providing emergency care, which is known as the most expensive and least efficient way to provide care.

5. There are massive gaps in access to care in the USA. WSO is likely more metropolitan and thus can't relate to this issue, but in many areas of the country there is not a doctor or hospital within 60+ miles of many people. This leads to people neglecting the regular preventive or low-cost management of chronic diseases, and limits their utilization of services to only those high-cost treatments / encounters when something goes extremely wrong, such as a heart attack / stroke / diabetic shock that could have easily been predicted or prevented if the individual had received regular treatment and proper interventions. Systemically, these costs are massive and is why a massive portion of the US healthcare cost burden is relegated to a minor portion of population.

6. The cost of care is extremely vague and largely disassociated from the quality of care provided. Price transparency is a known issue in the United States, and traditionally hasn't been an issue as employer-sponsored coverage used to mean that a person was generally "covered" and did not have a direct relationship to the cost of a procedure--that was the insurance company's job to figure out and pay. As employers and health plans more generally are asking customers to foot a larger portion of the bill, we see confusion and outrage about the vagueness of pricing and the inability of providers to share prices upfront. Because reimbursement rates are negotiated between a provider and an insurance company, a knee replacement can vary by upwards of 1000% at different facilities or within the same facility but for different insurers. Governments are trying to provide cost information upfront through All-Payer Claims Databases, however these typically are terrible and most people don't use them. From my perspective, it appears that consumers care less about knowing about the cost than they are upset about knowing what something costs.

7. Culturally, the United States is optimistic and proactive. This means that people tend to believe that they will always get better no matter the odds and seek out care regardless of potential impact on quality of life and cost of procedures. This is sticky territory for both policymakers and insurers, as simply being realistic about odds of survival and the systemic cost burden imposed by a medical intervention will be received as "health care rationing." The ACA possessed a requirement that doctors have a conversation with families about palliative care in cases of terminal illnesses, but was cut out after Sarah Palin termed this realistic conversation a "death panel" and caused universal outrage.

Now that we know the issues, we can talk about some of the major provisions that the ACA targeted:

1. Pre-Existing Condition Exclusions / Health Rating Factors.

Prior to the ACA's passing, health insurance companies had way more leverage to deny a person health coverage or to outright refuse to pay claims even though a person did have coverage through a health plan. These would often be disclosed as 'pre-existing conditions,' which basically meant that the plan enrollee lied about his or her health status when buying the plan, and thus claims were incurred under a fraudulent representation of that person's health status. This let the plan refuse to pay for services that a person had every right to incur for absurd reasons--one of the more egregious instances that comes to mind is a person who was denied cancer treatment because of acne. Others include people dropped from plans and unable to find new coverage because he or she unknowingly was HIV positive. I know WSO is big on personal responsibility, so am I, but this was pure bullshit and insurance companies had way too large of an incentive (and way more resources) to find a reason to drop an enrollee or refuse to pay a claim.

2. Increased Health Care Coverage to Eliminate Uncompensated Care.

As I stated earlier, uncompensated care at hospitals and doctors is a primary cause of increasing costs for paid coverage in order to make up for the lack of payment. The hope for the ACA was that, by requiring coverage for all Americans, these uncompensated care costs would slowly evaporate and we would see service costs level off to something more reasonable over time. Unfortunately, two things have prevented this from happening. First, several states refused to expand eligibility for their Medicaid programs (the ACA required this expansion, but it was struck down by the US Supreme Court as overly coercive). This led to a coverage 'gap' for people who made too much money to be eligible for Medicaid but made too little to be eligible for insurance premium subsidies through the Affordable Care Act Marketplaces. It should have worked like this (Low income on left, high income on right):

(Low) Medicaid ---> (Low) Expanded Medicaid ---> (Med) Subsidized Insurance ---> (Med-High) Unsubsidized Insurance

But instead it works like this in those states:

(Low) Medicaid ---> (Low) NOTHING ---> (Med) Subsidized Insurance ---> (Med-High) Unsubsidized Insurance

The second issue is that illegal immigrants or people who didn't sign up for coverage continue to abuse emergency departments and do not pay for services. I got a great life lesson in this earlier this year when I suffered a massive knife cut around midnight and had to wait two hours in an emergency room with a makeshift bandage as friendly folks from south of the border stormed in shouting '¡SIENTO MALO!' and got whisked away in wheelchairs.

Lastly, as alluded to earlier, the poor continue to use emergency rooms just because that's what they're used to and because very few doctors accept Medicaid due to depressed reimbursement and the overall stress of dealing with the Medicaid population. Emergency rooms are just more convenient for them because they're always open (most low-income people work late hours) and are able to see them more quickly.

Taking all of that into account, the rate of uncompensated care has dropped, but did not drop as much as expected. This is an issue because, while these rates haven't dropped as expected, the federal government still plans to reduce payments to hospitals for providing these services as if the rates have dropped. This is causing uproar in some states, particularly those who skipped the Medicaid expansion, as the federal government putting hospitals out of business. I fault both states and the federal government for this issue, as states could cut much of this uncompensated care by expanding medicaid, while the federal government must recognize that the Medicaid expansion won't completely eliminate uncompensated care. Meanwhile, the hospitals have no clue what is going to happen to them and keep prices high across the board because their funding streams are currently so unreliable.

3. Health Insurance Market Transparency and Competition.

The goal here was to standardize insurance products and allow insurance companies to compete on a clear purchasing platform at Healthcare.gov... which was a disaster... in the first year. The site works better now, insurance companies are now better at providing accurate information to the site, and operations overall have continued to become more seamless as the Marketplace matures. At least at the federal level, things are evening off pretty well. At the state level, the Exchanges are much less stable. Many of the state-based marketplaces have shuddered since their establishment, mostly due to high-profile technical failures of being deemed unsustainable. My opinion is that state-based exchanges shouldn't exist at all, as the federal government has proven that the process is extremely scalable and would establish a framework for eventual sale of insurance across state lines.

Regardless of the technical issues, there is the issue of the sustainability of Exchanges as major insurance carriers drop out of the Marketplace. United Healthcare has dropped many states, with threats to exit from others, while 13 Co-Op plans have since gone out of business. I have mixed feelings about these developments, as from what I have seen the plans that have dropped have dropped precisely because of their failure to compete effectively. Insurers will publicly say 'Obamacare is too burdensome in regulations' or 'people were sicker than we thought,' but when I compare plan and premiums I see that some health carriers are able to offer objectively better options--'better' meaning a lower premium with a wider network and lower cost sharing. In the past, one plan's shortcomings against others would have been obscured by an insurance broker pushing an enrollee towards the plan that paid the highest commission, or by the lack of a clear source of comparability across plans, but those differences are glaringly obvious on an effective Exchange platform.

To summarize, I feel that some plans are being dropped from Exchanges precisely because Marketplaces have made their shortcomings obvious to consumers. This should be interpreted as making the markets more efficient, but also has the worrying side-effect of a single insurer sucking up all of the enrollees in a market and cutting out the competition to establish a monopoly. On the one hand, the player who plays best should win, but on the other hand this trend could limit competition and lead to a player raising prices in the long run after it has cut out all competitors. I don't really have an answer to this issue, other than allowing more plans to compete across state lines to ensure that competition continues.

Another valid critique of the plans on these exchanges is that they all require pretty high cost sharing through deductibles and coinsurance. Many people purchase insurance and then find that they still receive a fat bill when they use services. This has evolved from research that shows that the premium is the primary factor in health plan selection, rather than plan cost sharing and expected service utilization. Education could fix this slightly, but in reality people just don't like the concept of cost sharing for health care because they're used to not paying anything.

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What was the point of this post again?

To conclude (I guess...), the Affordable Care Act has somewhat accomplished its goals, but the United States is fraught with other issues that spill over to our health system and prevent any attempt at a single-payer system from being close to financially sustainable.

One issue is that god damned Americans are extremely short-sighted and are largely unhealthy, and that our government requires doctors to provide services that will never be paid for while doing nothing to prevent abuse the medical system / entry of those who use these services but do not pay into the collective bailout funds to keep providers open.

Access to care is an issue that limits care provision to high-cost episodic, massive interventions, but is being alleviated through advances in technology such as the spread of telemedicine. Over time this will improve.

Costs generally are obscure and not linked to quality of care (meaning, actually doing a good job), but this is also being addressed through additional transparency efforts from both health plans and governments.

Health insurance is bullshit, forcing people to pay to have insurance and then pay again to use that insurance through copays / coinsurance. Outrage over out-of-pocket costs continues to prove that this payment structure is against human nature, and we will eventually need to establish more comprehensive parameters for coverage with zero cost out-of-pocket.

Things are getting better, but very slowly. At a bare minimum, I appreciate the ACA's calling attention to health care costs in the USA.