Thursday, November 14, 2013

Some Recent Articles Criticizing the Affordable Care Act

Critics of the Affordable Care Act are having a field day. Reasons include the well-publicized problems of the federal website for those shopping for health insurance under the ACA, the cancellation of existing insurance plans for some who acquired insurance as individuals, and the President’s false assurances that everybody could keep their existing plans if they “liked” them.. Some of the criticism I have run across comes from well-off, self-employed people; some is purely motivated by politics; and some make come from conservative analysts making valid criticisms and sometimes constructive suggestions.
An example of an unhappy well-off person is Lori Gottlieb, a Los Angeles marriage and family therapist and writer. This past Sunday the print edition of the New York Times published her article on her health insurance travails – “Daring to Complain About Obamacare.” She has two major complaints. First, she thinks the premium increase of $5400 a year over what she had been paying for her canceled plan by for a new plan offered by her insurance company, Anthem Blue Cross, is too much. Her second complaint is the lack of sympathy from her Facebook “friends” when she complained about this on her FB page. The problem with the first complaint is that she apparently has not done any research on what other plans might be available to her. She incidentally would not be dealing with the federal website but the California one, since California has set up its own exchange. Also, she does not mention that her out of pocket costs will be less than any premium increase, since as a self-employed person she can deduct the cost of health insurance as a business expense. The second complaint is pure whining from a person who probably has a relatively high income. Nevertheless, it is true that, if all she knew about the ACA was what the President said, she is right to complain that she was misled. (I would point out that anyone who thought about it had to know that the President’s assurances could not be taken at face value, since insurance companies can always change their plans, cancel policies, raise premiums, and change the membership of its network of providers. More criticism of Gottleib’s article from the progressive left can be found here.)

Today, the Administration bowed to the intense political pressure and announced that it will allow non-compliant plans to continue offering the plans to existing customers throughout 2014. This should please Gottleib.  However, it is not clear how this will work. We will see if private insurance companies and state regulators go along. The new policy does raise an adverse selection issue, which could affect the risk pools on the exchanges. On the other hand, many in the individual insurance market eligible for subsidies may find that to be the cheaper and better option.
Keith Hennessey, who was Director of the National Economic Council in the George W. Bush Administration, has posted on his blog three articles expressing his outrage at the President Obama’s “lies.” He even went so far as to create a flow chart about this. To me, these posts are purely political, but they probably do not accomplish much since most visitors to his blog, except for a few like me, are already convinced that the Obama Administration is terrible at economic policy. His posts are examples of what Ana Marie Cox (founder of and former Wonkette, now serious Guardian columnist) calls “faux outrage.” Unfortunately, Hennessey does not seem interested in making constructive suggestions. (Incidentally, Hennessey’s making unfavorable comparisons between the current Administration and the one he worked for regarding their relative propensities to mislead is a bit rich, even if the major issues in this regard in the Bush Administration did not fall under his bailiwick. In the future, he might want to proceed more cautiously on this topic.)

In the remarkably stupid category of criticism of the ACA is an article by someone who should know better, Edward Lezear, who was Chairman of the Council of Economic Advisers in the George W. Bush Administration – “President Obama, is a 'substandard' health plan really substandard?” In this article, Professor Lezear compares existing insurance plans to the base Ford Focus he chose to buy when he worked for the White House. Even putting aside that cars and health insurance plans are hardly the same thing, would he really want to drive a car that did not meet the minimal safety standards required by the federal government and not be subject to recall if problems develop? Consumers do want government standards when it comes to cars. That is probably enough said about this article, which, as it appears on the Fox News website, is another example of preaching to the choir.
James Capretta, who was an Associate Director of OMB in the first term of the George W. Bush Administration and is clearly no friend of the Obama Administration, recently wrote an article critical of the ACA website issues – “It's Already Too Late to Avoid the Train Wreck.” Capretta uses stronger language than necessary when he writes this at the end of his article that “[t]he Obama administration is in a very dangerous place.” This detracts from the valid point Capretta makes about the website problems. He argues that, even if the website problems are fixed by the end of November, this only gives people about two weeks to sign up for coverage by January 1 (the deadline is December 15.) This may cause problems for both the website and the people having to decide what plan to sign up for and filling out the necessary website forms. That is a genuine concern. The Administration does need to be thinking about contingency plans if the first two weeks of December become a logistical nightmare.

Finally, writing for the Real Clear Politics website, Robert Pollock, who used to be an editor of the opinion pages of the Wall Street Journal makes a suggestion worth considering (“Fixing Obamacare: The Federal Charter Solution”). He suggests that it would greatly simplify the regulatory situation for health insurance plans if there was an option for them to get a federal charter. Health insurance plans that opted for the federal charter would then not be subject to a maze of different regulatory requirements in the 50 states (and, I would add, in the District of Columbia and potentially other places, such as Puerto Rico). This would be similar to the federal charter that is available to commercial banks which choose to be supervised by the Office of the Comptroller of the Currency. It is also similar to the private health insurance plans made available to federal employees and retirees under the Federal Employee Health Benefits Program. These plans are subject to regulations of and overseen by the Office of Personnel Management, a federal government agency, and not by state regulatory authorities. I have not seen any discussion of this issue in the ACA context, but I think Mr. Pollock has made a constructive suggestion, though one that may be politically difficult to implement because of possible strenuous opposition by state governments.  

1 comment:

  1. I came here after reading an a WashingtonPost article on poorest people in rural Breathiff County Kentucky signing up in droves for Affordable Healthcare Act. The wife of a school district worker leaves with information only after learning she can get a $228 month subsidy but needs to pay $115-300 a month. Of the 56,422 people signed up in Kentucky, 80.86% are in it for Medicaid. The rest of the people in the article don't pay anything so they sign up. They are told to bring in their relatives. Kentucky is supposed to have 15% of its population uninsured, at 650,000 people. Dental care is included: xrays,cleanings,fillings but no bridges,cosmetic or dentures.
    I think the wife will skip out on medical care. I also think Dentists who enjoy high salaries will move to wealthier areas of the country.
    Cuba has socialized healthcare. The Affordable Healthcare Act seems to be socialized Insurance. Someone is still going to have to pay for it. More total visits equals higher insurance. Am I wrong?